About Indiana Retail Sales and Use Taxes

Geographic Coverage

Geographic Coverage

  • Indiana
  • Indiana counties
Frequency

Frequency

Annual, ~January each year.

Timespan

Time Span

1986 - forward (Note: 1997 data is not available)

Variables

Total sales, total taxable sales, sales tax due, use tax due, collection allowance (amount taxpayer can deduct for prompt payment).

Data Source

Indiana Department of Revenue

Important Data Notes

This information is from the Indiana Department of Revenue. It is derived from the BT-1 application for sales tax and sales tax return ST-103  which Indiana businesses and those out-of-state businesses conducting business in the state of Indiana must fill out. Sales data for period are provided in a an overview and time series format, plus we make available a spreadsheet version for download. Five items are available: Total sales, total taxable sales, sales tax due, use tax due, and collection allowance. Brief descriptions of the data are given below.

It is important to note that the Indiana Department of Revenue allows businesses that own business locations throughout the state to consolidate their sales tax on a return; therefore the total sales, sales tax due and use tax for all of these businesses would get reported under one county. This in effect understates the total sales and sales tax for some counties and overstates the sales tax in other counties. The data user should be mindful of this when using the data. Pat Barkey, a professor at Ball State University wrote a detailed brief on the problems inherent with the sales tax data as part of the Indiana State Data Initiative.

  • Total Sales: Sales activities include retail, wholesale, manufacturing, and out-of-state sales
  • Total Taxable Sales: Total sales minus total exempt sales is the total taxable sale amount. Exempt sales would include: (a) sales shipped out of state, (b) nontaxable grocery food, and (c) sales where an exemption certificate was received.
  • Retail Sales Tax: Retail sales tax is applicable whenever selling activities are conducted in Indiana; whenever a business location, warehouse, distribution center exists; or whenever employees solicit or take orders for your products in Indiana (this includes wholesalers). The sales tax due amount is 7 percent of total taxable sales. Sales tax is collected on the sale of merchandise within Indiana. The merchants collect the tax on behalf of Indiana and are held liable for the amount they should collect, even if no collection of the tax was made. Retail merchants must collect the sales tax unless they receive an exemption certificate from the purchaser, or if the merchandise is shipped out of Indiana. If sales tax is not paid to the supplier, use tax must be paid directly to the Department of Revenue. 
  • Out-of-State Use Tax: A voluntary registration available to out-of-state businesses not meeting the conditions listed for retail sales tax. Upon registration for out-of-state use tax, the Department of Revenue will issue an Out-of- State Use Tax Collection and Remittance Permit. This permit authorizes a business to collect Indiana use tax on sales shipped into Indiana. Use tax is paid on purchases made outside Indiana when sales tax is not collected.
  • Collection Allowance: The collection allowance is available when the payment is remitted timely. The deduction allows a retail merchant to retain a percentage of the amount due on sales tax and the tire fee. This is 0.83 percent of the sales tax due (it was reduced from 1 percent in 2002).

Related Links

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