Indiana is one of the few states that levies a sales tax on all goods and services. The Indiana sales tax rate is 7% as of 2023, which is the same rate that has been in effect since 2007. There may be additional local taxes imposed, depending on the county in which the sale takes place. This article provides an overview of the Indiana sales tax rate, including the current rate and any applicable local taxes.
What is the Current Indiana Sales Tax Rate?
The current Indiana sales tax rate is 7% as of 2023. This rate has been in effect since 2007 and is the same rate for all transactions. It applies to all goods and services, including digital products. The sales tax is collected by the seller at the time of the sale, and the rate is the same regardless of whether the sale is made in person or online.
Are There Any Local Taxes in Addition to the State Rate?
In addition to the state rate, some counties in Indiana also impose additional local taxes. These taxes are in addition to the state rate, and the rate varies depending on the county. For example, in Marion County, the local sales tax rate is 1.75%, bringing the total sales tax rate to 8.75%. Similarly, in Lake County, the local sales tax rate is 1.5%, bringing the total rate to 8.5%. In most cases, these local taxes are applied to the same goods and services that the state rate applies to.
Are There Any Exemptions or Exclusions to the Indiana Sales Tax?
The Indiana sales tax does not apply to certain goods and services. These exemptions include food for home consumption, medical devices, prescription drugs, and certain clothing items. Additionally, some services are exempt from the sales tax, such as legal services and labor for installation of tangible personal property. It's important to note that these exemptions may be subject to local taxes, depending on the county in which the sale takes place.
What is the Process for Collecting and Remitting Sales Tax in Indiana?
Businesses that sell taxable goods and services in Indiana are required to collect and remit sales tax to the state. The sales tax is collected at the time of the sale, and the rate is the same regardless of whether the sale is made in person or online. Businesses are required to register with the Indiana Department of Revenue to obtain a sales tax permit. They are then responsible for filing returns and remitting the collected sales tax each month.
Are There Any Penalties for Not Collecting or Remitting Sales Tax?
Businesses that fail to collect or remit sales tax may be subject to penalties and interest from the Indiana Department of Revenue. Penalties may include fines and/or suspension or revocation of the business's sales tax permit. Additionally, businesses may be held liable for any unpaid tax, interest, or penalties.
Conclusion
The Indiana sales tax rate is 7% as of 2023, and some counties may impose additional local taxes. Exemptions and exclusions may apply to certain goods and services, but these may still be subject to local taxes. Businesses that sell taxable goods and services are required to collect and remit sales tax, and failure to do so may result in penalties and interest from the Indiana Department of Revenue.
