SB 397 Summary

• Expands the definition of "retail merchant engaged in business in Indiana" to include merchants who allow customers to pick up purchases at third-party locations in Indiana or who have affiliates with substantial nexus in the state.

• Requires remote sellers to collect and remit sales and use taxes only if they have a physical presence in Indiana or their out-of-state activities are significantly associated with establishing and maintaining a market in Indiana.

• Creates a presumption that a retail merchant is engaged in Indiana business if affiliated entities have substantial nexus in Indiana and certain conditions are met (similar product lines, use of Indiana employees/facilities for promotion, or similar trademarks), though this presumption may be rebutted.

• Establishes a presumption that merchants with affiliate marketing agreements generating over $10,000 in cumulative gross receipts from Indiana referrals in the preceding 12 months are engaged in Indiana business, with the ability to rebut through sworn statements.

• Forgives unpaid use tax liabilities for tangible personal property acquired before January 1, 2012, and requires the budget agency to monitor federal legislation requiring remote sellers to collect use tax.