SALT Report 2032 – The Indiana State Legislature introduced a bill that contains affiliate nexus and click-through nexus provisions and amends the definition of “a retail merchant engaged in Indiana” for sales and use tax purposes. The provisions of SB 309 provide that a retail merchant engaged in business in Indiana would include any merchant who:
- Makes retail transactions in which a person acquires personal property or taxable services for use, storage, or consumption in Indiana, and
- Enters into an arrangement with any person, other than a common carrier, to facilitate the merchant’s delivery of property to Indiana customers by allowing those customers to pick up property that is sold by the merchant at a place of business location in Indiana
The bill also states that a retail merchant may be required to collect and remit sales or use taxes if an affiliate of the merchant conducts activities in Indiana that are associated with the merchant’s ability to establish and maintain a market in the state. It also provides that a merchant is presumed to be engaged in business in Indiana if an affiliate of the merchant has substantial nexus in Indiana and meets the following requirements:
- The merchant sells a line of products similar to a line of products sold by the affiliate, and the merchant does so under a business name that is the same as or is similar to the affiliate’s business name,
- The affiliate uses its Indiana employees or its Indiana facilities to advertise, promote, or facilitate sales by the merchant to customers, or
- The affiliate uses trademarks, service marks, or trade names in Indiana that are the same as or substantially similar to those used by the merchant
Finally, the bill provides that a merchant is presumed to be engaged in business in Indiana if the merchant enters into an agreement with an Indiana resident who directly or indirectly refers potential customers to the merchant and the cumulative gross receipts resulting from those sales are greater than $10,000 during the preceding 12 months. This presumption may be rebutted.
The provisions in this bill will apply to transactions that occur after June 30, 2013.
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