20110323-IR-045110147NRA Information Bulletin #67 Sales Tax March 2011 (Replaces Bulletin #67 Dated July 2005)

DEPARTMENT OF STATE REVENUE

Information Bulletin #67 Sales Tax March 2011 (Replaces Bulletin #67 Dated July 2005)

DISCLAIMER: Informational bulletins are intended to provide nontechnical assistance to the general public. Every attempt is made to provide information that is consistent with the appropriate statutes, rules and court decisions. Any information that is not consistent with the law, regulations, or court decisions is not binding on either the Department or the taxpayer. Therefore, the information provided herein should serve only as a foundation for further investigation and study of the current law and procedures related to the subject matter covered herein.

SUBJECT: Exemption Available to Professional Motor Racing Teams

REFERENCES: IC 6-2.5-5-37

INTRODUCTION

Effective April 1, 2011, transactions involving the purchase, lease, or operation of a qualified part of a motor racing vehicle, described below, by professional racing teams are exempt from Indiana sales and use tax. This includes replacement and rebuilding and component parts of a racing vehicle. Tires and accessories are not eligible for the sales and use tax exemption if used in Indiana.

EXEMPTION AVAILABLE TO PROFESSIONAL RACING TEAMS

Chassis; engines; and their component parts, excluding tires and accessories, constitute a complete motor racing vehicle. Therefore, with the exception of tires and accessories, a motor racing vehicle purchased by a professional racing team is exempt from Indiana sales and use tax. Tires and accessories purchased by professional racing teams for any purpose are subject to Indiana sales and use tax.

For purposes of the exemption found at IC 6-2.5-5-37, the following terms have the following meanings:

Professional Racing Teams are those racing operations qualified to file under the Internal Revenue Code as a for-profit business. To qualify as a trade or business under IRS regulations, a taxpayer must be involved in the activity with continuity and regularity, and the taxpayer's primary purpose for engaging in the activity must be for income or profit. A sporadic activity, a hobby, or an amusement diversion does not qualify.

Engines are engines of vehicles intended for use in competition by the professional racing teams that purchase, lease, or operate the engines.

Chassis are chassis of vehicles intended for use in competition by the professional racing teams that purchase, lease, or operate the chassis. For purposes of this exemption, the term "chassis" does not include tires or accessories but does include paint and decals.

Tires are tires of vehicles intended for use in competition by the professional racing teams that purchase, lease, or operate the tires. Tires include tubes and exclude wheels.

Accessories include any and all instrumentation and telemetry equipment that is not permanently attached to the racing vehicle. Accessories also include consumables and all elements of the motor vehicle driver's protective clothing and headgear. Accessories do not include instrumentation and telemetry equipment permanently affixed to the racing vehicle.

An Indiana-based professional racing team wishing to purchase items exempt pursuant to this exemption must claim the professional motor racing vehicle exemption on Form ST-105 General Sales Tax Exemption Certificate. The Form ST-105 is available online at http://www.in.gov/dor/3504.htm

A race team not located (based) in Indiana that is already registered in its home state may issue a Form ST-105 by using its home state business tax identification number.

_________________

John Eckart

Commissioner

Posted: 03/23/2011 by Legislative Services Agency

DIN: 20110323-IR-045110147NRA

Composed: Nov 01,2016 1:06:37AM EDT

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