Basics of the Indiana Sales Tax Nexus

Denise Hatem
November 23, 2020

The South Dakota v. Wayfair, Inc. Supreme Court decision allowed states to require sellers with no physical presence to collect and remit sales tax if they have an economic nexus with the taxing state. Indiana responded by enacting an economic nexus law like the one upheld in that case. Indiana HEA 1129 was challenged by a declaratory judgement action, but that was resolved on August 27, 2018, allowing the sales tax nexus changes to proceed. Below, we have highlighted the key points in the Indiana law.

Enforcement date:
October 1, 2018.

Sales/transactions threshold:
$100,000 or 200 transactions.

Measurement period:
Threshold applies to the previous or current calendar year.

Included transactions/sales:
Sales into Indiana include gross revenue from any combination of sales of tangible personal property delivered into the state, products transferred electronically into Indiana and services delivered in Indiana. The threshold applies regardless of whether the transactions would have been subject to Indiana sales tax or whether the revenue was generated by taxable sales.

When You Need to Register Once You Exceed the Threshold:
Immediately.

Summary: A retail merchant lacking physical presence in Indiana must collect and remit Indiana sales tax where sales into Indiana exceed the threshold of $100,000 or 200 or more separate transactions in the preceding or current calendar year. Similarly, marketplace facilitators lacking physical presence in the state must register and collect Indiana sales tax on behalf of sellers if it meets the previously mentioned conditions for economic nexus.

“With the incredible evolution of technologies and the growth of internet sales, this Supreme Court ruling will help level the playing field between our Hoosier-based companies that operate retail stores and out-of-state companies that sell products and services online in our state,” said Indiana Governor Eric J. Holcomb. “We’re taking a careful look at the ruling to better understand its implications for Indiana.”

Indiana Sales Tax Resources: Contact our team for more information on the Indiana sales tax nexus. Our interactive sales tax nexus map is also a great resource for real-time updates on each state.

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Author

Denise Hatem

Denise Hatem is a Regulatory Counsel at Sovos specializing in international taxation, with a focus on value added tax systems in the European Union. Denise received her B.A. from the University of Connecticut and her J.D. from Notre Dame Law School. She is a member of the Massachusetts Bar.
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