Sales Tax APIThe same engine Zamp customers use.Although the state has a single sales tax rate, navigating Indiana sales tax exemption rules and deadlines can still take time and effort.
In this Indiana sales tax guide, we’ll address the most critical questions, such as how to collect sales tax, whether services are taxable in the state, sales tax holidays, and more.
Additionally, we’ll introduce you to a reliable solution that ensures sales tax compliance throughout the process.
Indiana Sales Tax Rate 2026
Indiana has a state sales tax rate of 7%.
Counties and cities are not permitted to impose a local sales tax. This means that Indiana is a single sales tax state.
Collecting Indiana Sales Tax from Customers
Here are the answers to several questions you may have about Indiana sales tax collection.
Do I Have to Collect Indiana Sales Tax from Customers?
You need to meet these two requirements to collect sales tax in Indiana:
- You have a sales tax nexus in Indiana, and
- You sell taxable products or services in Indiana.
What Creates a Sales Tax Nexus in Indiana?
According to Indiana sales tax laws, some factors that create nexus in Indiana include:
- Economic Nexus: Out-of-state business with taxable sales of more than $100,000 in the past twelve months.
- Physical Location: Offices, stores, warehouses, or other places of business used or maintained permanently or temporarily, directly or indirectly, located in Indiana.
- Employee Location: A representative, agent, salesman, or solicitor who operates in Indiana by selling, delivering, installing, accepting returns, billing, or performing other work duties related to selling tangible physical property or services that are used, stored, or consumed in Indiana.
Learn more about the sales tax nexus and when you’re required to collect sales tax.
Do I Have to Collect Sales Tax from Indiana Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?
You do not have to collect sales tax on purchases made through a marketplace.
Indiana has a marketplace facilitator law, as per the Streamlined Sales Tax guidelines. This means that marketplaces like Amazon or Etsy should collect sales tax on behalf of third-party sellers on their platforms.
But if you are selling independently in addition to selling through a marketplace and have a sales tax nexus in Indiana, you must to collect sales tax on your other non-marketplace Indiana sales.
Zamp Tip
The Streamlined Sales Tax (SST) initiative aims to standardize sales tax collection and administration across multiple states in the United States. Indiana became a member state on October 1, 2005.
Taxable Products in Indiana
Sales tax applies to the retail sale of most tangible personal property.
On the other hand, Indiana doesn’t tax most services and food items. However, the state does tax ready for consumption food items, such as candy, soft drinks, heated food, and food sold with utensils.
Additionally, local governments that have been granted statutory authority can impose a Food and Beverage (FAB) Tax on food or beverages furnished, prepared, or served by a retail merchant for consumption at a location or on equipment provided by the retail merchant.
The FAB Tax is 1% of the gross retail income from selling taxable food and beverages. If both the county and municipality impose an FAB Tax, both rates will apply for a total of 2%.
Let’s take a closer look at how products are taxed in Indiana.
Are Groceries Taxable in Indiana?
No. Grocery items are not taxable in Indiana.
Is Clothing Taxable in Indiana?
Yes, clothing is taxable in Indiana.
Are Digital Products Taxable in Indiana?
Digital products are generally exempt in Indiana.
Is Software-as-a-Service (SaaS) Taxable in Indiana?
No. SaaS isn’t taxable in Indiana.
Are Services Taxable in Indiana?
In general, services are not taxable in Indiana.
However, if the transaction involves renting a room or providing a service that results in tangible personal property (such as designing and selling a t-shirt), then the transaction might be taxable.
Tax-Exempt Items
A few items that enjoy sales tax exemption in Indiana are:
- Medical devices, as well as prosthetic devices, like artificial limbs.
- Food and ingredients sold by a licensed practitioner or pharmacist.
- Insulin, oxygen, blood, or plasma bought for medical purposes.
- Equipment, materials, concrete, and barricades used in public works projects.
- Food and food ingredients sold unheated and without utensils.
If an item is not specifically exempt from sales tax, then the item is likely taxable. A business must have a sales tax permit to collect sales tax. Let’s explore how you can get one.
How to Register for an Indiana Seller’s Permit
To collect sales tax in Indiana, you must register and get a Registered Retail Merchant Certificate (RRMC) through the inbiz website.
Learn how sales tax registration works in every US state.
Do I Need an Indiana Seller’s Permit if I Only Sell Temporarily in the State?
Yes. Indiana requires everyone who makes a taxable sale in the state, even temporarily, to complete sales tax registration and collect sales tax.
How to Collect Sales Tax in Indiana
Indiana has a single sales tax rate of 7%. That means anytime you make a taxable sale to a buyer in the state, you should simply charge the 7% state sales tax rate.
Should You Collect Sales Tax on Shipping Charges in Indiana?
Yes. Shipping charges are subject to sales tax in Indiana.
How to File and Pay Sales Tax in Indiana
When your sales tax filing due date approaches, you can file and pay your Indiana sales tax return online at the Indiana Taxpayer Information Management Engine (INTIME).
Or, let Zamp handle your Indiana sales tax filing and remittance so you never have to look at a sales tax return again!
Learn how to file and pay sales tax in other US states here.
