Business FAQ

General Business

• How do I start a business in Indiana?
  1. Register your business through the Indiana Secretary of State.
  2. Register your business through INBiz.
     • Several tax types may be needed. For example, a business that sells a product will need to register for sales tax. A business that has employees will need to register for withholding tax.

  For more information, visit the Business Owner's Guide and DOR's New and Small Business Education Center.

  Established businesses that need to add a tax type or a location can do so in INTIME. For example, if a business previously did not have employees, but now needs to hire help, the business will need to add the withholding tax account to its business profile.

• How do I close my business in Indiana?

  Businesses can close their tax accounts on INTIME. If a business does not have an INTIME account, then it is required to send an Indiana Tax Closure Request (Form BC-100). If the tax account isn’t closed on INTIME or the BC-100 isn’t filed, DOR may continue to send bills for estimated taxes. Be aware that closing a business with DOR does not end your obligations to any other state agency.

• How do I dissolve, liquidate or withdraw my corporation?

  All businesses registered with the Secretary of State Corporate Division must first file Articles of Dissolution with the Indiana Secretary of State. You may reach their office at 317-232-6576.

  Once the Articles of Dissolution are approved, you receive a Certificate of Dissolution, DOR requires the following:

  • Form IT-966 is a notice of dissolution that is required of all organizations
  • BC-100 allows DOR to close your business trust tax accounts (i.e. sales tax, withholding tax, etc.)
  • Power of Attorney is required if someone other than a corporate officer requests a clearance concerning your dissolution
  • Final tax return for all Indiana tax type

  These forms can be submitted on INTIME and it is recommended that businesses use this method. If the business doesn’t have an INTIME account, then mail the completed forms to:
  Indiana Department of Revenue, MS #110
  Enforcement Division/Corporate Dissolutions
  100 N. Senate Ave., Room N181 Indianapolis, IN 46204

  If you have additional questions, call us at 317-232- 2240.

• Why do you require a Social Security number when registering a business?

  Social Security numbers are required by law. DOR does not provide any specific customer account information to any organization or person outside of DOR. The Social Security number is also used to verify the identity of authorized people on the business tax account.

• Can I add different tax types at a later date?

  Yes. You can add different tax types as your business changes. You can add a tax type in INTIME.

• Can I register using more than one NAICS code?

  You must enter at least one NAICS code, you may register up to four codes.

• How far in advance can I register my business?

  INTIME registrations can be submitted up to two months in advance. DOR can process paper applications up to three months in advance.

• What is the difference between LLC, LLP, LP, S Corporation, sole proprietorship and partnership?
  • Limited liability company (LLC*): A business structure that blends some characteristics of a partnership and a corporation. Liabilities are limited to the owner’s agreed investment in the business. An LLC is an entity formed under state law by filing articles of organization. None of the members of an LLC are personally liable for the business’s debt.
  • Limited liability partnership (LLP*): A hybrid form of a general partnership.
  • Limited partnership (LP*): A form of partnership in which liabilities are limited to general partners, while limited partners’ liabilities are limited to their agreed investment in the business.
  • S Corporation: An eligible domestic corporation that can avoid double taxation (once to the corporation and again to the shareholders and/or employees). This business structure is exempt from federal income tax other than tax on certain capital gains and passive income. The income passes through to individual shareholders and is taxed on the shareholder's individual income tax return. An additional requirement is to obtain a Federal Employer Identification number. According to federal guidelines, to obtain a S Corporation status federal Form 2553 must be filed with the Internal Revenue Service.
  • Sole Proprietorship: A person who conducts business for profit. The sole owner assumes complete responsibility for all liabilities and debts of the business. Sole proprietorships are not required to register with the Indiana Secretary of State.
  • Partnership: Two or more individuals that own a for-profit business. All partners are responsible for the liabilities and debts of the partnership. The income passes through to individual partners and is taxed on the partner’s individual income tax return. General partnerships are not required to register with the Indiana Secretary of State.

  *Limited liability partnership, limited liability companies, and limited partnerships are unincorporated entities, but are still considered formally organized entities.

  Visit the Indiana Secretary of State or the Business Owner's Guide for more information.

• If I registered for sales tax and hire employees later, what do I need to do?

  You will need to add withholding tax. You can add a tax type via INTIME.

• If I change my organization type am I required to re-register with DOR?

  If an owner decides to change the organization type, they are required to complete a new business tax application. If the owner is registering as a retail merchant, there is a $25 registration fee.

  If the organization change or restructuring results in the customer being issued a new Federal Employer Identification Number (FEIN), then a new registration is required.

  For other organizational changes, no new business tax application is required unless the entity is issued a new FEIN. For example, if a limited liability company files as a partnership but later elects to file as a corporation (or an S corporation), only the income tax form used would change (from IT-65 to IT-20 or IT-20S). The FEIN associated with the other business tax accounts should be the same FEIN used to file corporate income tax returns.

  Change of a corporate officer does not require another registration. The customer should update and/change responsible officers on INTIME. If the customer does not have an INTIME account they can complete the Responsible Officer Change Form (ROC-1).

• Is a Federal Identification Number required if I am a partnership?

  Yes. The federal guidelines for businesses require partnerships and corporations to have a Federal Employer Identification Number (FEIN). This number is also required when you withhold federal income tax from an employee regardless of the business organization type. To receive more information on how to obtain an FEIN number call 800-829-4933.

• Am I required to register with the Secretary of State?

  Organizations that are required to register with the Secretary of State include:

  • Corporations
  • S Corporations
  • Limited Liability Company (LLC)
  • Nonprofit Corporation
  • Limited Partnership (LP)
  • Limited Liability Partnership (LLP)

  To receive additional information on registration requirements you may visit the Secretary of State’s website or call 317-232-6576.

• What options do I have to file and pay my taxes?

  All businesses in Indiana must file and pay their sales and withholding taxes electronically.

  There are several options available to taxpayers wishing to file and pay their taxes.

  • INTIME: If you file and pay sales, withholding, out-of-state sales, prepaid sales, metered pump sales, fuel taxes, wireless prepaid fees, tire fees or type II gaming taxes, you are required by law to electronically file and pay these taxes. The easiest way is through INTIME which also allows you to:
    • Have 24/7 access to business tax records
    • File and pay
    • Securely communicate with DOR
    • View correspondence from DOR

  • Paper Filing – Mail a paper return and pay with a check or money order if it is not a tax type that must file electronically. Paper filing is also available for businesses with an approved Business Exemption Application (Form BT-EX) on file.
• What determines my filing frequency and the due dates associated with each frequency?

  The filing frequency is based on the average monthly liability throughout the tax year. Your filing status can be changed if there is an increase or decrease in the amount of tax you owe throughout the year. You will be notified of any changes to your filing status before the beginning of the next tax year. Also, if your average monthly tax exceeds $5,000, you are required to make payments by Electronic Funds Transfer.

• Can I change how often I file my tax returns?

  Yes. You can increase how often you file your returns, but you can’t decrease how often you file. All business accounts are reviewed in November and any filing status changes are made at that time.

• If I need to add a tax type to a previously registered account can I do this at any time?

  Yes. Tax types can be added on INTIME.

• Why do I have to fill out a different application for each business and/or location?

  Each separate location collecting sales tax is required to have a Registered Retail Merchant Certificate displayed in each place of business.

• Can I consolidate all of my companies under one Indiana taxpayer identification number?

  If the companies are separate entities with different federal identification numbers, then you cannot consolidate under one taxpayer identification number. However, if you have multiple locations under the same federal identification number you can consolidate under one Indiana TID. If you believe that your structure creates unique filing challenges, you may contact DOR to discuss other filing options.

  If you want to consolidate tax filings for all or some of your locations, you can complete this process on INTIME. If you don’t have an INTIME account, then you can complete Form BT-1C (Authorization for Consolidated Sales Tax Filing Number).

  To avoid delays in processing applications, please make sure all the applicable information is complete and the form is signed by a Responsible Officer of the company. Please note that the application will be delayed if the business itself has any outstanding tax liabilities.

  When you close your business, you are responsible for notifying DOR of the closure. This can be done on INTIME. If the business doesn’t have an INTIME account, then you can fill out a BC-100 (Business Closure Request Form). Failure to do this can result in billings being issued for failure to file returns.

• Does the State of Indiana have a Voluntary Disclosure Program?

  Yes, Indiana has a Voluntary Disclosure Program. If you want to know more about the Voluntary Disclosure Program, you may contact DOR anonymously. DOR will not in any way seek to identify you if you wish to remain unidentified. To remain anonymous when making the formal application, you can engage a representative, such as a tax preparer, an accountant or an attorney.

  See more information about the program

• How do I resolve a tax protest?

  You should have received a letter stating the specifics of your tax protest. The letter will spell out the exact reason(s) for the protest and the steps you must take to resolve it.

  Call 317-232-5977 to speak to a DOR representative regarding your specific case.

• How does a corporation obtain a Letter of Good Standing?

  You must submit a written request from a corporate officer or from an authorized representative (a Power of Attorney must be submitted if not an officer). Only original documents are accepted. The request must be on the organization's letterhead and contain the following:

  1. Official name of the organization
  2. Address of the organization
  3. Federal Identification Number (FEIN)
  4. Date of Incorporation in Indiana or date qualified to do business in Indiana
  5. Corporate officer's signature and title (must be an original signature)
  6. Name and the FEIN of the reporting organization if the organization files as a member of a consolidated group
  7. Other pertinent information, such as a deadline*
  8. Mailing instructions: complete address of where the letter is to be mailed if different from the corporate address

  *Due to the significant amount of research required, the approval for a Letter of Good Standing may take 20 to 30 business days for issuance.

  Note: All tax returns must be on file and all liabilities must be satisfied before the request will be approved.

  Questions may be directed to 317-232-5977 from 8 a.m.–4:30 p.m.

  Mail the completed request to:
  Indiana Department of Revenue
  P.O. Box 6072
  Indianapolis, IN 46206-6072

• My corporation has been administratively dissolved by the Indiana Secretary of State. How do I obtain a Clearance for Reinstatement from DOR?

  You will need to submit an Affidavit for Reinstatement (Form AD-19) for an organization that is located in Indiana, or a Form AD-19(2) for an organization located outside Indiana. All requests for reinstatement are reviewed in the order received, with the review process normally taking 20 to 30 business days. You will be notified by mail if any additional information is needed. If someone other than the officer completing the affidavit is to receive information from our office, a notarized Power of Attorney authorizing us to release information must be submitted with your request for reinstatement.

  When the affidavit has been approved, the clearance will be mailed to you at the address submitted on the affidavit unless we receive written instructions for correspondence to be mailed elsewhere. You must then submit the original reinstatement clearance to the Indiana Secretary of State with any other paperwork they require. Our reinstatement clearance is valid for 60 days from the date of issue. If time has expired, the clearance will be rejected by the Secretary of State and you will need to start the reinstatement process again by submitting a new AD-19 or AD-19(2) to DOR.

  For more information, you may call 317-232-0129 from 8 a.m.–4:30 p.m.

  Mail the completed request to:
  Indiana Department of Revenue Customer Service
  P.O. Box 6197
  Indianapolis, IN 46206-6197

• How do I obtain a tax clearance on my license?

  Indiana tax clearance can be obtained by meeting the following requirements:

  • All tax returns must be filed up to date.
  • All outstanding delinquencies must be paid in full.
  • All payments must be made using guaranteed funds.
• How do I get a private employment agency license?

  To obtain a new license as a private employment agency there are many steps including forms and fees.

• Why is there a tax lien on my vehicle title?

  This is often due to a stage of collection issued by DOR.

• Can I submit returns, receipts or any documents to DOR on CD, DVD or USB flash drive?

  No. As of December 1, 2020, DOR no longer accepts any removable media including CDs, DVDs or USB flash drives from customers needing to submit documents. This includes any removable media containing supporting documentation for returns, receipts accompanying Form GA-110L, wage statements, invoices and utility studies for submission with Form ST-200, information or data. Any media received in this manner will be returned or destroyed.

  DOR's new online e-services portal, INTIME, offers customers the ability to manage all their corporate or business tax accounts in one convenient location, 24/7. This includes filing returns, making payments, secure messaging and the ability to submit data and documents in a secure, quick and efficient manner.

  • Uploading files via INTIME gets your information to DOR faster, enabling us to process and fulfill the request quickly.
  • Using INTIME to submit your files (wage statements, receipts or data) is cost efficient and eliminates the hassle of mailing in a paper form.
  • Uploading files within the portal keeps customer information secure and protected.

Sales Tax

• How much is Indiana’s sales tax?

  Indiana’s sales tax is 7%.

• Is a Registered Retail Merchant Certificate (RRMC) the same as a vendor’s license?

  No. You will need to contact your county clerk’s office to apply for a vendor’s license. DOR will issue an RRMC when the Business Tax Application, available through INBiz, is processed.

• Am I required to renew my Registered Retail Merchant (RRMC) Certificate?

  Yes. The RRMC must be renewed every two years. If all tax filings and payments are current, you will automatically be sent your renewed certificate. If the business account is missing returns or if there is a balance due to DOR, the RRMC will be held until the account is current.

• How do I make sales tax-exempt purchases?

  If you are buying items that qualify for a sales tax exemption, fill out Form ST-105 and provide it to the merchant for their records. You may contact DOR at 317-232-2240 with specific tax exemption questions.

  Form NP-1, which can be filed at intime.dor.in.gov, is required to provide documentation that you are registered as a nonprofit with DOR. Registration confirms that you qualify for tax exempt purchases for your business. Form NP-1 must be completed for each of your vendors.

  Form NP-1 has replaced Form ST-105. Nonprofit customers should not use Form ST-105, as the option for nonprofits has been removed and it is no longer valid for nonprofit exemptions. Previously issued Form ST-105s remain valid through Dec. 31, 2023.

• What if I am entitled to an exemption but I do not have an Indiana taxpayer identification number, nor do I have a business license or registration number from my home state?

  You have three options:

  Option #1: The ST-105 form instructions detail other options available to those businesses entitled to exemption, but do not meet the requirements of this form. For example, if the purchaser is from another state and does not possess an Indiana Taxpayer Identification Number (TID), a resident state's business license or State issued ID Number must be provided. An FEIN or SSN may be used instead for certain exemptions.

  Option #2: You may register with Indiana for free via INBiz to obtain a Taxpayer Identification Number (TID). Registration will require you to begin collecting Indiana sales tax on sales shipped (sourced) to Indiana locations, unless you receive an exemption certificate from your Indiana customers.

  Option #3: If you cannot perform either option above but are entitled to an exemption, you must pay the Indiana sales tax to your vendor and then file for a refund directly with DOR. You will need to file Form GA-110L with DOR.

• What is Use Tax?

  Use tax is complementary to Indiana sales tax, and is due on property acquired for use, storage or consumption in Indiana if Indiana sales tax is not paid to the seller at the time of purchase. Exceptions for this tax may be found in the Indiana Code (IC 6-2.5-5 and IC 6-2.5-3).

• Which purchases that I make on the Internet or out-of-state are taxable?

  All purchases are subject to sales tax. If tax is not collected from you by the seller, you are required to remit use tax on the purchase price.

• What is the difference between use tax and sales tax?

  These taxes are complementary and are meant to assure the state gross retail tax of 7% is paid upon a purchase. Use tax accrues when a purchase is not subjected to sales tax at the time of purchase.

  If a purchaser does not pay a sales tax to the seller, the purchaser still has a use tax responsibility. The purchaser will pay the use tax owed on his or her annual Indiana income tax return (due April 15). Use tax may also be remitted directly to DOR as purchases occur using the ST-115 Consumer Use Tax return.

  Retail merchants with an Indiana location(s) or merchants that do not have a physical location in Indiana but have gross revenue from sales into Indiana exceeding $100,000 in the previous calendar year or the current calendar year are required to register their business and pay a one-time $25 registration fee, per location.

• How can I purchase tangible personal property from Indiana vendors without paying the sales tax if I am qualified to purchase such items for a statutory exempted purpose?

  The ST-105 General Sales Tax Exemption Certificate is a multiuse form that can be used by most exempt purchasers and for most validly exempt transactions.

• What are Indiana's previous sales tax rates?

  The tax rate from December 2002 to March 2008 was 6%. Older state tax rates can be found in sales tax rate history.

• When can a customer report/remit sales tax using an accrual method?

  IC 6-2.5-6-1 addresses the payment of sales tax.

  The option of using the accrual method is addressed in IC 6-2.5-6-2. In order to use the accrual method, the merchant must use the accrual method for determining adjusted gross income tax (AGI). Absent the use of the accrual method for income tax, the retail merchant must use the cash method.

  Thus, a retail merchant can use the accrual method without DOR consent. However:

  • The merchant MUST report adjusted gross income tax on an accrual basis
  • The merchant can use the cash method for sales tax and accrual method for adjusted gross income tax
  • DOR can request that the merchant stop using the accrual method at any time
• Do I have to file a return if I had no taxable activity for that time period?

  Yes. If you previously registered to file withholding, sales, FAB, CIT or other trust taxes, you must still file a $0 returns even if there is no tax revenue or activity for that period. Late filed returns are subject to a penalty of up to 20%, and a minimum penalty of $5.

• When is RP-11 due? How is it filed?

  RP-11 is due Jan. 31 and can only be filed online.

• Who has to file an RP-11?

  This return is intended for consolidated sales tax filers. IC 6-8.1-10-6 outlines penalty provisions for failure to file an information return.

Use Tax Liability

• Who owes Indiana use tax?

  Generally, any individual or business entity (partnership, corporation, LLC, etc.) that makes purchases of tangible personal property is subject to use tax if they have not previously paid at least a 7% sales tax on the purchase to the vendor. Use tax can be thought of as a mirror of the sales tax. Both our sales tax and use tax rates are 7%.

  Use tax is due on property brought into Indiana for use, storage or consumption, unless Indiana Code (IC 6-2.5-5) contains an applicable exemption for your purchase. If you paid at least 7% sales tax at the time of purchase, you do not owe use tax. However, if you did not pay at least a 7% sales tax, you may owe use tax (e.g. you paid a 5% sales tax for an item in another state that you bring back for use in Indiana, in which case you owe the difference in use tax).

• What type of purchases might cause me to become liable for use tax?
  • Purchases from vendors that are not registered to collect Indiana sales tax.
  • Items withdrawn from your inventory for personal use or to give away.
  • Any purchase for which a statutory exemption is not available per the Indiana Code (IC 6-2.5-5).
• What are some common examples of purchases I may make that become subject to the Indiana use tax?
  • A dentist operates their business as a sole proprietorship. The dentist buys toothbrushes from an unregistered out-of-state supply house to give away to their patients during their annual exams. The vendor did not collect any sales tax on this sale. The dentist owes 7% use tax on these purchases because no statutory exemption exists for this type of item when given away. The dentist should report the use tax on Form ST-115 which is also available through INTIME.
  • An auto repair shop purchases shop rags and other cleaning materials from an unregistered out-of-state vendor. The vendor did not collect sales tax on the invoice. The auto repair shop should report these purchases on its next sales tax return, because it’s subject to use tax.
  • A manufacturer purchases new office furniture for use in its corporate office from an out-of-state distributor. The office furniture is delivered to the manufacturer's warehouse outside of Indiana. The distributor collects the delivery state's 6% sales tax on the selling price. The manufacturer owes an additional 1% Indiana use tax on this purchase because the property is being used, stored or consumed within Indiana. When it transports the office furniture into Indiana, the manufacturer should report this use tax liability on its next sales tax return.
  • A law firm maintains an extensive legal library. Many of its legal books, manuals and publications are from out-of-state publishers who are not registered and do not collect sales tax on items shipped into Indiana. The law firm owes 7% Indiana use tax on these type of purchases and can remit these on its next sales tax return if it is a registered retail merchant, or it can use Form ST-115, available through INTIME.
  • An individual orders magazines, clothing and novelty items from various unregistered out-of-state catalog companies. Sometimes the individual orders the items via mail, sometimes via the telephone and sometimes online. This individual should report these purchases to Indiana as being subject to our use tax of 7%. The individual can report these purchases on their Individual Income Tax Returns (IT-40, Schedule 4; IT-40PNR, Schedule E) or can use Form ST-115, available through INTIME.
• What about items I purchase at garage sales and auctions?

  Items sold at garage sales are generally exempt "casual sales." The casual sale exemption is applicable when the seller is not in the business of selling merchandise and the seller has already paid an original sales or use tax on the item.

  Items purchased at auctions are slightly more complex. Naturally, if the auctioneer collects the 7% sales tax, you will not owe any additional use tax. Also, if the auction takes place on the premises of the owner of the tangible personal property, the items are considered to be "casual sales" and are therefore exempt from sales and/or use tax. However, if the merchandise to be auctioned is moved to a location not owned by the owner of the merchandise, the sales become subject to sales and/or use tax. All sales at auction "houses" are subject to sales or use tax. For more information about casual sales, see Sales Tax Information Bulletin #20.

• What if I've paid sales tax to another state?

  The Indiana use tax rate is 7%, the same as our sales tax rate.

  • If you paid state sales tax of 7% or more to the other state, you do not owe use tax to Indiana.
  • If you paid state sales tax of less than 7% to the other state, your Indiana use tax will be the difference between the Indiana 7% use tax and the amount you paid to the other state.
• Why should I report and pay the Indiana use tax?

  If you self-report the use tax due, you will only owe the tax. If you wait until DOR issues you a bill for the use tax due, you will also have to pay a 10% penalty, plus interest. Indiana Code requires use tax to be paid unless at least an equal amount of sales tax was paid on your taxable purchases IC 6-2.5-3-2.

• Do I have to file a return if I had no taxable activity for that time period?

  Yes. If you previously registered to file withholding, sales, FAB, CIT or other trust taxes, you must still file a $0 returns even if there is no tax revenue or activity for that period. Late filed returns are subject to a penalty of up to 20%, and a minimum penalty of $5.

Withholding Tax

• How do I figure Indiana state withholding tax for my employees?

  Departmental Notice #1 explains how to withhold taxes on employees. The current state withholding tax rate is 3.23%. The county tax rate will depend on where the employee resided or worked as of January1. If you have more questions, please call 317-232-2240.

• How do I contact DOR for help with withholding income tax?

  Withholding tax information and rates are available. Call 317-232-2240 with questions.

• Who are withholding agents?

  Withholding agents are employers who are required by the Internal Revenue Service to withhold income tax on salaries, wages, tips, fees, bonuses and commissions.

  To find out if you should withhold state and county taxes for your employees, contact the Internal Revenue Service at (800) 829-4933. If you are required to withhold federal taxes, then you must also withhold Indiana state and county taxes.

  Withholding payments must be made to DOR by the due dates or penalties and interest will be assessed. If you do not file a return and pay the proper amount of tax, you will face criminal prosecution for fraud or tax evasion.

• How do I register as a new withholding agent?

  Register with DOR via INBiz. If you registered with DOR previously, you must add the withholding tax type when you add your first employee.

  The responsible officer of your organization may register the business via INBiz. Processing time for the online application may take up to two business days.

  Once you have registered, you will receive an Indiana Taxpayer Identification Number that allows the business to be identified in DOR’s system.

• What information do I need to collect from my employees?

  Employees should complete an Employee’s Withholding Exemption and County Status Certificate (WH-4). This form provides DOR with:

  • The number of exemptions the employee will claim.
  • The county the employee is living and working in so that the proper county tax rate can be figured.

  Both the employer and the employee should keep a copy of the WH-4 for their records. The employee should update the WH-4 when the information changes, such as the number of exemptions.

• What do I do if my employees work in Indiana, but live in another state?

  Employers must withhold Indiana state tax from the employees’ wages unless the employees live in a state that has a Reciprocal Agreement with Indiana. For a complete list of reciprocal states, please read Information Bulletin #33 or call 317-232-2240.

  Important: Employers must withhold Indiana county tax from reciprocal state employees who work in Indiana as of January 1 of the year.

• Do I have to withhold state taxes for part-time or summer employees?

  Yes. Part-time or summer employees are treated the same as full-time employees.

• Are there any cases I would not have to withhold state or county taxes for an employee?

  Casual laborers, some domestic employees, ministers and those who receive pension annuities may choose not to have tax withheld from their earnings. However, their income is still subject to state and county tax. If you have questions about your specific situation, please call DOR at 317-232-2240.

• How do I make my payments to DOR?

  Starting on January 1, 2013, any employer that filed more than 25 withholding statements in a calendar year is required to file their annual WH-3 and their employees’ W-2s electronically. This law (IC 6-3-4-16.5) applies to all withholding statements filed after December 31, 2012. You can use INTIME Indiana's free online tax portal, which allows you to file and pay your business taxes and much more.

• What records do I need to keep as a withholding agent?

  You should have a correct list of all employees, which includes:

  • List of who is employed by the month, week or day
  • Length of a normal pay period
  • Salaries
  • Social Security numbers
  • County of residence as of January 1 of the tax year
  • County of work
• What information should I provide my employees for their records?

  You should provide each employee with a statement of the amount of state and county tax withheld. This is usually shown on the federal Wage and Tax Statement (W-2). The employee must get a copy of this form by January 31. A copy of the W-2 should also be sent to DOR by February 28. If you have more questions about withholding income tax, call 317-232-2240.

• How does DOR determine when my withholding payments are due?

  Each year, the system re-evaluates each customer’s withholding from the prior year. If the average anticipated monthly wages paid to employees changes significantly then their frequency is adjusted for the following year. The employer will receive a letter with the new filling status for the next year.

  Monthly average tax withheld	Filing Status	Due date(s)
  $83.33 or less	Annual	30 days after the end of the month
  $1,000 or less	Monthly	30 days after the end of the month
  More than $1,000	Early filer	20 days after the end of the month

• Do I have to file withholding tax returns if I do not have employees, will not issue W-2s or no withholding tax is otherwise due?

  If you previously registered to file withholding tax, you must still file Forms WH-1 and WH-3 for each period even if no tax is due or to report no employees for that time period. Late filed WH-1 returns are subject to a penalty of up to 20%, and a minimum penalty of $5. Late filed WH-3’s are subject to a penalty of $10 per withholding document (W-2, 1099, K-1).

W-2 and WH-3 Electronic Filing

• Can files contain more than one employer record (RE)?

  For a single business, yes, a file can contain more than one RE record, but all RS records must contain the same Tax Identification (TID) number. The TID number is located at position 331 of the RS record. The TID number should be the same for every RS record in the file. Each WH-3 must only contain information for the company for which the file is being uploaded. Each business must have its own WH-3 for uploading.

  Software vendors uploading through batch upload can upload files containing all clients in which a Federal Form 2848 is on file. Clients do not have to be registered in INtax.

• Can I upload my WH-3 if I have outstanding liabilities?

  Yes. You can upload or manually enter your WH-3 even if you have an outstanding balance with DOR.

• If I am a service provider, do the purchasers of my software have to certify to file using the batch upload process?

  The submitter of the file must be certified with DOR. If the software developer is also the submitter, the clients are not required to certify. If the taxpayer purchases the software and becomes the submitter, the taxpayer must certify with DOR.

• After selecting a file to upload, I received a message stating a valid file had not been uploaded. Why?

  Verify that the “Upload” button was clicked. Clicking “Browse” and then clicking “Next” triggers this error. The correct order is “Browse,” “Upload,” and then “Next”.

• How do I file my W-2s?

  If your withholding file size is less than 10MB, you’ll manually enter or batch load in INTIME. If your withholding file size is 10MB or over, you will batch load your W-2s using the bulk upload SFTP. For more information about both methods of submitting WH-3s, see the SFTP webpage.

• I am getting an error stating my employer ID for the uploaded file does not match the currently selected account. Why?

  Usually the taxpayer did not include the TID number on the RS record. For each RS record, position 331 must have the taxpayer’s 10-digit TID number and then the 3-digit location number. Not having this ID number in this location triggers this error.

• Is there a document that explains in which format my W-2 file should be for uploading?

  Yes, the SFTP webpage explains the file layout requirements and WH-1 and WH-3 information.

• Have there been any recent changes to the technical specifications for the W-2 file format?

  The most recent change was for the 2010 tax year. The file layout of the Social Security Administration's W-2 file specifications (Publication No. 42-007) were changed.

• Do you send files so customers can enter information and upload the file?

  No. We do not provide files for taxpayers. See the specific file requirements.

• I am getting a message saying that the TID does not match. I have looked at my file, and the TIDs are the same. What else can I do?

  Verify that the TID and LOC for the account selected are correct. The TID and LOC will be displayed in the top portion of the upload screen.

• Can I use an XML or EFW2 file format?

  Both formats are accepted. See the SFTP webpage for the specific formats accepted for form types and wage statements.

• After I have uploaded my file, do I need to send in my paper W-2s?

  No. If you upload your W-2 information in INTIME, you should not submit paper W-2s or WH-3s to DOR. This is also true for files uploaded through the batch upload process.

• After I have uploaded my W-2 file in INTIME or batch upload, do I need to send in my paper WH-3?

  If you upload your W-2 information in INTIME, you should not submit paper W-2s or WH-3s to DOR. This is also true for files uploaded through the batch upload process.

• Can I request an extension of time to file?

  Yes. If you have filed for an extension of time to file form W-3 with the IRS, you may file for a 30-day extension for the state WH-3. Extension can be requested on INTIME.

Composite Filing & Nonresident Withholding

• What is nonresident shareholder withholding?

  Nonresident shareholder withholding is an amount held on a distribution made to a nonresident shareholder, or partner, at the Indiana tax rate of 3.23%.

  Note: Withholding is required on any entity that is not an individual. The withholding rates are as follows:

  • After June 30, 2018, and before July 1, 2019, 5.75%
  • After June 30, 2019, and before July 1, 2020, 5.5%
  • After June 30, 2020, and before July 1, 2021, 5.25%
  • After June 30, 2021, 4.9%
• What is the difference between regular withholding and nonresident shareholder withholding?

  Regular withholding is an amount held on Indiana income such as salary, wages and/or tips, by an employer on the employee’s behalf. Nonresident shareholder withholding is an amount held on distributions to a partner or shareholder who makes money from their investment with the business.

• What is composite filing?

  Composite filing is the reporting of tax on distributions or undistributed income made by a partnership or S Corporation and is reported on the shareholder's or partner's composite income tax return. The composite filing must include all nonresident shareholders and/or partners, including individuals, trusts, partnerships and corporations.

• Can a partner or shareholder opt out of the composite filing?

  There is no opt out for any nonresident shareholder or partner. The composite filing must include all nonresident shareholders and/or partners, including individuals, trusts, partnerships and corporations.

• How do I claim a nonresident withholding credit since the WH-18 is no longer a valid form?

  The Beneficiary's Share of Indiana Adjusted Gross Income, Deductions, Modifications and Credits, Form IN K-1, Part 1 reflects all information to claim a withholding credit and the actual entity that remitted the nonresident withholding payment. The amount reflected on the IN K-1 should never exceed the composite tax amount paid.

• How does a trust remit nonresident withholding on behalf of its nonresident beneficiaries?

  Any trust making nonresident withholding payments on behalf of nonresident beneficiaries is no longer required to file the payment into the nonresident withholding account or issue WH-18s. Nonresident withholdings are reported and remitted with the Fiduciary Payment Voucher, Form IT-41ES, directly into the trust account and the credit is reflected on Form IN K-1 to be claimed by the nonresident beneficiaries.

• For those who are included on the composite return, can an S corporation or a partnership remit the withholding directly into the corporate account with the return?

  Yes, payment for the nonresident withholding may be remitted with the corporate return. However, any payment made after the original due date must include any assessed penalty and interest that has been added to the original amount owed. Corporate tax forms are available on DOR’s website. Online payments can be made through INTIME.

• How does the partnership/S corporation get access to Form IT-6WTH?

  The IT-6WTH is a controlled form. INTIME is DOR’s preferred method of payment as it reduces the risk of late or misapplied payments due to incorrect or illegible forms. Contact DOR at 317-232-0129 to receive an IT-6WTH coupon if you make monthly or quarterly distributions and are unable to use INTIME.

• Should the S corporation or partnership follow the nonresident withholding procedures when combining investment income as an overall loss?

  Yes. Each distribution should be reviewed individually. Withholding should take place on any positive distribution.

• If the withholding is greater than the tax due when filing a composite IT-20S or composite IT-65 return, how is the difference refunded?

  Any refund will be issued from the IT-20S or IT-65 return to the business entity since all withholding payments are made directly into the corporate income tax account. Corporate tax forms are available on DOR’s website.

• Are shareholders or partners required to be included on the composite if there is a loss on the IN K-1?

  No. Individual shareholders or partners are not required to be on the composite worksheet; however, the IN K-1 is required to be attached to the return when filed.

• What if there was withholding on the shareholder or partner and the IN K-1 it shows a loss – how does the shareholder or partner get their money back?

  Any refund will be issued from the IT-20S or IT-65 return since all withholding payments are made directly into the corporate income tax account. A nonresident shareholder who shows a loss will not reflect any withholding on the IN K-1 Part 1.

• Is withholding required for those who live in a reverse credit state?

  Residents of reverse credit agreement states will appear on the Schedule Composite, but the schedule will not reflect any financial information. However, since a reverse credit state resident will be listed on the Schedule Composite, withholding must be done on the shareholder’s behalf. The reverse credit state resident may then file the IT-40PNR income tax return to claim the withholding credit to report IN K-1 income.

• A shareholder or partner has Indiana-source income other than IN K-1 income. Should the shareholder or partner still be included on the composite return?

  Yes. The composite filing must include all nonresident shareholders and/or partners, including individuals, trusts, partnerships and corporations.

• Whom do I contact if I have more questions about composite filing or nonresident shareholders?

  For more information, contact the DOR at 317-232-0129.

IT-6WTH

• Who files the IT-6WTH?

  Any IT-20S or IT-65 return that has nonresident shareholders or partners must remit nonresident withholding tax due into the corporate income tax account with the IT-6WTH.

• When is the IT-6WTH due?

  The IT-6WTH is due on the 15th day of the fourth month after the close of the corporate taxable year. An extension of time to file does not extend the time to make payments. Any remittance made after the original due date of the corporate taxable year is subject to penalty and interest.

• Can the payment be remitted with the IT-20S or IT-65 instead of the IT-6WTH?

  Yes. Payments may be remitted with the IT-20S or IT-65. However, any remittance made after the original due date of the corporate taxable year is subject to penalty and interest.

• If I have a loss or no income for Indiana, do I still have to submit the IT-6WTH?

  No. If there is no tax due for the composite members, the form does not need to be filed. The IT-6WTH is a payment voucher that should be submitted to DOR only when there is a remittance with the voucher.

• Why do the IT-65 and IT-20S have both a "Total amount of pass-through withholding" line and an "IT-6WTH" line?

  The line for "IT-6WTH" is used when the withholding is remitted with the IT-6WTH voucher. The line for "Total amount of pass-through withholding" is used when withholding is passed through from another entity to the composite members. The IN K-1 from the paying entity must be included with the return.

• Where can I find a blank IT-6WTH?

  The IT-6WTH is currently a controlled form. To receive a copy, you must contact DOR to request the form. The request can be made by calling 317-232-0129 or in writing to:

  Indiana Department of Revenue
  P.O. Box 7206
  Indianapolis, IN 46207

• Will DOR send the IT-6WTH to my CPA?

  If the CPA has a valid POA-1 on file for the entity, DOR will print and send a copy of the IT-6WTH to the CPA if requested to do so.

• Can the IT-6WTH be filed electronically?

  Yes. IT-6WTH can be filed and paid through INTIME.

• If I am remitting withholding using the IT-6WTH for the members on the schedule composite, how do I report the credit amount to the nonresident shareholder or partner?

  The IN K-1 Part 1 reflects all credit information to claim a withholding credit and reflects the actual entity that remitted the nonresident withholding payment.

• Can more than one IT-6WTH be filed in a taxable period?

  Yes. More than one IT-6WTH may be remitted in a taxable period. Additional IT-6WTH vouchers must be requested by contacting DOR. The request can be made by calling 317-232-0129 or in writing to:

  Indiana Department of Revenue
  P.O. Box 7206
  Indianapolis, IN 46207

Billing

• How do I get information about my tax bill?

  You can inquire about a tax bill by using DOR’s automated information line. This information line is available Monday through Saturday 7 a.m.–10 p.m. You can find out your current balance due on any individual or business tax liability by calling 317-232-2240.

  You will need to have your taxpayer identification number or Social Security number and the liability number or warrant number available when you call. This information is on the notice that you have received.

• What are my rights as an Indiana taxpayer?

  All Indiana taxpayers have certain rights and responsibilities that correspond to the Indiana tax laws.

  • Quality taxpayer service
  • Taxpayer Advocate to help taxpayers in the preservation of their rights
  • Taxpayer education and information
  • A fair collection process
  • Appointed hearing time and representation
  • Demand Notices
  • Warrants for collection of tax
  • Judgment liens against property
  • Annual Public Hearing and Department Report

  You can find more information on what these rights mean in the Taxpayer Bill of Rights.

• What are my responsibilities as an Indiana taxpayer?

  Your responsibilities as an Indiana taxpayer:

  • File your tax returns and pay any taxes due on time.
  • Notify us in writing when you have an address change.
  • Know the tax laws that relate to you as an individual or a business and comply with those laws.
  • Contact us if you have any questions or concerns.
• How do I pay my tax bill?

  See information on paying business taxes electronically. If paying by postal service, a check or money order should be made payable to the Indiana Department of Revenue and addressed to:

  Indiana Department of Revenue
  P.O. Box 595
  Indianapolis, IN 46206-0595

• What is the DOR’s delinquent tax collection process?

  Every Indiana customer has the right to a fair collection process. You have the right to protest a liability. If you protest a liability, DOR is required to conduct a hearing on that case. You are entitled to be represented at your hearing when your case is presented. If a liability is not paid or protested within 60 days of the first notice, we will issue a "Demand Notice" for payment before issuing a tax warrant. If we do not receive a payment, a warrant for the collection of tax will be issued. When a tax warrant is filed with your county clerk, it becomes a judgment lien (levy) against all your property within the county. DOR intends for you to have every opportunity to rectify your account balance whether it is paying it right away or protesting it.

  Read about the collection process.
  Know your rights and responsibilities as an Indiana taxpayer.

Power of Attorney

• What is a Power of Attorney (Form POA-1)?

  Power of Attorney (POA) grants a chosen authority access to an individual’s personal information and the ability to act on their behalf in certain capacities. To elect a POA representative, an individual is required to submit a Form POA-1 to the Indiana Department of Revenue (DOR) by uploading an electronic Power of Attorney (ePOA) on INTIME or by mailing or faxing in a copy of the original paper form.

  The easiest way to obtain POA is through INTIME, where the process can be completed within minutes. Using this method, your representative will gain access to your tax records in INTIME, may respond to notices, and communicate with DOR electronically on your behalf.

  The process of requesting POA access through INTIME starts with your practitioner or representative requesting POA access through their INTIME account. You may then approve the access request from your own INTIME account. More information on this process is available in the INTIME Guide.

  A paper Form POA-1 is still used for POA authorization but does not allow access to client accounts in INTIME.

  Extended time is required to process a paper Form POA-1.
• Why do I need an ePOA?

  An electronic Power of Attorney (ePOA), granted to third-party relationships such as lawyers, accountants, and family members, provides online access to a customer's account. INTIME permits tax practitioners to submit an ePOA to streamline the establishment of a POA relationship.

  Step-by-step guides for Tax Practitioners and Clients are available to help with approving ePOA and tax practitioners access to a client's account(s).

• Why is an ePOA needed for INTIME when my tax practitioner already has POA authority to speak to DOR on my behalf?

  Although a tax practitioner may have a POA to manage a client’s tax accounts, an ePOA is needed to ensure the security of a client’s INTIME account information.

  Requesting ePOA access is done through a tax practitioner’s INTIME account. The client will be notified that the request has been submitted and to log in to their INTIME account to review and approve.

  Once approved by the client, the tax practitioner will be able to see and perform the same actions as the client in INTIME.

  For more information, see the INTIME User Guide for Individual Income Tax Customers.

• If ePOA access to INTIME is approved, is a Form POA-1 still needed on file with DOR?

  An INTIME ePOA is equivalent to a Form POA-1 for the purpose of discussing tax matters. DOR reserves the right to request a Form POA-1 in certain circumstances. Generally, a Form POA-1 is not required if DOR has an approved INTIME ePOA access request on file. The INTIME ePOA only allows clients to approve access to the accounts currently in INTIME. A Form POA-1 may be needed for other tax types.

• Do I need access to the internet to register for INTIME to approve the ePOA request from my tax practitioner?

  If you do not have the ability to access INTIME to approve your request, an access request letter will be mailed to your legal address on file with DOR. This letter can be used to approve the ePOA and your tax practitioner’s access request to INTIME.

• Where do I get the Power of Attorney (Form POA-1)?

  Power of Attorney Form POA-1

• Can my certified public accountant (CPA) submit a Form POA-1 for me?

  Yes, CPAs can submit a signed Form POA-1 for their clients.

• Do I need to have a Form POA-1 notarized if a family member is my POA?

  Customers can designate anyone, including a family member, as their POA representative. Form POA-1 does not need to be notarized.

• Can DOR speak to family members without a Form POA-1 on file?

  No, a Form POA-1 must be on file. DOR will speak to a family member only if they are listed as a POA representative on the customer’s Form POA-1.

• Can anyone be my POA, or does it have to be an attorney or a CPA?

  Customers can designate anyone, including family members, CPAs or attorneys, to be their POA representative.

• If I submit my Form POA-1 to my local district office, will my POA representative be able to speak with an employee at any DOR office?

  Yes, the POA representative can speak with any DOR team member after the Form POA-1 has been processed by DOR.

• I’ve entered my representative’s company name on a Form POA-1. Can DOR speak with anyone who is employed at that firm?

  No, a company cannot be listed on a Form POA-1 as a customer’s representative. By law, DOR can accept only an individual’s name as a POA representative. A Form POA-1 without an individual listed as the customer’s designated POA representative will not be accepted.

• How can I submit a Form POA-1?

  Customers or their POA representatives should mail or fax their signed Form POA-1 to:

  Indiana Department of Revenue
  P.O. Box 7230
  Indianapolis, IN 46207-7230
  Fax: 317-615-2605

  A PDF file may also be attached to an INTIME message.

• Can I give blanket permission for my POA representative to receive information for all my tax types and years?

  Yes, DOR will accept a Form POA-1 with the General Authorization box checked to indicate that your POA representative may access all periods and tax types with DOR. This authorization is valid for five years from the date stamp on the Form POA-1. If the General Authorization box is not checked, you can indicate the specific tax types and periods your POA representative may access.

• How much will it cost to file a Form POA-1 with DOR?

  There is no cost to you or your POA representative to file a Form POA-1 or to complete an ePOA for access to your INTIME account.

• When does my POA expire with DOR?

  Your POA expires after five years from the date it was signed. Therefore, you must renew your POA with DOR every five years.

• Can I still use the paper Form POA-1?

  Yes, a Form POA-1 is still used for Power of Attorney, but it does not allow access to client accounts in INTIME. An ePOA is needed to ensure the security of a client’s INTIME account information.

Aircraft

• I am an Indiana resident and I purchased an aircraft. Does the aircraft need to be registered with the State of Indiana?

  Yes. Aircraft registration with DOR is required within 31 days of the purchase date. Penalty and interest will be assessed on late registrations.

• How do I obtain Indiana aircraft registration forms?

  You can register and manage your aircraft obligations online with INTIME.

• When I register my aircraft with the Federal Aviation Administration (FAA), will the FAA automatically notify DOR?

  No. It is the aircraft owner’s responsibility to register the aircraft with the federal government through the FAA, and with the State of Indiana through DOR.

• I am a nonresident of Indiana (for example, a Delaware Corporation) but base my aircraft in the State of Indiana. Do I have to register my aircraft with DOR?

  If a nonresident bases an aircraft in Indiana for 60 days or more, the nonresident is required to register with DOR and pay all applicable fees and taxes.

• What kind of documentation do I need to prove what I paid for the aircraft?

  A detailed bill of sale, invoice, sworn affidavit or Form AE-5, Certification of Purchase Price, must be submitted with Form AE-7, Application for Aircraft Registration. The FAA bill of sale is not acceptable if an aircraft trade-in was involved or if the bill of sale states “$1.00” and/or “other valuable considerations.”

• Are aircraft registration fees and aircraft excise taxes due each year?

  Yes. Registration fees and excise taxes are due by December 31. Aircraft renewal forms are mailed the first week of November to all registered owners. If you have not received an aircraft renewal by the second week of November, contact DOR by email at 317-615-2710.

• How do I make a payment?

  You can pay by check, credit card, debit card or electronic check. Visit INTIME for online payment options.

• Is the aircraft seller or the aircraft purchaser required to report the transfer of an aircraft?

  Both the aircraft seller and the aircraft purchaser are required to report a sale or purchase of their aircraft to DOR within 31 days of the transaction. Failure to register within 31 days will result in penalty and interest being charged to the purchaser and may result in the tax liability not being transferred from the seller.

• If I sell my aircraft after I have paid the registration and excise tax, can I apply for a cash refund?

  No. If you sell your aircraft after paying the registration fee and excise tax, you may be entitled to an excise tax credit, but not a cash refund. The credit may be applied toward the excise tax due on another aircraft purchased in the same calendar year.

• I am a nonresident of Indiana and want to have my aircraft repaired at an Indiana repair station. Can I do this without incurring any sales tax or aircraft excise tax liabilities?

  Yes. An aircraft brought to Indiana to be repaired, remodeled or refurbished is exempt from Indiana sales tax and/or aircraft excise tax. Repairs must be made at an FAA-certified repair station as defined under 14 CFR Part 145.

Auto and Watercraft*

*The term “vehicle” does not include watercraft

• What documentation is needed for a sales tax exemption when an out-of-state dealer sells or trades vehicles or watercraft with an Indiana dealer?

  Out-of-state dealers have three options available to purchase vehicles or watercraft exempt from Indiana sales tax.

  Option #1: If an out-of-state dealer does not have a physical presence in Indiana and delivers vehicles or watercraft into Indiana to customers other than other dealers, and the out-of-state dealer meets the economic thresholds for a remote seller, registration is required through INBiz—Indiana’s one-stop resource for registering a business and ensuring it complies with Indiana laws and regulations. Registration is free and confirmation emails are usually sent within 48 hours. Out-of-state dealers are required to file Indiana sales tax returns and collect Indiana sales/use tax on any vehicles or watercraft delivered into Indiana for sales to persons who do not have a valid exemption. All dealers need to file sales tax returns for all reporting periods, including those for which there were no transactions.

  Option #2: An out-of-state dealer that is not required to register with Indiana, as described in Option #1, should issue a Certificate of Gross Retail or Use Tax Exemption (ST-108E) to the Indiana dealer for each transaction. Disclosure of the out-of-state dealer's Federal Employer Identification Number (FEIN) and dealer license number must be shown on this form in lieu of registration with INBiz. The dealer license number is to be shown on the same line as the dealer name located at the top of the form.

  Option #3: An out-of-state dealer that is not required to register with Indiana can issue a Dealer-to-Dealer Resale Certificate of Sales Tax Exemption (ST-105D) to the Indiana dealer, which can be used either as a single or as a blanket purchase exemption certificate. Disclosure of the out-of-state dealer's Federal Employer Identification Number (FEIN) and dealer license number must be shown on this form in lieu of registration with INBiz.

• I possess a manufacturer's franchise to sell specific vehicle models as "new." Must I collect the sales tax even though the sale is to another dealer?

  Yes. The "resale" exemption is not valid for any new vehicle sold to another dealer if the vehicle being sold is to a dealer that does not possess a manufacturer's franchise to sell the type of new vehicle being purchased. The dealer must collect Indiana sales tax if selling a new vehicle to a non-franchised new vehicle dealer. See I.C. 6-2.5-5-8 for details.

• My customer lives in another state. If I charge Indiana sales tax, will the customer pay sales tax again when they register and/or title the purchase in their home state?

  Some states give credit for a legally imposed sales tax paid in one state against their state’s sales/use tax. If your customer lives in another state, their state may allow the amount of sales tax paid to Indiana as a credit against the amount of sales or use tax due; however, not all states allow a credit. The customer will have to pay an additional amount if the other state has a higher tax rate than Indiana’s or if the other state has any locally imposed taxes.

  For example, California currently has a sales tax rate of 7.25%. If Indiana sales tax (currently 7%) is paid at the time of purchase, the customer should expect to pay the 0.25% difference in sales tax (plus any local taxes) when registering in California.

  Exceptions:

  • A few states have specific laws prohibiting credit for a sales tax paid to another state. States known to DOR at this time include Arkansas, Mississippi and West Virginia. This is subject to change without notice to DOR.
  • A few states impose a tax that is different from a sales/use tax on the purchase of new or used vehicles. For instance, Georgia imposes a “Title Ad Valorem Tax.” These states may not apply credit for sales tax paid in Indiana to the other tax types.

  For your convenience, DOR lists sales tax rates for other states on our website. This information is the best we have available at the time of posting and is subject to change without notice. For questions regarding non-Indiana sales tax, reciprocity and other taxes, please contact that state directly for assistance.

• My customer lives in another state that has a sales tax rate lower than Indiana's 7% sales tax rate. Will the buyer be entitled to a refund for the difference in tax rates?

  Motor vehicle dealers (retailers) should collect Indiana sales tax at the rate the buyer would pay in his/her home state. The Indiana dealer must complete and retain a Certificate of Gross Retail or Use Tax Paid on the Purchase of a Motor Vehicle For a Nonresident (ST-108NR) to document this sale. This form includes identifying vehicle information and an affidavit for the purchaser to sign certifying that the vehicle will be transported outside Indiana within 30 days after delivery, and will be titled or registered in another state or country. Although the Indiana dealer will charge sales tax at the other state’s current tax rate, the tax collected is Indiana’s sales tax and must be remitted to DOR.

• My customer lives in a state that does not have sales tax. Do they still have to pay the Indiana sales tax on the purchase of a motor vehicle?

  No, the customer will not have to pay Indiana sales tax. The dealer must complete a Certificate of Gross Retail or Use Tax Paid on the Purchase of a Motor Vehicle For a Nonresident (ST-108NR) and the dealer should verify that the state of registration has no sales tax due.

• I have a customer from a foreign country. Do I collect sales tax on the purchase of a motor vehicle?

  Sales to residents of other countries who will transport and register the vehicle in that country should be taxed at that country’s rate. If that rate exceeds Indiana’s, then the dealer should only collect sales tax at Indiana’s current rate.

  For example, in Canada the combined equivalent sales tax for each province or territory exceeds 7%, so Indiana’s 7% should be collected, with the exception of Alberta (5%), Nunavut (5%), NW Territories (5%) and Yukon (5%), where the lower rate should be collected.

  Finally, if the country does not have a sales tax or equivalent, then no sales tax should be imposed.

• What are some of the other sales tax exemptions a customer might claim?

  The back of the Certificate of Gross Retail or Use Tax Exemption (ST-108E) lists all available statutory exemptions. Some of the exemptions available include sales to nonprofits, Indiana state or local governmental agencies, the federal government, vehicles to be used for hire in public transportation and sales to other dealers for resale.

• How is sales tax affected when an Indiana dealer delivers a vehicle, watercraft or aircraft to a customer’s location in another state or country?

  The delivery of a vehicle from Indiana to a customer’s location outside Indiana is an example of a “sale in interstate commerce.” The term “interstate commerce” is applicable any time a seller delivers tangible personal property across a state line. Any sales tax exemption applies to the seller, not for the purchaser. The purchaser is still required to pay all applicable taxes due in the locality, state or country in which the vehicle is registered.

  However, delivery into another state that is only for the purpose of tax avoidance is still subject to sales tax (e.g., delivery is made directly across the border).

  On the other hand, a transaction in which a purchaser picks up property within Indiana, or where a purchaser hires a delivery service to pick up a purchase in Indiana, is an example of an "intrastate sale" and is subject to Indiana sales tax. The following summarizes the information necessary to be kept to demonstrate method of delivery:

  Delivery Made by a Dealer: If a dealer delivers vehicles themselves, shipping documentation must be kept. The selling dealer’s purchase order must show the:

  • Method of delivery
  • Specific delivery location
  • Date of delivery
  • Signature of the purchaser (confirming the vehicle was inspected and accepted outside Indiana)
  • Delivery price (if applicable)

  Please note that a dealer that delivers property into another state without the use of a third-party common carrier is often considered to be doing business in that state and may be subject to that state’s tax laws. A dealer may be required to register and collect that state’s sales tax where the vehicle is delivered even if the transaction is exempt from Indiana sales tax.

  Delivery by a Third-Party Carrier: If a delivery is made via a third-party delivery carrier, the selling dealer must indicate on the purchase order (sales invoice) that the item sold is being delivered outside Indiana and must keep a copy of the delivery bill-of-lading from the delivery carrier as evidence of the out-of-state delivery. The bill-of-lading must show the:

  • Method of delivery
  • Specific delivery location
  • Date of delivery
  • Recipient of the delivery
  • Delivery price (if applicable)

  Note: A transaction in which a purchaser picks up property within Indiana, or where a purchaser hires a delivery service to pick up a purchase in Indiana, is an example of an "intrastate sale" and is subject to Indiana sales tax.

RVs and Cargo Trailers

• How are recreational vehicles, travel trailers and cargo trailers defined for purposes of sales tax exemptions?

  The definitions of a recreational vehicle or a cargo trailer that must be met to utilize an exemption from sales tax are defined under Indiana Code 6-2.5-5-39(a) and (b).

  According to this code:

  A cargo trailer is defined as a vehicle:

  • Without motive power;
  • Designed for carrying property;
  • Designed for being drawn by a motor vehicle; and
  • Has a gross vehicle weight rating of at least 2,200 pounds.

  A recreational vehicle (RV) is defined as a vehicle with or without motive power equipped exclusively for living quarters for persons traveling on highways. The term includes a travel trailer, a motor home, a truck camper with a floor and facilities enabling it to be used as a dwelling and a fifth-wheel trailer.

• What documentation is needed for a sales tax exemption when an out-of-state dealer sells or trades RVs or cargo trailers with an Indiana dealer?

  In December 2018, the Indiana Supreme Court ruled that delivery into another state for the purpose of tax avoidance is still subject to sales tax (e.g., delivery is made directly across the border).

  Out-of-state dealers have three options available to purchase RVs or cargo trailers exempt from Indiana sales tax.

  Option #1: If an out-of-state dealer does not have a physical presence in Indiana and delivers vehicles or watercraft into Indiana to customers other than other dealers, and the out-of-state dealer meets the economic thresholds for a remote seller, registration is required through INBiz—Indiana’s one-stop resource for registering a business and ensuring it complies with Indiana laws and regulations. Registration is free and confirmation emails are usually sent within 48 hours. Out-of-state dealers are required to file Indiana sales tax returns and collect Indiana sales/use tax on any RVs or cargo trailers delivered into Indiana for sales to persons who do not have a valid exemption. All dealers need to file sales tax returns for all reporting periods, including those for which there were no transactions.

  Option #2: An out-of-state dealer that is not required to register with Indiana, as described in Option #1, should issue a Certificate of Gross Retail or Use Tax Exemption (ST-108E) to the Indiana dealer for each transaction. Disclosure of the out-of-state dealer's Federal Identification Number and dealer license number must be shown on this form in lieu of registration with INBiz. The dealer license number is to be shown on the same line as the dealer name located at the top of the form.

  Option #3: An out-of-state dealer that is not required to register with Indiana can issue a Dealer-to-Dealer Resale Certificate of Sales Tax Exemption (ST-105D) to the Indiana dealer, which can be used either as a single or as a blanket purchase exemption certificate. Disclosure of the out-of-state dealer's Federal Identification Number and dealer license number must be shown on this form in lieu of registration with INBiz.

• I am a RV and/or cargo trailer dealer with a customer who is a non-resident of Indiana. Must I collect Indiana sales tax (7%) if the customer will transport the purchase to his home state for title or registration?

  Yes, nonresidents are subject to Indiana sales tax unless they register/title their purchase in a “reciprocal” state within 30 days of purchase. A state is reciprocal with Indiana if the other state allows a sales tax exemption to Indiana residents who purchase a recreational vehicle or cargo trailer in that state (assuming the purchase will be registered or titled in Indiana). No exemption exists for a customer who is registering or titling in a nonreciprocal state or any foreign country.

  A purchaser claiming a sales tax exemption must complete an Affidavit of Exemption by a Nonresident of Indiana on the Purchase of a Recreational Vehicle or Cargo Trailer (ST-137RV). The selling dealer must keep this form at its place of business. A legible copy of the form should be sent to DOR for review. Tax must be charged for the nonreciprocal states and all foreign countries, as shown in the below chart.

  As of July 1, 2020, when a nonresident intends to register the vehicle in a "nonreciprocal" state, the dealer must collect Indiana sales tax at the rate of the destination state where the vehicle will be registered. These nonreciprocal states are as follows:

  • Arizona
  • California
  • Florida
  • Hawaii
  • Kentucky*
  • Maine*
  • Massachusetts
  • Michigan
  • North Carolina
  • Rhode Island*
  • South Carolina

  *Cargo trailers only are taxable in these states. RVs are exempt.

  In December 2018, the Indiana Supreme Court ruled that delivery into another state for the purpose of tax avoidance is still subject to sales tax (e.g., delivery is made directly across the border).

• Why are some nonresidents exempt, but others are taxable?

  Nonresidents are subject to Indiana sales tax unless they register/title their purchase in a “reciprocal” state within 30 days of purchase. Reciprocal states are those whose laws allow the same exemption for purchases made in that state by Indiana residents.

  Many states, but not all, give Indiana residents a sales tax exemption when purchasing RV or cargo trailers. A few states (see above) do not allow this type of exemption, thus the Indiana law mandates the dealer collect sales tax from purchasers that are residents from nonreciprocal states.

• I am a resident of a state with either no sales tax or a lower tax rate than the Indiana. I am purchasing a RV or cargo trailer from an Indiana dealer but registering and titling in my home state. Will I be entitled to a refund for the higher tax paid?

  Indiana sales tax is applicable to both residents and nonresidents. If you reside in a state listed on the Affidavit of Exemption by a Nonresident of Indiana on the Purchase of a Recreational Vehicle or Cargo Trailer (ST-137RV) or in another country, you must pay Indiana sales tax to the dealer. No refund shall be paid by Indiana or the state/country where you will title the vehicle.

• What happens when the customer does not provide an ID number for The Affidavit of Exemption by a Nonresident of Indiana on the Purchase of a Recreational Vehicle or Cargo Trailer (Form ST-137RV)?

  If any information requested on the Affidavit of Exemption by a Nonresident of Indiana on the Purchase of a Recreational Vehicle or Cargo Trailer (ST-137RV) form is missing, the exemption will be invalidated and the dealer (and ultimately the purchaser) will be liable for the sales tax not collected at the time of purchase. A legible copy of the purchaser’s state driver’s license will suffice in place of an SSN if attached to the form.

  It is the dealer’s responsibility to ensure that all forms are accurate and appropriate tax is remitted to DOR. Dealers are required to remit sales tax for disqualified exemptions due to missing information or other factors. Dealers are allowed to recoup this amount from the customer.

• Why was I was charged additional sales tax by my home state upon registration and/or titling? I already paid a sales tax to Indiana.

  There are three possible answers to this question:

  1. Your home state has a higher state tax rate than Indiana.
  2. Your state may allow a credit for the amount of sales tax paid in Indiana against your state’s sales tax; however you are subject to additional taxes such as local sales or excise taxes in addition to your state’s sales tax.
  3. You live in a state that does not allow credit for a sales tax legally imposed by another state. DOR is aware of five states that do not credit residents for sales tax paid on vehicles in other states. These are:
     • Arkansas
     • Maryland
     • Mississippi
     • Oklahoma
     • West Virginia
• I am an RV and/or cargo trailer dealer. I have a customer who is a nonresident of Indiana. Should I collect the Indiana sales tax from this customer?

  Yes, nonresidents are subject to Indiana sales tax (7%) unless they register or title their purchase in a “reciprocal” state within 30 days of purchase. A state is reciprocal with Indiana if the other state allows the same exemption for purchases made in that state by Indiana residents. No exemption exists for customers who register or title their purchase in a nonreciprocal state or country. A purchaser claiming an exemption must complete an Affidavit of Exemption by a Nonresident of Indiana on the Purchase of a Recreational Vehicle or Cargo Trailer (ST-137RV). The selling dealer must also complete this form and keep it filed at its place of business.

  As of July 1, 2020, when a nonresident intends to register the vehicle in a "nonreciprocal" state, the dealer must collect Indiana sales tax at the rate of the destination state where the vehicle will be registered. These nonreciprocal states are as follows:

  • Arizona
  • California
  • Florida
  • Hawaii
  • Kentucky*
  • Maine*
  • Massachusetts
  • Michigan
  • North Carolina
  • Rhode Island*
  • South Carolina

  *Cargo trailers only are taxable in these states. RVs are exempt.

  Note: A sale to a nonresident that is determined to be subject to the Indiana sales tax due to registration/titling in one of the states or countries listed above may still be entitled to an exemption if they can legitimately claim one of the listed exemptions as shown on the back of Form ST-108E.