Indiana Sales Tax Rates

How to register for sales tax in Indiana

There are two ways to register for a sales tax permit in Indiana:

• Online: This is the fastest and most recommended method. You can register through the Indiana’s INBiz program at https://inbiz.in.gov/.
• Paper application: You can download the BT-1 application form from the Indiana Department of Revenue’s website and mail it in.

Here’s what you’ll generally need to have on hand to register online:

• Business name, address, and contact information
• Federal Employer Identification Number (EIN)
• Date business activities began or will begin
• Projected monthly sales
• Projected monthly taxable sales
• Products or services to be sold

Once you’ve registered, you’ll receive a Registered Retail Merchant’s Certificate (RRMC), which is your sales tax permit.

How to collect sales tax in Indiana

Here’s how to collect sales tax in Indiana:

1. Calculate the Tax: Determine the appropriate sales tax rate. The base rate in Indiana is 7%, but some localities add additional county or local option income taxes. You can find the specific rate for your area on the Indiana Department of Revenue (DOR) website or by using a sales tax calculator.
2. Charge the Tax:  Unless you have a valid exemption certificate from the buyer, you must add the sales tax to the sales price of taxable goods and services. Most point-of-sale systems can automatically calculate and add the tax.
3. Keep Records: Maintain accurate records of your sales and the amount of sales tax collected for each transaction. This includes the date, customer information, itemized sales, and the total tax collected.
4. File and Pay Sales Tax:  The Indiana DOR will assign you a filing frequency (monthly, quarterly, or annually) based on your sales volume. You must file your sales tax return and submit the collected tax by the due date.

How to get a sales tax permit/license in Indiana?

o obtain a sales tax permit in Indiana, you need to register your business with the Indiana Department of Revenue. Start by gathering essential business information, such as your business name, address, contact details, Employer Identification Number (EIN) or Social Security Number (SSN), and information about the owners or officers. Once you have this information, complete the online registration through Indiana’s INBiz portal. During registration, select the option to apply for a Retail Merchant Certificate, which serves as your sales tax permit.

After your application is processed and approved, you will receive your Retail Merchant Certificate. This certificate must be displayed at your place of business. With this permit, you are authorized to collect sales tax from customers and remit it to the state.

When are Indiana’s sales tax returns due?

Indiana sales tax returns are due on the 20th day of the month following the reporting period for most filers. However, the exact due date can vary depending on your filing frequency:

• Earlier filers (high volume): Businesses that averaged more than $1,000 per month in sales tax liability during the previous calendar year must file and pay by the 20th of the following month.
• Standard monthly filers (lower volume): Businesses averaging less than $1,000 per month in sales tax liability typically file by the end of the month following the reporting period (30th day).
• Annual filers (very low volume): Businesses with a liability of less than $10 per month can file annually by the end of January or July, depending on their accounting method.

If the due date falls on a weekend or holiday, the sales tax is due on the next business day.

Is anyone exempt from sales tax in Indiana?

In Indiana, there are certain categories of purchases and customers that are exempt from paying sales tax. Here’s a breakdown:

Exempt Purchases:

• Groceries (exceptions): Most non-prepared food items like fruits, vegetables, and grains are exempt from sales tax. However, prepared foods, restaurant meals, and alcoholic beverages are taxable.
• Prescription drugs and medical supplies: These are generally exempt, but some durable medical equipment might be taxable.
• Farm equipment: This includes machinery and tools used for agricultural production.
• Certain services: Generally, services aren’t taxable in Indiana. Exceptions include installation or repair services related to tangible personal property (e.g., installing flooring).

Exempt Customers:

• Government agencies: Federal, state, and local government purchases are typically exempt.
• Certain non-profit organizations: Qualified non-profits may be exempt if the purchase is used for their exempt purpose and they have a sales tax exemption certificate.
• Merchants purchasing for resale: Businesses with a valid resale certificate can purchase goods without paying sales tax, as they will collect it when they sell the item.

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.