Indiana, also known as Hoosier State, is a state located in Midwestern and Great Lakes regions of North America, famous for the low cost of living, great universities, amazing people, a flourishing economy, and a favorable business environment. Hence, attracting numerous businesses and startups throughout the year.
So if you are planning to start, relocate, or expand your business in Indiana, you should know how to deal with Indiana Sales Tax. Wherefore, you experts have poured in all of their expertise to bring you a handy Indiana Sales Tax calculator, supported by a comprehensive Sales Tax Calculations guide, to educate you with all the essentials.
Businesses and Sellers involved in the retail sale of taxable tangible personal property and some services, as well as have Nexus in Indiana are required to register for Sales tax. They are required to collect, manage, and remit it to the Indiana Department of Revenue while staying in compliance with state laws and avoid penalties and interest.
The sales tax determined on four factors:
To calculate Sales Tax in Indiana, follow the steps below:
You, as a Business owner, are only required to collect sales tax if you are eligible for collecting sales tax and have Sales Tax Nexus in the Indiana State. And to determine your Nexus in Indiana, you must have any of the following:
Out of State Seller is eligible to register, collect and remit sales tax under Indiana Law, if:
Once you have determined that your Nexus is with Indiana, next is to deduce the Sales Tax rate (State) applicable to your product. However, No city or county levy local sales tax, so wherever you go in Indiana State, you will pay the same rate of 7%.
Moreover, Prepared Food is subjected to a special and higher sales tax rate of 9%. Prepared Food includes food and beverages that are packaged, prepared, sold as meals. Moreover, food consumed on or near the premises, as well as food sold through vending machines or street vendors.
As the Sales Tax rate in Indiana is the same, so it is easy to calculate the sales tax amount charged on the product and gross price (amount after-tax) of a product.
Example # 1:
For instance, you sell a Gaming PC on your store in Greenwood, Indiana, having a net cost of $650. The amount of Sales Tax that you have to pay on the Gaming PC would be:
Net Price (amount before Tax) of a Gaming PC: $650
Total Sales Tax rate: 0.00% (Greenwood) + 0.00% (Johnson County) + 7.00% (Indiana State) = 7.00%
Total Sales Tax amount = $650 x 7.00% = $45.5
Gross Price (Amount after Tax) = 650 + 45.5 = $695.5
So the Sales Tax amount charged on the Gaming PC would be $45.50, raising the gross cost of it to $695.5.
Using our Sales Tax Calculator:
All of the steps mentioned above can be skipped to get an instant result using our Sales Tax Calculator. All you need is:
Our calculator will automatically calculate the result, and represents it in 3 different forms, as shown in the image below:
In the example above, we have explained to you to calculate the Sales Tax amount payable in a product, and the Gross Price of the Product.
But there are also instances when you are required to deduce how much Sales tax you have actually paid on a product in Indiana.
This is where the Reverse Sales Tax Calculation Kicks in. And luckily, our Indiana Sales Tax Calculator can perform this calculation like a Pro.
The gross cost (amount after tax) of a Gaming Laptop is $720, which you sell on your store in Fort Wayne, Indiana. Now, if you want to deduce the amount of sales tax you have actually paid on it and the net cost (amount before tax) of a Gaming Laptop, you can follow the steps below:
Gross Price (Amount after Tax) of Gaming Laptop: $720
Total Sales Tax rate: 0.00% (Fort Wayne) + 0.00% (Allen County) + 7.00% (Indiana State) = 7.00%
Gross Price with sales tax = [Net Price × (tax rate in decimal form + 1)]
720 = [Net Price x ((7/100) + 1)]
720 = Net Price x 1.07
$672.9 = Net Price
So the original Price (net price) of the Gaming Laptop would be $672.9.
Using our Sales Tax Calculator:
You can also use our Sales Tax Calculator for Reverse Sales Tax calculation to skip the aforementioned manual method. All you need is:
Our calculator will automatically calculate the result and represents it in 3 different forms.
Answer: Prescription drugs and groceries are exempted from Sales Tax.
Answer: No, Indiana doesn't generally charge Sales Tax on Services.
Answer: You can conveniently access DORpay, which allows individuals to pay the tax owed to the Department. You can make a tax payment by Visa, MasterCard, or e-check.
Answer: All tangible personal property and certain services for sale are charged with sales tax in Indiana.
Answer: No, Groceries are exempted from Sales Tax in Indiana.