2024 Guide to Sales Tax in Indianapolis, Indiana

What is the Sales Tax in Indianapolis?

Indianapolis has a combined sales tax rate of 7.00%. In Indiana, the sales tax rate is straightforward as it consists of the state sales tax rate with no additional county or city taxes:

• The Indiana state sales tax rate: 7.00%
• A Marion County sales tax rate: 0.00%
• Any special sales tax rates: 0.00%

What is Marion County Sales Tax?

Marion County does not have an additional sales tax beyond the state rate. Therefore, the sales tax rate you will charge in Indianapolis is the same throughout Marion County. This simplicity helps maintain uniformity across the county, reducing the complexity of calculating the appropriate sales tax.

Tax Rates in Indianapolis, Indiana

Curious about how the sales tax rates are distributed across different parts of Indianapolis? Here’s a breakdown of the sales tax rates for the top 10 zip codes in Indianapolis:

Other Tax Rates for Indianapolis

We’ve now covered the primary tax rates for Indianapolis. Here are some other tax rates that might apply to your business operations:

What Items are Taxable in Indianapolis?

In Indiana, not all items are subject to sales tax. For instance, certain types of medical products and groceries may be exempt. To ensure you’re charging the correct tax, consider adding a Tax Information Code (TIC) to each item you sell. A TIC is a unique identifier that categorizes goods or services.

Here are some examples of taxable items in Indianapolis:

What Items are Exempt from Taxes in Indianapolis?

Indiana exempts several items from sales tax to encourage their purchase or because they are deemed essential. To avoid mistakenly charging tax on exempt items, apply a Tax Information Code (TIC) to each of these products.

Here is a list of some tax-exempt items in Indianapolis:

Who Needs to Collect Sales Tax in Indianapolis?

Businesses must collect sales tax in Indianapolis if they have either a physical presence (nexus) or an economic nexus in Indiana.

What is Physical Nexus in Indiana?

Physical nexus in Indiana means that your business has some kind of physical presence in the state. This can include having an office, warehouse, employees, or even a significant amount of inventory within the state.

What is Economic Nexus in Indiana?

If your business doesn’t have a physical presence in Indiana, you can still be required to collect sales tax if you exceed the economic nexus threshold. This is defined as making $100,000 in sales or 200 transactions in the state within a year.

How you qualify for economic nexus in Indiana (full details):

• You must count all sales into Indiana, including wholesale transactions, toward your $100,000 sales threshold or 200 transactions.
• Sales made through a marketplace where the facilitator collects tax on your behalf do not count toward the threshold.
• Once you reach the threshold, you must register for sales tax in Indiana and begin collecting and remitting the appropriate taxes.

How to Get a Sales Tax Permit in Indianapolis?

If your business meets the physical or economic nexus criteria, you’ll need to obtain a sales tax permit in Indiana. This process is simple and free.

Here are the steps:

1. Visit the Indiana Department of Revenue website.
2. Complete the online registration form with details about your business.
3. The system will identify the necessary permits and register you for them.
4. You’re all set!

For more information, refer to the State of Indiana’s Sales Tax website.

How Do You Charge the Right Amount for Sales Tax in Indianapolis?

Ensuring you charge the correct sales tax in Indianapolis can be challenging due to potential rate changes and differing rates across regions. Here’s how to stay compliant:

1. Manually update rates: Keep track of changes by regularly checking the Indiana Department of Revenue’s website. This approach requires updating your ecommerce platform frequently to ensure accurate tax rates.
2. Use sales tax software: Automate the process with sales tax compliance software like TaxCloud. These tools update rates automatically across all jurisdictions, saving you time and reducing errors.

How Do You File and Remit Sales Tax in Indianapolis?

Do you need to file sales tax returns for Indianapolis or Marion County specifically? No, you don’t. If you have sales tax nexus in Indiana, you collect sales taxes from across the state and file a single state-wide return. The Indiana Department of Revenue will then distribute the funds to the appropriate city or county.

If filing Indiana sales taxes is time-consuming for you, TaxCloud can help. Our platform automates the entire sales tax management process, from tracking nexus and registering for sales tax to filing returns. With TaxCloud, you can focus on growing your business while we handle your sales tax compliance.

Learn how TaxCloud can simplify sales tax for your business.