Definition & Meaning
The ST-135 form is an Indiana Department of Revenue Sales and Use Tax Exemption Certificate. It is used by individuals or businesses engaged in public transportation under leases or contracts with certified motor carriers. This form helps such entities claim exemptions from state sales and use tax for tangible personal property purchased when the property is predominantly used for transporting people or property for hire. The exemption is applicable when over 50% of the property’s use is intended for these transportation activities.
Steps to Complete the ST-135
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Identify the Purchaser: Begin by providing the legal name and address of the purchaser. This includes the name of the business or individual and any other identifiers such as tax ID numbers.
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Describe the Purchased Items: Specify the tangible personal property being purchased. The items must be predominantly used for eligible transportation activities to qualify for the exemption.
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Certification Statement: Include a certification statement confirming that the purchased property will be used as indicated. The purchaser must certify, under penalties of perjury, that the information provided is true and accurate.
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Signature Section: An authorized representative of the purchaser must sign and date the form. This signature confirms all details provided are accurate and meet the form’s requirements.
Why Should You Use the ST-135
Using the ST-135 form is beneficial for eligible entities as it provides a tax exemption that can lead to significant cost savings. By reducing or eliminating sales tax on qualifying purchases, businesses can allocate funds more effectively and maintain financial efficiency. Furthermore, properly using the form ensures compliance with Indiana tax regulations, avoiding potential penalties or audits.
Who Typically Uses the ST-135
The ST-135 form is primarily used by businesses operating in the public transportation sector in Indiana. This includes companies that lease vehicles or equipment to certified motor carriers responsible for transporting passengers or goods. Businesses engaging in significant transportation activities, like logistics companies or bus services, often use this exemption to manage operational costs more efficiently.
Key Elements of the ST-135
- Purchaser Information: Clear identification of the purchasing entity.
- Item Description: Detailed listing of items claimed under the exemption.
- Intended Use Statement: A declaration of how the purchased items will be used in public transportation.
- Certification of Accuracy: Confirmation that the provided information is correct, coupled with a signature from an authorized individual.
State-Specific Rules for the ST-135
Indiana’s tax code specifies that the ST-135 form is intended for those engaged in public transportation activities. There are specific criteria that transportation activities must meet to qualify for tax exemption, including the requirement that more than 50% of the tangible personal property is used for eligible purposes. Businesses must maintain comprehensive records to prove eligibility in the event of an audit.
Examples of Using the ST-135
Consider a bus company that purchases equipment such as GPS devices and bus parts. By using the ST-135 form, the company can claim an exemption on sales tax for these purchases as long as the equipment is primarily used for public transportation. This enables the company to save money that can be reinvested into the business or passed on to consumers through lower prices.
Eligibility Criteria
Entities must be engaged in public transportation under leases or contracts with certified motor carriers to qualify for the ST-135 exemption. Furthermore, the purchased items must be primarily used (over 50%) for eligible transportation activities. Businesses should verify their contracts and operations align with these criteria before submitting the form to ensure compliance.
Legal Use of the ST-135
The ST-135 form is governed by Indiana state tax laws. Misuse of the form, such as falsely claiming an exemption for ineligible purchases, may result in penalties, including fines or interest charges on unpaid taxes. Businesses must ensure honest and accurate reporting to legally benefit from the form. It is advisable to consult with a tax professional to confirm compliance with all applicable laws and guidelines.
