The Indiana Department of Revenue (DOR) wants to ensure you have the best opportunity to succeed in your business—because people like you bring jobs, innovation and progress to our state. We created the New and Small Business Education Center to help you better understand state laws, the tax-filing process, and what services are available to support you as your business evolves. This page provides a basic overview on these issues. For more detailed information, see our Indiana Tax Handbook for New and Small Business Owners and watch our "Start Strong and Stay Strong" webinars for small businesses.
Nonprofit Changes You Need to Know About
Nonprofit customers with open and active accounts and a sales tax-exempt checkbox marked in the Indiana Tax System (ITS) received a letter in early November 2022 detailing upcoming changes to sales tax requirements and annual report filings.
- Beginning Jan. 1, 2023, exemption certificates (Form NP-1) will no longer be mailed. Nonprofit customers should no longer use Form ST-105 as the option for nonprofits will be removed. With this change, nonprofit customers will need to go through INTIME to request Form NP-1 as a replacement for Form ST-105. (Previously issued ST-105s will remain valid.) Nonprofit customers who are not registered will need to create an INTIME account to access their exemption certificates. See instructions on creating an INTIME logon.
- Other changes affecting nonprofits include the revised filing frequency from annual to every five years. This law requires nonprofits to file their 2021 Form NP-20 (Nonprofit Organization’s Annual Report) in 2022 to qualify for the new filing frequency. Your letter from DOR specifies your next report filing due date based on your Federal Employer Identification Number (FEIN). This also applies to fiscal year filers whose tax years end before Aug. 1, 2022. New nonprofit customers will need to file Form NP-20R by May 15 every fifth year.
Note: You will not need to file Form NP-20 in 2023 for the 2022 calendar year. Fiscal year filers who file Form NP-20 for a fiscal year ending after July 31, 2022, will not need to file an NP-20 during the 2023 calendar year. Additionally, Form NP-20 is being revised to Form NP-20R.
- Effective July 1, 2022, nonprofits must collect state gross retail sales tax after exceeding $20,000 in sales during a calendar year. This includes sales made by all units operating under the organization’s registration with DOR.
If your out-of-state organization is hosting a conference, seminar, or educational event within our state, you can request temporary sales tax exemption status for the duration of your visit. Form NP-20T, Nonprofit Application for Temporary Sales Tax Exemption, will be published on our website in December 2022.
Business Registration with INBiz
DOR has partnered with several state agencies to create a streamlined process to help register and manage your business. INBiz is a one-stop portal that allows you to register your business with:
- Department of Revenue: Registration is required for all tax types applicable to your business including Indiana retail sales, withholding, out-of-state sales, gasoline use taxes and metered pump sales, tire fees, fuel taxes, prepaid wireless service charges, food and beverage taxes, county innkeeper's taxes, heavy vehicle rental tax and motor vehicle rental taxes (see Tax Types section for more information)
- Secretary of State: Registration is required for formally organized businesses such as C corporations, S corporations, LLCs, nonprofits, LPs and LLPs
- Department of Workforce Development: Registration is required for businesses with employees in order to pay state unemployment insurance premiums
DOR recommends using INBiz to register a new business because it's the simplest way to get started.
Your specific tax requirements will depend on your business type and several other factors such as if you have employees, sell products and so on. Below, we've outlined the general registration requirements and tax obligations for the most common small business structures.
- Sole Proprietorship
If you’re one person who conducts business for profit, and you assume all liabilities and debts of the business, then you meet the definition of a sole proprietorship. You'll report your business income on your own individual tax return. You may also need to register with DOR for certain tax types if you sell products or have employees.
Example 1: Geoffrey decides to open a booth at an antique mall. His booth sells restored antique furniture. He hires his niece, Molly, to help him run the booth. Geoffrey’s business sells tangible items (furniture), and he has an employee. He must register for sales and withholding taxes.
Example 2: Harriett is a seamstress. She repairs and alters clothing and drapes for her friends and family. Harriett is not selling any tangible property, so she is not required to register her business with DOR. She will report the income from her services on her individual income tax return.
Example 3: Juanita opens a computer store. She sells computer components and offers repair services for electronics. The store sells products so Juanita needs to register for sales tax with DOR.
Note: These examples show some of the many possibilities for sole proprietorships. They are not meant to provide legal advice for organizing your business.
- General Partnership
When two or more people own a for-profit business, they could form a general partnership. In this case, all partners are responsible for the liabilities and debts of the business. And when tax time rolls around, each partner must report the income from the business on their individual tax returns.
Alison and Jaime run a winery in Fort Wayne. The winery has a small café that allows customers to pair wines with appetizer-style foods. The winery employs 10 people to assist with the café and processing the grapes. Alison and Jaime will need to register their business for food and beverage tax, withholding tax and sales tax. Selling bottles of wine and food requires the company to register for sales tax; being in Allen County requires the company to collect a food and beverage tax; and having employees requires the company to withhold taxes for employees' wages. The business will register with DOR to set up the proper tax accounts. And because they'll be selling alcohol, they will need to get a license from the Alcohol and Tobacco Commission.
Note: This example shows one of the many possibilities for a partnership. It is not meant to provide legal advice for organizing your business.
A corporation is a legal entity that's created by filing Articles of Incorporation and owned by shareholders. The corporation assumes all liabilities and debts of the company and shareholders are protected from them. The income of a corporation is taxed twice. The corporation entity is taxed, and individual income taxes are withheld from employees' wages. The same is true for corporate shareholders when dividends are distributed from their shareholdings.
Jackson Conventions Inc. is a convention center in Rockport. The company has an area where they sell concessions in addition to renting booth areas for convention attendees. The company employs several hundred people to manage and run the facilities. The company will need to register for withholding tax, sales tax, food and beverage tax and county innkeeper’s tax. Sales tax and food and beverage tax should be added to the purchase of any concessions, and the employees must all have withholding tax paid from their salaries. Since the corporation operates in Spencer County, they must collect innkeeper's tax and a food and beverage tax. At the end of the year, the corporation must file taxes as well as pass out W-2s for all it's employees.
Note: This example shows one of the many possibilities for corporation. It is not meant to provide legal advice for organizing your business.
A nonprofit is a corporation whose purpose is to engage in activities that provide no financial profit to its members.
To qualify properly as a nonprofit, businesses must secure tax exempt status from the Internal Revenue Service. The IRS provides the nonprofit organization with a Federal Determination letter, showing the exemption from federal tax.
Nonprofits who wish to have the sales tax exemption must be recognized by the IRS as a nonprofit, file a Nonprofit Application for Sales Tax Exemption (Form NP-20A, available through INTIME) and annually file a Nonprofit Organization's Annual Report (Form NP-20, available through INTIME).
If the organization has unrelated business income of more than $1,000, it must also complete a Nonprofit Organization Unrelated Business Income Tax form (Form IT-20NP).
Jane Q. Public operates an after-school youth center in Indianapolis. The center has a small administrative staff and two counselors on staff and a bookstore, which provides some of their members with employment. The center will also hold an annual fund raiser for two weeks in the summer.
The staff of the center and the bookstore require the center to register with DOR for withholding tax. Because the bookstore sells books, the center must also register for sales tax. The fund raiser will not be required to collect sales tax because it runs less than 30 days, but they must apply for an exemption status for this event with Form NP-20A.
Each year, the center would file Form NP-20. If the income from the bookstore exceeds $1,000 per year, the center will also need to file Form IT-20NP.
Note: This example shows one of the many possibilities for nonprofits. It is not meant to provide legal advice for organizing your business.
- Other Business Types
There are several other potential entity structures for your business including S corporations, limited liability companies (LLC), limited partnerships (LP) and limited liability partnerships (LLP). For more information about these structures see the INBiz overview on business registration and DOR's guide to choosing the proper income tax form.
If you are unsure of which business type your business is considered, consult a lawyer or contact the nearest Indiana Small Business Development Center. The Indiana Secretary of State also may be able to assist you. Sole proprietors and general partnerships do not have to file with the Secretary of State. However, limited liability companies, corporations, limited liability partnerships, limited partnerships and other formally organized companies must register with the Secretary of State.
You will need to register for all tax types applicable to your business. See this chart for information on some of the most common tax types for new and small businesses. Please also see our calendar of tax filing deadlines to make sure you file on time.
|If you...||Register for...|
|Sell products or tangible items||Sales tax|
|Have employees||Withholding tax|
|Sell food and beverages*||Food and beverage tax|
|Rent accommodations for less than 30 days*||County innkeeper's tax|
|Rent motor vehicles||Motor vehicle rental tax|
|Distribute gasoline or special fuel||Gasoline use tax|
|Sell tires||Tire fee|
|Sell fireworks||Safety fee|
*In certain counties/municipalities, see our map of tax rates by county
Filing and Paying Taxes
DOR offers electronic filing and payment services for businesses. Please note, state law requires businesses to file and pay sales, withholding, alcohol, cigarette, other tobacco products and motor carrier fuel taxes electronically.
Running and succeeding in a new or small business is a dream, and a challenge. Understanding taxes is often one of the biggest challenges. DOR is here to help.
Frequently Asked Questions
State Tax Forms
Several administrative changes can now be completed via INTIME. An INTIME Guide for Business Customers is available if needed to complete these tasks:
- Add a new location
- Close my business
- Update address, phone number, and e-mail
- Update responsible officer