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Use Tax Liability
W-2 and WH-3 Electronic Filing
Composite Filing & Nonresident Withholding
Power of Attorney
Auto, Watercraft, RV and Trailer Dealers
RVs and Cargo Trailers
Before working with the Indiana Department of Revenue to establish the proper, corporations, S Corporations, limited liability companies, nonprofit organizations, limited partnerships and limited liability partnerships one should register with the Indiana Secretary of State. For more information, visit the Business Owner's Guide.
Some businesses must then file the Business Tax Application (Form BT-1) with the Department. The BT-1 establishes the proper tax accounts that will apply to your business. 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.
Established businesses that need to update their accounts will need to file a new BT-1 if their business profile changes. For example, if a business previously did not have employees, but now needs to hire help, the business will need to file a BT-1 to add the withholding tax account to its business profile.
The Department requires a close of business notification (Form BC-100) to close the tax accounts for a business. If the BC-100 isn’t filed, the Department may continue to send bills for estimated taxes.
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 by the Secretary of State and you receive a Certificate of Dissolution, the Indiana Department of Revenue requires the following:
- Form IT-966 is a notice of dissolution that is required of all organizations
- BC-100 allows the Department 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
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, you may call the Department at (317) 232-3376.
Social Security numbers are required by law. The Department does not provide any specific taxpayer account information to any organization or person outside of the Department. The Social Security number is also used to verify the identity of authorized people on the business tax account.
Yes. You can add different tax types as your business changes. You simply submit a new BT-1 with the appropriate tax type added.
While you must enter at least one NAICS code, you many register up to four codes.
The Department can process applications up to three months in advance.
- 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. A 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 at the individual level. 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. 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.
You will need to add withholding tax type by filing a new Business Tax Application (Form BT-1).
If an owner decides to change the organization type, he or she is required to complete a new application. If the owner is registering as a retail merchant there is a $25 registration fee.
Change of a corporate officer does not require another registration. It is in the best interest of the taxpayer, however, to re-register and receive his or her own taxpayer identification number. If the taxpayer chooses not to do so he or she can update and/change responsible officers by completing the Responsible Officer Change Form (ROC-1).
Yes. The federal guidelines for businesses require partnerships and corporations to have an FID. 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 FID number call (800) 829-4933.
Organizations that are required to register with the Secretary of State include:
- 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 Web site or call (317) 232-6576.
NOTE -- Effective Jan. 1, 2013, ALL businesses in Indiana must file and pay their sales and withholding taxes electronically. For more information, click here.
There are several options available to taxpayers wishing to file and pay their taxes.
- INtax – If you are filing and paying sales, withholding, out-of-state sales, prepaid sales, metered pump sales, fuel taxes, wireless prepaid fees, and type II gaming taxes, you are required by law to electronically file and pay these taxes. The easiest way is through INtax at www.intax.in.gov. With INtax, you can manage all these tax types. You can also manage filing and paying tire fees. It also gives you 24/7 access to business tax records, lets you file and pay online right up to the last deadline minute, securely communicate with the Department, and much more. Once you have received your INtax Access Code, download an INtax QuickStart Guide at www.in.gov/dor/4336.htm to get started.
- Electronic Funds Transfer – You have the options to sign up and pay through EFT. The available choices to pay are ACH Debit and ACH Credit. For more information about filing using EFT, please call (317) 232-5500.
- Paper Filing – Mail a paper return and pay with a check or money order if it is not a tax type that you are required to electronically file.
The filing frequency is based on the average monthly liability throughout the tax year. Remember 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. Call (317) 233-4015 if you have questions on your filing status.
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.
Yes. Simply file an updated Business Tax Application.
Each separate location collecting sales tax is required to have a Registered Retail Merchant Certificate displayed in each place of business. Therefore, a separate registration is needed for each location.
If the companies are separate entities with different federal identification numbers then you cannot consolidate under one tax identification number. However, if you have multiple locations under the same federal identification number you can consolidate under one Indiana TID.
If you want to consolidate tax filings for all or some of your locations, 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 compete 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 the Indiana Department of Revenue of the closure. This is typically done by filling out a BC-100 (Business Closure Request Form). Failure to do this can result in billings being issued for failure to file returns.
Yes, Indiana has a Voluntary Disclosure Program. If you want to know more about the Voluntary Disclosure Program, you may contact the Department anonymously. The Department 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.
For more information, click here.
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.
You may call (317) 232-5977 to speak to a representative of the Indiana Department of Revenue regarding your specific case.
For more information on resolving a tax protest, click here.
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 (no facsimiles). The request must be on the organization's letterhead and contain the following:
- Official name of the organization
- Address of the organization
- Federal Identification Number (FEIN)
- Date of Incorporation in Indiana or date qualified to do business in Indiana
- Corporate officer's signature and title (must be an original signature)
- Name and the FEIN of the reporting organization if the organization files as a member of a consolidated group
- Other pertinent information, such as a deadline*
- 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) 232-0129 from 8 a.m. to 4:30 p.m.
Mail the completed request to:
Indiana Department of Revenue
P.O. Box 6197
Indianapolis, In 46206-6197
My corporation has been administratively dissolved by the Indiana Secretary of State. How do I obtain a Clearance for Reinstatement from the Indiana Department of Revenue?
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 the Department. For more information, you may call (317) 232-0129 from 8 a.m. to 4:30 p.m. Mail the completed request to:
Indiana Department of Revenue
P.O. Box 6197
Indianapolis, IN 46206-6197
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 the Department.
For more information, you may call (317) 232-0129 from 8 a.m. to 4:30 p.m.
Mail the completed request to:
Indiana’s sales tax is 7 percent.
No. You will need to contact your county clerk’s office to apply for a vendor’s license. The Department will issue an RRMC when the Business Tax Application is processed.
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 the Department, the RRMC will be held until the account is current.
If you are buying items that qualify for a sales-tax exemption you can fill out Form ST-105. You provide the merchant with the ST-105 for their records. The merchants will keep the ST-105 for their audit records. You may contact us at (317) 233-4015 if you have specific tax exempt questions.
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.
Option #2 - You may register with Indiana for free by filing a Business Tax Application (BT-1). Register for "Out-of-State Use Tax" to obtain a taxpayer identification number. 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 can not 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 the Indiana Department of Revenue. You will need to file Form GA-110L with the Department.
All purchases are subject to the sales tax. If tax is not collected from you by the seller, you are required to remit use tax on the purchase price.
Both taxes are complimentary and are meant to assure the state gross retail tax of 7 percent is paid upon a purchase. A purchaser pays a “sales” tax when purchasing from an Indiana seller. A purchaser pays a “use” tax when purchasing from an out-of-state seller, but the purchase is delivered into Indiana.
If a purchaser does not pay a sales tax or a use 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 (which is due April 15).
Retail merchants with an Indiana location(s) and/or who perform certain activities, such as solicitation of orders within Indiana, are required to register their business (BT-1) and pay a one-time $25 registration fee, per location. An out-of-state seller without an Indiana location and who does not perform activities within Indiana that would legally require the seller to register (nexus), may voluntarily register to collect the Indiana use tax without incurring a registration fee.
For more information on registering your business, click here.
The ST-105 General Sales Tax Exemption Certificate is a multiuse form that can be used by most exempt purchasers. Most exempt purchasers, instate and outstate purchasers, may use this form for most types of Indiana allowed exemptions.
ST-104 Agricultural Single Purchase Exemption
ST-106 Agricultural Blanket Purchase Exemption
ST-134 Exemption for Construction Contractors
ST-135SB Sales and Use Tax Exemption (school bus operators)
ST-136A Out-of-State Purchaser's Exemption Affidavit
All of the above exemptions have been included on the ST-105 General Sales Tax Exemption Certificate. As such, the ST-104, ST-106, ST-134, ST-135SB and ST-136A have been deleted from our forms menu.
To view Indiana's sales tax history, click here.
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
Generally, any type of business entity (individual, partnership, corporation, etc.) that makes purchases of tangible personal property is subject to use tax unless it previously paid at least a 7 percent 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 percent.
Use tax is due on property brought into Indiana for use, storage or consumption, unless the Indiana Code (IC 6-2.5-5) contains an applicable exemption for your purchase. If you paid at least 7 percent sales tax at the time of purchase, you do not owe a use tax. However, if you did not pay at least a 7 percent sales tax, you may owe use tax.
Items sold at garage sales are generally exempted under Indiana's casual sale statute. A 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. (IB #20)
Items purchased at auctions are slightly more complex. Naturally, if the auctioneer collects the 7 percent 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 the sales or use tax. (IB #20)
The Indiana use tax rate is 7 percent, same as our sales tax rate. Thus, if you:
- Paid sales tax of 7 percent or more to the other state, you do not owe use tax to Indiana.
- Paid sales tax of less than 7 percent to the other state, your Indiana use tax will be the difference between the Indiana 7 percent use tax and the amount you paid to the other state.
If you self-report the use tax due, you will only owe the tax. If you wait until the Department of Revenue issues you a bill for the use tax due, you will have to pay a 10 percent penalty, plus interest. The 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
Departmental Notice #1 explains how to withhold taxes on employees. The current state withholding tax rate is 3.4 percent. The county tax rate will depend on where the employee resided as of Jan.1. If the county is a non-taxing county or the employee is working in Indiana but does not reside in Indiana then the non-resident rate should be used. If you have more questions please call (317) 233-4015.
The Department is happy to answer any question you may have about withholding taxes. For more information about withholding taxes, click here, or call us at (317) 233-4016.
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 the Indiana Department of Revenue 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.
Complete and file a Business Tax Application (BT-1) with the Department of Revenue. If you registered with the Department previously, you must still file a new BT-1 when you add your first employee.
The responsible officer of your organization may submit your BT-1 online. Processing time for the online application may take up to two business days to review.
Once you have registered, you will receive an Indiana Taxpayer Identification Number that allows the business to be identified in the Department’s system.
Employees should complete an Employee’s Withholding Exemption and County Status Certificate (WH-4). This form provides the Department 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.
Employers must withhold Indiana state tax from the employees’ salaries 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) 233-4016.
Yes. Part-time or summer employees are treated the same as full-time employees.
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 the Department at (317) 233-4016.
You can use INTax, Indiana's free online tax filing program allows you to file and pay your business taxes and much more. With INTax, you can manage your obligations for Indiana retail sales, out of state sales, prepaid sales, metered pump sales, tire fee, fuel tax and withholding taxes. To get started using INTax, click here.
Taxpayers with an average monthly withholding tax payments of more than $5,000 must submit their payments via electronic funds transfer before their due date. All other withholding agents may make their payments via EFT or mail.
Those withholding agents who must file early, monthly, or quarterly will receive the Indiana Employer’s Withholding Tax Return (WH-1). The WH-1 should be completed and returned to the Department on or before the due date. All Indiana withholding agents are required to complete and file an annual reconciliation form (WH-3) by Feb. 28 of the following year.
If you have more questions on withholding tax, please call the Department at (317) 233-4016.
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
- county of residence
- county of work
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 Jan. 31. A copy of the W-2 should also be sent to the Department by Feb 28. If you have more questions about withholding income tax, please visit the Department's Web site or call (317) 233-4016.
The Department uses the average anticipated monthly wages that are paid to your employees. If there is a significant increase or decrease in your average monthly tax withheld, your filing status will be adjusted.
Monthly average tax withheld Filing Status Due date(s) $25 or less Semi-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
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.
Yes. You can upload or manually enter your WH-3 even if you have an outstanding balance with the Indiana Department of Revenue.
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”.
The “File a Return” option does not become available until after you choose the tax type of “Withholding.” After you’ve selected “Withholding” under “Account,” select “File a Return” from the menu on the left. An option will be available for “Filing a WH-1” or a “Filing a WH-3.” Select WH-3. Verify the return period and click “Next.” From there, you will have the option of uploading your W-2s or manually entering the W-2 data.
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.
Yes, a document is available on the Department’s Web site at www.in.gov/dor/files/w-2book.pdf This file explains the file layout requirements. You can find additional information at www.in.gov/dor/4035.htm
Yes, there have been significant changes to the file layout of the Social Security Administration's W-2 file specifications (Publication No. 42-007). Those changes will also be reflected in the Indiana Department of Revenue W-2 specifications booklet for the 2010 tax year.
The Indiana Department of Revenue will accept W-2 files uploaded using either new 2010 file layout or the previous version of the file layout.
Yes. Files over 2MB, or approximately 2,000 W-2s, can not be uploaded into INtax. You can register to use the batch upload option or break the file into smaller files and upload multiple files in INtax.
No. We do not provide files for taxpayers. File specifications can be downloaded at www.in.gov/dor/4035.htm
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.
INtax does not currently allow for an XML file format. We do follow the guidelines established by the Social Security Administration for filing W-2 information using the EFW2 format. Only RS and RV records are unique to Indiana.
No. If you upload your W-2 information in INtax, you should not submit paper W-2s to the Department. This is also true for files uploaded through the batch upload process.
No. If you upload your W-2 information in INtax, you should not submit paper W-2s or WH-3s to the Department. This is also true for files uploaded through the batch upload process.
Yes, an extension of time to file may be requested if you do not have distribution amounts that apply to WH-18s by the due date. The Department will accept a copy of the federal extension to submit Form WH-3. Also, if the withholding account is designated as a separate account for nonresident withholding and making an annual one time distribution by pass through entities to shareholders, partners, or beneficiaries, the WH-3 filing due date is the fifteenth day of the fourth month following the year end date.
Nonresident shareholder withholding is withholding Indiana tax rate of 3.4 percent on a distribution made to a nonresident shareholder or partner.
Note: Withholding is required on any entity that is not an individual. The rates are as follows:
- Before July 1, 2012, 8.5%percent should be withheld.
- After June 30, 2012, and before July 1, 2013, 8 percent should be withheld.
- After June 30, 2013, and before July 1, 2014, 7.5 percent should be withheld.
- After June 30, 2014, and before July 1, 2015, 7 percent should be withheld.
- After June 30, 2015, 6.5 percent should be withheld.
Regular withholding is withholding on Indiana income such as salary, wages, and/or tips, which is withheld from the employees of the business. Nonresident shareholder withholding is withholding on distributions to a partner or shareholder who makes money from their investment with the business.
Composite filing is for nonresident individual shareholders and/or individual partners only, including grantor trust entities. Distribution (which is considered income) made by the partnership or S Corporation is reported on the shareholder’s or partner’s composite income tax return.
This can be done by going to the BT-1 (Business Tax Application) and when completing the withholding section select non-resident withholding.
After the account is established, the Department will automatically supply the S corporation or partnership with a form called WH-1 (Withholding Tax Return). For more information about the WH-1, visit www.in.gov/dor/4183.htm
Yes. A business is still required to file a WH-1 form even if there is no withholding to submit. Reflect zero ($0.00) on the WH-1 form for informational purposes. Failure to do so may result in the Department issuing an assessment for failure to file the required return. For more information about the WH-1, visit www.in.gov/dor/4183.htm
The WH-3 (Annual Withholding Reconciliation Form) is a reconciliation form that is filed at the end of the nonresident withholding period. The WH-18(s) should be enclosed with this form when filed.
A WH-18 (Miscellaneous Withholding Tax Statement for Nonresidents) acts like a W-2 wage statement. It is a form given to each shareholder/partner reflecting how much was withheld on his or her behalf due to a distribution. The shareholder/partner must attach this form to his or her income return to claim this credit. WH-18 forms distributed by the business should also be enclosed with the filed WH-3.
Yes. You will notice that the taxpayer identification number is the same but the location number (ex: 001, 002) will differ. Therefore, a WH-3 will need to be filed with the Department for each withholding account because these accounts are maintained separately.
No. The S corporation or partnership must follow Indiana law (IC 6-3-4-12 and IC 6-3-4-13) that states nonresident withholding must take place.
Yes. Each distribution should be reviewed individually. Withholding should take place on any positive distribution.
The refund may be issued from the IT-20S or IT-65 return retroactive to Jan. 1, 2008.
No. The individual shareholder or partner is not required to be on the composite worksheet; however, the K-1 is required to be attached to the return when filed.
Report the withholding on the withholding credit line on the IT-20S or IT-65 and attach a copy of the WH-18.
Yes. Residents of reverse credit agreement states may opt to not be on the composite and instead file the IT-40PNR return to report K-1 income. Also, nonresident withholding does not apply to reverse credit agreement state residents. Therefore, the individual taxpayer will take a credit for taxes paid to his or her home state on the Indiana IT-40PNR income tax return.
Use the WH-1U if the additional payment can be made prior to the nonresident withholding due date and the WH-18s have not been issued to the shareholder/partner. If it is after the nonresident withholding’s due date or the WH-18s have been issued, then pay the difference with the IT-65 or IT-20S return.
Yes. The shareholder or partner will report only the K-1 income on the composite return. The K-1 income and the other Indiana-source income will be reported on the IT-40PNR income tax return. Note that the WH-18 credit can be claimed on both the composite return and the IT-40PNR income tax return.
Report the additional credit on the state withholding line for W-2s on Schedule G. Attach information reflecting how the credit was determined and the corresponding federal identification number of the S corporation or partnership return.
For more information, please contact the Department at (317) 232-0129.
You can inquire about a tax bill by using the Department’s automated information line. This information line is available Monday through Saturday 7 a.m. to 10 p.m. You can find out your current balance due on any individual or business tax liability by calling (317) 233-4018.
You will need to have your tax 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.
If you have a rotary telephone, you may call (317) 232-2165 from 8 a.m. to 5:30 p.m. or (317) 232-2240 from 8 a.m. to 4:30 p.m., Monday through Friday.
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
For more information on what these rights mean, click here.
Your responsibilities as an Indiana taxpayer:
- You should file your tax returns and pay any taxes due on time.
- You should notify us in writing when you have an address change.
- You should know the tax laws that relate to you as an individual or a business, and comply with those laws.
- You should contact us if you have any questions or concerns.
If you are a business wanting to pay your Indiana retail sales, out of state sales, prepaid sales, metered pump sales, tire fee, fuel tax and payroll withholding taxes you can use INtax, Indiana's free online tax filing program that allows you to file and pay your business taxes and much more.
The Department accepts MasterCard, Visa, Discover, American Express (by phone only), debit cards, electronic checks, check or money order.
A check or money order should be made payable to the Indiana Department of Revenue. Payments should be mailed to:
Indiana Department of Revenue
P.O. Box 595
Indianapolis, IN 46206-0595
Every Indiana taxpayer has the right to a fair collection process. You have the right to protest a liability. If you protest a liability, the Department 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. The Department intends for you to have every opportunity to rectify your account balance whether it is paying it right away or protesting it.
Taxpayers wishing to authorize a representative to have Power of Attorney on their behalf for state tax matters needs to fill out a POA-1 form. Only when the Department has received the properly completed POA-1 form can a Department employee speak with the representative about specific tax types and periods indicated on the form.
To view a POA-1 form click here.
Taxpayers or their POA representatives can mail the POA-1 form to the following address:
Indiana Department of Revenue
P.O. Box 7230
Indianapolis, IN 46207-7230
Taxpayers or their POA representatives can fax the POA-1 form to the following number: (317) 615-2605.
Yes, CPAs may send in the POA-1 form for their clients.
Regardless of whom taxpayers designate as their POA, the POA-1 form does not need to be notarized.
Yes, the Department will accept an electronic copy of the POA-1 form via e-mail. However, the Department will not accept an electronic copy of the POA-1 form without a taxpayer’s signature.
No, a POA-1 form must be on file. The Department will only speak to a family member if he or she has been declared a POA representative on the taxpayer’s POA-1 form. However, if a married couple filed a joint return, the Department can speak to either spouse without a POA-1 form.
The military family member can print the POA-1 form off the Department’s Web site. Next, the military family member must complete and sign the POA-1 form. Finally, the military family member can e-mail an electronic copy, fax or mail a completed and signed copy of the POA-1 form to the Department.
Taxpayers can designate anyone, including family members, CPAs or attorneys, to be their POA representative.
Yes, the POA representative may speak with any employee once the POA-1 form has been processed in the Department’s system.
A company cannot be represented on the POA-1 form. By law, the Department can only accept an individual’s name as a POA representative. The Department will not accept a POA-1 form that does not have a designated POA representative from a company.
The taxpayer must first complete and sign the POA-1 form. Next, the taxpayer would scan the POA-1 form into his or her computer. Finally, the taxpayer can attach the electronic copy and send it via e-mail to the Department.
The Department will not accept a POA-1 form that says all tax types for all periods. The taxpayer or POA representative must indicate the specific tax type(s) and period(s) that he or she needs.
There is no cost to the taxpayer or POA representative to file a POA-1 form with the Department.
Yes. Aircraft registration with the Indiana Department of Revenue is required within 31 days after the purchase date. Late penalty and interest will be assessed on all late registrations.
Aircraft Registration forms can be obtained from these sources:
Indiana Department of Revenue
P. O. Box 644
Indianapolis, IN 46206-0644
Telephone: (317) 615-2544
No. The FAA and the Indiana Department of Revenue are separate government agencies. They do not automatically exchange information. 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 the Indiana Department of Revenue.
If a nonresident bases an aircraft in Indiana for 60 days or more, the nonresident is required to register with the Indiana Department of Revenue and pay all applicable fees and taxes. The 60 days do not have to be consecutive days.
A detailed bill of sale, invoice or sworn affidavit (Form 7669) signed by the seller must be submitted with your Application for Registration or Exemption, Form 7695. The FAA Bill of Sale, Form 8050-2, is not acceptable if an aircraft trade-in was involved or if the bill of sale states “$1.00 and other valuable considerations” or “$1.00 & OVC”.
The following is a summary of the exemptions available. A complete, detailed description of all exemptions is listed in Indiana Code 6-6-6.5-9.
- Aircraft owned and used exclusively by government.
- An aircraft owned by a nonresident and registered in another state, provided the nonresident does not establish a base in Indiana or use the base for 60 days or more. The 60 days do not have to be consecutive days.
- An aircraft prohibited from taxation by the laws of the United States.
- An aircraft owned or operated by a nonresident who is either an air carrier certificated under Federal Air Regulation Part 121 or a scheduled air taxi operator certified under the Federal Air Regulation Part 135.
- An aircraft that has been scrapped, dismantled or destroyed and the FAA certificate of registration has been surrendered. (The FAA N# has been canceled.)
- An aircraft owned by an Indiana resident that is not an aircraft dealer and is not based in Indiana at any time. However, the owner is required to file Form AE-1 no later than 31 days after the date of purchase and is required to furnish the required documentation verifying where the aircraft is registered and based.
- An aircraft owned by a dealer for not more than 5 days that is part of an ultimate sale or transfer of an aircraft that will not be based in Indiana.
- An aircraft owned by a registered nonprofit museum, if the museum provides documentation with its registration no later than 31 days after the purchase date. The Department will issue the registration for no charge.
- An aircraft owned by and used exclusively in the service of Indiana, a political subdivision of Indiana or any university or college supported in part by state funds. The aircraft must be reported for registration, but the Department will issue the registration at no charge.
The following is a summary of the sales/use tax exemptions available.
- An aircraft purchased for resale by a registered Indiana Aircraft Dealer.
- An aircraft purchased by a registered Indiana Retail merchant for rental and lease to others.
- An aircraft purchased for public transportation. The aircraft must be operated exclusively under FAA Part 135, 125 or 121. A copy of the federal certificate issued for public transportation must be submitted with your application for aircraft registration. (Operation of an aircraft under FAA PART 91 is not public transportation.)
- An aircraft purchased by a registered nonprofit organization for exempt use as described in IC 6-2.5-5-25.
- An aircraft purchased by a governmental entity for use for governmental purposes
- An aircraft purchased by a nonresident and taken out of state within 30 days after taking delivery either from an outright purchase or a repair, refurbishment or remanufacture is exempt from Indiana sales/use tax. The purchaser is required to supply the seller with a copy of the purchaser’s registration or title for the state where the aircraft is registered or titled within 60 days.
Aircraft registration and excise tax are in lieu of personal property tax. So if you own the aircraft, the registration and tax are due regardless of the condition of the aircraft. If you release or surrender the FAA Certificate of Registration (FAA N#) and the airworthiness certificate, it is no longer considered an aircraft by the FAA or the State of Indiana; registration and payment of the excise tax would not be required.
Aircraft registration and excise tax are due each year, the 1st day of January, and are delinquent if not paid before the last day of February. Aircraft Renewal forms are mailed the last week of December to all previously registered owners. If you have not received an aircraft renewal by the second week of January, please contact the Indiana Department of Revenue at (317) 615-2544 or by e-mail.
The aircraft seller and the aircraft purchaser are required to report a sale or purchase of their aircraft to the Indiana Department of Revenue within 31 days of the transaction. Failure to register within 31 days will result in a late penalty being charged to the purchaser and may result in tax liability not being transferred from the seller. (The FAA must be notified by both parties as well.)
If you sell your aircraft after payment of registration and excise tax, you are entitled to a tax credit but not a cash refund. The tax credit is the lesser of 90 percent of the excise tax paid or 10 percent times the number of months after the sale of the aircraft times the excise tax paid. The excise tax credit may be applied toward the excise tax due on another aircraft purchased in the same calendar year. The registration fee paid is not used in the computation.
Contact the Department of Revenue at (317) 615-2544 or by e-mail with the correct information. The Department will issue a revised “proposed assessment,” which must be returned with your purchase documentation signed by the seller to support the correction.
Yes. Effective July 1, 2007, an aircraft brought to Indiana to be repaired, remodeled, refurbished, remanufactured or subject to a prepurchase evaluation is exempt from Indiana use and/or aircraft excise tax. A “repair station” is a person who holds a repair station certificate issued by the FAA. However, the aircraft must be properly titled or registered in another state. The purchase of parts used to repair the aircraft is subject to Indiana sales tax.
Out-of-state dealers have three options available to purchase vehicles, trailers or watercraft exempt from the Indiana sales tax.
Option #1 - If the out-of-state dealer has Indiana customers and the out-of-state dealer delivers vehicles, trailers or watercraft into Indiana to anyone other than other dealers, registration is required. They may register with the Department of Revenue at no cost, electronically, from the Department's Web site.
Click on "Register a New Business Online." This is a free registration. You should receive your registration within 48 hours. If you are an out-of-state dealer delivering vehicles or watercraft into Indiana to nondealers, you must register. This registration requires you to file sales tax returns with Indiana and to collect Indiana sales/use tax on any vehicles or watercraft delivered into Indiana for sales to persons who do not have a valid exemption available. You will have to file sales tax returns even if your sales are zero for any particular reporting period.
Option #2 - An out-of-state dealer not required to register with Indiana, as described in Option #1, may issue a single purchase form exemption certificate, ST-108E, with the selling Indiana dealer. The out-of-state dealer must disclose both its Federal Identification Number and state of residence vehicle or watercraft dealer license number on this form in lieu of registration with the Department of Revenue. 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 not required to register with Indiana can issue an ST-105D Dealer to Dealer Resale Certificate with the Indiana dealer, which can be used as a single or 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 the Department of Revenue.
I possess a new-vehicle manufacturer's franchise to sell specific types/models of vehicles as "new." I have heard there is a new law regarding sales of new vehicles to other dealers where the "resale" exemption is not valid and I am supposed to collect the sales tax even though the sale is to another dealer. Is this true?
You are correct. Effective July 1, 2003, the "resale" exemption is not valid for any new vehicle sold to another dealer if the vehicle being sold is to a dealer not possessing a manufacturer's franchise to sell the type of new vehicle being purchased. The dealer must collect the Indiana sales tax if selling a new vehicle to a nonfranchised new vehicle dealer. See I.C. 6-2.5-5-8 for details at www.in.gov/legislative/ic/code/title6/ar2.5/ch5.html
All states are mandated to give credit for a legally imposed sales tax paid to one state against another state's sales/use tax. This is due to the United States Commerce Clause, which is a federal statute. Thus, if your customer lives in another state, that state should allow the amount of sales tax paid to Indiana as a credit against the amount of sales or use tax due. Your customer may have to pay an additional amount if his home state has a higher tax rate than Indiana or if his state has any local (non-state) imposed taxes. Example: California currently has a state rate of 7.25 percent plus local taxes. If the Indiana sales tax of 7 percent is paid at the time of purchase, your customer will have to pay only California’s extra .25 percent state sales tax plus any local taxes due in California. He will get credit for the 7 percent paid to Indiana, thus no double-taxation. (see warning below)
Warning - A few states impose a tax different from a sales/use tax, often termed an excise tax. Because the tax is not the same type of tax as Indiana’s sales tax, these states may not allow a credit for a sales tax paid in Indiana against their tax. A few states might have specific tax statutes that do not allow for a credit for a sales tax paid to another state. States known to the Indiana Department of Revenue that might not allow a credit for a sales tax paid to Indiana are Arkansas, Maryland, Mississippi, Oklahoma and West Virginia. These states may impose additional taxes upon registration and/or titling in their state without allowing a credit for the sales tax paid to Indiana. This list might not be all-inclusive. It is provided solely to alert dealers and customers of the existence of these types of situations.
The customer will not receive a refund from either state.
Yes, the customer is still subject to the Indiana sales tax. The residence of a buyer is not a consideration for sales tax purposes. States that are currently known to not have a state sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon.
Yes. All sales are subject to Indiana's sales tax if physical possession of the vehicle or watercraft transfers to the buyer in Indiana. Sales tax is due unless the customer is entitled to an exemption listed on the back of the ST-108E.
The back of the ST-108E form lists all the available statutory exemptions. Some of the exemptions available are for sales to nonprofits, governmental agencies, the federal government, vehicles to be used for hire in public transportation, sales to other dealers for resale etc.
As a condition of a sale, a vehicle dealer delivers the vehicle, watercraft, trailer or aircraft across the state line into another state or country where the customer takes physical possession of her purchase. Is this transaction exempt from the Indiana sales tax?
This is an example of a “sale in interstate commerce.” The United States Commerce Clause outlines provisions that regulate sales conducted in interstate commerce. The term “interstate commerce” is applicable any time a seller delivers tangible personal property across a state line. Note: this is an exemption for a seller, not for the purchaser. A purchaser or a purchaser’s hired delivery service that picks up property within Indiana is an example of an “intrastate sale” and thus is subject to the Indiana sales tax.
The interstate sales exemption applies if either the selling dealer personally delivers the vehicle or the selling dealer hires a third-party common carrier to deliver the vehicle to a point outside Indiana.
- 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 sales tax laws. A dealer might be required to register and collect that state’s sales tax where the vehicle is delivered even though they would be exempt from collecting the 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 purchaser who picks up property within Indiana, or a purchaser that hires his own delivery service to pick up his purchase in Indiana, is an example of an "intrastate sale" and thus is subject to the Indiana sales tax.
Yes, nonresidents are subject to Indiana’s 7 percent sales tax 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 would allow an Indiana resident to purchase exempt from that state to be registered or titled in Indiana. No exemption exists for a customer who is registering or titling in a nonreciprocal state or country. A purchaser claiming an exemption must complete an ST-137RV affidavit of exemption form. The selling dealer must also complete this form and keep it filed at its place of business. Tax must be charged for the following nonreciprocal states or countries:
Arizona Massachusetts California Michigan Florida Mississippi Hawaii North Carolina Kentucky * Rhode Island * Maine * South Carolina All nonresidents of the U.S. are taxable
*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 the ST-108E form.
The definitions of a recreational vehicle or a cargo trailer that must be met to utilize an exemption from sales tax is defined under Indiana Code 6-2.5-5-39(a) and (b).
According to this code:
- A cargo trailer is defined as a vehicle:
(1) without motive power;
(2) designed for carrying property;
(3) designed for being drawn by a motor vehicle; and
(4) having 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 upon the 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.
I am a RV and/or cargo trailer dealer. I have a customer who is a nonresident of Indiana. Must I collect the Indiana 7 percent sales tax if the nonresident is going to immediately take the purchase back to his home state to be registered and titled?
Yes, nonresidents are subject to Indiana’s 7 percent 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 would allow an Indiana resident to purchase a recreational vehicle or cargo trailer exempt from that state’s sales tax to 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 an exemption must complete an ST-137RV affidavit of exemption form. The selling dealer must keep this form at its place of business. A legible copy of the exemption form must be forwarded to the Indiana Department of Revenue for review. Tax must be charged for the nonreciprocal states and all foreign countries, as shown in the below chart.
Residents of the below jurisdictions must pay the Indiana sales tax of 7 percent:
Arizona Massachusetts California Michigan Florida Mississippi Hawaii North Carolina Kentucky * Rhode Island * Maine * South Carolina All nonresidents of the U.S. are taxable
*Cargo trailers only are taxable in these states. RVs are exempt.
The statute that allows for an exemption for a sale to a nonresident was written to only allow an exemption if the nonresident purchaser’s state would allow an Indiana resident to purchase an RV or a cargo trailer exempt in that state or country. Many states, but not all, allow an Indiana resident to purchase these types of vehicles exempt. A few states do not allow this type of exemption, as shown in the chart above, thus the Indiana statute mandates the tax must be collected.
I am a resident of a state with either no sales tax or a lower tax rate than the Indiana tax rate. I plan to purchase a recreational vehicle or cargo trailer from an Indiana dealer. I will be registering and titling in my home state. Will I be entitled to a refund for the higher tax paid to Indiana?
If you reside in a state listed on the ST-137RV exemption form or a foreign country, you must pay Indiana sales tax to the dealer. No refund shall be paid by Indiana or the state where you will title the vehicle. The Indiana tax rate, by statute, is applicable to both instate residents as well as nonresidents.
I am a resident of a state that has the same tax rate or a higher tax rate than Indiana. I want to purchase a recreational vehicle or cargo trailer from an Indiana dealer and plan to take it back to my state of residence to be registered and titled. Which tax do I have to pay?
If you reside in a state listed on the ST-137RV exemption form or reside in any foreign country, you are required to pay the Indiana sales tax of 7 percent. Your state will compute how much state tax is due in your state and then allow a credit for the amount of state sales tax paid to Indiana. Any additional state tax due will be collected by your state. In addition, your state may collect a local sales tax that is not related to the Indiana state tax. You will have to pay any additional state sales or local tax due upon registration and/or titling in your state.
The ST-137RV affidavit of exemption form contains the requirement for the purchaser to provide an identification number (Social Security number or Federal Identification Number). I do not want to divulge my SSN and I do not possess an FEIN. What happens if I do not provide the seller with one of these numbers or any other information requested on the exemption form?
If all the information requested on the ST-137RV form is not obtained, your exemption will be invalidated and your 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 ST-137RV form.
The dealer will be billed for any exemption that is not allowed due to missing information. The dealer will in turn bill you for the amount of tax exemption you had requested when you signed the ST-137RV form.
There are three possible answers to this question:
- Your home state may have a higher state tax rate than Indiana.
- Your home state may impose a local sales or excise tax in addition to its state sales tax. Indiana imposes only a state sales tax. Your state should allow a credit for the state tax paid to Indiana against your state sales tax; however, you will have to pay any additional local taxes that may be due in your home state.
- You live in a state that does not allow credit for a sales tax legally imposed by another state. Of the 45 states that have a state sales tax, the Indiana Department of Revenue is aware of only five states where credit is not given to their residents for sales tax paid on vehicles in other states. These states that do not allow a tax credit are:
- West Virginia
To avoid double taxation, Indiana statute does allow a tax credit for a state sales tax paid to another state.