Do You Need to Get a Sales Tax Permit in Indiana?
Quick Answer: You need to get a sales tax permit in the state of Indiana if you have a physical presence or meet economic nexus requirements. Read on for more detailed information.
What is Sales Tax Nexus Anyway?
Your business owes sales tax in any state where it has “sales tax nexus”. In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit.
Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, economic presence, or by other factors. Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.
What Should You Do Once You Determine You Have Sales Tax Nexus?
Once you determine that you have sales tax nexus in Indiana, your next step is to register for a sales tax permit in the state. Check out our blog post on getting a sales tax permit in Indiana for more information about that process.
Common Ways to Have Sales Tax Nexus in Indiana
1. Economic nexus in Indiana
If you made $100,000 of sales or 200 transactions in the previous or current calendar year into Indiana, then you are required to register for, collect and pay sales tax to the state. If you meet this threshold, it does not matter if you have a physical presence in Indiana. Nexus has been created based on your volume of sales. For more information, please see Information Bulletin #89.
If you need help determining which states you have crossed economic nexus thresholds, check out our Sales Tax Starter Kit service.
2. Physical presence in Indiana
The following creates physical presence nexus in Indiana. If you have any of the following in Indiana, you will need to get a sales tax permit:
a. Maintain an administrative office in Indiana;
b. Maintain a research facility in Indiana;
c. Display merchandise at local trade fairs and exhibitions in Indiana;
d. Maintain a factory or warehouse in Indiana;
e. Deliver goods into Indiana by the seller’s truck where title and possession transfer in Indiana.
For more information about physical presence in Indiana, see Information Bulletin #37.
If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.
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State-by-State Audit Risk Percentages
Do You Need a Sales Tax Permit in Indiana If You Only Sell on Marketplaces?
If you are an online retailer who ONLY sells on approved marketplaces (such as Amazon, eBay, etc), sales tax will be remitted by the marketplace, and you are not required to get a sales tax permit in Indiana.
For more information about marketplace sellers, see Indiana Dept. of Revenue Information Bulletin #89.
If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, check out our Sales Tax Starter Kit service. In fact, if at any point you are stuck and want a team of experts to handle all of this for you, don’t hesitate to contact us.