Understanding Use Tax in Indiana and Related Questions

When purchasing tangible personal property or taxable services that will be used, kept, or consumed in Indiana but for which the retailer does not charge sales tax, a use tax is levied. This tax is implemented to ensure tax equity and to stop consumers from evading sales tax by buying goods from out-of-state merchants that do not charge it. You will be required to pay use tax if, for instance, you buy a television from an internet seller from outside of Indiana who does not charge Indiana sales tax. Similar to this, you must pay use tax on any taxable services you obtain from a supplier outside of Indiana, such as repair or installation services.

You must declare the amount of your purchases subject to use tax on your Indiana income tax return in order to pay use tax in Indiana. To open a use tax account, you might also need to register with the Indiana Department of Revenue.

You can qualify for a resale certificate if your company buys products to resell. With a resale certificate, you can buy products without paying sales tax as long as you intend to sell them again as part of your regular company operations. Form ST-105, which is available on the website of the Indiana Department of Revenue, must be filled out in order to receive a resale certificate in Indiana.

On the other side, a sales tax exemption certificate is utilized to exclude particular transactions from sales tax. Nonprofit organizations, governmental bodies, and companies that are exempt from paying sales tax frequently use this certificate. Depending on the type of exemption and the issuing body, a sales tax exemption certificate’s validity in Indiana varies. Finally, a business may submit a Blanket Purchase Exemption Request to ask for an exemption from sales tax on all purchases made for a specific time period. The Indiana Department of Revenue must receive this form, and it must be approved.

The use tax in Indiana is a fee that is levied on purchases of tangible personal property or taxable services that are used, kept, or consumed in Indiana but for which sales tax was not recouped. Sales tax exemption certificates are available to charity organizations and governmental bodies, and businesses can get resale certificates to buy items without paying sales tax. Depending on the kind of exemption and the issuing organization, these certificates’ expiration dates change. Businesses may also submit a Blanket Purchase Exemption Request to ask for a blanket exemption from sales tax on all purchases made for a specific time period.