The Indiana sales tax rate is an important factor for businesses operating in the Hoosier state. As per the reports of 2025, Indiana  maintains a direct sales tax system with a statewide sales tax rate of 7%. Here, in this blog, you will come to know about the details of Indiana sales tax rate, its key considerations and implications.

What is the Indiana sales tax rate? 

For the majority of taxable products and services, the current sales tax rate in Indiana is 7%. The 7% rate is the same in all counties and cities, from Indianapolis to Fort Wayne, because Indiana does not charge additional municipal sales taxes like many other states do. For both customers and corporations, this standardization makes computations easier. For instance, a $100 purchase in Indiana costs $107 overall because of a $7 sales tax. 

Which products or services are subject to sales tax in Indiana?

Electronics, apparel, and furniture are examples of tangible personal property that is subject to the Indiana sales tax. Repairs and other tangible property-related services could potentially be subject to taxes. Prescription medications, medical supplies, and the majority of groceries are an exception, though. To guarantee appropriate tax collection, businesses need to be aware of these differences. For example, a grocery store usually does not charge sales tax on prepackaged food items, but a bookstore is required to charge it on books.

Indiana sales tax obligations 

If a business has a nexus, or a substantial link, in Indiana, they are required to collect the sales tax. This includes having a physical presence (such a store or warehouse) or having an economic nexus that was brought about by sales into Indiana of more than $100,000 in the previous or current calendar year. These regulations also require marketplace facilitators, such as Amazon, and remote sellers to collect and remit the 7% tax on applicable sales.

Use Tax in Indiana

Purchases bought out of state for use in Indiana when sales tax was not collected are subject to Indiana's use tax, which has a 7% rate similar to the sales tax. For instance, you must pay 2% use tax to Indiana to make up the difference if you purchase a $1,000 laptop from a different state with a 5% sales tax. For in-state companies, this guarantees equity.

Filing and Compliance

A Registered Retail Merchant Certificate (RRMC) is granted to companies that register with the Indiana Department of Revenue (DOR). Depending on their sales volume, these companies are required to file sales tax reports on a monthly, quarterly, or annual basis. Usually, returns must be made by the 20th of the subsequent month. Penalties for noncompliance, such as late files, can be as much as 20% of the tax owed, with a $5 minimum. Compliance can be made easier by using resources like software or sales tax calculators.

Navigating the tax environment in Indiana requires an understanding of the 7% sales tax rate. Businesses and consumers can avoid fines and help Indiana's economy, which depends on sales tax for 24% of state and local revenue, by remaining aware and in compliance.