Indiana – Sales of Synthetic Drugs May Result in Merchant’s Certificate or Exemption Certificate Revocation

SALT Report 2477 – Indiana has enacted legislation that amends the definition of “good cause” to include sales of synthetic drugs. Under the new provisions retailers will have their retail merchant’s certificate revoked for good cause, if they are involved in:

  • The sale or solicitation of a sale involving a synthetic drug or a synthetic drug lookalike substance, or
  • The retailer fails to collect sales tax on a sale involving a synthetic drug or a synthetic drug lookalike substance

If the Department of Revenue gives a retailer a notice of intent to revoke a certificate for either one of the above reasons, the Department must hold a public hearing to determine whether good cause exists. If the Department determines, by a preponderance of the evidence, that a person has committed one of the above violations, the Department is required to:

  • Suspend the person’s registered retail merchant certificate for the place of business for one year if the violation results in a criminal conviction, or
  • Suspend the person’s registered retail merchant certificate for the place of business for six months if the violation results in an infraction

Additionally, the legislation authorizes a court to order the Department of Revenue to suspend a supplier’s registered retail merchant certificate if the court finds that the person committed a deceptive act involving the sale or solicited sale of a synthetic drug or a synthetic drug lookalike substance.

Finally, if the violations are found to constitute good cause, the Department has the authority to revoke the person’s manufacturer’s or wholesaler’s exemption certificate or the exempt organization’s exemption certificate.

The provisions in this Bill are effective May 7, 2013.

For Further Information

Indiana State Legislature – Senate Bill 536, Laws 2013