Happy Halloween from the Indiana Department of Revenue. Just in time for Halloween the Department has issued a Letter of Finding regarding the taxability of custom costumes.
An Indiana company that designs and produces custom mascots and costumes was found liable for Indiana sales tax on design and labor charges separately stated on its invoices because the mascot and costume sales were considered "retail unitary transactions". Under Indiana law a combined sale of tangible personal property and services is a taxable retail unitary transaction when the services are performed prior to the transfer of the property.
Letter of Findings 10-0096, Indiana Department of Revenue, October 27, 2010