Do you need to collect sales tax in Indiana?
You’ll need to collect sales tax in Indiana if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Indiana?
Indiana considers a seller to have physical nexus if you have any of the following in the state:
- Owned or leased tangible personal property
- An employee or independent sales representative in the state
- Indiana inventories
- Third parties that install, repair or service property that is sold to Indiana customers.
You can click here to read exactly what the Indiana Department of Revenue (Indiana’s taxing authority) has to say about what constitutes sales tax nexus in Indiana
Do you have economic nexus in Indiana?
Indiana law requires a seller without a physical location in Indiana to obtain a registered retail merchant’s certificate, collect and remit applicable sales tax if the seller meets the following conditions in the previous or current calendar year:
- Gross revenue from sales into Indiana exceeding $100,000, including sales that are not subject to sales tax or are considered tax exempt
You can read Indiana’s economic nexus guidance for sellers here and you can read more about economic nexus in every state here. Indiana removed the 200 transaction threshold effective March 29, 2024.
Is what you’re selling taxable?
Services in Indiana are generally not taxable. However, if the service you provide includes fabrication, alteration or preparation of a product, you may have to deal with the sales tax on products.
Tangible products are taxable in Indiana, with a few exemptions. These exemptions include grocery items, items sold to farmers, and items sold to construction contractors.
Is SaaS taxable in Indiana?
SaaS is considered non-taxable in Indiana. A letter ruling from November 2016 said, “Cloud computing fees, remote storage fees, and data transfer fees were not subject to Indiana sales tax because the fees were paid for services and not for tangible personal property, specified digital products, prewritten computer software, or telecommunication services.” (Source)
How to get a sales tax permit in Indiana
You can register for a sales tax permit through the Indiana’s tax center INTIME. Or visit our registration page to request TaxJar manage your Indiana registration for you.
You need this information to register for a sales tax permit in Indiana:
- Your estimated monthly taxable sales, if left blank you will be a monthly filer.
There is a $25 registration fee for businesses in Indiana. Other business registration fees may apply. Contact each state’s individual department of revenue for more about registering your business.
Collecting Sales Tax
The Indiana sales tax rate is 7%, with no local sales taxes. So collecting sales tax in Indiana is easy – just collect the state sales tax rate of 7%.
Should you collect sales tax on shipping charges in Indiana?
If you ship taxable goods to buyers in Indiana, you are most likely required to charge sales tax on shipping charges.
Read a full explanation of sales tax on shipping in Indiana here.
When are Returns Due?
When you file and pay Indiana sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Indiana?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Indiana, you will be required to file and remit sales tax either monthly or annually (calendar annual or fiscal annual).
Indiana sales tax returns are generally due the 20th of the month following the reporting period, though some may be due on different dates. If the Indiana filing due date falls on a weekend or holiday, sales tax is due the next business day.
Filing Sales Tax
When it comes time to file sales tax in Indiana you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Indiana
Calculating how much sales tax you should remit to the state of Indiana is easy with TaxJar’s Indiana sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Indiana sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to File and Pay Sales Tax in Indiana
You have a couple options for filing and paying your Indiana sales tax:
- File online at the Indiana Department of Revenue. You can remit your tax bill through their online system.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.