Sales Tax Rules
Indiana imposes a state sales tax rate of 7%, with a maximum combined rate (state plus local) of 7% when local taxes are added. Economic nexus is triggered at $100,000 in sales — meaning out-of-state businesses that exceed this threshold must collect and remit Indiana sales tax. SaaS and digital software products are generally exempt from sales tax in Indiana. Groceries are exempt from state sales tax.
SaaS Tax Details
Remotely accessed software is specifically exempt.
Grocery Details
Most food items are exempt; prepared foods are taxable.
What is the sales tax rate in Indiana?
Indiana's state sales tax rate is 7%. When local taxes are added, the maximum combined rate can reach 7%. The actual rate you pay depends on the county and city where the purchase is made.
What is the economic nexus threshold in Indiana?
Indiana requires out-of-state businesses to collect sales tax once they exceed $100,000 in sales in a calendar year. Once nexus is established, the business must register, collect, and remit Indiana sales tax.
Is SaaS taxable in Indiana?
No. SaaS products are generally exempt from sales tax in Indiana. Remotely accessed software is specifically exempt.
Are groceries taxed in Indiana?
Groceries are generally exempt from sales tax in Indiana. Most food items are exempt; prepared foods are taxable.
Are digital goods taxable in Indiana?
Yes. Indiana taxes digital goods including downloaded software, music, movies, and e-books. Businesses selling digital products to Indiana customers should collect sales tax.
Are clothing items exempt from sales tax in Indiana?
Clothing is subject to sales tax in Indiana at the standard state rate.
How often do I need to file sales tax in Indiana?
Indiana requires sales tax filing on a Monthly, Quarterly, or Annual. Online filing is available through the official Department of Revenue portal.
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Official Source
Indiana Department of Revenue
Last verified: 2026-03-26 · Always confirm current rates with your tax advisor before filing.