Revenue Publishes Statutory Calculation of Prepayment Rate

DEPARTMENT OF STATE REVENUE

 

Departmental Notice #2 December 2013

SUBJECT: Prepayment of Sales Tax on Gasoline

Statutory Calculation of Prepayment Rate

 

The prepayment rate is defined by IC 6-2.5-7-1 and IC 6-2.5-7-14 as the product of:
 

Step 1

1) The statewide average retail price per gallon of gasoline (excluding the Indiana gasoline tax, the federal gasoline tax, and the Indiana gross retail tax); multiplied by

2) The state gross retail tax rate (7%); multiplied by

3) Eighty percent (80%); rounded to

4) The nearest one-tenth of one cent ($0.001)

Step 2

1) Determine the lesser of the results in Step 1 or

2) The product of:

(i) The prepayment rate in effect on the day immediately preceding the day on which the prepayment rate is redetermined; multiplied by

(ii) One hundred twenty-five percent (125%); rounded to

3) The nearest one-tenth of one cent ($0.001)
 

Using the most recent retail price of gasoline available (as required by IC 6-2.5-7-14(b)), the department has determined the statewide average retail price per gallon of gasoline to be two dollars ninety-nine and four-tenths cents ($2.994) for the month of August 2013. The data is derived from www.IndianaGasPrices.com.
 

Based on the provisions of Step 1 and Step 2, the calculations are as follows:

Step 1
Statewide average retail price per gallon:	2.994
Multiplied by the state retail tax:	x .07
	0.20958
Multiplied by 80%:	x 0.8
	0.16766
Rounded to the nearest one-tenth of one cent:	0.168
Step 2
Previous 6-month prepayment rate:	0.177
Multiplied by 125%:	x 1.25
	0.22125
Rounded to the nearest $0.001:	0.221

 

Prepayment Rate
 

Based on the previous calculations, Step 1 will be used to determine the prepayment rate. The prepayment rate of sales tax on gasoline for the 6-month period beginning January 1, 2014, is sixteen and eight-tenths cents ($0.168) per gallon.