Zero local taxes, zero grace period
At 7%, Indiana has one of the highest flat sales tax rates in the country. Most states bury you in local tax rates. Indiana doesn't. But what it lacks in local complexity, it makes up for with an aggressive stance on digital products and SaaS.
Indiana sales tax rate table
| Field | Value |
|---|---|
| State base rate | 7.0% |
| Average combined rate | 7.0% |
| Local add-on range | 0%, no local taxes |
| Maximum combined rate | 7.0% |
| Rates vary by county/city | No |
| Sourcing | Destination-based |
$100,000, and no cushion once you cross it
Indiana expects you to register and collect the moment you exceed $100,000 in gross sales. The state eliminated its 200-transaction rule in early 2024. Now only revenue matters.
- Marketplace sales count toward your $100,000, though the marketplace remits the tax for those.
- Hit $100,000 on a Tuesday? You need to register and start collecting on Wednesday.
SaaS is deeply taxable, with no exceptions
Indiana does not care if you sell to enterprise businesses or everyday consumers. If you deliver software electronically, you collect tax.
| Product / service | Tax treatment |
|---|---|
| SaaS (B2B and B2C) | Taxable at 7% |
| Downloaded software (permanent license) | Taxable at 7% |
| Streaming / subscription software | Taxable at 7% |
| Digital goods (e-books, music, video) | Taxable at 7% |
| Cloud storage / hosting | Taxable at 7% |
| Custom software / data analysis (services) | Generally exempt |
The distinction: selling access to prewritten software (downloaded, streamed, or subscription) is taxable. Building custom software from scratch for one client is usually a service and escapes tax.
Product taxability in Indiana
| Product category | Tax treatment |
|---|---|
| Groceries & unprepared food | Exempt |
| Prepared food & restaurant meals | Taxable at 7% |
| Candy & soft drinks | Taxable at 7% |
| Clothing & apparel | Taxable at 7%, no exemption |
| Prescription drugs | Exempt |
| Manufacturing machinery & equipment | Exempt |
| Lawn care / pest control application (2026) | Nontaxable |
Indiana taxes all clothing and footwear: no exemption like many other states offer.
Indiana does not offer sales tax holidays
The flat 7% rate applies year-round to all taxable goods and services.
Filing and registration
Register through the INBiz portal. Free, 1 to 2 business days.
| Frequency | Assigned when… |
|---|---|
| Monthly | Average liability $1,000+/month |
| Quarterly | Under $1,000/month |
| Annual | Typically under $100/month |
Returns due the 20th of the month following the reporting period.
- Late filing/payment: 10% each
- Interest: ~7% annually
No vendor discount.
Not sure which of these apply to you?
We map your Indiana exposure, from the immediate registration rule to how your digital goods are classified, and give you a plan. The first call costs nothing.
One registration, and full SST membership
Indiana is not a home-rule state: every taxable sale gets the same 7% rate, no local registrations needed. Indiana is a full SST member, letting you use certified service providers at no cost.
Voluntary Disclosure Agreement (VDA)
Indiana offers a formal VDA program directly or through the MTC. Lookback typically 3 years (vs. 4-year standard). Penalties waived; interest owed. Process takes 60-90 days.
Audit risk in Indiana
Indiana takes enforcement seriously, especially around software. Common triggers: high exempt sales without documentation, treating SaaS as nontaxable, late registration after crossing $100,000. Statute of limitations: 3 years standard; unlimited for fraud or non-filers.
Recent changes & quirky rules
Eliminated in early 2024, now only the $100,000 revenue mark matters.
Home exterior application services like fertilizer and pest control no longer collect sales tax on labor.
Exemptions & resale certificates
Indiana accepts Form ST-105 or the SST Uniform Exemption Certificate. Blanket, don't technically expire (update every few years). Common exemptions: resale, manufacturing (direct-use production), agriculture, government.
Your next step: get clear on Indiana compliance
- Past $100,000? You're legally required to collect right now.
- Selling software or digital products? You almost certainly need to tax it.
- Behind on compliance? A VDA wipes out penalties, but interest keeps ticking.
Where this comes from
Rates and thresholds on this page were verified June 10, 2026 against the Indiana Department of Revenue and its sales and use tax guidance. ZIP-level rates in the calculator come from our rate file, updated monthly.