Indiana sales tax on invoices (2026 guide)

Indiana is one of the simplest states for sales tax. The rate is 7%, and the Department of Revenue says that's the sales tax for the entire state — there are no local sales taxes, so you never have to look up a city or county rate.

It's also friendly to service businesses: the Department says Indiana does not generally impose sales tax on services. If you sell goods, though — even alongside a service — you'll need to register and collect 7% on them. This guide covers what's taxable, registration, certificates and what your Indiana invoices should show.

Indiana sales tax rates

Indiana counties do have other local taxes — every county has a local income tax, and some counties and cities have a food and beverage tax or a county innkeeper's tax. Those only matter if you sell prepared food and drinks or rent short-term lodging. For everyone else, 7% is the only rate you need.

Which services are taxable in Indiana?

Indiana's sales tax is aimed at goods. The Department's remote seller FAQ says Indiana imposes sales tax on the sale of most goods and tangible personal property, and does not generally impose sales tax on services.

In practice, for small businesses:

• Goods you sell — products, parts, materials, merchandise — are taxable unless an exemption applies.
• Most services — consulting, design, writing, cleaning, professional services — are not.
• Mixed jobs need care. The Department's own example is a computer store that sells component parts and offers repair services: it won't collect sales tax on the repair service, but it must collect sales tax on the components it sells.

The Department also lists activities that need additional registrations, such as selling food and beverages, renting rooms for less than 30 days, renting motor vehicles under 11,000 lbs., and selling tires, fireworks or prepaid wireless cards.

Registering as an Indiana retail merchant

If your business sells goods, you register with the Department through INBiz to collect Indiana's 7% sales tax. Once processed, you receive a Registered Retail Merchant Certificate (RRMC) — one for each business location, displayed at that location.

Registration costs a one-time $25 fee per location. After that:

1. you file and pay sales tax electronically through INTIME (or a Streamlined Sales Tax provider),
2. you file returns even for periods with $0 in sales — late returns can carry a penalty of up to 20%, with a $5 minimum, and
3. a merchant with annual collections under $1,000 only files once a year.

Out-of-state sellers must register and collect when gross revenue from sales into Indiana exceeds $100,000 in the current or preceding calendar year. Indiana dropped its 200-transaction test on January 1, 2024. The Department notes that a service provider that meets the threshold but doesn't sell goods or taxable services to Indiana customers doesn't need to register.

What an Indiana sales tax invoice should show

• your business name and address,
• the customer's name and address,
• a unique invoice number and the invoice date,
• a description and price for each item or service,
• goods and services on separate lines,
• sales tax as a separate line at 7%, and
• the total due.

In Invoice Native, tick Tax only on the lines for goods, and leave nontaxable service lines unticked.

Resale and exemption certificates

Indiana's main certificate is Form ST-105, General Sales Tax Exemption Certificate. Businesses buying goods to resell give it to you, and so do most other exempt purchasers. The Department also accepts the Streamlined Sales and Use Tax Agreement Certificate of Exemption.

Two details from the Department's business FAQ:

• Nonprofits use Form NP-1, not Form ST-105. The nonprofit option was removed from ST-105.
• An out-of-state purchaser without an Indiana taxpayer ID can give its home state's business license or state-issued ID number on the certificate.

Keep the certificate with your records and don't charge tax on that sale. See how to invoice a tax-exempt customer.

A worked example

Following the Department's computer store example, suppose you repair a client's laptop in Fort Wayne and invoice:

• $400 for a replacement screen and battery (goods), and
• $250 for repair labor (a service).

Only the parts are taxable: $400 × 7% = $28.00. The invoice total is $400 + $250 + $28 = $678.00. Because there are no local sales taxes, the math is the same anywhere in Indiana.

Selling to customers in other states

The Department's FAQ points out that an Indiana business shouldn't collect Indiana sales tax on sales to customers outside Indiana. Other states may have their own rules instead. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register and collect their sales tax once sales into the state pass a threshold the state sets. If you sell across state lines regularly, check the thresholds and registration rules of each state you sell into — and use that state's rate on those invoices.

Common mistakes on Indiana invoices

• Adding a city or county sales tax. Indiana has none — 7% is the whole rate.
• Charging sales tax on pure services that Indiana doesn't tax.
• Lumping parts and labor together, which makes the taxable amount unclear.
• Accepting Form ST-105 from a nonprofit instead of Form NP-1.
• Skipping $0 returns once you're registered.

Quick checklist for Indiana invoices

• ✅ Registered Retail Merchant Certificate ($25 per location) before selling goods
• ✅ 7% on taxable goods, no local rate added
• ✅ Goods and services on separate lines
• ✅ Form ST-105 (or NP-1 for nonprofits) on file for exempt sales
• ✅ Returns filed electronically, including $0 returns