Indiana Sale Tax Purchases Matrix
Sales tax paid by IU on purchases of goods and services.
Example: Certain situations are tax exempt based on IU's Tax Status in Indiana.
In order for the university to receive exemption from Indiana sales tax, the purchaser must provide the Indiana University ST-105 to the seller and the purchase must be:
- invoiced directly to Indiana University;
- paid for via University funds (e.g. –wire, check, P-Card);
- and for a governmental function and not a proprietary activity
|| Exempt with ST-105
||Explanation (See definitions)
|Lodging||X||X||Follow 1,2 & 3 above|
|Meeting room rentals||X||X||Follow 1,2 & 3 above|
IB 7, 11, 29, 68
|Prepared and catered food||X||X||Follow 1,2 & 3 above|
45 IAC 2.2-4-2(a)
|Purchase with no transfer of tangible personal property||X|
|Purchase for services when bundled with tangible personal property||?||Not taxable when the tangible personal property is inconsequential (< 10%)|
Tangible Personal Property
IB 4, 10, 68
|Purchases for resale||X||X||Follow 1,2 & 3 above|
|Items used to perform governmental function||X||X|
|Items used in generation of income for a proprietary activity||X|
|Items of personal benefit (ex. prizes or gift for staff)||X|
|Taxable purchase is bundled with exempt sale||?||
Not taxable when the taxable sales are inconsequential
Bundled Transaction: Is a retail sale of two or more products, (except real property and services to real property) that are:
- identifiable; and
- sold for one non-itemized price
1. Teaching and instruction that involves educating citizens, businesses, and institutions of the state through the use of conventional and electronic classroom facilities to provide:
- Courses that grant credit toward the attainment of an undergraduate or a graduate degree;
- Post-graduate practical training and instruction in academic disciplines offered by state universities;
- Continuing education courses (non-credit);
- Professional development activities; and
- Educational conferences, seminars, and training meetings.
2. Research that includes expanding the knowledge base of the citizens, businesses, and institutions of the state of Indiana through scientific inquiry and the dissemination of scholarly information. Activities associated with the fulfillment of this function include participation in laboratory and field research and the development and distribution of educational or research-related tools or materials that are published, copyrighted, or patented by a state college or university.
3. Public service that includes activities that are consistent with other governmental and educational functions serviced by the state of Indiana and other charitable, nonprofit purposes for which the university is granted exemption from Indiana adjusted gross income tax and federal income tax.
4. Other university activities that are customarily undertaken in the conduct of governmental functions, including:
- Sponsoring continuing education activities;
- Operating the county extension service for the state;
- Providing public access to intercollegiate athletic functions;
- Providing public access to recreational and physical fitness facilities;
- Providing public access to musical, theatrical, and artistic performances;
- Providing access to informational and cultural events and productions; and
- Providing recruiting and development activities including recruiting of students and faculty.
Proprietary activity: Is an activity that generates revenues for state colleges or universities from the
general public and that is both customarily associated with the conduct of a private business enterprise
and that is outside the scope of activities of governmental and educational functions as defined for state
colleges or universities.
State agency: Is an authority, a board, a branch, a commission, a committee, a department, a division, or
another instrumentality of the executive, legislative, or judicial departments of Indiana state government.
Activities that serve the public’s general health, welfare and/or safety are considered to be governmental
Student: Is an individual enrolled or registered in courses that grant credit toward the attainment of an
undergraduate or graduate degree or who is enrolled in an elementary or a secondary school. The term
student also includes any individual enrolled in remedial courses that are certified by the college or
Student Function: An event related to recruitment of students within Indiana, experiential learning for
students, or primarily a student function put on for the benefit of students. Examples include: student
commencement, student orientation, or campus student life event.
“Tangible personal property”: Is personal property that can be seen, weighed, measured, felt, or touched or that is in any other manner perceptible to the senses. The term includes electricity, water, gas, steam, and prewritten computer software.
- The University, through IU Conferences is hosting a 3-day conference in Indianapolis. The university rents meeting rooms in a hotel to conduct its educational conference. The rental of the meeting rooms will be exempt from the sales tax and local innkeepers’ tax if applicable due to our governmental function exemption. Sales of meals during the conference are taxable because the meals are provided for the convenience of the attendees. Such meals are taxable even when served in conjunction with a meeting which is furthering the university’s exempt purpose. At the same conference, the organization reserves and pays for, out of its IU funds, the cost of four hotel rooms for lodging. The lodgings provided for the attendee, or speakers are not exempt - unless the individuals are employees of Indiana University - from the sales tax or the innkeepers’ tax if applicable. The rental of hotel rooms is a private benefit for the individual and does not serve the purpose for which the organization exists.
- A department holds a catered educational seminar with prepared food. All prepared food is subject to tax unless the event is for recruitment of students within Indiana, is considered a learning experience for students, or is primarily a student function. Charges for labor to serve food or beverages furnished, prepared, or served for consumption at a location are not subject to sales tax. Also, the rental of linens and equipment in conjunction with the meal are exempt because the event falls within the University’s mission. Finally, the rental of the rooms will be exempt from sales tax and local innkeepers’ tax if applicable.
- Question: A Science Olympiad is held on campus for local non-IU students in grades 4-12. Would the food provided to the students not be taxed? Should the food provided for IU student judges not be taxed, while food provided for non-student judges be taxed? Does equipment rental from a local rental company need to be taxed? If ordering boxed lunches for both IU student and non-student judges, does the order need to be separated or allocated by percent in order to tax the non-student group or are both non-taxable? Would the taxability of the event be based on the purpose of the event and not who is consuming the food? Answer: The taxability of food for the event is based wholly on its purpose. If the event is an IU sponsored one and the purpose of the event is student recruitment then the exemption applies. All other considerations of breaking out IU/non-IU judges for taxability are unnecessary.
- Question: A department rents a meeting room for a staff retirement function. Food is included. What is taxable? Answer: The room rental would be subject to tax because the function is not teaching research or public service. The food would also be taxable as this is not a student function. Tax should be paid to outside vendors and when purchased or rented from an IU department in the business of catering and renting space.