Indiana Sales Tax: 7% Rate, Food Rules and Use Tax

Indiana runs one 7% sales tax and a matching 7% use tax. This guide pulls together what the Department of Revenue (DOR) says about the rate, what counts as exempt grocery food, the separate local food and beverage tax, and how to work out use tax on purchases made elsewhere. The one thing that varies by place is the food and beverage tax; for the vehicle-specific rules see our Indiana vehicle sales tax guide.

The rate: 7% sales tax and 7% use tax

The DOR tells sellers they must register to collect a seven percent sales tax, and its Business FAQ states that "Both our sales tax and use tax rates are 7%." Sellers register for a Registered Retail Merchant Certificate (RRMC) with the DOR. The DOR pages read for this guide describe one statewide rate; they do not list a general city or county sales tax. The DOR sales tax information line is 317-232-2240.

Some businesses need extra registration, including those that rent rooms or accommodations for periods of less than 30 days.

Groceries, prepared food and other food items

DOR Sales Tax Information Bulletin #29 (Sales of Food, published September 2025) says the sale of food and food ingredients for human consumption is generally exempt, and that the exemption is primarily limited to "grocery" food. The sales tax does not apply if the food is sold unheated and without eating utensils provided by the seller.

• Prepared food is taxable: food sold with utensils, food sold in a heated state, and food where two or more ingredients are mixed.
• Not treated as exempt food: the bulletin's definition of food does not include tobacco, alcoholic beverages, candy or dietary supplements, and sales of dietary supplements are subject to Indiana sales tax.
• Soft drinks: defined as nonalcoholic beverages that contain natural or artificial sweeteners (with exceptions the bulletin lists, such as milk-based drinks and drinks over 50 percent juice).

The bulletin has an appendix with examples of taxable and non-taxable items and further rules for bakery items, restaurants and bulk items; read it before relying on a borderline item.

Local food and beverage tax

The DOR says that in some counties or municipalities, businesses that sell food and beverages must register for sales tax and a separate food and beverage tax. Its own example: a winery with a café in Allen County must collect a one percent food and beverage tax on top of sales tax. The DOR publishes the rate, code and start date for each adopting area on its Food & Beverage Tax page, and says your county auditor's office can tell you whether your county has the tax. This is the local add-on to check for restaurants and prepared food; it is not a general local sales tax.

Use tax: online and out-of-state purchases

Use tax applies to property acquired for use, storage or consumption in Indiana when Indiana sales tax was not paid to the seller at the time of purchase. If you paid at least 7% sales tax at purchase you owe no use tax; if you paid less, you owe the difference. Individuals can report it on their annual Indiana income tax return (due April 15) or pay it as purchases occur using Form ST-115, the Consumer Use Tax return. The DOR's own example is a person ordering clothing and novelty items online from sellers who do not collect Indiana tax.

Our worked example (computed by us from the DOR's 7% rule, not a DOR table): a $400 purchase would carry $28 of tax at 7%. The use tax owed depends on tax already paid:

Your own purchase may qualify for an exemption, so treat this as an illustration of the credit rule only.

Vehicles and other special cases

Vehicles follow the same 7% rate but have their own rules. DOR Bulletin #28S (May 2026) explains, among other things, that if a vehicle is to be moved and titled in another state or country within 30 days of the sale, the other state's rate may apply instead of the normal 7% rate. Our Indiana vehicle sales tax guide covers trade-ins and rebates. Indiana's treatment of clothing, prescriptions and services was not verified from a DOR page for this guide, so it is not covered here; check the DOR's Sales and Use Tax Exemptions pages.

Official sources

• Indiana DOR: Sales Tax
• Indiana DOR: Business FAQ (use tax)
• Indiana DOR: Food & Beverage Tax
• Sales Tax Information Bulletin #29: Sales of Food
• Sales Tax Information Bulletin #28S: Motor Vehicles and Trailers