Indiana Sales Tax on Out of State Purchases: What You Need to Know

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Does Indiana collect sales tax on out of state purchases?
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.
Read more on www.stats.indiana.edu

The state of Indiana is one of many in the US that charges sales tax on retail purchases. However, it is unclear if Indiana collects sales tax on purchases made outside of the state. Yes, Indiana does in some circumstances require the payment of sales tax on purchases made outside the state.

Sales tax must be paid if the out-of-state transaction is for goods or services that will be used in Indiana. This includes shopping online from merchants who don’t have a physical location in Indiana. The county in which the purchase is made determines the applicable tax rate.

The first step in calculating the Indiana sales tax on a purchase is to ascertain the entire selling price. The subsequent step is to apply the county-specific tax rate that is applicable to the purchase. To help in this process, the Indiana Department of Revenue’s website offers a tax rate lookup tool.

A certificate of exemption from Indiana’s retail sales and use tax is known as a BT-1 form. Businesses that are buying goods for resale as opposed to their personal usage utilize this form. The document attests that the buyer is registered to collect Indiana sales tax and is actively selling tangible personal property.

A reseller permit is required if your company plans to buy goods in Indiana to resell. By registering with the Indiana Department of Revenue and supplying information about your company, you can get this permit.

Out-of-state sales certificates are recognized in Indiana. The out-of-state certificate, however, must be valid in the state in which it was issued and have all the same details as an Indiana resale certificate. Additionally, the certificate must be shown to the vendor while making a transaction.

In conclusion, Indiana does occasionally mandate the payment of sales tax on purchases made outside the state. If you are a business buying goods to resell, it is crucial to comprehend the applicable tax rate and to secure the required documents and permissions. Additionally, Indiana accepts out-of-state sales certificates, but they have conditions.