Collecting and Paying Sales Tax in Indiana

If you have a business in Indiana that makes retail or wholesale sales, you are subject to the Indiana sales tax. According to the Indiana Department of Revenue, the sales tax also applies to renting or leasing tangible personal property, renting or furnishing lodging for periods of less than 30 days, renting or furnishing booths, displays, or banquet facilities, storage of tangible personal property, and certain utility and cable television services.

If your business is subject to the Indiana sales tax, you have to register with the Indiana Department of Revenue by filing Form BT-1, Business Tax Application. You can do this online. When you register you need to indicate your estimated monthly sales. If you leave that amount blank you will have to file sales tax returns monthly. There is a $25 non-refundable fee for registering for sales tax.

On the same BT-1 Business Tax Application you can also register for other taxes that may apply, depending on your type of business, such as the withholding tax for employers, the county innkeepers' tax, the food and beverage tax, the motor vehicle rental excise tax, and the prepaid gasoline sales tax.

The BT-1 Business Tax Application can be used by any type of business structure, including partnerships and corporations. One of the requirements for the Business Tax Application is a federal employer identification number. You can apply for this number online on the IRS website. Limited partnerships, limited liability companies and corporations would need an Indiana Secretary of State Control Number. These types of entities can use Business Services Online to register with the Indiana Secretary of State.

As pointed out by the Indiana Department of Revenue, a sole proprietorship or limited liability corporation that is not registering for withholding tax and does not plan to obtain a federal employer identification number must submit Form BT-1 on paper.

Once your application is approved you will receive a sales tax certificate. According to the Indiana Department of Revenue, you should hear back within 48 hours if you register online. The certificate should be displayed at your place of business. And as indicated by the Indiana Department of Revenue, you will also need to apply for a vendor's license from your county clerk's office.

The Indiana state sales tax certificate must be renewed every two years. If all your tax returns and payments are up to date, your renewed certificate will be sent automatically.

The Indiana state sales tax rate is 7%. Sales tax returns can be filed and paid online using INtax, the Indiana Tax Center. Your filing frequency depends on your average monthly tax liability.

Sources:

Apply for an Employer Identification Number Online, IRS

Business Services Online, Indiana Secretary of State

Frequently Asked Questions - Businesses, Indiana Department of Revenue

Indiana Retail Sales Tax & Use Tax, Indiana Department of Revenue

Online Business Tax Application (BT-1) Checklist, Indiana Department of Revenue