fbpx

< Back to Thought Leadership

New Indiana Heavy Equipment Excise Tax for 2019

Does your business engage in the rental of heavy equipment? If so, there is a new excise tax enacted in Indiana which may affect your business.

Effective January 1, 2019, Indiana implemented an excise tax imposed upon the rental of heavy rental equipment from a retail merchant located in Indiana.

What is the Indiana Heavy Equipment Excise Tax?

As stated in §6-6-15-3, the excise tax will be 2.25% of the gross retail income received by the retail merchant for the rental. The liability for this tax will fall upon the person renting the equipment as part of the transaction and must be separately stated on the invoice to customers. Tax collected will then be remitted to the state of Indiana by the retail merchant.

What qualifies as “heavy rental equipment”?

§6-6-15-2 defines “heavy rental equipment” as personal property (including attachments used in conjunction with the personal property) that is owned by a person or business that is classified under the NAICS code of 532412 and is a retail merchant in the business of renting heavy equipment. However, this does not include heavy rental equipment that is rented for mining purposes or any equipment that is eligible for a property tax abatement.

Under these new Indiana statutes, the term “rental” does not apply to any transfer of possession or control of heavy rental equipment that is in excess of 365 days, or for a period with no specified end date. Those transactions are not subject to the excise tax.

Any transactions involving the United States government, the state of Indiana, a political subdivision, or an agency of the previously mentioned entities are exempt from the tax imposed by these statutes.

Property Taxes

Equipment that qualifies as “heavy rental equipment” will be exempt from Indiana Property Tax for any assessment dates after December 31, 2018. §6-1.1-2-7 specifically lists property subject to the heavy equipment rental excise tax as exempt property.

If you have questions about how this tax affects your business, please contact your local Blue & Co. tax advisor.

Big Changes Coming to Individual 2018 Tax Returns; and Not Just the Look of the Forms!

The Tax Cuts and Jobs Act (TCJA) was the biggest tax overhaul we have experienced since 1986.  While much of the publicity was around simplifying the code and the forms for individuals, you will notice some major changes in how your tax liability is calculated this year. Let’s discuss three of the big changes (not […]

Learn More
LLC members & self-employment taxes

LLC Members & Self-Employment Taxes

When it comes to self-employment taxes, an LLC member is not necessarily in the same boat as a limited partner. The IRS is cracking down on LLC members who underreport their SE income by erroneously claiming they are similar to a limited partner of a Partnership. Facts and circumstances play a key role in making […]

Learn More
The #1 issue facing construction companies (still) (1)

The #1 Issue (Still) Facing Construction Companies

Workforce development continues to be a major issue facing the construction industry. The fact that it has remained a top issue for the past several years shows it is not going away, and solutions are slow to come. When we talk to construction company clients and ask them how it’s going, many of them say, […]

Learn More