reglab/statecodes huggingface dataset:
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-22 - "Domicile" defined

Current through July 10, 2024
Authority: IC
				  6-8.1-3-3
Affected: IC
				  6-3-1-12
Sec. 22.
(a)
				"Domicile" means a person's domicile is the state or other place in which a
				person intends to reside permanently or indefinitely and to return to whenever
				he or she leaves the place. A person has only one (1) domicile at a given time
				even though that person may be statutorily a resident of more than one (1)
				state. A person is domiciled in Indiana if he or she intends to reside in
				Indiana permanently or indefinitely and to return to Indiana whenever he or she
				leaves the state.
(b) A person is
				domiciled in a state or other place until such time as he or she voluntarily
				takes affirmative action to become domiciled in another place. Once a person is
				domiciled in Indiana, that status is retained until such time as he or she
				voluntarily takes positive action to become domiciled in another state or
				country and abandons the Indiana domicile by relinquishing the rights and
				privileges of residency in Indiana.
(c) In order to establish a new domicile, the
				person must be physically present at a place, and must have the simultaneous
				intent of establishing a permanent place of residence at that place. The intent
				to change one's domicile must be present and fixed and not dependent upon the
				happening of some future or contingent event. It is not necessary that the
				person intend to remain there until death; however, if the person, at the time
				of moving to the new location, has definite plans to leave that new location,
				then no new domicile has been established.
(d) There is no one (1) set of standards that
				will accurately indicate the person's intent in every relocation. The
				determination must be made on the totality of facts, supported by objective
				evidence, in each individual case.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-22.5 - Determination of domicile

Current through July 10, 2024
Authority: IC
				  6-8.1-3-3
Affected: IC
				  6-3-1-12
Sec. 22.5.
(a) The
				department may require documentation from a person to evaluate
				domicile.
(b) The one hundred
				eighty-three (183) day and permanent place of residence threshold in IC
				6-3-1-12 (b)  and
				section 21 of this rule is not a test for domicile.
(c) A person is presumed not to have
				abandoned their state of domicile and established a new state or other place of
				domicile in a given year if, during that year, the person maintained a
				permanent place of residence (whether as an owner, renter, or other occupier of
				the residence) in that state and the person did more than one (1) of the
				following:
(1) Claimed a homestead credit or
				exemption or a military tax exemption on a home in that state.
(2) Voted in that state.
(3) Occupied a permanent place of residence
				in that state or other place of domicile for more days of the taxable year than
				in any other single state.
(4)
				Claimed a benefit on the federal income tax return based upon that state being
				the principal place of residence.
(5) Had a place of employment or business in
				that state.
A person may rebut this presumption through the presentation
				  of substantial contrary evidence.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-23 - Special cases of residency

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-12
Sec. 23.
Residency As It Affects Tax Liability.
(1) Taxpayer Moving to Indiana
When a taxpayer moves to Indiana and becomes a resident
				  and/or domiciliary of Indiana during the taxable year, Indiana will not tax
				  income from sources outside Indiana which the taxpayer received prior to
				  becoming an Indiana domiciliary. Indiana will, however, assess adjusted gross
				  income tax on all taxable income after the taxpayer becomes an Indiana
				  resident.
(2) Taxpayer
				Moving from Indiana
Any person who, on or before the last day of the taxable
				  year, changes his residence or domicile from Indiana to a place without
				  Indiana, with the intent of abiding permanently without Indiana, is subject to
				  adjusted gross income tax on all taxable income earned while an Indiana
				  resident. Indiana will not tax income of a taxpayer who moves from Indiana and
				  becomes an actual domiciliary of another state or country except that income
				  received from Indiana sources will continue to be taxable.
(3) Nonresident Citizens
An individual from Indiana who is permitted to file Federal
				  income tax returns as a nonresident citizen is considered as being domiciled in
				  Indiana and his income taxable as a resident citizen, if he maintains a place
				  of abode in Indiana immediately prior to residing in a foreign country as a
				  nonresident citizen of the United States, and has not permanently established
				  his domicile in a foreign country or in another state.
The fact that ordinary rights of citizenship, including
				  voting at public elections are present but not exercised, shall not prevent a
				  person from being classified as a resident if he meets the other tests set out
				  in this regulation
[ 45 IAC 3.1-1-23 ]
.
(4) Part-Time Resident Individuals
Persons residing in Indiana but living part of the year in
				  other states or countries will be deemed residents of Indiana unless it can be
				  shown that the abode in the other state or country is of a permanent nature.
				  Domicile is not changed by removal therefrom for a definite period or for a
				  particular purpose. A domicile, once obtained, continues until a new one is
				  acquired.
(5) Military
				personnel
Indiana residents who become members of the military service
				  remain Indiana residents regardless of their geographical assignments. Military
				  members can change their legal residence only by filing DD Form 2058, State of
				  Legal Residence Certificate.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-24 - Definition of nonresident

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-13
Sec. 24.
"Nonresident" Defined. A nonresident of Indiana is any
				  individual, estate, trust, or other entity not included in the definition of
				  "Resident" given in Regulation 6-3-1-12(010)
[ 45 IAC 3.1-1-21
				  ]
.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-25 - Tax liability of nonresident

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-13; IC 6-3-2-2
Sec. 25.
Nonresident's Indiana Adjusted Gross Income Tax Liability.
				  All persons who are not residents of Indiana are required to report that
				  portion of their entire income directly or constructively from or attributable
				  to business, activities or any other source within Indiana, with the exception
				  of nonresident members of the armed forces receiving compensation for military
				  duty in Indiana. These latter persons will not be subject to the adjusted gross
				  income tax on their military pay. A nonresident must include on his tax return
				  all gross income received from a business, activities or any other source in
				  Indiana whether taxable or not. In order to avail himself of the deduction of
				  non-taxable income, the nonresident must first include the non-taxable portion
				  of his income in the total gross income figure.
In order to qualify as a nonresident, the taxpayer shall
				  submit proof, upon demand by the department, of having indicated his bona fide
				  intention to reside permanently elsewhere before the last day of the taxable
				  year.
Such person changing his domicile during a taxable year may
				  also be required to furnish evidence of compliance with the requirements of the
				  other state with respect to taxation and the qualification as a resident
				  citizen thereof.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-26 - Definition of person

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-14
Sec. 26.
"Person" Defined. Statutory definition of "person" is used
				  synonymously with the Act.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-27 - Definition of taxpayer

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-15
Sec. 27.
"Taypayer"
[sic.]
Defined. The term
				  "taxpayer" means any person or corporation subject to taxation under these
				  Regulations
[45 IAC]
.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-28 - Taxable year

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-16
Sec. 28.
"Taxable Year" Defined. The term "taxable year" means the
				  taxable year of the taxpayer as shown on the return required to be filed or
				  filed pursuant to the Internal Revenue Code. When the Internal Revenue Code
				  requires no return to be filed, the taxable year will be the calendar
				  year.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-29 - Definition of business income

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-20
Sec. 29.
"Business Income" Defined. "Business Income" is defined in
				  the Act as income from transactions and activity in the regular course of the
				  taxpayer's trade or business, including income from tangible and intangible
				  property if the acquisition, management, or disposition of the property are
				  integral parts of the taxpayer's regular trade or business.
Nonbusiness income means all income other than business
				  income.
The classification of income by the labels occasionally used,
				  such as manufacturing income, compensation for services, sales income,
				  interest, dividends, rents, royalties, gains, operating income, non-operating
				  income, etc., is of no aid in determining whether income is business or
				  nonbusiness income. Income of any type or class and from any source is business
				  income if it arises from transactions and activity occurring in the regular
				  course of a trade or business. Accordingly, the critical element in determining
				  whether income is "business income" or "nonbusiness income" is the
				  identification of the transactions and activity which are the elements of a
				  particular trade or business.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-30 - Trade or business construed

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-20
Sec. 30.
Whether An Activity Is A "Trade or Business". For purposes of
				  determining whether income is derived from an activity which is in the regular
				  course of the taxpayer's trade or business, the expression "trade or business"
				  is not limited to the taxpayer's corporate charter purpose of its principal
				  business activity. A taxpayer may be in more than one trade or business and
				  derive business therefrom depending upon but not limited to some or all of the
				  following:
(1) The nature of the
				taxpayer's trade or business.
(2)
				The substantiality of the income derived from activities and transactions and
				the percentage that income is of the taxpayer's total income for a given tax
				period.
(3) The frequency, number,
				or continuity of the activities and transactions involved.
(4) The length of time the property producing
				income was owned by the taxpayer.
(5) The taxpayer's purpose in acquiring and
				holding the property producing income.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-31 - Definition of nonbusiness income

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-21
Sec. 31.
"Nonbusiness Income" Defined. Statutory definition of
				  "nonbusiness income" is used synonymously with the Act.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-32 - Definition of commercial domicile

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-22
Sec. 32.
"Commercial Domicile" Defined. The term "commercial domicile"
				  is defined in the Act as "the principal place from which the trade or business
				  of the taxpayer is directed or managed." Commercial domicile is not necessarily
				  in the state of incorporation. A corporation that is incorporated in a state,
				  but that has little or no activity in that state, has not established a
				  commercial domicile there.
Each corporation has one, and only one, commercial domicile.
				  Generally, it is where the executive authority of the business is concentrated.
				  However, if such authority is not centralized in one state, then the commercial
				  domicile is the place where the majority of the corporation's daily operational
				  decisions are made. There are several factors to be considered in determining
				  the commercial domicile of a corporation. These factors include, but are not
				  limited to:
(a) The relative amount of
				revenue from sales in the various states
(b) The relative value of fixed assets in the
				various states
(c) The principal
				place of work of a majority of the employees
(d) The place where the corporate records are
				kept
(e) The principal place of
				work of the corporate executives
(f) The place where policy and investment
				decisions are made
(g) The relative
				amount of decision-making power held by various executives and
				employees
(h) The place where
				payments are made on intangibles held by the corporation
(i) Whether income from intangibles held by
				the corporation is taxable elsewhere
(j) The office from which the Federal income
				tax return is filed
(k) Information
				contained in the corporation's annual and quarterly reports
(l) The place where the board of directors
				meets.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-33 - Definition of compensation

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-23
Sec. 33.
"Compensation" Defined. The term "compensation" is used
				  synonymously with the Act.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-34 - Definition of sales

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-23; IC 6-3-1-24; IC 6-3-2-2
Sec. 34.
"Sales" Defined. The term "sales" as used in the Act includes
				  all gross receipts which are not subject to allocation under IC 6-3-2-2(g)
				  -(k), and which are not the compensation of an employee for personal services
[See IC 6-3-1-23 ]
. Thus any business income of a corporate
				  taxpayer is considered to be from "sales" under this definition, regardless of
				  its actual source.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-35 - Definition of state

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-25
Sec. 35.
"State" Defined. The term "state" means any state of the
				  United States, the District of Columbia, the Commonwealth of Puerto Rico, any
				  territory or possession of the United States, and any foreign country or
				  political subdivision thereof.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-36 - Tax rates

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-1
Sec. 36.
Imposition of Tax. The rate of adjusted gross income tax for
				  individuals is 2%. The rate of adjusted gross income tax for corporations is
				  3%.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-37 - Allocation and apportionment of income of multistate corporations

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-3.5; IC 6-3-2-2
Sec. 37.
Division of Income in General. Corporations doing business
				  both within and without Indiana shall determine their income from Indiana
				  sources through the use of the allocation and apportionment provisions
				  contained in IC 6-3-2-2(b)-(n), which generally follow the Uniform Division of
				  Income For Tax Purposes Act. The multistate corporation must first determine
				  what part of its adjusted gross income constitutes business income [See
				  Regulation 6-3-1-20(010)
[ 45 IAC 3.1-1-29 ]
] and what part is
				  nonbusiness income. Business income is apportioned to this state based on the
				  3-factor (or other approved) formula. Nonbusiness income is allocated to
				  specific jurisdictions pursuant to paragraphs (g)-(k) of IC 6-3-2-2. Business
				  income apportioned to this state plus nonbusiness income allocated to Indiana
				  plus the modifications required by IC 6-3-1-3.5 (b) gives the total of the
				  taxpayer's net income which is subject to adjusted gross income tax. As used
				  above, the word "apportionment" refers to the division of income between states
				  by use of the 3-factor (or other approved) formula; "allocation" means the
				  assignment of income to a particular jurisdiction.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-38 - Definition of doing business

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 38.
Doing Business. For apportionment purposes, a taxpayer is
				  "doing business" in a state if it operates a business enterprise or activity in
				  such state including, but not limited to:
(1) Maintenance of an office or other place
				of business in the state
(2)
				Maintenance of an inventory of merchandise or material for sale distribution,
				or manufacture, or consigned goods
(3) Sale or distribution of merchandise to
				customers in the state directly from company-owned or operated vehicles where
				title to the goods passes at the time of sale or distribution
(4) Rendering services to customers in the
				state
(5) Ownership, rental or
				operation of a business or of property (real or personal) in the
				state
(6) Acceptance of orders in
				the state
(7) Any other act in such
				state which exceeds the mere solicitation of orders so as to give the state
				nexus under P.L. 86-272 to tax its net income.
As stated in Regulation 6-3-2-2(b)(010)
[ 45 IAC
				  3.1-1-37 ]
, corporations doing business in Indiana as well as other
				  states are subject to the alloc ation and apportionment provisions of IC
				  6-3-2-2 (b) -(n).
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-39 - Apportionment of business income by corporations

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 39.
Apportionment of Business Income. All corporations subject to
				  the allocation and apportionment provisions of IC 6-3-2-2(b) -(n) shall
				  apportion their business income by use of the 3-factor formula described below,
				  unless the taxpayer obtains a ruling which permits, or the Department requires,
				  the use of a different formula which more fairly reflects its income from
				  Indiana sources. See IC 6-3-2-2(1). The 3-factor formula is as follows:
Click here
				  to view Image
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-42 - Consistency among reports

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 42.
Consistency in Reporting. In filing returns with this state,
				  the taxpayer's valuation and treatment of property as business or nonbusiness
				  property must be consistent from year to year. It must also be consistent with
				  the taxpayer's treatment of such property for purposes of returns filed with
				  other states having apportionment statutes and regulations substantially
				  similar to Indiana's. If the taxpayer's Indiana returns are not consistent in
				  these respects, the returns should disclose the nature and extent of the
				  inconsistency.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-50 - Sales factor for apportionment; sales defined

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 50.
Sales Factor-Sales Made in General Business Operations.
				  "Sales" means all gross receipts of the taxpayer which are not subject to
				  allocation as nonbusiness income. The following are examples of "sales" in
				  various situations:
(1) If the
				taxpayer's business activity consists of manufacturing and selling or
				purchasing and reselling goods or products, "sales" includes all gross receipts
				from the sales of such goods or products (or other property which would be
				included as inventory of the taxpayer if on hand at the close of the tax year)
				held by the taxpayer primarily for sale in the ordinary course of business.
				Gross receipts for this purpose means gross sales price, less returns and
				allowances, and includes all interest income, service charges, carrying
				charges, or time-price differential charges incidental to such sales. Federal
				and state excise taxes (including sales taxes) shall be included as part of
				such receipts and shall be in the sales factor only if such taxes are included
				in the gross receipts or gross sales as reported on the taxpayer's Federal
				returns.
(2) If the taxpayer's
				business activity consists of providing services, such as the operation of an
				advertising agency, or the performance of equipment service contracts or
				research and development contracts, "sales" includes the gross receipts from
				the performance of such services including fees, commissions and similar
				items.
(3) If the taxpayer is
				working under a cost plus fixed fee contract, such as the operation of a
				government owned plant for a fee, gross receipts includes the entire reimbursed
				cost plus the fee.
(4) If the
				taxpayer is in the business of renting real or tangible personal property,
				"sales" includes the gross receipts from the rental, lease, or licensing the
				use of the property.
(5) If the
				taxpayer is in the business of selling, assigning, or licensing of intangible
				personal property such as patents and copyrights, "sales" includes the gross
				receipts therefrom.
In some cases, certain gross receipts should be disregarded
				  in determining the sales factor to effectuate an equitable apportionment. See
				  Regulation 6-3-2-2(l)(010)
[ 45 IAC 3.1-1-62 ]
. The sales
				  factor should be consistent in the manner described in Regulation
				  6-3-2-2(c)(030)
[ 45 IAC 3.1-1-42 ]
.
(010); filed Oct
				  15, 1979, 11:15 am:
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-51 - Denominator of sales factor

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2; IC 6-3-4-14
Sec. 51.
Denominator of Sales Factor. The denominator of the sales
				  factor includes all gross receipts from the taxpayer's sales, except as noted
				  in Regulation 6-3-2-2(l)(010)
[ 45 IAC 3.1-1-62 ]
. The
				  denominator shall not include sales made between members of an affiliated group
				  filing consolidated returns under IC 6-3-4-14.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-52 - Numerator of sales factor

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2; IC 6-3-4-14
Sec. 52.
Numerator of Sales Factor. The numerator of the sales factor
				  generally includes gross receipts from sales attributable to this state, and
				  includes all interest income, service charges, carrying charges, or time-price
				  differential charges incidental to such sales regardless of the place where the
				  accounting records are maintained or the location of the contract or other
				  evidence of indebtedness. The numerator shall not include sales between members
				  of an affiliated group filing consolidated returns under IC
				  6-3-4-14.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-54 - Definition of sales to United States government

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 54.
Sales to United States Government. Gross receipts from the
				  sales of tangible personal property to the United States Government are in this
				  state if the property is shipped from an office, store, warehouse, factory or
				  other place of storage in this state. For the purposes of this regulation
[ 45 IAC 3.1-1-54 ]
, only sales for which the United States
				  Government makes direct payment to the seller pursuant to the terms of the
				  contract constitute sales to the United States Government. Thus, as a general
				  rule, sales by a subcontractor to the prime contractor, the party to the
				  contract with the United States Government, do not constitute sales to the
				  United States Government. However, sales made to a prime contractor will be
				  considered sales to the United States Government where the prime contractor is
				  authorized to act as agent for the United States Government, and for this
				  reason only qualifies to purchase under Federal Supply Contracts entered into
				  between the taxpayer and the United States Government.
Examples:
(1) A
				taxpayer contracts with the General Services Administration to deliver X number
				of trucks which were paid for by the United States Government. The United
				States Government is the purchaser.
(2) The taxpayer as a subcontractor to a
				prime contractor with the National Aeronautics and Space Administration
				contracts to build a component of a rocket for $1,000,000. The sale of the
				subcontractor to the prime contractor is not a sale to the United States
				Government. When the United States Government is the purchaser of property
				which remains in the possession of the taxpayer in this state for further
				processing under another contract, or for other reasons, "shipment" is deemed
				to be made at the time of acceptance by the United States Government.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-56 - Allocation of nonbusiness income

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 56.
Allocation of Nonbusiness Income. Rents, royalties, capital
				  gains, interest and dividends when considered nonbusiness income are allocated
				  to specific jurisdictions as outlined in Regulations 6-3-2-2(h) through
				  6-3-2-2(k)
[ 45 IAC 3.1-1-57-45 IAC 3.1-1-61 ]
. Such income
				  and the deductions connected therewith are not taken into consideration in
				  computing the taxpayer's apportionment formula. W hen the taxpayer has
				  deductions applicable to both business and nonbusiness income, such deductions
				  mus t be prorated to determine what part is subject to
				  allocation.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-57 - Rents and royalties from real property and tangible personal property as nonbusiness income

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 57.
Rents and Royalties from Real and Tangible Personal Property.
				  Rental income from real and tangible property is nonbusiness income if the
				  property with respect to which the rental income was received is not or could
				  not be used in the taxpayer's trade or business or is not incidental thereto.
Examples:
(1) The
				taxpayer operates a multistate car rental business. The income from car rentals
				is business income since such activity is the taxpayer's principal
				business.
(2) The taxpayer is
				engaged in the heavy construction business in which it uses equipment such as
				cranes, tractors, and earthmoving vehicles. The taxpayer makes short-term
				leases of the equipment when particular pieces of equipment are not needed on
				any particular project. The rental income is business income.
(3) The taxpayer operates a multistate chain
				of men's clothing stores. The taxpayer purchases a five-story office building
				for use in connection with its trade or business. It used the street floor as
				one of its retail stores and the second and third floors for its general
				corporate headquarters. The remaining two floors are incidental to the
				operation of the taxpayer's trade or business. The rental income is business
				income.
(4) The taxpayer, who
				operates a multistate chain of grocery stores, purchases as an investment an
				office building in another state with surplus funds and leases the entire
				building to others. The net rental income is nonbusiness income.
(5) The taxpayer constructed a plant in 1930
				as a part of its multistate manufacturing business. On June 30, of the tax
				year, the plant was closed and put up for sale. The plant was rented from July
				1 of that year, until sold in November of the following year. Rental income is
				business income.
Net rents and royalties from real property, to the extent
				  they constitute nonbusiness income, are allocated to the state where the
				  property is located. Nonbusiness income from tangible personal property is
				  allocated to Indiana to the extent the property is utilized in the state, or to
				  Indiana in its entirety if the taxpayer's commercial domicile is in this state
				  and the taxpayer is not organized under the laws of or taxable in the state in
				  which the property is utilized.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-58 - Allocation of capital gains and losses

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 58.
Capital Gains and Losses. Capital gains and losses from the
				  sale of real property formerly used to produce nonbusiness income are allocated
				  to the state where the property is located. Capital gains and losses from the
				  sale of nonbusiness tangible personal property are allocated to Indiana if the
				  property had a situs in the state when sold, or if the taxpayer's commercial
				  domicile is in Indiana and it is not taxable in the state in which the property
				  had a situs. Capital gains and losses from sales of nonbusiness intangible
				  property are allocated to Indiana if the taxpayer's commercial domicile is in
				  this state.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-59 - Interest as nonbusiness income

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 59.
Interest. Interest income is nonbusiness income if the
				  intangible with respect to which the interest was received did not arise out of
				  or was not created in the regular course of the taxpayer's trade or business
				  operations or where the purpose for acquiring and holding the intangible was
				  not related to or incidental to such trade or business operations. The term
				  "interest" as used in this regulation
[ 45 IAC 3.1-1-59 ]
includes service charges, time-price differentials, and all other
				  charges for the use of money.
Examples:
(1) The
				taxpayer operates a multistate chain of department stores, selling for cash and
				on credit. Service charges, interest, or time-price differentials and the like
				are received with respect to installment sales and revolving charge accounts.
				These amounts are business income.
(2) The taxpayer conducts a multistate
				manufacturing business. During the year the taxpayer receives a Federal income
				tax refund and collects a judgment against a debtor of the business. Both the
				tax refund and the judgment bore interest. The interest income is business
				income.
(3) The taxpayer is engaged
				in a multistate manufacturing and wholesaling business. In connection with that
				business, the taxpayer maintains special accounts to cover such items as
				Workmen's Compensation claims, rain and storm damage, machinery replacement,
				etc. The monies in those accounts are invested as interest. Similarly, the
				taxpayer temporarily invests funds intended for payment of Federal, State and
				local tax obligations. The interest income is business income.
(4) The taxpayer is engaged in a multistate
				money order and traveler's checks business. In addition to the fees received in
				connection with the sale of the money orders and traveler's checks, the
				taxpayer earns interest income by the investment of the funds pending their
				redemption. The interest income is business income.
(5) The taxpayer is engaged in a multistate
				manufacturing and selling business. The taxpayer usually has working capital
				and extra cash totaling $200,000 which it regularly invests in short-term
				interest bearing securities. The interest income is business income.
(6) In January the taxpayer sold all stock of
				a subsidiary for $20,000,000. The funds are placed in a separate
				interest-bearing account pending a decision by management as to how the funds
				are to be utilized. The interest income is business income.
(7) The taxpayer, a multistate manufacturer,
				purchases and maintains a portfolio of interest-bearing securities for
				investment purposes. The interest from such securities is nonbusiness income.
Nonbusiness interest is allocated to Indiana if the
				  taxpayer's commercial domicile is in this state.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-60 - Dividends as business income

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 60.
Dividends. Dividends are nonbusiness income if the stock with
				  respect to which the dividends are received did not arise out of or was not
				  acquired in the regular course of the taxpayer's trade or business operations
				  or where the purpose for acquiring and holding the stock is not related to or
				  incidental to such trade or business operation.
Examples:
(1) The
				taxpayer operates a multistate chain of stock brokerage houses. During the year
				the taxpayer receives dividends on stock it owns. The dividends are business
				income.
(2) The taxpayer is engaged
				in a multistate manufacturing and wholesaling business. In connection with that
				business the taxpayer maintains special accounts to cover such items as
				Workmen's Compensation claims, etc. A portion of the monies in those accounts
				is invested in interest-bearing bonds. The remainder is invested in various
				common stocks listed on national stock exchanges. Both the interest income and
				any dividends are business income.
(3) The taxpayer and several unrelated
				corporations own all of the stock of a corporation whose business operations
				consist solely of acquiring and processing materials for delivery to the
				corporate owners. The taxpayer acquired the stock in order to obtain a source
				of supply and materials used in its manufacturing business. The dividends are
				business income.
(4) The taxpayer
				is engaged in a multistate heavy construction business. Much of its
				construction work is performed for agencies of the Federal government and
				various state governments. Under state and Federal laws applicable to contracts
				for these agencies, a contractor must have adequate bonding capacity, as
				measured by the ratio of its current assets (cash and marketable securities) to
				current liabilities. In order to maintain an adequate bonding capacity the
				taxpayer holds various stocks and interest-bearing securities. Both the
				interest income and any dividends received are business income.
(5) The taxpayer receives dividends from the
				stock of its subsidiary or affiliate which acts as the marketing agency for
				products manufactured by the taxpayer. The dividends are business
				income.
(6) The taxpayer is engaged
				in a multistate glass manufacturing business. It also holds a portfolio of
				stock for investment purposes, the acquisition and holding of which are
				unrelated to the manufacturing business. The dividends received are nonbusiness
				income.
Nonbusiness dividends are allocated to Indiana if the
				  taxpayer's commercial domicile is in this state.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-61 - Patent and copyright royalties as nonbusiness income

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 61.
Patent and Copyright Royalties. Patent and copyright
				  royalties are nonbusiness income if the patent or copyright with respect to
				  which the royalties were received did not arise out of or was not created in
				  the regular course of the taxpayer's trade or business operations or where the
				  purpose for acquiring and holding the patent or copyright is not related to or
				  incidental to such trade or business operations.
Examples:
(1) The
				taxpayer is engaged in the multistate business of manufacturing and selling
				industrial chemicals. In connection with that business the taxpayer obtained
				patents on certain of its products. The taxpayer licensed the production of
				chemicals in foreign countries, in return for which the taxpayer receives
				royalties. The royalties received by the taxpayer are business
				income.
(2) The taxpayer is engaged
				in the music publishing business and holds copyrights on numerous songs. The
				taxpayer acquired the assets of a smaller publishing company, including music
				copyrights. Their acquired copyrights are therefore used by the taxpayer in its
				business. Any royalties received on these copyrights are business
				income.
(3) Same as last example,
				except that the acquired company also held the patent on a type of phonograph
				needle. The taxpayer does not manufacture or sell phonographs or phonograph
				equipment. Any royalties received on the patent would be nonbusiness income.
Nonbusiness patent and copyright royalties are allocated to
				  Indiana to the extent used in the state, or, if the taxpayer's commercial
				  domicile is in Indiana, to the extent used in states in which the taxpayer is
				  not taxable.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-62 - Special cases of allocation and apportionment

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2
Sec. 62.
Special Formulas for Division of Income. All corporations
				  doing business in more than one state shall use the allocation and
				  apportionment provisions described in Regulations 6-3-2-2(b)-(k)
[ 45
				  IAC 3.1-1-37-45 IAC 3.1-1-61 ]
unless such provisions do not result in
				  a division of income which fairly represents the taxpayer's income from Indiana
				  sources. In such case the taxpayer must request in writing or the Department
				  may require the use of a more equitable formula for determining Indiana income.
				  However, the Department will depart from use of the standard formula only if
				  the use of such formula works a hardship or injustice upon the taxpayer,
				  results in an arbitrary division of income, or in other respects does not
				  fairly attribute income to this state or other states. It is anticipated that
				  these situations will arise only in limited and unusual circumstances (which
				  ordinarily will be unique and nonrecurring) when the standard apportionment
				  provisions produce incongruous results.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-64 - Definition of taxable in another state

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-1-25; IC 6-3-2-2
Sec. 64.
"Taxable in Another State" Defined. A corporation is "taxable
				  in another state" under the Act when such state has jurisdiction to subject it
				  to a net income tax. This test applies if the taxpayer's business activities
				  are sufficient to give the state jurisdiction to impose a net income tax under
				  the Constitution and statutes of the United States. Jurisdiction to tax is not
				  present where the state is prohibited from imposing the tax by reason of the
				  provision of Public Law 86-272, 15 U.S.C.A. §381 - 385. In the case of any
				  "State," as defined in IC 6-3-1-25, other than a state of the United States or
				  political subdivision of such state, the determination of whether such "state"
				  has jurisdiction to subject the taxpayer to a net income tax shall be made by
				  application of the jurisdictional standards applicable to that state of the
				  United States. If jurisdiction to tax is otherwise present, such "state" is not
				  considered as being without jurisdiction to tax by reason of the provisions of
				  a treaty between that state and the United States.
Example:
Corporation X is actively engaged in manufacturing farm
				  equipment in State A and foreign country B. Both State A and foreign country B
				  impose a net income tax but foreign country B exempts corporations engaged in
				  manufacturing farm equipment. Corporation X is subject to the jurisdiction of
				  State A and foreign country B.
Taxpayers are not subject to throwback on sales into states
				  in which they are taxable under this regulation
[ 45 IAC 3.1-1-64
				  ]
. See Regulation 6-3-2-2(e)(040)
[ 45 IAC 3.1-1-53
				  ]
.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-65 - Exempt organizations and income; report

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2.8
Sec. 65.
Exempt Organizations. Organizations exempt from Federal
				  income tax under IRC §501 (a) are exempt from adjusted gross income tax.
				  However, this exemption extends only to income of such organizations which is
				  not taxable for Federal tax purposes. Thus organizations subject to tax under
				  IRC §511 on their unrelated business income are also subject to adjusted
				  gross income tax on such income.
Exempt organizations are required to file an annual report by
				  the fifteenth day of the fifth month following the close of the tax year. Those
				  organizations having unrelated business income must report such income by
				  filing an annual income tax return no later than the time the annual report is
				  due. The organization must make quarterly payments of adjusted gross income tax
				  and file quarterly income tax returns if its adjusted gross income tax
				  liability exceeds its gross income tax liability by $1000. See Regulation
				  6-3-4-4 (020)
[ 45 IAC 3.1-1-92 ]
.
For the supplemental net income tax liability of exempt
				  organizations having unrelated business income, see Regulation 6-3-2-3.1 (010)
[ 45 IAC 3.1-1-68 ]
.
Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 3.1 - ADJUSTED GROSS INCOME TAX › Rule 1 - State Adjusted Gross Income Tax › Section 1-66 - Subchapter S corporations and shareholders

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-3-2-2.8; IC 6-3-4-13
Sec. 66.
Subchapter S Corporations. Corporations electing Subchapter S
				  status under Internal Revenue Code §1372 and which comply with the
				  withholding requirements of IC 6-3-4-13 are exempt from adjusted gross and
				  supplemental net income tax on all income except capital gains subject to tax
				  under Internal Revenue Code §1378. This exemption is effective until the
				  corporation's shareholders terminate the election with the Internal Revenue
				  Service or until the corporation engages in transactions which disqualify it
				  from Subchapter S status. A complete or partial corporate liquidation or the
				  intent to dissolve will not in itself terminate the election.
Subchapter S corporation shareholders are taxed on their
				  distributive shares of income at the individual income tax rate. The character
				  of the income (as capital gains or ordinary income) also passes through to the
				  shareholders.
Although Subchapter S corporations are generally not subject
				  to adjusted gross income tax, they are subject to use tax and intangibles tax,
				  and must report and pay such tax at the time the annual return is filed.
				  Subchapter S corporations must also withhold adjusted gross income tax on any
				  nonresident shareholder's share of corporate income. See Regulation
				  6-3-4-13(010)
[ 45 IAC 3.1-1-109 ]
et seq.
For filing requirements of Subchapter S corporations, see
				  Regulation 6-3-2-3(b)(020)
[ 45 IAC 3.1-1-67
				  ]
.