INDIANAPOLIS – Businesses thinking about donating food or supplies to help with the coronavirus pandemic now have a tax incentive.
Businesses pay “use tax” on purchases. It’s the same seven-percent as the sales tax individuals pay, but it applies even to items like food and medicine which aren’t subject to sales tax. An executive order from Governor Holcomb suspended those taxes three weeks ago for donations of food, clothing, protective gear, sanitizer and other cleaning supplies, medicine, and other medical equipment.
The exemption applies to manufacturers who donate their own product, or to groups who buy and donate supplies. Indiana Department of Revenue Commissioner Bob Grennes says the department has set up a special email address to handle those requests.
Donors need to submit both a list of items and confirmation from the organization which received them. Grennes says the list of eligible items and recipients should be straightforward, and says the department will take a broad view of applications to encourage people to help.
It’s not clear how many businesses have used the exemption already, or how much it will cost the state. Grennes says the department will have a better idea after April’s monthly use tax filings.