This blog was last updated on December 12, 2025
Indiana imposes a statewide sales and use tax rate of 7%. The state does not allow local jurisdictions to levy additional sales taxes. Keeping track of the sales tax rate in Indiana and all other states is essential for businesses.
What’s Taxable in Indiana?
Indiana sales and use tax applies to the sale of tangible personal property and certain enumerated services. Sellers selling taxable goods and/or services are required to collect and remit sales tax to the state. Businesses should also understand how Indiana use tax applies to out-of-state purchases used within Indiana.
Examples of taxable items and services include:
- Clothing
- Prewritten computer software
- Non-prescription medical items or drugs
- Telecommunication services
- Certain installation or repair services
Sales Tax Nexus in Indiana
A seller is liable to collect and remit Indiana sales tax if they meet the state’s nexus requirements. Nexus can be established through either physical or economic presence.
Physical Nexus in Indiana
Physical presence is created by having a business location, office, warehouse, vehicle, employee, or other representative operating in the state of Indiana.
Economic Nexus in Indiana
Indiana enforces economic nexus for remote sellers. If your business has:
- Over $100,000 in sales in Indiana during the previous or current calendar year;
you may be required to register for and collect Indiana sales tax.
Indiana Sales Tax Exemptions
Certain sales in Indiana are considered generally exempt from the sales and use tax requirements.
Exempt Products and Services
- Most services (unless Indiana statutes specify otherwise)
- Food and food ingredients
- Agricultural items
- Medical equipment
- Software as a Service (SaaS)
Entity or Use Based Exemptions
Additionally, Indiana exempts sales to certain entities from the sales/use tax, including the following:
- Certain qualified nonprofit entities
- 501(c)(3) and 501(c)(4) organizations
- Churches and houses of religious worship
- Nonprofit schools, hospitals and homes for children and aged persons
- Certain wholesalers
- Retailers selling for resale
- Certain manufacturers
- Schools
- Government
How to Claim Sales Tax Exemption in Indiana
To claim an exemption, an entity must provide an exemption certificate with the sale. The Indiana Department of Revenue accepts Form ST-105 as the most commonly used form.
Indiana Filing and Remittance Requirements
Indiana offers multiple methods for filing and remitting sales and use tax:
- E-filing through INTIME
- Simplified Electronic Return (SER) for SST participants and their affiliates
There is an electronic filing mandate for all licensed sellers in the state, so it is important to know about the Indiana sales tax online system. The state provides instructions for electronically filing sales taxes through INTIME (see ST-103 Instructions here).
Frequently Asked Questions
Is Indiana part of the Streamlined Sales Tax (SST) initiative?
Yes, Indiana is part of the Streamlined Sales Tax (SST) initiative, a multi-state agreement designed to simplify and standardize sales tax rules.
Does Indiana have sales tax holidays?
No, Indiana does not currently offer sales tax holidays.
Are there any special point of sale fees in Indiana?
Point-of-sale fees are fixed amount or rate-based assessments levied on certain products or services at the time of sale and paid by the final consumer at retail. For example, Indiana imposes the following point of sale fees:
- E911 Fee
- Fireworks Public Safety Fee
- Tire Fee
Does Indiana apply sales tax to shipping charges?
Generally, Indiana does apply sales tax to shipping charges.
For sourcing sales tax, is Indiana origin or destination based?
Indiana is destination based.
Can I use the Simplified Electronic Return (SER) in Indiana if I’m not in the SST Model 1 program?
Yes. Indiana accepts Simplified Electronic Returns (SER) from any seller or tax provider that can transmit the return properly. You don’t need to be in the SST Model 1 program to use the SER—providers like Sovos can file on behalf of any client who opts into that method.
How do I register for an Indiana Sales Tax License?
Indiana businesses or individuals selling tangible personal property or certain services to Indiana consumers may need to register to collect sales tax when meeting qualifying requirements. Registrations may be completed online through the InBiz website. Once approved, Indiana will issue a Registered Retail Merchant Certificate to the applicant, and they may begin collecting/remitting sales taxes. More information may be found here.
Additional Resources
For more information on U.S. sales tax compliance across all 50 states, check out our:
State-by-State Sales Tax Guide
Looking for an easier way to manage sales tax in Indiana and beyond? Learn how Sovos simplifies compliance and helps you stay aligned with Indiana tax laws.