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A personal property tax is assessed on all vehicles that are operated intrastate in Indiana and are licensed or based in the state. Personal property tax is calculated on a mileage basis for interstate carriers domiciled in the state of Indiana. Payment of tax is done in the year after the assessment year. In a lessee/lessor situation, the State Tax Board provides for joint tax liability.
Indiana also assesses an annual license excise tax that replaces the ad valorem property tax or “rolling stock” tax. In order to obtain new license registration, the tax must be paid at the time of the IRP or intrastate registration renewal. The tax rates due are determined by a statutorily mandated formula.
The Indiana state sales tax applies to retail sales, including the rental and leasing of tangible personal property. A use tax at the same rate of the sale price is imposed for storage, use or other consumption in Indiana.
Vehicles purchased in Indiana but which will be registered in another state are exempt from the Indiana sales tax. New vehicles purchased outside the state and then brought in for titling and registration are subject to the state use tax.
Cargo trailers (vehicles with a gross weight of at least 2,200 pounds without motive power, designed for carrying property, and drawn by a motor vehicle) purchased in Indiana and registered in another state may be exempt from sales tax if the other state provides a similar sales tax exemption for Indiana residents making such a purchase in the other state.
Indiana has complicated exemptions from tax for the “sale, storage, use or consumption instate of tangible personal property or services used or consumed directly in public transportation of persons or property.” What is and isn't taxable under this exemption is quite complex; carriers should check with the Department of Revenue for complete provisions.
If a carrier is eligible for the exemption, an Indiana General Exemption Certificate must be issued to any suppliers: Form ST-105. Before that certificate can be used, the carrier must be properly registered with the Department of Revenue.
The State of Indiana taxes the gross income/adjusted gross income/supplemental net income of any corporation (whether resident or non-resident) doing business in the state. However, there is a specific exemption for charges for the transportation of property by truck if an initial, intermediate or final link in an interstate movement occurs in the State of Indiana. Entirely intrastate truck transportation would be subject to the Indiana Gross Income Tax.