Tax Professionals
Indiana Sales Tax Will Change to 7 Percent – Effective April 1, 2008
With the passage of House Enrolled Act 1001, the Indiana sales tax rate will increase to 7 percent effective April 1, 2008. This one-percent increase is intended to help offset new limits on property taxes in Indiana.
Below is a detailed list of changes that HEA 1001 will affect:
- New sales tax rate – All transactions* occurring on or after April 1, 2008, will be subject to a 7-percent sales tax rate. Utility companies, along with cable, satellite, television and radio service providers, are not required to collect the 7-percent rate until a customer bill is issued after April 30, 2008.
- New multiplier on gasoline and special fuels – The new sales tax gas multiplier will be 6.54 percent for gasoline and special-fuel retailers, effective for all transactions on or after April 1, 2008.
- New sales-tax collection allowance – Effective for reporting periods beginning after June 30, 2008, the sales tax collection allowances for retail merchants will change to:
- 0.73% if the total sales tax collected was less than $60,000.
- 0.53% if the total sales tax collected was between $60,000 and $600,000.
- 0.26% if the total sales tax collected was more than $600,000.
*Please note that property and services that are delivered after March 31, 2008, but paid for prior to April 1, 2008, are not subject to the new 7-percent sales tax.
Revised sales tax vouchers for the months of April, May and June 2008 will be mailed to retail merchants by April 30, 2008, and will reflect the new 7-percent sales tax rate. Retail merchants should continue to use their existing return envelopes.
If you should have any questions about the new sales tax rate, please call us at 317.233.4015, Monday – Friday, 8 a.m. to 4:30 p.m.
