Indiana Sales Tax and Invoicing Rules for 2026

TL;DR: Indiana has a flat 7% state sales tax with no local additions — uniform across the entire state. Economic nexus applies at $100,000 in sales OR 200 transactions. Indiana is an SST member state with straightforward compliance.

State sales tax rate

Indiana levies a 7% state sales and use tax with no local additions. The rate is identical everywhere in the state — Indianapolis, Fort Wayne, Evansville, and all other locations.

This makes Indiana one of the simplest states for sales tax compliance. The 7% rate is one of the higher flat state rates in the country.

Indiana uses destination-based sourcing as a Streamlined Sales Tax member state.

Nexus rules

Physical nexus applies through offices, employees, inventory, or property in Indiana.

Economic nexus triggers at $100,000 in gross revenue from Indiana sales OR 200 or more separate transactions in the current or prior calendar year. Either threshold creates nexus.

Marketplace facilitators must collect and remit on behalf of third-party sellers. Indiana is a full member of the Streamlined Sales Tax (SST) agreement, and registration is available through the SST system for simplified multi-state compliance.

Invoice requirements

The Indiana Department of Revenue (DOR) requires sellers to maintain records of all sales. Invoices should include:

• Seller's name, address, and registered retail merchant certificate number
• Date of transaction
• Buyer information
• Description of goods or services
• Quantity and price
• Tax amount (shown separately)
• Total

For exempt sales, retain the buyer's Streamlined Sales Tax Certificate of Exemption (Form ST-105) or the General Sales Tax Exemption Certificate. Records must be maintained for at least three years from the date the return was due or filed.

Exemptions and special cases

Groceries (food for human consumption) are exempt from sales tax. Prescription drugs and medical equipment are exempt.

Manufacturing equipment directly used in the production process qualifies for exemption. Agricultural products and farm machinery are exempt for qualifying purchasers.

Clothing is fully taxable at 7%. SaaS is generally not taxable in Indiana — the state taxes tangible personal property and does not broadly classify cloud-based software as taxable. However, prewritten software delivered electronically is taxable.

Digital goods (e-books, music, video downloads) are taxable under Indiana's specified digital products provisions.

Filing frequency and deadlines

Indiana assigns filing frequency:

• Monthly — most businesses
• Quarterly — smaller sellers
• Annually — very small sellers

Monthly returns are due the 20th of the following month (the 30th for returns filed through INtax). Quarterly returns are due the last day of the month following the quarter. Annual returns are due January 31.

Indiana provides a vendor collection allowance — retailers may retain a portion of the tax collected as compensation. Electronic filing through INtax is standard.

Penalties for non-compliance

Late filing incurs a 10% penalty on unpaid tax. Interest accrues at the rate established by the DOR.

Failure to obtain a Registered Retail Merchant Certificate before selling is an infraction. Back-assessments with penalties apply when nexus existed but the seller did not register. Indiana participates in SST audit programs and information sharing.

FAQ

Is the rate really 7% everywhere in Indiana?

Yes. Indiana has a uniform 7% rate with no local additions. No city, county, or district in Indiana adds additional sales tax. This makes rate determination trivial compared to states with local variations.

Are digital downloads taxable in Indiana?

Yes, specified digital products (e-books, digital music, streaming video, digital photographs) are taxable in Indiana. However, SaaS accessed through a browser without downloading is generally not taxable. The distinction matters.

Can I register through the Streamlined Sales Tax system?

Yes. Indiana is a full SST member. You can register through the Streamlined Sales Tax Registration System to simultaneously register in Indiana and other SST states, simplifying multi-state compliance.

Verify Indiana's 7% rate and others with InvoiceQuickly's tax rate lookup.