Indiana's statewide sales tax rate is 7 percent
Indiana charges a flat 7 percent sales tax on most retail purchases. This is the rate you pay on clothing, groceries, electronics, and most other goods at checkout. The rate does not vary by county or city — it is the same whether you shop in Indianapolis, Fort Wayne, or a small town in southern Indiana.
Some counties and cities add a local tax on top of the state rate. These local taxes range from 0.25 percent to 1 percent depending on where you live. Your total sales tax bill is the state rate plus any local rate that applies in your area. A few Indiana counties have no local tax at all, so residents there pay only the 7 percent state rate.
Key Takeaways
- Indiana's state sales tax is 7 percent everywhere in the state, with no variation by county or city.
- Local taxes add 0.25 to 1 percent on top of the state rate in most counties, bringing your total to between 7.25 and 8 percent.
- Groceries, prescription medications, and medical equipment are exempt from sales tax in Indiana.
- You can find your exact local rate by entering your address on the Indiana Department of Revenue website or asking a retailer in your area.
Local taxes that add to the state rate
Most Indiana counties impose a local income tax, a local sales tax, or both. The local sales tax is separate from the state rate and appears as a line item on your receipt. Marion County (Indianapolis) adds 0.75 percent, so the total rate there is 7.75 percent. Lake County (Gary, Hammond) adds 1 percent, bringing the total to 8 percent. Other counties add smaller amounts — 0.25 or 0.5 percent — or nothing at all.
The local tax funds county and city services like roads, police, and public libraries. Because the rate depends on where you live, not where you shop, you pay your home county's rate even if you buy something in a different county. A person from Marion County who shops in a neighboring county still pays Marion County's rate.
If you live near a state border, you may see residents from Ohio or Kentucky shopping in Indiana to avoid their higher sales taxes. Indiana's combined rates (7 to 8 percent in most places) are lower than Ohio's (5.75 to 8 percent) and Kentucky's (6 percent), though this varies by specific location.
What is not taxed in Indiana
Indiana exempts certain items from sales tax. Groceries — food you buy to cook at home — are not taxed. This includes bread, milk, vegetables, meat, and canned goods. Restaurant meals and prepared foods are taxed, even if you take them home. Candy and soft drinks are also taxed because they are not considered groceries.
Prescription medications are exempt from sales tax. Over-the-counter drugs like aspirin or cold medicine are taxed. Medical equipment such as wheelchairs, crutches, and hearing aids are exempt when prescribed by a doctor. Vitamins and supplements are taxed because they are not considered medical equipment.
Clothing is taxed in Indiana. Unlike some states that exempt clothing, Indiana taxes all apparel at the full rate. Shoes, shirts, pants, and coats are all subject to sales tax.
How to find your exact local rate
Your total sales tax rate depends on your address. The Indiana Department of Revenue publishes a list of all county and local rates on its website. You can search by county name or ZIP code to find the exact percentage you pay. The site updates when rates change, though local rate changes happen infrequently.
If you are unsure, ask a cashier at any store in your area — they know the local rate and can tell you the total. You can also look at a recent receipt from a purchase in your county; the sales tax line shows the combined rate.
Sales tax on online and mail orders
Indiana requires online retailers to charge sales tax on orders shipped to Indiana addresses. This applies whether you order from a large company like Amazon or a small business website. The retailer collects the tax based on your shipping address and sends it to Indiana.
If an online retailer does not charge you sales tax at checkout, you may owe use tax on the purchase. Use tax is Indiana's way of collecting tax on items bought outside the state or online without tax. Most people do not pay use tax voluntarily, but it is technically owed. The amount is the same as the sales tax rate in your county.
Tax on services and special purchases
Most services are not taxed in Indiana. Haircuts, car repairs, plumbing work, and medical services do not have sales tax. However, some services are taxed. Admissions to movies, concerts, and sporting events are taxed. Rental of tangible goods — like car rentals or equipment rentals — is taxed.
Motor vehicles have their own tax structure. When you buy a car, truck, or motorcycle, you pay sales tax on the purchase price. The rate is the same as your local sales tax rate. Some counties also charge a separate vehicle registration tax, which is different from sales tax.
Frequently Asked Questions
Does Indiana sales tax apply to everything I buy?
No. Groceries, prescription medications, and medical equipment are exempt. Most services like haircuts and repairs are not taxed. Everything else — clothing, electronics, restaurant meals, household goods — is taxed at your local rate.
What is the difference between state and local sales tax?
The state tax is 7 percent everywhere. Local tax is added on top and varies by county from 0 to 1 percent. Both appear on your receipt as separate line items. You pay both on taxable purchases.
Do I pay sales tax if I buy something online from out of state?
If the retailer ships to your Indiana address, they must charge Indiana sales tax. If they do not, you technically owe use tax, though most people do not pay it. The rate is the same as your local sales tax rate.
Is clothing taxed in Indiana?
Yes. All clothing and shoes are taxed at your full local rate. Indiana does not exempt clothing like some other states do.
How do I know my exact sales tax rate?
Search your county or ZIP code on the Indiana Department of Revenue website, or ask a cashier at any store in your area. Your rate is between 7 and 8 percent depending on your county.