What is the sales tax rate in Indiana?

The Indiana state sales tax rate range is 7%. The base state rate is 7%, with local jurisdictions adding between depending on the county or city.

What is the economic nexus threshold in Indiana?

Indiana requires businesses to collect and remit sales tax once they exceed $100,000 in annual sales, measured during Current or Previous Calendar Year. Once exceeded, you must register by Next transaction after threshold is crossed.

When are sales tax returns due in Indiana?

In Indiana, monthly filers must submit returns by the 20th day of the following month. Businesses with lower tax liability may qualify for quarterly (Last day of the month following the end of the quarter) or annual (January 31st of the following year) filing.

Does Indiana include marketplace sales in the economic nexus threshold?

No, Indiana excludes sales made through marketplace facilitators when calculating whether a seller has exceeded the economic nexus threshold.

What is the physical nexus standard in Indiana?

A physical nexus in Indiana is created by maintaining any physical presence in the state — such as an office, warehouse, store, or inventory. In Indiana, employees or contractors in any role (including back-office functions) can trigger physical nexus.

How can Galvix help with Indiana sales tax compliance?

Galvix automates Indiana sales tax compliance end-to-end: calculating the correct rates at checkout, preparing your returns each period, and filing on your behalf. Our tax specialists review every return before it's filed so you don't have to worry about errors or missed deadlines.

How should a business collect sales tax in Indiana?

Businesses in Indiana must collect sales tax from customers on relevant transactions. The collected tax must align with the Indiana sales tax rate, which varies by location. Enterprises should regularly verify the sales tax rates to ensure accurate collection. To learn the best practices, explore our [SaaS sales tax compliance guide] ( https://www.galvix.com/article/mastering-sales-tax-compliance-in-the-saas-sector ).

How to calculate Indiana sales tax?

To calculate the total sales tax on a purchase in Indiana, use this formula: Total Tax = (State Rate + Local/District Rates) × Purchase Price The applicable rate depends on whether Indiana is an origin-based or destination-based state, which determines whether the seller's location or the buyer's shipping address is used. The state rate is 7% and the combined rate ranges from 7%.

How should a business collect sales tax in Indiana?

Businesses in Indiana must collect sales tax from customers on relevant transactions. The collected tax must align with the Indiana sales tax rate of 7% (combined rates range from 7%) and varies by location. Enterprises should regularly verify the sales tax rates via Indiana Department of Revenue ( https://www.in.gov/dor/ ) to ensure accurate collection.

What is the highest sales tax rate in Indiana?

The highest combined sales tax rate in Indiana reaches the upper end of 7%. This occurs in jurisdictions where local city, county, or district taxes are stacked on top of the 7% state rate. The local-only portion can add up to depending on where you are in the state.

Use tax is the companion to sales tax in Indiana. It applies to taxable goods purchased outside Indiana or from out-of-state sellers who didn't collect sales tax that are stored, used, or consumed within the state. If you paid no sales tax on a taxable item at purchase, you likely owe the equivalent amount in use tax to Indiana Department of Revenue. Businesses can confirm their use tax obligations at https://www.in.gov/dor/ .

Are there any benefits if a business files Indiana sales tax on time?

Yes. Indiana rewards businesses that file and pay sales tax on time. Filing by the 20th day of the following month of the due month ensures you avoid late penalties and interest charges assessed by Indiana Department of Revenue. Some states also offer a vendor's compensation allowance, a small percentage of tax collected that businesses may retain as reimbursement for the administrative cost of collection. Check https://www.in.gov/dor/ to confirm whether Indiana offers this benefit and the current rate.

What are the key things to remember while filing sales tax in Indiana?

When filing in Indiana, keep these three pillars in mind: • Filing Frequency: Your schedule (monthly, quarterly, or annually) is determined by your sales volume. Missing a single deadline can trigger an automatic penalty with Indiana Department of Revenue. • Exemption Certificates: If you sell to resellers or exempt organizations, you must have a valid Indiana Exemption Certificate on file at the time of the transaction. • Economic Nexus: Remote sellers must register once Indiana sales exceed $100,000 in the Current or Previous Calendar Year. Registration is required within Next transaction after threshold is crossed of crossing the threshold.

Indiana Sales Tax Guide For Businesses

Q: How do I register for a sales tax permit in Indiana?

Businesses can register for a Indiana sales tax permit online through the Indiana Department of Revenue. Use the INTIME (Indiana Taxpayer Information Management Engine) at https://intime.dor.in.gov/ . You'll need to provide your business type, ownership details, and nature of operations.

Q: Is SaaS taxable in Indiana?

SaaS is currently not taxable in Indiana. SaaS is not considered tangible personal property in Indiana and is not subject to sales tax. Only prewritten software delivered on tangible media or electronically downloaded is taxable. Always check for recent changes to state tax law as digital goods rules evolve frequently.

Q: Does Indiana offer a timely filing discount?

Yes, Indiana provides a vendor compensation credit for businesses that file and pay on time. See the timely filing section above for the applicable rates and conditions.

Quick Highlights on Indiana Sales Tax

Detail	Value
State Sales Tax Rate Range	7%
Base State Sales Tax Rate	7%
Local Rate Range
Economic Nexus Sales Threshold	$100,000
Reference Period	Current or Previous Calendar Year
Registration Deadline	Next transaction after threshold is crossed
Revenue Authority	Indiana Department of Revenue
Online Filing Portal	INTIME (Indiana Taxpayer Information Management Engine)

As a business, do I need to collect sales tax in Indiana?

Businesses are required to collect sales tax in Indiana if they have a sales tax nexus in the state. This includes having a physical presence or reaching a specific sales level, which establishes an economic nexus. This is why understanding Indiana state sales tax obligations is crucial for compliance.

Do I have a physical nexus in Indiana?

A physical nexus in the state of Indiana is established if your business has a physical presence in the state, like an office, warehouse, or store. Even temporary physical presence, like participating in trade shows or craft fairs, can create a nexus.

In Indiana, physical nexus is triggered by employees or contractors in any role — including back-office, administrative, and support functions, not just customer-facing roles.

How do I know if I have an economic nexus in Indiana?

An economic nexus in Indiana is determined by your sales volume. If your enterprise meets the threshold, you must register for a Indiana sales tax permit, collect tax on sales shipped to Indiana, and remit that tax to Indiana Department of Revenue.

In Indiana, economic nexus is established if your sales in the state exceed $100,000, based on Current or Previous Calendar Year.

Marketplace sales (e.g., Amazon, eBay) are excluded when calculating whether you've exceeded the Indiana economic nexus threshold.

Sales made for resale are included in the nexus threshold calculation for Indiana.

Non-taxable sales are included in the nexus threshold calculation for Indiana.

Once you cross the threshold, you must register by Next transaction after threshold is crossed.

Which goods are taxable in Indiana?

In Indiana, sales tax applies to:

Retail sales of tangible personal property
Prewritten (canned) computer software, whether delivered physically or electronically
Specified digital products (digital audio, audiovisual, and books)
Utilities including electricity, gas, water, and steam
Mixed transactions where more than 50% of the price is for tangible personal property

Most services are not taxable in Indiana unless they involve the transfer of tangible personal property.

What items are exempt from sales tax in Indiana?

Indiana exempts the following from sales tax:

Food and food ingredients purchased for home consumption (unprepared food)
Prescription drugs and insulin
Durable medical equipment and mobility enhancing equipment
Manufacturing equipment and materials consumed in production
Agricultural production inputs
Sales to government entities and qualifying nonprofits

Is SaaS taxable in Indiana?

SaaS is not considered tangible personal property in Indiana and is not subject to sales tax. Only prewritten software delivered on tangible media or electronically downloaded is taxable. SaaS is currently not taxable in Indiana. However, sales tax laws change frequently — always verify the latest guidance with your tax advisor.

How can a business get a sales tax permit in Indiana?

To obtain a sales tax permit in Indiana, businesses need to register with the Indiana Department of Revenue. Registration can be completed online through the INTIME (Indiana Taxpayer Information Management Engine).

You will need to provide detailed information about your business, including business type, ownership details, and the nature of your business activities.

When should a business file sales tax in Indiana?

Sales tax returns in Indiana are generally due on the 20th day of the following month for the previous period. Based on your annual tax liability, you may qualify for a less frequent filing schedule:

Quarterly filing: Available if your annual tax liability is below $1,000 (returns due Last day of the month following the end of the quarter)
Annual filing: Available if your annual tax liability is below $1,000 (returns due January 31st of the following year)

Note: Indiana removed its 200-transaction economic nexus threshold in 2024. Only the $100,000 revenue threshold applies. Indiana is a member of the Streamlined Sales Tax (SST) governing board.

You can file your Indiana sales tax return through the INTIME (Indiana Taxpayer Information Management Engine) at https://intime.dor.in.gov/.

Does Indiana offer a timely filing discount?

Yes, Indiana offers a timely filing benefit for businesses that file and pay on time:

Indiana provides a tiered merchant's collection allowance for timely filing and payment:

0.73% if annual state tax liability is $60,000 or less
0.53% if between $60,001 and $599,999
0.26% if $600,000 or more

The allowance is applied automatically when the return is filed and paid by the due date.

What are the penalties for late filing in Indiana?

Indiana imposes the following penalties for non-compliance:

Late filing/payment penalty: 10% of the unpaid tax or a minimum of $5, whichever is greater
Fraud penalty: 100% of the underpayment if due to fraud
Interest: Accrues on unpaid tax from the due date at the rate set by the Department of Revenue (adjusted annually)

Penalties may be waived for reasonable cause upon written request.

Is shipping taxable in Indiana?

In Indiana, the taxability of shipping and handling depends on how the charge is presented. Generally: • Taxable: If the shipping charges are mandatory or included in the price of a taxable item. • Non-Taxable: If shipping is separately stated on the invoice and provided as an optional service to the customer. Note: If you ship a mix of taxable and non-taxable goods in Indiana, the shipping charge must usually be prorated to determine the taxable portion. Confirm current rules with Indiana Department of Revenue at https://www.in.gov/dor/.

Does Indiana have a Remote Seller program?

Indiana requires remote sellers who exceed the economic nexus threshold to register, collect, and remit sales tax using standard state rates.