New heavy equipment excise tax in Indiana

Published April 2, 2018

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Indiana has enacted a new excise tax on the rental of heavy equipment. The rental excise tax is 2.25% of the gross retail rental income. The renter is liable for the tax and it will be collected by the retail merchant.

Heavy rental equipment is defined as property:

  • classified under 532412 of the North American Industry Classification System Manual in effect on January 1, 2018;
  • owned by a retail merchant in the business of renting heavy equipment, including any attachments;
  • not intended to be permanently affixed to any real property; and
  • not subject to registration for use on a public highway.

Equipment this new tax would apply to includes the following types:

  • Bulldozer rental or leasing without operator
  • Construction machinery and equipment rental or leasing without operator
  • Crane rental or leasing without operator
  • Earth moving equipment rental or leasing without operator
  • Forestry machinery and equipment rental or leasing
  • Heavy construction equipment rental without operator
  • Logging equipment rental or leasing without operator
  • Oil field machinery and equipment rental or leasing
  • Oil well drilling machinery and equipment rental or leasing
  • Welding equipment rental or leasing
  • Well drilling machinery and equipment rental or leasing

However, the term does not include equipment rented for mining purposes or heavy equipment that is eligible for a property tax abatement deduction.

Lastly, heavy rental equipment is excluded from personal property tax assessment. Also keep in mind that rental with an operator is a service, not the rental of tangible personal property, and thus would be a non-taxable service.

For more information, please contact Partner Mike Grim, JD via e-mail or phone (502.882.4510).

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