Indiana Sales
Tax Rate

State rate, taxable purchases, use tax, food rules, remote seller nexus and marketplace responsibilities.

Indiana sales tax is 7 percent on taxable retail transactions in 2026. Indiana also imposes a complementary 7 percent use tax when taxable property is used, stored or consumed in Indiana and enough sales tax was not paid at purchase. The state does not use a general local sales tax layered onto every retail transaction, although certain jurisdictions can impose separate food and beverage taxes or other transaction-specific local taxes.

Most sellers with a physical presence in Indiana must register before making taxable retail sales. Remote sellers can also create Indiana sales tax nexus when gross revenue from sales into Indiana exceeds $100,000 in the current or preceding calendar year. The former 200-transaction economic nexus test no longer applies.

Indiana Sales Tax Rate in 2026

The statewide Indiana sales tax rate is 7 percent. For a standard taxable retail sale, the seller collects the tax from the purchaser then reports and remits it to the Indiana Department of Revenue.

What Is Taxable in Indiana?

Indiana generally taxes retail sales of tangible personal property unless a specific exemption applies. Certain digital products and specifically taxable services can also be subject to sales tax.

Common taxable transactions include retail merchandise, many prepared-food sales, certain digital products, leases or rentals of tangible personal property plus other transactions identified in Indiana law. Indiana generally does not tax services unless the transaction falls within a taxable category or the service is part of a taxable retail unitary transaction.

Are Groceries Taxable in Indiana?

Many qualifying food and food ingredients sold for home consumption are exempt from Indiana sales tax. The exemption does not apply to every item sold in a grocery store.

• Many basic food and food ingredients can qualify for exemption.
• Prepared food is generally taxable.
• Candy can be taxable under Indiana's food definitions.
• Soft drinks are generally taxable.
• Food sold in a heated state or prepared for immediate consumption can be taxable.
• Restaurant meals are generally taxable.

Indiana food rules depend on the product and how it is sold. A grocery item that is exempt in one setting can become taxable when it meets the definition of prepared food or another taxable food category.

Indiana Sales Tax vs. Use Tax

Sales tax and use tax are complementary. Sales tax is normally collected by the seller at the time of a taxable transaction while use tax can become due when Indiana sales tax was not collected or when less than the required Indiana rate was paid.

For example, if taxable property is purchased for use in Indiana and only 5 percent tax was paid to another state, the purchaser can owe Indiana use tax equal to the difference needed to reach the 7 percent Indiana rate, subject to the applicable credit rules.

Who Must Register to Collect Indiana Sales Tax?

A business with an Indiana retail location or other physical presence generally must register to collect tax on taxable Indiana retail sales. Registration produces a Registered Retail Merchant Certificate, commonly called an RRMC.

Indiana charges a $25 registration fee per retail location. A separate certificate is required for each business location that must be registered.

Indiana Economic Nexus for Remote Sellers

A remote seller without physical presence in Indiana must register and collect Indiana sales tax when gross revenue from sales into Indiana exceeds $100,000 in the current or preceding calendar year.

The threshold can include revenue from tangible personal property delivered into Indiana, electronically transferred products and services delivered in Indiana. Indiana removed its former 200-transaction economic nexus threshold effective January 1, 2024.

Threshold analysis can be more detailed when sales are made through marketplaces. Sellers should separate direct sales from transactions where a registered marketplace facilitator has the collection responsibility.

Marketplace Facilitators in Indiana

Marketplace facilitators can be responsible for registering, collecting and remitting Indiana sales tax on facilitated sales. A marketplace can be physical or electronic and can include platforms that provide sales infrastructure while collecting or processing payment.

Marketplace transactions also affect economic nexus calculations. A seller should confirm whether the marketplace facilitator is collecting Indiana tax before deciding whether the seller has a separate collection duty for those transactions.

How Do Indiana Sales Tax Exemptions Work?

Indiana exempts certain purchases and purchasers from sales tax when the requirements of the exemption are met. Exemption treatment depends on the nature of the transaction and supporting documentation.

• Qualifying food and food ingredients
• Certain prescription drugs and medical items
• Qualifying purchases for resale
• Certain manufacturing or production purchases
• Eligible nonprofit or governmental purchases
• Other exemptions specifically provided under Indiana law

A purchaser claiming an exemption can need to provide an exemption certificate such as Form ST-105. Sellers should retain valid exemption documentation rather than treating an exempt sale as a normal taxable sale with zero tax.

Does Indiana Have Local Sales Tax?

Indiana does not impose a general city or county sales tax on every ordinary retail transaction. The standard statewide retail sales tax remains 7 percent.

Some local jurisdictions can impose transaction-specific taxes. A common example is a local food and beverage tax, which can apply to qualifying food and beverage transactions for immediate consumption in an adopting jurisdiction. Lodging can also be subject to county innkeeper taxes in addition to state sales tax.

Indiana Sales Tax for Online and E-Commerce Businesses

Online businesses should determine whether they have physical presence, economic nexus or marketplace activity in Indiana. A seller that crosses the $100,000 remote seller threshold can need to register even when the business has no Indiana office or store.

For taxable sales, sellers should identify the correct transaction, collect the applicable Indiana tax and maintain records that support taxable sales, exempt sales, marketplace transactions and use-tax adjustments.

Sales Tax Is Separate From Indiana Income Tax

Sales tax applies to taxable transactions while individual income tax applies to taxable income. The two tax systems use different tax bases, filing rules and compliance processes.

If your question concerns wages, state income tax or personal filing rather than a retail transaction, the Indiana income tax guide is the relevant resource.

Sales Tax Should Not Appear as an Employee Payroll Deduction

Indiana sales tax is not a normal employee payroll deduction. Employee pay stubs can show federal and state income tax withholding plus other payroll deductions, but ordinary retail sales tax should not be subtracted from wages.

Businesses that need to document genuine payroll after calculating employee wages can use the Indiana pay stub generator. For a broader payroll-document workflow, the online paystub generator should be used only with accurate employer, employee and payment information.

Methodology and Accuracy

This guide reflects current Indiana Department of Revenue sales and use tax guidance, current remote seller rules plus Indiana information bulletins available as of August 25, 2026. Transaction-specific exemptions, local food and beverage taxes, accommodations taxes and industry rules can change the amount due, so current Indiana guidance should control when a transaction falls outside the general rules described here.