Indiana Sales Tax Rates and What They Apply To

Indiana's statewide sales tax rate is 7 percent

Indiana charges a 7 percent sales tax on most retail purchases. This is the base rate that applies statewide. However, some counties and cities add their own local sales tax on top of the state rate, so your total tax can be higher depending on where you shop.

The combined rate you pay at checkout depends on the specific location of the store. A purchase in Indianapolis may have a different total tax rate than the same purchase in Fort Wayne or Evansville, because each has different local add-ons. When you see a price tag, the 7 percent is the floor — not necessarily what you'll pay.

Key Takeaways

• Indiana's base sales tax is 7 percent, but your actual rate depends on local taxes added by your county or city.
• Groceries, prescription medications, and certain medical devices are exempt from Indiana sales tax.
• Services like haircuts, repairs, and professional consulting are generally not taxed in Indiana.
• Local tax rates vary by location, so the same item costs different amounts in different towns.
• You can find your exact local rate by entering your address on the Indiana Department of Revenue website or asking at checkout.

How local taxes add to the state rate

On top of the 7 percent state tax, counties and cities in Indiana can impose their own sales tax. These local rates range from zero to around 2 percent, depending on where you are. Some counties have no additional local tax at all, while others layer on the maximum allowed.

This means your total sales tax bill can range from 7 percent in areas with no local add-on to as high as 9 percent or slightly more in areas with multiple local taxes stacked together. The only way to know your exact rate is to check your location or ask the cashier before you buy.

What is and isn't taxed in Indiana

Not everything you buy is subject to sales tax in Indiana. Groceries — food you cook at home — are exempt. This includes bread, milk, vegetables, meat, and canned goods. However, prepared foods, restaurant meals, and items from a deli counter are taxed.

Prescription medications are not taxed. Over-the-counter drugs like pain relievers and cold medicine are taxed, but prescriptions filled at a pharmacy are exempt. Medical devices prescribed by a doctor, such as diabetic testing supplies, are also exempt.

Services are generally not taxed in Indiana. A haircut, car repair, plumbing work, or accounting consultation is not subject to sales tax. However, if you buy a product as part of that service — like paint during a painting job — the product itself may be taxed depending on how the transaction is structured.

Clothing is taxed in Indiana, including shoes and accessories. There is no clothing exemption, even for children's clothing or school uniforms.

Finding your exact local sales tax rate

The Indiana Department of Revenue maintains a sales tax rate lookup tool on its website. You can enter your street address or zip code to see the exact combined state and local rate for your location. This tool is updated regularly as local rates change.

If you do not have internet access or prefer to ask directly, you can call the Indiana Department of Revenue or ask the cashier at any store in your area. Most retailers know their local rate and can tell you what you will pay before you check out.

Sales tax on online and mail orders

Indiana requires most online retailers to collect and pay sales tax on orders shipped to Indiana addresses. This applies whether you order from a large national company or a smaller online seller. The tax rate is based on the delivery address, not where the seller is located.

If a retailer does not collect tax at checkout, you may owe it yourself when you file your Indiana tax return, though this is uncommon for individual purchases. Most major online retailers now collect Indiana sales tax automatically.

Tax-free shopping days and special exemptions

Indiana does not have an annual statewide tax-free shopping day like some other states. However, certain organizations and purchases may be exempt from sales tax under specific circumstances. Nonprofit organizations, government agencies, and certain educational institutions may not pay sales tax on their purchases, but this does not explore to individual shoppers.

If you are buying items for a nonprofit organization you work with, that organization may be able to provide a resale certificate or exemption form to avoid paying tax. This is handled between the organization and the retailer, not at the point of sale for individual customers.

Frequently Asked Questions

Is sales tax the same everywhere in Indiana?

No. The state rate is 7 percent everywhere, but counties and cities add their own local taxes. Your total rate depends on your exact location. Two towns just a few miles apart can have different rates.

Do I pay sales tax on used items?

Yes, used items sold by a retailer are subject to sales tax in Indiana. However, private sales between individuals are not taxed. If you sell your used car to a friend, no tax applies. If you sell it to a used car dealer who resells it, tax applies to that dealer's sale.

What about sales tax on vehicles?

Vehicle purchases are subject to sales tax in Indiana, but the tax is typically handled through vehicle registration rather than at the point of sale. The rate and process depend on whether you are buying from a dealer or a private party, and the Indiana Bureau of Motor Vehicles can provide specific details for your situation.

Are digital products like apps and e-books taxed?

Digital products and downloads are generally subject to Indiana sales tax. This includes e-books, software, streaming subscriptions, and digital games. The tax is based on where you live, not where the seller is located.

Can I get a refund of sales tax I already paid?

Sales tax refunds are not common for individual shoppers. If you believe you were overcharged or taxed incorrectly, contact the retailer first. If the issue is not resolved, you can file a complaint with the Indiana Department of Revenue, though recovery is not may provide.