Indiana is one of the simplest sales tax states — a flat 7% rate applies uniformly across the entire state with no local add-ons. Whether you shop in Indianapolis, Fort Wayne, or a small rural town, you pay exactly 7%. Indiana's rate is relatively high for a state that compensates consumers by exempting groceries, prescription drugs, and many agricultural products.
Indiana sales tax overview
| Component | 2026 Rate |
|---|---|
| State sales tax | 7.00% |
| Avg local add-on | 0.000% |
| Avg combined | 7.00% |
| Maximum combined | 7.00% |
Note: Indiana has no local sales tax — uniform 7% statewide.
Indiana sales tax by city
Combined state + local sales tax rates for major cities in Indiana:
| City | Combined Rate |
|---|---|
| Indianapolis | 7.00% |
| Fort Wayne | 7.00% |
What's exempt in Indiana
Groceries
Exempt from Indiana state sales tax. Local jurisdictions may still tax.
Clothing & footwear
Taxed at standard rate.
Prescription drugs
Exempt from sales tax (typical across most states).
How Indiana sales tax is calculated
Sales tax in Indiana is calculated by multiplying the pre-tax purchase price by the applicable combined rate. The formula is simple:
Sales Tax = Purchase Price × 7.00% (avg combined)
Total = Purchase Price + Sales Tax
The exact rate depends on where the purchase occurs — the state base rate (7.00%) plus any local city or county add-ons. Indiana does not allow local sales taxes — the rate is uniform statewide at 7.00%.
Quick calculation examples at average rate 7.00%:
$100 item
$7.00 tax
$107.00 total
$250 item
$17.50 tax
$267.50 total
$500 item
$35.00 tax
$535.00 total
$1,000 item
$70.00 tax
$1070.00 total
Additional tax-free items in Indiana
Beyond the standard exemptions, Indiana also provides sales tax relief on these categories:
Exemptions may have conditions. Always verify with the Indiana Department of Revenue for complete rules.
Indiana sales tax in context: rates, history, and neighbors
Indiana's 7% state sales tax (since 2008) is uniform statewide — Indiana law constitutionally prohibits local sales taxes. Every Indiana shopper pays exactly 7% on taxable goods, regardless of city or county. This makes Indiana one of the simplest states for both consumers and retailers. The 7% rate is on the higher end among states without local taxes (vs Massachusetts 6.25%, Maryland 6%, Kentucky 6%, Michigan 6%). Indiana is the only Midwest state with a high uniform rate and no local add-ons. Compared to neighbors: Illinois (~8.82% Chicago combined), Michigan (6%), Ohio (~7.21% combined), Kentucky (6%) — Indiana sits in the middle of the Midwest. Indiana exempts groceries and prescriptions from sales tax. The simplicity of Indiana's tax system is a major business-friendly attribute.
Online shopping & Indiana sales tax
Indiana enforces economic nexus — sellers with $100,000+ or 200+ Indiana transactions must collect Indiana's 7% sales tax. Indiana is a member of the Streamlined Sales Tax (SST) Agreement. All marketplace sales through Amazon, Etsy, and similar platforms have Indiana tax automatically collected by the marketplace.
Use Tax reminder: If you purchase taxable goods online from a seller who does NOT collect Indiana sales tax, you technically owe Use Tax — the same rate as sales tax, reportable on your Indiana state tax return. Use Tax enforcement on consumers is rare but the obligation exists for significant purchases.
How much Indiana sales tax on common purchases?
Using Indiana's average combined rate of 7.00%:
| Purchase | Price | Sales Tax | Total |
|---|---|---|---|
| Grocery cart | $150 | Exempt | $150.00 |
| Clothing / shoes | $120 | $8.40 | $128.40 |
| Prescription drug | $80 | Exempt | $80.00 |
| Smartphone | $999 | $69.93 | $1068.93 |
| Laptop / tablet | $1,299 | $90.93 | $1389.93 |
| New car ($35,000) | $35,000 | $2450.00 | $37450.00 |
| Home appliance | $1,500 | $105.00 | $1605.00 |
| Restaurant meal | $60 | $4.20 | $64.20 |
Based on Indiana's average combined rate of 7.00%. Exact tax depends on city/county. Use our calculator above for specific locations and amounts.
Collecting sales tax in Indiana: business guide
If you sell goods or taxable services to Indiana customers, here's what you need to know:
- Registration: Register for a Indiana sales tax permit/license through the Indiana Department of Revenue before making your first taxable sale. Most states process registrations online within a few days.
- Economic nexus (online sellers): If you have $100,000+ in Indiana annual sales or 200+ transactions, you must collect Indiana sales tax even without a physical presence in the state — per South Dakota v. Wayfair (2018). The rate is uniform at 7.00% statewide.
- Destination vs origin sourcing: Indiana uses destination-based sourcing for most sales — the tax rate where the buyer receives the goods applies. Always use the customer's delivery address to determine the rate.
- Filing frequency: Frequency depends on your Indiana sales volume — monthly for high-volume sellers, quarterly or annually for low-volume sellers. Check with the Indiana Department of Revenue for your specific filing schedule.
- Marketplace sales: If you sell through Amazon, Etsy, eBay, or similar platforms, the marketplace is required to collect and remit Indiana sales tax on your behalf — you don't need to collect it separately on marketplace transactions.
- Resale certificates: Businesses purchasing goods for resale can provide a Indiana resale certificate to suppliers to avoid paying sales tax on wholesale purchases. Keep copies of all resale certificates for audits.
Streamlined Sales Tax (SST): Indiana is a full member of the Streamlined Sales Tax (SST) Agreement, which simplifies multi-state sales tax registration and compliance through a single registration portal (streamlinedsalestax.org).
Indiana-specific business compliance details
Indiana businesses register with the Indiana Department of Revenue (DOR) at intime.dor.in.gov for an Indiana Registered Retail Merchant Certificate (RRMC). Filing frequency: monthly for most businesses, quarterly or annually for small businesses based on tax owed. Out-of-state sellers with $100,000+ in Indiana sales (or 200+ transactions) must collect Indiana tax (economic nexus, since 2018). Indiana is a Streamlined Sales Tax (SST) Agreement member — multi-state sellers benefit from simplified compliance. Marketplace facilitators (Amazon, Etsy, eBay) collect Indiana tax automatically. Indiana's flat 7% rate eliminates the multi-jurisdictional complexity that plagues states like Colorado or Louisiana. Penalties: 10% of unpaid tax plus interest. Indiana DOR is generally considered taxpayer-friendly with reasonable enforcement.
Indiana sales tax frequently asked questions
Why does Indiana have such a simple, uniform sales tax?
Indiana's constitution and statutes prohibit local governments from imposing their own sales taxes — only the state can levy sales tax, and it does so at a uniform 7% everywhere. This dramatically simplifies compliance for businesses and shopping decisions for consumers. You always know exactly what rate applies: 7%, period. Indiana has maintained this simplicity since its 1963 sales tax was enacted.
What is the total tax on a $500 electronics purchase in Indiana?
In Indiana, $500 × 7% = $35 in sales tax, for a total of $535. This is the same regardless of which Indiana city or county you're in — Indianapolis, Evansville, Bloomington, or any rural store all charge exactly 7%. Electronics are fully taxable; the only major exemption categories are groceries, prescription drugs, and a few agricultural/manufacturing items.
Are online purchases from out-of-state retailers taxable in Indiana?
Yes — Indiana requires out-of-state sellers with $100,000+ in Indiana sales to collect and remit Indiana's 7% sales tax. Major online retailers like Amazon, Walmart.com, and others automatically collect Indiana sales tax at checkout. If you buy from a small out-of-state retailer who doesn't collect Indiana tax, you technically owe Indiana Use Tax at the same 7% rate, reported on your state income tax return.
Indiana city paycheck calculators
If you live or work in a Indiana city, see our city-specific paycheck calculators for take-home pay including any local income tax, plus local employer and cost-of-living context: