Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions.
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?
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.
Individuals are required to report use tax on their Indiana adjusted gross income tax return, which is due on 15 April. Indiana is expected to soon require remote sellers to collect and remit tax on sales to Indiana residents based on thresholds similar to those in South Dakota v. Wayfair. There is pending litigation over legislation passed in Indiana in 2017 that was modeled on South Dakota’s remote seller laws.
Click here to view the full article.