Indiana: Sales Tax Handbook

Indiana Sales Tax Rate

2024 Indiana Sales Tax Handbook

Indiana Table of Contents

• List of Local Sales Tax Rates
• Sales Tax Calculator
• Sales Tax Exemption Certificates
• Sales Tax Info For Businessowners
  • Getting A Sales Tax Permit
  • Filing Your Sales Tax Return
  • Sales Tax Return Filing Schedule
  • What Defines Sales Tax Nexus?
  • Appealing Sales Tax Audits
• Taxable vs. Non-Taxable Purchases
  • What Sales Are Taxable?
  • Sales Tax Exemptions
  • Sales Tax Basis Components
  • Alcohol Excise Taxes
  • Tobacco Excise Taxes
  • Gasoline & Fuel Excise Taxes
  • Marijuana Taxes
• Sales Tax on Cars & Vehicles
• More Information
  • State Sales Tax Map
  • State Sales Tax Rate Table
  • Recent Tax Rate Changes
  • List of Sales Tax Holidays
  • Contact the Department of Revenue

These rankings show how the Indiana sales tax compares to the other 49 states + DC. The state with the highest sales tax is ranked 1st, and states with the same sales tax have a tie rank.

Indiana's Sales Tax By The Numbers:

Indiana has a higher-than-average sales tax, including when local sales taxes from Indiana's 278 local tax jurisdictions are taken into account.

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Rankings by Average State + Local Sales Tax:

  Ranked 24th highest by combined state + local sales tax

  Ranked 23rd highest by per capita revenue from state + local sales taxes ($1,015 per capita)

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Rankings by State Sales Tax Only:

  Ranked 2nd highest by state sales tax rate

  Ranked 9th highest by per capita revenue from the statewide sales tax ($1,037 per capita)

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IN City & County Taxes

IN Sales Tax Calculator

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Printable PDF Indiana Sales Tax Datasheet

What is exempt from sales taxes in Indiana?

Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Indiana taxes five types of commonly-exempted goods:

Clothing

  7%

Groceries

  EXEMPT

Prepared Food

  9%

Prescription Drugs

  EXEMPT

OTC Drugs

  7%

For more details on what types of goods are specifically exempt from the Indiana sales tax see Indiana sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Indiana? Taxation of vehicle purchases in particular are discussed in the page about Indiana's sales tax on cars.

Are services subject to sales tax in Indiana?

"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In Indiana, services are generally not taxable.

About the Indiana Sales Tax

The state of Indiana has a relatively simple sales tax system, consisting of a flat state tax rate in addition to county and local city taxes, which will vary significantly depending on which jurisdiction you are in. Many localities also have local taxes on restaurant food and beverages.

Indiana's sales tax was raised to its current rate in 2008 to offset tax revenue lost due to statewide property tax reform. Revenue raised through the sales tax is generally used for local economic development and tourism projects. Examples include the Indiana Convention Center and Lucas Oil Stadium, both of which were paid for with sales tax revenues.

Is the Indiana Sales Tax Destination-Based or Origin-Based?

Indiana is a destination-based sales tax state, which means that sales tax rates are determined by the location of the buyer when the transaction is completed. This means that, for orders placed via the internet/mail by a customer within Indiana from a Indiana vendor, the vendor must collect a sales tax rate applicable at the buyer's address (including any applicable local sales taxes). This can significantly increase the complication of filing your sales tax return, because different sales tax rates must be charged to different buyers based on their location.

Is Indiana a Streamlined Sales Tax State?

Indiana is a member of the Streamlined Sales and Use Tax Agreement, which means that the Indiana Department of Revenue has taken significant steps to simplify Indiana's sales tax rules and administration process.

Contact the Indiana Department of Revenue

The Indiana Sales Tax is administered by the Indiana Department of Revenue. You can learn more by visiting the sales tax information website at www.in.gov.

Phone numbers for the Sales Tax division of the Department of Revenue are as follows:

• Local Phone: (317) 233-4015

Learn More: Our Book Recommendations

If you would like to learn more about how to manage your Indiana sales taxes, we recommend the following books:

Small Business Taxes For Dummies

This introductury book assists both current and aspiring small business owners with important tax planning issues, and covers a wide variety of small business tax topics.

Buy on Amazon

A Guide to Sales and Use Tax

This book provides information and insights on how to comply with a multitude of sales and use tax laws and regulations. This is our recommendation if you need an in-depth look into sales taxes.

Buy on Amazon