What is an Indiana Sales Tax?
The state of Indiana is one of the states where sales and use tax is applied on the taxable goods and services. Current sales tax rate in the state of Indiana is 7%, but the most updated list of sales tax rates, including taxable and nontaxable items is published on the Indiana Department of Revenue website.
Sales tax is rather assumed a withholding tax instead of a business tax because it is not deductible and receive from a buyer on behalf of the government body. It is a wrong perception of a seller who perceives that sales tax is imposed on a business owner, but in fact it is a burden on a buyer on taxable purchases.
What is an Indiana Use Tax?
A use tax is paid on the taxable goods and services which are deemed taxable in the state of Indiana regardless purchases were made from a local or a foreign state buyer.
Generally, purchases of catalog, phone, internet purchases from out of state vendors, inventory items which are used personally are subjected to pay use tax in the state of Indiana.
Use tax does not apply if a buyer paid sales tax to the foreign state vendor on taxable goods. The difference is paid if sales tax of the foreign state was less than 7%.
Indiana department of revenue imposes 10% penalty and interest on unpaid use tax on the taxable purchases.
What is the difference between sales tax and use tax?
State of Indiana's vendor either collects sales tax or use tax from a buyer, not both on a specific purchase.
Sales and use tax is a withholding tax, which is not a business expense. It is simply collected from a buyer and pay back to the Indiana Department of Revenue.
Generally, Sales tax is collected from a domestic buyer whereas use tax is collected from an out of state buyer.
Both taxes are recognized complimentary taxes, which are calculated on gross receipts.
What is deemed a tangible personal property in the state of Indiana?
A property which is felt, seen and touched is deemed as tangible property and sales and use tax is imposed upon whom buys taxable tangible properties which are subjected to sales and use tax.
Who applies for a Sales and Use Tax Permit in Indiana?
An individual or a company who wants to sell taxable tangible property in the state of Indiana obtains sales and use tax permit Indiana.
What are the taxable items in Indiana which are deemed to collect sales tax?
A complete and an updated list of the taxable and nontaxable items are published on the Indiana Department of Revenue Website.
How to treat sales tax on auction Sales in the state of Indiana?
An auctioneer collects sales tax from a buyer.
If the auction sales take place at the owner's place, it is considered a "casual sales" therefore it is exempted from sales and use tax.
Sales becomes taxable, if the merchandise is auctioned and moved from a location.
All sales at auction "houses" is subject to sale and use tax.
How to make sales-tax exempt purchases?
A buyer provides form ST-105 to a merchant to buy taxable items without sales tax.
How to renew sales and use tax permit Indiana?
Sales and use tax permit Indiana is renewed every after two years. The sales tax, license process is automated and state of Indiana does not charge any fee to renew sales tax certificate.
Sales and Use Tax returns are filed on time to keep the RRMC in good standing. It will not be renewed until entire prior sales tax dues are paid along with the sales and use tax returns.
How to register for a sales tax permit in Indiana?
A sales and use tax application is submitted to the Indiana Department of Revenue website electronically. The Indiana department of revenue issues Registered Retail Merchant Certificate/RRMC to a retailer/seller which is posted in a prominent place in the business.
Indiana Department of revenue asks $25.00 to issue a sales and use tax permit to conduct taxable sales.
Generally, Indiana department of revenue generates a sales and use tax number in two to three and issues a hard copy in seven to ten business days.
Does state of Indiana indemnify to a vendor upon collecting sales tax revenue from a buyer?
No, the state of Indiana does not compensate to vendor. It is just a relationship of a trustee and beneficiary between a buyer and the Indiana department of revenue.
What is the difference between a vendor license Indiana and registered retail merchant certificate?
A vendor license is obtained from the county clerk's office to conduct business in the state of Indiana whereas RRMC is obtained from the Indiana department of revenue to collect sales and use tax from the end user.
How does state of Indiana treat sales and use tax on the internet sales?
A taxable sale, which is initiated through online is subject to sales and use tax in the state of Indiana. A seller is personally liable to pay sales and use tax to the Indiana department of revenue regardless it was collected from a buyer or not.
