(a)As used in this section, "research and
development activities" includes design, refinement, and testing of
prototypes of new or improved commercial products before sales have
begun for the purpose of determining facts, theories, or principles, or
for the purpose of increasing scientific knowledge that may lead to new
or enhanced products. The term does not include any of the following:
(5)Advertising or promotions.
(6)Research in connection with nontechnical activities, including
literary, historical, social sciences, economics, humanities,
psychology, or similar projects.
(7)Testing for purposes of quality control.
(8)Market and sales research.
(9)Product market testing, including product
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(a) As used in this section, "research and
development activities" includes design, refinement, and testing of
prototypes of new or improved commercial products before sales have
begun for the purpose of determining facts, theories, or principles, or
for the purpose of increasing scientific knowledge that may lead to new
or enhanced products. The term does not include any of the following:
(1) Efficiency surveys.
(2) Management studies.
(3) Consumer surveys.
(4) Economic surveys.
(5) Advertising or promotions.
(6) Research in connection with nontechnical activities, including
literary, historical, social sciences, economics, humanities,
psychology, or similar projects.
(7) Testing for purposes of quality control.
(8) Market and sales research.
(9) Product market testing, including product testing by product
consumers or through consumer surveys for evaluation of
consumer product performance or consumer product usability.
(10) The acquisition, investigation, or evaluation of another's
patent, model, process, or product for the purpose of investigating
or evaluating the value of a potential investment.
(11) The providing of sales services or any other service, whether
technical or nontechnical in nature.
(b) As used in this section, "research and development equipment"
means tangible personal property that:
(1) consists of or is a combination of:
(A) laboratory equipment;
(B) computers;
(C) computer software;
(D) telecommunications equipment; or
(E) testing equipment;
(2) has not previously been used in Indiana for any purpose; and
(3) is acquired by the purchaser for the purpose of research and
development activities devoted directly to experimental or
laboratory research and development for:
(A) new products;
(B) new uses of existing products; or
(C) improving or testing existing products.
(c) As used in this section, "research and development property"
means tangible personal property that:
(1) has not previously been used in Indiana for any purpose; and
(2) is acquired by the purchaser for the purpose of research and
development activities devoted to experimental or laboratory
research and development for:
(A) new products;
(B) new uses of existing products; or
(C) improving or testing existing products.
(d) For purposes of subsection (c)(2), a research and development
activity is devoted to experimental or laboratory research and
development if the activity is considered essential and integral to
experimental or laboratory research and development. The term does
not include activities incidental to experimental or laboratory research
and development.
(e) For purposes of subsection (c)(2), an activity is not considered
to be devoted to experimental or laboratory research and development
if the activity involves:
(1) heating, cooling, or illumination of office buildings;
(2) capital improvements to real property;
(3) janitorial services;
(4) personnel services or accommodations;
(5) inventory control functions;
(6) management or supervisory functions;
(7) marketing;
(8) training;
(9) accounting or similar administrative functions; or
(10) any other function that is incidental to experimental or
laboratory research and development.
(f) A retail transaction:
(1) involving research and development equipment; and
(2) occurring after June 30, 2007, and before July 1, 2013;
is exempt from the state gross retail tax.
(g) A retail transaction:
(1) involving research and development property; and
(2) occurring after June 30, 2013;
is exempt from the state gross retail tax.
(h) The exemption provided by subsection (g) applies regardless of
whether the person that acquires the research and development
property is a manufacturer or seller of the new or existing products
specified in subsection (c)(2).