About Indiana's Remote Seller Law
On June 21, 2018, the United States Supreme Court issued its ruling in South Dakota v. Wayfair, Inc., overturning past decisions requiring remote sellers to have physical presence in a state before the state could require the seller to collect the state’s sales tax. With the Wayfair decision, physical presence is no longer required for sellers to be obligated to collect and remit sales taxes, and instead states can impose economic nexus thresholds on remote sellers.
On June 21, Indiana Gov. Eric J. Holcomb offered the following statement regarding the Wayfair decision:
“A lot about our world and economy has changed in the 26 years since our nation’s highest court last ruled on this issue. With the incredible evolution of technologies and the growth of internet sales, this Supreme Court ruling will help level the playing field between our Hoosier-based companies that operate retail stores and out-of-state companies that sell products and services online in our state. We’re taking a careful look at the ruling to better understand its implications for Indiana.”
Indiana law (Ind. Code 6-2.5-2-1(d)) requires a seller without a physical location in Indiana to obtain a registered retail merchant’s certificate, collect and remit applicable sales tax if the seller’s gross revenue from sales into Indiana exceeds $100,000 in the previous calendar year or the current calendar year. Sales into Indiana include any combination of sales of tangible personal property delivered into Indiana, products transferred electronically into Indiana, and services delivered in Indiana.
Note: Prior to January 1, 2024, Indiana had a second economic threshold, and if a merchant met either or both of the thresholds in the current or prior calendar year, they were required to register with the department as a registered retail merchant and collect and remit Indiana sales tax on retail transactions made in Indiana as an agent for the state. This second threshold was for instances where the retail merchant had 200 or more separate transactions into Indiana during the current or prior calendar year. Sales into Indiana include any combination of sales of tangible personal property delivered into Indiana, products transferred electronically into Indiana, and services delivered in Indiana.
Effective January 1, 2024, Indiana only has the $100,000 threshold. If a merchant met the 200 transaction threshold in 2023, but not the $100,000 threshold, they may close their sales tax account in 2024 if they do not have $100,000 in sales in 2024. They will still have to file all required sales tax returns for 2024.
Streamlined Sales Tax Guidance
More Information
- U.S. Supreme Court’s decision in South Dakota v. Wayfair
- More about Indiana sales tax
- Additional information:
- Register in multiple states to collect sales tax using the Streamlined Sales Tax Registration System
- Register to collect Indiana sales tax use Indiana’s INBiz
- File and pay Indiana sales tax electronically using INTIME
Frequently Asked Questions
- What is a remote seller?
A remote seller is a business or person who sells into a state where it does not have a physical presence.
- What changed for remote sellers in 2018?
On June 21, 2018, in the matter of South Dakota v. Wayfair, the U.S. Supreme Court overturned the 1992 case of Quill v. North Dakota. The Court specifically ruled in Wayfair that sellers who do not have a physical presence within a state can be required to collect and remit sales taxes in states where they meet certain economic thresholds
On August 27, 2018, the lawsuit challenging the constitutionality of the remote seller provisions in Ind. Code 6-2.5-2-1, which were enacted in House Enrolled Act 1129 (2017), was resolved and the Department was authorized to enforce Indiana’s economic nexus law starting October 1, 2018.
- What is the current status of the law in Indiana?
On August 27, 2018, the declaratory judgment action challenging the economic nexus provisions in Ind. Code 6-2.5-2-1 was resolved and DOR was authorized to enforce Indiana’s economic nexus law starting October 1, 2018.
Effective January 1, 2024, the 200 transaction threshold in Ind. Code 6-2.5-2-1 was removed. Indiana now only has the $100,000 threshold.
- Is the repeal of the 200 transaction threshold applied retroactively?
Prior to January 1, 2024, Indiana had a second economic threshold, and if a merchant met either or both of the thresholds in the current or prior calendar year, they were required to register with the department as a registered retail merchant and collect and remit Indiana sales tax on retail transactions made in Indiana as an agent for the state. This second threshold was for instances where the retail merchant had 200 or more separate transactions into Indiana during the current or prior calendar year. Sales into Indiana include any combination of sales of tangible personal property delivered into Indiana, products transferred electronically into Indiana, and services delivered in Indiana.
Effective January 1, 2024, Indiana only has the $100,000 threshold. If a merchant met the 200 transaction threshold in 2023, but not the $100,000 threshold, they may close their sales tax account in 2024 if they do not have $100,000 in sales in 2024. They will still have to file all required sales tax returns for 2024.
- How do I register?
The easiest way to register for multiple states, including Indiana, is through the Streamlined Sales Tax Registration System. Register directly with Indiana only.
Note: A remote seller will generally not be required to register with the Indiana Secretary if State. Refer to the information on the INBiz portal and the Indiana Secretary of State's website for more information.
- Should I register to collect sales tax or out-of-state use tax?
Ind. Code 6-2.5-2-1(d) specifies that qualifying remote sellers should register to collect sales tax. Any use tax accrued or collected by the seller can be remitted utilizing their sales tax registration without the need for a separate use tax registration.
Note: Any additional seller locations, whether located within or outside of Indiana, will be required to register as additional locations under the sellers Taxpayer Identification Number (TID).
- What is the Streamlined Sales Tax Registration System (SSTRS)?
The SSTRS is a quick and easy way to register for a sales tax account in all Streamlined Sales Tax member states. When you register through the SSTRS, you receive sales tax accounts to collect and remit sales tax in all Streamlined Sales Tax full member states. You may also choose to register in any associate member states. Once you are registered, you must collect and remit sales and use taxes in those states.
- Can I register today?
Yes. You may register immediately through the Streamlined Sales Tax Registration System or with Indiana’s INBiz portal.
- Many news articles make reference to states providing free software to vendors. Is this correct?
DOR does not provide sales tax compliance software. The software provided by states which is referred to in the Wayfair decision and news articles is provided to qualified taxpayers that register through the Streamlined Sales and Use Tax Registration system. The qualifications and requirements to qualify for those services and software can be found at the Streamlined Sales Tax website.
- What is a Certified Service Provider (CSP)?
A CSP is an agent certified under the Streamlined Sales and Use Tax Agreement to perform all of the seller's sales and use tax functions, other than the seller's obligation to remit tax on its own purchases. A CSP is designed to allow a business to outsource most of its sales tax administration responsibilities. See more information.
- If I have already collected sales tax, what do I need to do?
If you have collected sales tax on an Indiana sale, you must remit the sales tax to DOR. If you are not already registered, please see the “How do I Register?” question above. Failure to remit can potentially subject you to civil and criminal penalties.
- Which of my sales are taxable in Indiana? Indiana imposes a sales tax on the sale of most goods and tangible personal property.
- See list of taxable sales for Indiana or all states
- Review the Sales Tax Information Bulletins on particular types of transactions
- See sales tax information or call 317-233-4015
- What are the documentation requirements regarding exempt sales made by a remote seller?
A remote seller will be required to adhere to the same requirements as all other Indiana registered retail merchants. This means that the remote seller will be required to obtain either an Indiana (ST-105) or a Streamlined Sales Tax Agreement certificate of exemption from the customer.
- What if I meet Indiana’s threshold, but I don’t make any taxable sales in Indiana?
The threshold applies regardless of whether any of the $100,000 of revenue was generated by taxable sales. Wholesalers are considered to be retail merchants as well. Thus, a remote vendor will still be required to register and file returns even if it believes that none of its sales will be subject to Indiana sales or use tax. Note that a retail merchant with annual collections of less than $1,000 will only be required to file a return annually.
The law states that the seller’s gross revenue includes sales of “service[s] delivered in Indiana.” Pursuant to Ind. Code 6-2.5-13-1, a service is sourced to Indiana if it is first used in Indiana. Indiana does not generally impose sales tax on services. Therefore, a service provider that meets either component of Indiana’s economic nexus threshold, but does not sell tangible personal property or provide taxable services to Indiana residents will not be required to register.
- I don’t have a physical presence in Indiana, do I have to register?
If you sell goods or tangible personal property into Indiana, you will be required to be registered if you receive gross revenue from sales of more than $100,000 into Indiana in the current calendar year or the preceding calendar year.
- I make sales through my own website; do I need to collect tax?
If you are located in Indiana or have a physical presence in Indiana, you must collect and remit sales tax. If you don’t have a physical presence in Indiana, but you sell goods or tangible personal property into Indiana, you will be required to collect tax if you receive gross revenue from sales of more than $100,000 into Indiana in the current calendar year or the preceding calendar year.
- What is Indiana’s current sales tax rate?
Indiana’s sales tax rate is 7 percent.
- How do I file and remit the sales tax to Indiana?
If you register through the Streamlined Sales Tax Registration System, you can file returns and make payments through a Certified Service Provider (CSP) or using a Certified Automated System (CAS). This will allow you to file for multiple states at one time. If you register as a retail merchant with Indiana only, you are required to file and pay electronically using Indiana’s online portal.
- What if I am an Indiana business that makes sales into other states?
Many states have adopted provisions similar to those in Ind. Code 6-2.5-2-1(d). Those provisions may differ somewhat from those enacted by Indiana. Please refer to the Streamlined Sales Tax, the Multistate Tax Commission, and the Federation of Tax Administrators website for information regarding the remote seller rules in other states.
For example: Jeff owns a T-shirt store in Indianapolis. He also sells T-shirts from that Indianapolis location through a website. Jeff should already be collecting Indiana sales tax on any T-shirt sales made at the Indianapolis store or sales to Indiana residents through the website. The Indiana remote seller provisions have no impact on Jeff’s business. He should not collect Indiana sales tax on any sales to customers located outside of Indiana. Since many other states have enacted provisions similar to Indiana, Jeff should determine whether he is required to collect any other states’ sales taxes on sales made to residents those states.
- Can I voluntarily register to collect Indiana sales tax even if I do not meet Indiana’s threshold?
Yes. An out of state vendor may voluntarily register to collect Indiana sales tax even if they do not have a physical presence in Indiana or meet the economic nexus threshold. Once an out of state vendor registers to collect Indiana sales tax they are obligated to collect and remit Indiana sales tax on all taxable sales until such time as they cancel their registration and file all required returns.
- Do the remote seller requirements apply to non-U.S. sellers?
Yes.
- Will registering for Indiana sales tax obligate a remote seller to file and pay any other taxes or result in the seller receiving a nexus questionnaire to determine whether the seller has any other Indiana tax obligations?
Ind. Code 6-2.5-2-1(d) only applies to Indiana sales tax. DOR does not automatically send out questionnaires or similar inquires to taxpayers that register to collect Indiana sales or use taxes. However, if the seller sells products subject to a food and beverage tax, a county innkeeper’s tax, the other tobacco products tax, the closed system cartridge tax, the electronic cigarette tax, the tire fee, the fireworks fee, the vehicle sharing excise tax, or the enhanced prepaid wireless charge, the economic nexus threshold is imposed on these taxes and fees as well. In other words, if the seller meets the economic nexus threshold for sales tax, they will automatically meet the threshold for these other taxes and fees in the event that they sell products subject to those taxes or fees.
- How do the economic nexus provisions in Ind. Code 6-2.5-2-1 impact remote sellers that utilize an online marketplace facilitator?
Remote sellers that utilize a marketplace facilitator do not include sales made through the marketplace to Indiana customers within their calculation of the $100,000 gross revenue into Indiana. Marketplace facilitators will count both their own Indiana sales and sales of remote sellers into Indiana utilizing their marketplace when determining their calculation of the $100,000 gross revenue into Indiana.