Indiana Use Tax

You might have noticed when you were shopping online over the holidays that some websites would add sales tax to the checkout and some would not. This might have even incentivized you to purchase from one website over another if it was a big-ticket item. The truth is however, you still owe tax on that item, but instead of the seller charging you Sales tax, the burden has moved to you in the form of Use tax.

Use tax is generated in Indiana when you purchase items, such as computers, clothing, or other items, and the seller does not meet requirements of having to collect Sales tax in Indiana. It is the ‘mirror’ of Sales tax and it therefore makes sense that it is 7%, matching the Sales tax rate.

Individuals pay Use tax in Indiana on their Indiana return, on schedule 4: Other Taxes. Consider this when you are shopping online and keep receipts of purchases made that do not charge Sales tax. There is a question on our planner where you can tell us how much you purchased that you owe Use tax on, so we can properly calculate this for you.

If you were wondering, Amazon does charge Sales tax for sales in Indiana.

Shane

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