 Commissioner's Corner
By Adam J. Krupp
Being relatively new to the
world of tax – it’s been 21 months, not that anyone is counting – I lack
the genuine appreciation for the magnitude of the statement repeated among
fellow state tax administrators, long-time employees, and practitioners who
have made a career in tax: this is the most exciting time in tax
administration in the last 30 years. For many individuals, using the
words exciting and tax in the same phrase is an oxymoron.
The driving force behind such a bold declaration is the U.S. Supreme Court’s landmark decision in South Dakota v. Wayfair, Inc., wherein our nation’s highest court decided on June 21, 2018 to overturn 50+ years of legal precedent (National Bellas Hess, Inc. v. Department of Revenue of Illinois (1967); Quill Corp. v. North Dakota (1992), as it eviscerated the physical presence requirement for out of state retailers to be obligated to collect and remit sales (ahem, or use) tax to states imposing the tax on purchases made by residents. My initial reading of Quill – after scholars, tax practitioners, and anyone interested in analyzing SCOTUS precedent in their spare time had the opportunity to do for the past 25 years – was that it was incorrectly decided. Once I heard South Dakota was mounting a legal challenge that could potentially overturn the Court’s infamous 1992 decision, I was confident Quill’s time was up. Not only was it an unnecessary result, but it was decided in a different era, before the Internet and e-commerce became part of our everyday culture. As tax professionals, we know this is largely about changing the point of collection, because consumers already know they are obligated to report use tax when appropriate, right? Unsurprisingly, the Wayfair Court acknowledged that “consumer compliance rates are notoriously low” for use tax reporting. Effective October 1, 2018, after 3.5 months of planning, preparation and coordinating with other state tax administrators around the country, Indiana will officially implement House Enrolled Act 1129 (2017), which is supported by the Court’s holding in Wayfair. For more on HEA 1129 (2017), and the specifics of Wayfair applied to Hoosiers, please visit DOR’s website.
But if Wayfair isn’t enough, many revenue agencies around the country are modernizing antiquated IT systems responsible for revenue processing. Indiana is no different. Recently we announced a partnership with FAST Enterprises, LLC, to deliver to DOR a modern, innovative, customer-centric system of record referred to as a fully integrated tax system. For over half the states around the country, the concept of multiple stand-alone systems housed within a single agency is a thing of the past. So, too, is operating within the confines of a custom-built, state-specific system that often leaves an agency feeling like it is on an island when system issues arise. Twenty-two years after DOR’s current system was built, Project NextDOR is our four year journey to completely modernize the agency. With the initial public roll-out (Phase 1) of the system set for the fall of 2019, all corporate transactions will be receivable and processed in the fully modernized environment. The wait is almost over.
2018 has presented Indiana’s DOR with the rare combination of not one, but two once-in-a-generation events (one legal, one operational), referring to Wayfair and Project NextDOR. Folks around the country are right – this is an exciting time in tax administration.
 DOR's Outstanding Year of Protecting Hoosier Identities and Stopping Fraud
DOR has made a tremendous
investment in protecting Hoosier’s identities and preventing refund fraud. The
results have been impressive as DOR’s identity and refund fraud protection
program has stopped over $119 million in refund theft since its inception in
2014.
As DOR’s tax refund fraud program
has matured, the 2018 DOR fraud team initiated several new fraud detection and
prevention programs. The biggest fraud prevention program successes of 2018
were the Schedule C business expense and the excess withholding verification
programs. More...
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New Laws in Effect from the 2018 Legislative Session
Each year DOR's policy team creates a legislative summary to make it easier to navigate the new state laws which affect DOR.
You can find the 2018 Legislative Summary, as well as prior years’ summaries, on DOR’s website.
 Tax School Updates
DOR gives updates on changes to
Indiana tax laws, forms, agency processes and other issues at two tax
schools. Indiana University’s Tax Practitioner Institutes and Purdue
University’s Income Tax Schools offer updates to tax and legal
professionals.
Programs are offered
at several locations throughout the state. Please go to the following
websites for more information:
DOR's Bloomington District Office has Relocated
DOR's Bloomington District Office has relocated. On Monday, October 1, we began conducting business at our NEW location: 1531 South Curry Pike, Suite 400, Bloomington, IN 47403.
A list of all DOR district offices.
DOR is Partnering with FAST Enterprises
The
next level in state tax administration is coming to DOR. FAST Enterprises, LLC will provide support and implement the
integrated tax solution system. This partnership will offer a new,
state-of-the-art technology system for DOR’s customers to file tax returns,
make payments, view and manage their business and individual tax accounts.
Be sure to check back for updates on the progress made with Project NextDOR.
Remote Sellers and Sales Tax
By now you’ve probably heard about the South Dakota v. Wayfair decision if you’re a remote seller or a tax professional. But, what does that mean for Indiana?
A remote seller is a seller without a physical location in Indiana that sells to Indiana residents. All remote sellers must have a Registered Retail Merchant’s certificate and starting October 1, 2018 will need to collect and remit the seven percent Indiana sales tax if they meet the following criteria in the previous calendar year or the current calendar year:
1. The seller has a gross revenue from sales into Indiana exceeding $100,000; or
2. The seller makes 200 or more separate transactions into Indiana.
More information including FAQ’s can be found on DOR’s website.
DOR is Cracking Down on Sales Tax Suppression Software
DOR has taken tremendous
steps forward to decrease sales tax suppression software throughout the state.
Sales tax suppressors, often called tax zappers, are devices or programs that
delete or modify sales transactions with the intention of under reporting sales
and therefore less tax is reported and paid.
To report a business that is using tax zapper software or
committing another type of tax fraud, use the form on DOR’s tax fraud website.
Helpful Links on DOR's Website
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