Indiana Sales Tax Guide

After reading this guide, you will have learned:

• How to be prepared for your call with the Indiana Department of Revenue.
• How to contact the Indiana Department of Revenue.
• When to charge sales tax in Indiana.
• What goods, products, and services are taxable in Indiana.
• When you establish a sales tax nexus with the state of Indiana, and the nuances of various thresholds.
• How to register for a sales tax license in Indiana.
• How to collect sales tax in Indiana.
• How to file and pay sales tax in Indiana.

If, after reading, you still have any questions to help you determine your tax sales obligations in Indiana and how to fulfill them, we are here for your small business bookkeeping needs!

Indiana Sales Tax Contacts

✅ Do you need to get in touch with the Indiana Department of Revenue?

✅ Are you uncertain about whether to visit, call them, or contact them through their website?

✅ Do you wonder what information you should have ready before you contact them?

If you answered “Yes” to any of these questions, read on, as we have just the information you need! :)

The Indiana Department of Revenue is reachable by phone at 317-233-4015.

You can also shoot a message to them via email, or visit one of their District Office Locations. If you are hoping for the fastest response, our suggestion is that you call rather than send a message or wait in line.

When you do call the Indiana Department of Revenue, you will want to have some information on hand. It will save time to have the following information easily accessible before you call:

• Taxpayer Name
• EIN
• Sales & Use Tax ID Number

If you are calling on behalf of an individual or a business, or having a third party call on your behalf, you must have an Indiana Power of Attorney (form POA-1, PDF) signed before you call or else you will be wasting your time; they can only help if you have a completed form.

If you have any more questions, please feel free to contact us so we can assist you with your sales tax needs.

Indiana Sales Tax Registration

Are you a new business selling tangible property in Indiana? If yes, you are going to want to register your business with the Indiana Department of Revenue so that you can pay your sales tax on time.

You need not fret as this is a relatively simple process and one for which you’re about to be fully prepared. We are going to outline the steps below so you are totally ready to register for your sales tax license.

Here we go! Remember...

Preparation is key.

Let’s get started!

How do I register to collect sales tax in Indiana?

You can apply or register for an Indiana sales tax permit by visiting the Indiana Department of Revenue and following the instructions provided.

Indiana is one of the few states to have moved to online-only registration... and we commend them for it! No offense to the USPS or any postal carriers reading this :)

What information do I need to register for an Indiana sales tax permit?

Great question!

Before you sign up for Indiana sales tax permit you’ll want the following information on hand:

• Business name
• Business entity type
• Description of business activities
• Date business activities began or will begin
• Business address and mailing address
• Business contact information
• Associated business entities
• NAICS code that best matches the business
• Federal Employer Identification Number (FEIN)
• List of business officers, partners, managing members, and/or trustees

Don’t forget! Preparation is key. When you have all this information ready, you can go online and register for your permit at the Indiana InBiz Tax Application website.

How much does it cost to register for an Indiana sales tax permit?

Indiana charges $25 to register an RRMC for your small business.

Do I need a Federal Tax ID Number or EIN to register for an Indiana sales tax permit?

Indeed, yes! You will absolutely need one, but if you don’t already have one and need to get a new EIN, it’s a quick and painless process. You can easily register for a Federal EIN right here :).

Which agencies in Indiana do I need to additionally register with?

You may need to apply to some of the following agencies:

• Indiana Department of Labor
• Indiana Department of Environmental Management
• Indiana Commission for Women

You’ll want to give this some thought and do a little research or investigating; since every business is unique, and there are such different rules, regulations, and laws that may apply.

We suggest contacting the Indiana Department of Revenue to verify which additional government agencies you may be required to register with.

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Huzzah! That’s all, folks --You should be all set!

You are now prepared to register for your Indiana sales tax permit in Indiana.

Let’s summarize where we reviewed:

• Have all the required information easily accessible before registering online.
• Acquire a tax ID or EIN before registering for an Indiana sales tax permit.
• Register online at the Indiana Department of Revenue website.
• Look into what other agencies you may have to additionally register with.

Registering for your Indiana sales tax permit will be stress free as long as you are prepared. We recommend organizing all the essential information in a folder, preferably using a system like Box.com or Dropbox (something we’re happy to handle for our customers).

Indiana Sales Tax FAQ

By now, you may have already contacted the Indiana Department of Revenue and applied for an Indiana sales tax permit.

Once you have a license to collect and remit sales taxes in Indiana, you will probably be asking yourself two questions:

• When do I charge a sales tax in Indiana?
• What goods and services are subject to sales taxes in Indiana?

We are going to go over some common questions that our clients have asked. We believe these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations.

Let’s start with the first question…

What goods and services are considered taxable in Indiana?

The following items are all taxable in the state of Indiana:

• Sales of tangible goods at retail.
• Repairs or alterations of tangible personal property.
• Property rentals, leases, or licenses [e.g. commercial, mini-warehouse]
• Selling service warranty contracts.
• Short-term rentals for living accommodations (e.g. motel/hotel, beach houses, condos, timeshares, vacation homes, or RV homes).
• Rental/lease of personal goods (e.g.: machinery, vehicles, equipment, or other property).
• Charges for admission to any place of amusement, sport, or recreation.
• Manufacturing or producing goods for retail sales.
• Operating vending machines or amusement rides.
• Services mostly exempted [except those which produce a tangible good]

The bottom line is …

Your business must pay taxes on sales of all non-exempt goods.

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Let’s now review some of our clients’ frequently asked questions:

• Is Indiana an Origin or Destination sales tax State?
• What creates a sales tax nexus in Indiana?
• What is the economic threshold in Indiana?
• Does Amazon have fulfillment centers in Indiana?
• Does Indiana have a Click-Through Nexus?

To best understand your tax obligations, new businesses need to consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions.

Let’s discuss some questions that will help you understand the nature of your small business and the subsequent tax implications.

Is Indiana an origin or destination sales tax state?

Indiana has a singular state-wide rate irrespective of location.

Protip: Charge the same rate in Indiana no matter where you are.

What creates a tax nexus with the state of Indiana?

Having nexus, also known as "sufficient business presence,” with Indiana means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in Indiana because you created a sales tax Nexus.

Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the Indiana Department of Revenue even if you never step foot in Indiana.

So, how do you create a sales tax Nexus in Indiana?

A business establishes a nexus in Indiana by:

• having a business location in Indiana;
• having property stored in Indiana;
• employing any person in Indiana;
• contracting with a salesperson or other agent in Indiana;
• leasing equipment used in Indiana;
• performing services in Indiana;
• licensing the use of intangible property in Indiana, or transporting property in Indiana using the taxpayer’s vehicles.

Let’s talk a bit more specifically about where your goods are stored such as in the instance of an Amazon warehouse.

Does Amazon have fulfillment centers in Indiana?

Yes, a good many of them! The Amazon fulfillment centers in Indiana are at the following addresses:

• 4255 Anson Blvd, Whitestown IN 46075
• 715 Airtech Pkwy, Plainfield IN 46168 (two centers)
• 710 South Girls School Rd, Indianapolis IN 46214
• 800 S Perry Rd, Plainfield IN 46168
• 900 Patrol Rd, Jefferson IN 47130
• 5100 S Indianapolis Rd, Whitestown IN 46075

This is relevant if you sell your products on Amazon or are recognized as an Amazon FBA (Fulfillment by Amazon) seller. When Amazon stores your products in one of its fulfillment centers in any state including Indiana, this triggers a sales tax requirement. If Amazon is storing your products in a warehouse in Indiana, you have created a taxing connection with the state of Indiana.

We can help guide your small business through this. We use tools like A2X and Wherestock to identify where our clients' inventory is currently being held and shipped from so that we can keep them in compliance.

Does Indiana have economic nexus?

Yes, they do, as of October 2018. This means businesses without a physical presence or traditional nexus may be required to register for and pay sales taxes.

The thresholds for registering are having either:

• a cumulative gross of $100,000+ to Indiana purchasers or
• 200 or more separate sales with Indiana purchasers.

For more information see the Indiana DOR’s out-of-state retailer page here.

Does Indiana have click-through nexus?

No. This means if your business is involved in affiliate marketing you don’t, at this time, need to worry about paying sales taxes in Indiana.

Is Indiana a streamlined sales tax state?

Yes! Since October, 2005 Indiana has been a full member of Streamlined Sales Tax.

If you are planning on taking advantage of the Streamlined Sales Tax as a business, it is recommended you use a Certified Service Provider though businesses may opt to register themselves without a CSP. Ultimately the aim of streamlined sales tax is to simplify payment to multiple different states of sales and use tax. It isn’t required that you utilize them, but it can significantly reduce complexity to do so.

More effectively manage your tax needs by keeping this guide handy.

You and your business can be better-equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in Indiana.

Collecting Sales Tax in Indiana

By now you know if you are a business that has established a nexus with Indiana. So you have a hand on whether you are required to collect sales tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.

Let’s review some common questions our clients have asked regarding their Indiana Sales Tax obligations.

• How do I collect Indiana Sales Tax?
• Who is eligible for Indiana Sales Tax exemptions?
• What should I do if my customer is exempt from sales tax in Indiana?
• What happens if I lose an Indiana nontaxable transaction certificate?

After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in Indiana.

How do I collect Indiana Sales Tax?

Indiana makes it relatively easy as they have a statewide rate; simply ensure your Point of Sales equipment is configured with the correct rate [currently 7%] and you’re good to go!

What are the current Indiana Sales Tax rates?

Seven percent at the time of this writing. However, since sales tax rates may change, we shall refer you to check out the Indiana Department of Revenue tax history page. Any change should be reflected on that page.

It always helps to be accurate and up to date with this type of information! :)

What is exempt from Indiana Sales Tax?

Here is a list of exemptions:

• purchases for resale
• Everyday clothing items
• Medical supplies
• Groceries are taxed at a lower rate

Who are eligible for Indiana Sales Tax exemptions?

At this point, you should know what products are exempt from sales tax in Indiana. You also want to know who may be exempt.

Under Indiana law, the type of buyer or the way the goods will be used can qualify can buyer for a sales tax exemption. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.

Other common examples of an exempt buyer may include:

• Government agencies
• Non-profit organizations
• Religious groups
• Out-of-state buyers (should their business not have nexus in their home state).

Altogether, sales tax exemptions apply if the buyer falls under one of these categories.

What should I do if my customer is exempt from sales tax in Indiana?

Purchasers who are tax exempt must have completed form ST-105 (PDF) and present their completed exemption certificate at the time of purchase. It is then incumbent upon the seller to hold on to this exemption certificate. Failure to do so may leave you unable to justify tax exempt sales.

Remember, you want to collect and file a copy of the certificate. Such certificates must be produced upon request in the event of an audit to justify tax-exempt sales.

What happens if I lose an Indiana Sales Tax exemption certificate?

Hmm... Obviously this issue is best to be avoided! Imagine finding out you’ll be audited and discovering you cannot produce an exemption certificate for a buyer! That nightmare scenario would mean you could be held liable to pay all taxes on behalf of the buyer. This is a bad scene and can be avoided by taking proper care with your paperwork… which happens to be one of our specialties! :)

Does Indiana have a sales tax holiday?

Nope! The tax man doesn’t rest in the state of Indiana.

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We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions, who is eligible for tax exemption certificates, and, finally, the process of collecting sales tax in Indiana state.

Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper!

Filing and Paying Sales Tax in Indiana

It is time to talk about filing and paying your sales taxes in Indiana. In this section, We are going to cover the following frequently asked questions from our clients:

• When is Indiana Sales Tax due?
• What are the Indiana Sales Tax thresholds?
• What if an Indiana Sales Tax filing date falls on a weekend or holiday?
• How do I file an Indiana Sales Tax Return?
• How do I correct an Indiana Sales Tax return?
• What happens if I don’t collect sales tax?
• What happens if I file or pay my sales tax return late?
• Do I need to file a return if I don’t collect any sales tax in Indiana?
• If I close my business, do I need to file a final sales tax return?
• Does the Indiana Department of Revenue offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your Indiana Sales Tax.

When is Indiana Sales Tax due?

Indiana sales tax payments are due no later than the 20th day following the reporting period for early filers and the 30th day for monthly filers (see below).

What are the Indiana Sales Tax thresholds?

The thresholds of income for various filing frequency requirements are:

Collect File

Not sure how to determine your tax filing frequency?

You can review your eCommerce or Point of Sale Software to see the volume of sales you have generated.

Don't worry though! The state will let you know when your due dates change. :)

Watch your mail for a letter from the State of Indiana so that you don't miss any deadlines.

What if an Indiana Sales Tax filing date falls on a weekend or holiday?

The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we always suggest filing well before the holiday.

How do I file an Indiana Sales Tax return?

Paper: Not an option!

Electronic: File form ST-103 at INtax and submit payment via EFT.

How do I correct an Indiana Sales Tax return?

Correct the return via the INtax website.

What happens if I don’t collect sales tax?

If you were required to collect sales taxes and failed to do so for whatever reason, that’s a big time whoopsy! You will ultimately be held responsible for the tax due. Always collect sales tax at the point of sale. Attempting to collect after the fact will be time consuming and most likely unsuccessful.

Protip: You are still responsible for remitting sales taxes even if you failed to collect them.

What happens if I file or pay my sales tax return late?

This is not a problem our customers tend to face, as we keep them on the straight and narrow. But in the interest of completeness:

Indiana's Department of Revenue charges a 10% penalty for late payments.

Do I need to file a return if I don’t collect any sales tax in Indiana?

Yes, Indiana is one of many states that require businesses to file a “Zero-Tax” return. Yes, even when you have no sales during a taxing period!

If I close my business, do I need to file a final sales tax return?

Yes, Indiana requires businesses to file a “Final sales tax” return when closing a business in Indiana.

Does the Indiana Department of Revenue offer a discount for filing on time?

Yes! 🎉🎉🎉 Though teensy, the Indiana Department of Revenue offers a discount of 0.73% of the first $60,000 with no minimum or maximum.

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Now that we covered all our bases for filing and paying sales taxes in the state of Indiana, you should feel more at ease about the process.

Some things to remember:

• Due dates are important. If anything, file and pay your taxes early.
• There are three payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
• You can file and pay your taxes electronically or by mail
• If you need to amend a return, you may do so electronically or by paper.
• If you don’t collect sales tax and you were supposed to, you (not the buyer) is liable to pay the sales tax to the state of Indiana.
• You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
• Even if you collect no sales tax, you still need to file a return.
• You need to file a “Final sales tax report” when you close your business.

Now, you are ready to file and pay your sales tax in Indiana. If you have any more questions, feel free to contact us.

Please note: This blog is for informational purposes only and the information is accurate as of 6/28/2019. If you want legal advice on sales tax law for your business, please contact a Sales Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.