Sales and use taxes
What goods are subject to sales and use tax in your state (at both state and local level)?
In general, sales of all tangible personal property in Indiana by a retail merchant are subject to Indiana sales tax and, generally speaking, the storage, use or consumption in Indiana of property acquired in a retail transaction are subject to Indiana use tax. Some electronically delivered goods may also be subject to sales and use tax if not remotely accessed or are special digital products (e.g., music, movies and books). Indiana is a party to the Streamlined Sales and Use Tax Agreement.
What is the state sales tax rate?
What is the range of local sales tax rates levied in your state?
There are no local sales taxes, but there are local taxes on certain sales, such as admissions taxes, innkeeper taxes, and food and beverage taxes.
What goods are exempt from sales and use tax?
There are numerous exemptions from sales and use tax, each of which is subject to specific qualifications. Notable exemptions include exemptions for:
- equipment directly used or consumed in the direct production of tangible personal property, as well as for property incorporated into goods for sale;
- property predominantly used in providing public transportation;
- certain medical equipment, drugs and devices;
- transactions involving colleges and other not-for-profits;
- environmental compliance equipment;
- research and development equipment; and
- recycling materials and equipment.
Are any services taxed?
Indiana does not have a broad based sales tax on services. It does tax certain specified services, including:
- renting accommodation for less than 30 days;
- renting tangible personal property; and
- licensing pre-written software, telecommunications services, utility services, and cable television services.
What filing requirements and procedures apply?
Vendors are required to collect and remit sales tax on retail transactions made in Indiana. In general, returns must be filed within 20 or 30 days of the end of each month (depending on collection volume), although the Indiana Department of Revenue can use a different reporting schedule.
Effective October 1, 2018, Indiana began requiring remote sellers without a physical presence in Indiana to collect and remit tax on sales to Indiana residents based on thresholds similar to those in South Dakota v. Wayfair.
Indiana also joined a growing number of states when it recently passed legislation to impose tax collection and remittance obligations on “marketplace facilitators.” This law went into effect on July 1, 2019. Indiana took a broad-based approach, imposing this obligation on:
- the sale of tangible personal property;
- the rental of hotel and lodging accommodations; and
- peer-to-peer vehicle sharing/rental platforms.
The law also imposed innkeeper’s tax and food and beverage tax collection and remittance obligations, as well as excise taxes on vehicle rentals.
Individuals are required to report use tax on their Indiana adjusted gross income tax return, which is due on 15 April.