Ultimate Indiana Sales Tax Guide

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 2024

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.

Want to calculate tax rates for other states? 

Just use our sales tax calculation service!

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.

Note: 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 taxable in Indiana when the buyer has permanent access to the digital goods. 

If the buyer only has temporary access (such as renting a digital movie), then the transaction will likely not be taxable.

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.

FAQs on Paying and Filing Indiana Sales Tax

What Is Use Tax?

You should pay Indiana use tax if you haven’t paid sales tax on taxable tangible personal property at the time of purchase. 

The Indiana use tax is the same rate as the sales tax (7%).

I Didn’t Collect Any Indiana Sales Tax During this Period. Do I Still Need to File a Return?

Yes. 

You should still file a ‘zero’ return with the state even if you didn’t collect any sales tax over the taxable period. 

What Is the Penalty for Filing and Paying Indiana Sales Tax Late?

The penalty for failing to file and pay Indiana sales tax is 10% of the tax due, or $5, whichever is greater.

How Often Do I Need to File and Pay Sales Tax in Indiana?

Indiana requires sales tax returns to be filed and paid either monthly or annually. 

Regular filers: Businesses who average less than $1,000 in monthly tax must pay by the 30th day of the month following the taxable period. 

Early filers: Businesses who owe an average of $1,000 or more in tax per month should pay by the 20th of the month following the taxable period. 

Annual filers: Annual filers must pay the tax collected by January 30th.

If your Indiana sales tax filing due date falls on a weekend or holiday, it’s due the next business day.

Are Time and Cash Discounts Taxed in Indiana? 

No. Indiana doesn’t impose sales tax on discounts, such as cash, coupons, or terms. Sales tax is only applicable to the total amount paid after the discount. 

Does Indiana Have Sales Tax Holidays?

Indiana doesn’t have a sales tax holiday at present.

Can You Collect Sales Tax through an Accrual Method?

The accrual method is used when you record expenses or tax revenue that have been earned but still haven’t been recorded in the business's financial statements.

You can use the accrual method for sales tax, but these conditions may apply:

• You must report adjusted gross income tax on an accrual basis.
• You can use the cash method for sales tax and the accrual method for adjusted gross income tax.
• The Indiana Department of Revenue can ask you to stop using the accrual method anytime. 

Can I Amend an Indiana Sales Tax Return? 

Yes.

If you need to change a previously filed tax return, you can file an amended return with the Indiana Department of Revenue and the Internal Revenue Service. 

Indiana allows you to file amended returns up to three years after the original due date or when the tax was paid.

Indiana Sales Tax Due Dates

Indiana monthly state sales tax filing due dates for ‘regular’ filers:

Taxpayers with less than $1,000 in monthly sales tax liability have sales tax due on these dates:

Taxable Period	Filing Due Date
January 2024	March 2, 2024
February 2024	April 1, 2024
March 2024	April 30, 2024
April 2024	May 30, 2024
May 2024	July 1, 2024
June 2024	July 30, 2024
July 2024	August 30, 2024
August 2024	September 30, 2024
September 2024	October 30, 2024
October 2024	December 2, 2024
November 2024	December 30, 2024
December 2024	January 30, 2025
January 2025	March 2, 2025

Indiana monthly sales tax filing due dates for “early” filers:

These dates apply to taxpayers with an average monthly tax liability of $1,000 or more for the previous calendar year OR the fiscal year ending on June 30:

Taxable Period	Filing Due Date
January 2024	February 20, 2024
February 2024	March 20, 2024
March 2024	April 22, 2024
April 2024	May 20, 2024
May 2024	June 20, 2024
June 2024	July 22, 2024
July 2024	August 20, 2024
August 2024	September 20, 2024
September 2024	October 21, 2024
October 2024	November 20, 2024
November 2024	December 20, 2024
December 2024	January 20, 2025
January 2025	February 20, 2025

Indiana annual sales tax filing due dates:

Taxable Period	Filing Dates
Year 2024	January 30, 2025

Let The Experts Handle Your Indiana Sales Taxes

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