Sec. 8. (a) For purposes of determining the amount of state gross retail and use taxes which a retail merchant must remit under section 7 of this chapter, the retail merchant may exclude from the retail merchant’s gross retail income from retail transactions made during a particular reporting period, an amount equal to the product of:

(1) the amount of that gross retail income; multiplied by

(2) the retail merchant’s “income exclusion ratio” for the tax year which contains the reporting period.

     (b) A retail merchant’s “income exclusion ratio” for a particular tax year equals a fraction, the numerator of which is the retail merchant’s estimated total gross retail income for the tax year from unitary retail transactions which produce gross retail income of less than eight cents ($0.08) each, and the denominator of which is the retail merchant’s estimated total gross retail income for the tax year from all retail transactions.

     (c) In order to minimize a retail merchant’s recordkeeping requirements, the department shall prescribe a procedure for determining the retail merchant’s income exclusion ratio for a tax year, based on a period of time, not to exceed fifteen (15) consecutive days, during the first quarter of the retail merchant’s tax year. However, the period of time may be changed if the change is requested by the retail merchant because of the retail merchant’s peculiar accounting procedures or marketing factors. In addition, if a retail merchant has multiple sales locations or diverse types of sales, the department shall permit the retail merchant to determine the ratio on the basis of a representative sampling of the locations and types of sales.

As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.2-1982(ss), SEC.4; P.L.192-2002(ss), SEC.61; P.L.146-2008, SEC.312.