Current through September 18, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-2.5
Sec. 16.
(a) The
state gross retail tax shall not apply to sales of nonreturnable wrapping
materials and empty containers to be used by the purchaser as enclosures or
containers for selling contents to be added, and returnable containers
containing contents sold in a sale constituting selling at retail and
returnable containers sold empty for refilling.
(b) In general the gross proceeds from the
sale of tangible personal property in a transaction of a retail merchant
constituting selling at retail are taxable. This regulation [45 IAC
2.2] provided an exemption for wrapping materials and
containers.
(c) General rule. The
receipt from a sale by a retail merchant of the following types of tangible
personal property are exempt from state gross retail tax:
(1) Nonreturnable containers and wrapping
materials including steel strap and shipping pallets to be used by the
purchaser as enclosures for selling tangible personal property.
(2) Deposits for returnable containers
received as an incident to a transaction of a retail merchant constituting
selling at retail.
(3) Returnable
containers sold empty for refilling.
(d) Application of general rule.
(1) Nonreturnable wrapping material and empty
containers. To qualify for this exemption, nonreturnable wrapping materials and
empty containers must be used by the purchaser in the following way:
(A) The purchaser must add contents to the
containers purchased; and
(B) The
purchaser must sell the contents added.
(2) Returnable containers sold at retail with
contents. To qualify for this exemption, the returnable containers must be:
(A) Sold in a taxable transaction of a retail
merchant constituting selling at retail; and
(B) Billed as a separate charge by the retail
merchant to his customer. If there is a separate charge for such containers,
the sale of the container is exempt from tax under this regulation [45
IAC 2.2].
(3)
Returnable containers sold empty. To qualify for this exemption the returnable
container must be resold with the purpose of refilling. The sale of returnable
containers to the original or first user thereof is taxable.
(e) Definitions.
(1) Returnable containers. As used in this
regulation [45 IAC 2.2], the term returnable container means
containers customarily returned by the buyer of the contents for reuse as
containers.
(2) Nonreturnable
containers. As used in this regulation [45 IAC 2.2], the term
"nonreturnable containers" means all containers which are not returnable
containers.
