Foreign sellers can have an Indiana sales tax obligation even without an Indiana office, warehouse, employee, or other physical presence. Indiana requires a remote seller to register as a retail merchant and collect and remit Indiana sales tax when gross revenue from sales into Indiana exceeds $100,000 in either the current or preceding calendar year.
Indiana is unusually straightforward for rate calculation: it uses one statewide sales tax rate and does not impose a local sales tax on ordinary retail sales. The current state rate is 7%. The Indiana Department of Revenue administers the tax; registration is completed through Indiana’s business registration process, and returns and payments are handled through INTIME. Sales made through a marketplace may be collected and remitted by the marketplace facilitator, but a foreign seller should still review direct sales, threshold calculations, records, and any non-marketplace obligations.
When foreign sellers must collect Indiana sales tax
A foreign seller without an Indiana physical presence is treated as a remote seller. The economic nexus threshold is more than $100,000 of gross revenue from sales into Indiana during the current or preceding calendar year. Indiana’s current rule uses the dollar threshold; the former separate 200-transaction test is no longer part of the current threshold.
The threshold is measured using the seller’s Indiana-directed revenue from the categories covered by Indiana law. It can include tangible personal property delivered into Indiana, products transferred electronically into Indiana, and services delivered in Indiana. Indiana’s guidance also indicates that threshold calculations include sales that are not subject to tax or are treated as exempt, so do not limit the review to taxable receipts alone.
Once the threshold is met, the seller must register as an Indiana retail merchant and follow Indiana collection, filing, payment, exemption, and recordkeeping requirements. If you are close to the threshold, have unusual products or services, or sell through several channels, the exact position depends on your facts—confirm the treatment with the Indiana Department of Revenue or ask us to review it.
Other activities that create Indiana sales tax nexus
Economic nexus is not the only possible basis for an Indiana collection obligation. A physical presence can create nexus, including business property, inventory, personnel, or other in-state activities connected with making retail sales. Inventory stored in Indiana, including inventory held for fulfillment, deserves particular attention because the seller may have an obligation even when Indiana revenue is below the remote-seller threshold.
Other arrangements can also matter, such as representatives or contractors acting in Indiana, installation or service activity performed in Indiana, or an affiliated business helping generate or support sales. The legal result depends on the activity and the transaction structure. Foreign sellers should not assume that the $100,000 remote-seller test replaces a physical-nexus analysis.
Indiana is not a home-rule sales-tax state for ordinary retail rate administration. Local jurisdictions do not administer separate local sales taxes that a remote seller must add to the statewide rate. That makes Indiana rate calculation simpler, but it does not remove the need to determine whether the product, service, or transaction is taxable.
Register for an Indiana sales tax account
A foreign seller that has Indiana sales tax nexus should register with the Indiana Department of Revenue as a registered retail merchant. Indiana’s registration process is available through the state’s business registration services, and the department’s remote-seller information directs sellers to register before collecting Indiana sales tax. Indiana issues a Registered Retail Merchant Certificate after registration.
Returns and payments are handled through INTIME, the Indiana Taxpayer Information Management Engine. Indiana requires sales tax returns and payments to be filed and made electronically. Registration creates an ongoing compliance responsibility: the seller must collect tax on taxable Indiana sales, file required returns, remit what was collected, and keep supporting records.
Registration does not determine whether every product is taxable. It places the seller into Indiana’s filing system. Product taxability, exempt transactions, marketplace treatment, and the seller’s filing frequency must still be reviewed separately. A foreign business should also allow time for identity, banking, address, and authorization issues that can arise during state registration.
Indiana sales tax rate and sourcing rules
Indiana’s statewide sales tax rate is 7%. For ordinary remote sales of goods delivered to Indiana, the rate calculation is comparatively simple because Indiana does not add a local sales tax to the statewide retail sales tax. A seller generally does not need to calculate separate city, county, or special district sales-tax rates for an ordinary Indiana delivery.
Indiana uses destination-based sourcing for sales shipped to customers. For a shipped product, the relevant Indiana destination is generally the delivery location. For electronically transferred products and services, sourcing depends on the applicable Indiana rules and the facts of how and where the product or service is received or first used. A foreign seller should not apply the goods-delivery rule automatically to digital products or services.
The taxable amount can include charges connected with the sale. Indiana treatment of shipping, delivery, handling, and similar charges depends on the transaction and how the charges relate to the taxable item. Before configuring invoices, confirm the current Indiana Department of Revenue treatment for the particular charge; do not assume that separately stating a fee makes it nontaxable.
What foreign sellers must tax in Indiana
Indiana sales tax generally applies to retail sales of tangible personal property delivered in Indiana. Indiana also includes electronically transferred products within the remote-seller nexus calculation, but whether a specific digital product is taxable is a separate question. Indiana generally does not impose sales tax on services, although particular services, products bundled with services, rentals, accommodations, food and beverage transactions, and other specially regulated transactions can have different rules.
Foreign sellers should classify each product and transaction before collecting tax. A physical product, digital item, subscription, warranty, installation charge, shipping charge, and service component may not receive identical treatment. Bundles require particular care because one taxable component can affect the treatment of the transaction.
Collecting at 7% is not a substitute for a taxability review. If the product category is unclear, the exact position depends on Indiana’s classification rules and the transaction facts—confirm it with the Indiana Department of Revenue, or have us check the product catalog and invoicing structure for you.
How marketplace sales affect Indiana obligations
Indiana requires a marketplace facilitator to register and collect Indiana sales tax on facilitated transactions into Indiana. For a seller using a marketplace facilitator, sales made through that marketplace generally are not included in the seller’s own $100,000 Indiana gross-revenue calculation when the facilitator is responsible for the transactions and has met its own obligation. The facilitator counts its own sales and facilitated sales when testing its threshold.
This does not mean every Indiana sale is covered. Direct website sales, telephone orders, invoices, wholesale transactions, and sales through a different channel may remain the seller’s responsibility. A seller should reconcile marketplace reports with its direct-channel sales and retain evidence showing which party collected and remitted tax.
Marketplace treatment can also vary for special taxes or unusual transaction types. Confirm the marketplace’s collection responsibility, the scope of its filings, and whether it provides transaction-level documentation. If the facilitator has not met the applicable requirements or the sale falls outside its collection arrangement, the seller may have its own obligation.
File and remit Indiana sales tax on time
Indiana filing frequency is assigned by the Department of Revenue rather than chosen solely by the seller. The department can require monthly, quarterly, or annual filing depending on the account and its Indiana tax liability. A foreign seller should follow the filing frequency shown in its Indiana account and check each INTIME filing notice for the applicable due date.
Marketplace facilitators are required to file monthly Indiana sales tax returns in INTIME. Streamlined Sales Tax participants using the applicable filing models also have specific monthly filing requirements. Those rules should not be assumed to apply to every self-filing remote seller, so the seller should confirm its assigned frequency and any special filing arrangement.
A return may be required even when no tax is due for the period. Report the correct gross sales, exempt sales, taxable sales, tax collected, marketplace sales, and remittances according to the return instructions. Keep sales records, customer destinations, exemption documentation, marketplace statements, and proof of payment together so the return can be supported later.
Exempt sales and exemption certificates
An Indiana-registered seller generally must collect tax unless the transaction is not taxable or the purchaser provides acceptable exemption documentation. Indiana identifies Form ST-105 as a certificate of exemption used by customers for qualifying exempt purchases. The seller should obtain and retain the certificate or other documentation required for the specific exemption.
A customer’s statement that it is a business does not, by itself, establish an exemption. Exemptions are limited and fact-specific, and a resale or other exemption may depend on the purchaser’s use, registration, and the nature of the goods. Review certificates for completeness, keep them connected to the customer account, and do not use an exemption certificate to support a transaction that does not meet the exemption’s conditions.
Marketplace sales can create separate documentation issues because the marketplace may collect tax while the seller retains order and product records. Reconcile exempt orders and marketplace tax reports rather than treating every marketplace transaction as automatically exempt or automatically taxable.
Late registration, filings, and tax exposure
If a foreign seller should have registered but did not, it should identify the date its Indiana obligation began, measure Indiana sales under the current threshold rules, and review all direct and marketplace channels. The seller may need to register, file delinquent returns, pay tax that should have been collected, and address interest or penalties assessed under Indiana law. Do not backdate or estimate periods without reviewing the underlying records.
Late registration can expose a seller to tax on transactions for which it charged no Indiana tax. Whether the seller can recover that amount from customers depends on the transaction, contracts, customer relationship, and Indiana procedures. A seller should preserve order data, invoices, shipping destinations, tax settings, exemption certificates, marketplace reports, and payment records before correcting the account.
The safest process is to quantify the exposure first, then contact the Indiana Department of Revenue or obtain professional assistance with registration and delinquent filings. The exact position depends on the seller’s products, channels, physical activities, threshold history, and filing history—talk to us and we will help check the facts before a correction is submitted.
Not sure how this applies to your business? We handle US sales tax registration, filing and remittance for ecommerce sellers as a fully managed service, for one fee. Book a free consultation and we will review your own position with you.
Indiana sales tax compliance points for foreign and remote sellers
| Situation | Indiana treatment | Action for the seller |
|---|---|---|
| Remote seller exceeds the current or preceding calendar year threshold | Registration and collection are required when gross revenue from covered Indiana sales exceeds $100,000. | Register as an Indiana retail merchant, collect on taxable Indiana sales, and file through INTIME. |
| Remote seller has Indiana revenue below the threshold but keeps inventory or has personnel or other in-state activity | Economic nexus may not be the only issue; physical or activity-based nexus may apply. | Review the activity separately instead of relying only on the remote-seller threshold. |
| Direct sale of taxable goods delivered to Indiana | Indiana’s statewide sales tax rate is 7%; ordinary retail sales do not require a separate local sales-tax rate. | Apply the Indiana rate after confirming the product is taxable and source the sale to the delivery destination. |
| Sale through a marketplace facilitator | The facilitator generally collects and remits tax on facilitated Indiana transactions and excludes those transactions from the seller’s own threshold calculation when the facilitator is responsible. | Verify the facilitator’s coverage and reconcile facilitated sales with direct sales. |
| Qualifying exempt purchase | Tax need not be collected when the transaction qualifies and the seller receives acceptable exemption documentation. | Obtain and retain Form ST-105 or other required support before treating the sale as exempt. |
| No taxable sales during a filing period | Indiana may still require the assigned return to be filed, including a zero return where applicable. | Check the INTIME account and submit every required return by its assigned due date. |
| Late discovery of an Indiana obligation | The seller may face delinquent returns, unpaid tax, interest, and penalties. | Reconstruct the exposure from transaction records and address registration and filings promptly. |
Frequently asked questions
What is the Indiana economic nexus threshold for foreign sellers?
The current Indiana economic nexus threshold is more than $100,000 of gross revenue from covered sales into Indiana during the current or preceding calendar year. Indiana’s current rule no longer uses the separate 200-transaction threshold. Covered revenue can include tangible personal property delivered into Indiana, electronically transferred products, and services delivered in Indiana.
Do foreign sellers need to register for Indiana sales tax?
Yes, if the seller has Indiana nexus, including by exceeding the $100,000 economic nexus threshold, or by having another activity that creates a physical or activity-based obligation. Registration is with the Indiana Department of Revenue as a registered retail merchant, with returns and payments handled through INTIME.
When do remote sellers have to collect Indiana sales tax?
A remote seller must register and collect on taxable Indiana retail sales when its covered gross revenue exceeds $100,000 in the current or preceding calendar year. A seller with physical presence or another basis for nexus may have an obligation even below that remote-seller threshold.
What sales count toward the Indiana economic nexus threshold?
Indiana counts gross revenue from covered sales into the state, including tangible personal property delivered into Indiana, products transferred electronically into Indiana, and services delivered in Indiana. Indiana guidance indicates that the calculation can include sales that are not taxable or are exempt. Marketplace sales generally are excluded from the individual seller’s calculation when the marketplace facilitator is responsible for the transactions.
Does Indiana sales tax apply to marketplace sales?
Indiana requires marketplace facilitators to collect and remit Indiana sales tax on facilitated transactions into Indiana. The seller should still review direct sales and confirm the facilitator’s collection coverage, reporting, and documentation. A marketplace arrangement does not automatically cover every sale made by the seller.
What is the Indiana sales tax rate for remote sales?
The Indiana statewide sales tax rate is 7%. Indiana does not impose a separate local sales tax on ordinary retail sales, so an ordinary taxable remote sale delivered to Indiana generally does not require adding a city or county sales-tax rate. Product taxability and special transaction rules still need to be checked.
How often must foreign sellers file Indiana sales tax returns?
Indiana assigns filing frequency based on the account and tax liability; a seller may be assigned monthly, quarterly, or annual filing. Marketplace facilitators have monthly filing requirements, and certain Streamlined Sales Tax filing models are also monthly. The seller should follow the frequency and due dates shown in INTIME rather than assume a frequency.
Are shipping and handling charges taxable in Indiana?
Shipping, delivery, handling, and similar charges can be included in the taxable amount depending on the transaction and how the charge relates to the item sold. Separately stating a charge does not automatically make it exempt. Confirm the current Indiana Department of Revenue treatment for the specific product, charge, and invoice structure before configuring collection.
How we handle this for you
The mechanics in Indiana are manageable on their own; the cost is the time it takes every single filing period, in every state you are registered in. We are a managed service: our team registers you with the Indiana Department of Revenue, prepares and files your returns, and keeps you compliant period after period. You get one point of contact and one invoice — you do not get another dashboard to learn.
See our sales tax compliance services, check where you have obligations with the nexus calculator, or talk to us about Indiana.
Official sources
- https://www.in.gov/dor/i-am-a/business-corp/remote-sellers/
- https://www.in.gov/dor/i-am-a/business-corp/business-faq/remote-seller-faqs/
- https://www.in.gov/dor/files/sib57.pdf
- https://www.in.gov/dor/files/sib89.pdf
- https://www.in.gov/dor/i-am-a/business-corp/remote-sellers/marketplace-facilitators/
- https://www.in.gov/dor/i-am-a/business-corp/business-faq/
Reviewed by Paul le Roux, CA(SA). Sales Tax Compliance USA handles US sales tax registration, filing and remittance for cross-border and domestic ecommerce sellers as a fully managed service.
This page is general information for educational purposes and does not constitute legal or tax advice. Sales tax rules change and depend on your specific facts. Consult a qualified tax professional about your own position.
Related guides
Other Indiana guides: Amazon FBA · Audit defence · Back sales tax · Filing · Marketplace facilitator · Permit
Foreign sellers in nearby states: Illinois · Michigan · Ohio
Selling into several states? Check where you have crossed a threshold with the free nexus diagnostic, see the full 51-state threshold table, or browse every state guide.