Indiana Sales Tax Calculator

One flat rate everywhere in Indiana

Indiana's sales tax is 7% on taxable purchases in every city and county, and there is no local general sales tax, so the rate on a receipt in Indianapolis is the same as in Gary, Evansville or a rural township. That makes Indiana one of the simplest states for shoppers: if an item is taxable, multiply the price by 0.07.

The trade-off is a high base rate. 7% is tied for the second-highest state-level rate in the country, so a $1,000 purchase carries $70.00 of tax no matter where in the state you buy it. Neighboring states with lower state rates can end up costing more once their local taxes are added, so compare combined rates, not state rates, when shopping across a border.

Local taxes that do apply: food and beverage and innkeeper taxes

Indiana has no local general sales tax, but counties and cities can levy narrower local taxes that show up on specific bills. The Department of Revenue registers businesses for two that consumers meet most often:

Because these taxes apply only to restaurant and lodging sales, a grocery receipt and a hardware store receipt in the same town will show the plain state rate, while a dinner bill or hotel folio can show more.

• Food and beverage tax: a local tax on prepared food and drink sold by restaurants and similar sellers in participating counties and cities, charged on top of the state sales tax.
• Innkeeper’s tax: a county tax on hotel, motel and short-term room rentals of fewer than 30 days.
• Motor vehicle rental tax: an extra tax on rentals of passenger vehicles and trucks under 11,000 pounds, charged by rental companies.

What is exempt in Indiana: groceries yes, prepared food no

Food and food ingredients for human consumption, the items people think of as grocery food, are exempt from Indiana sales tax. Under Sales Tax Information Bulletin #48, drugs sold by a pharmacist or licensed practitioner are exempt when the patient gets them on a prescription or drug order, and insulin, oxygen, blood and blood plasma are exempt even without one. The line that trips people up is "prepared food", which is taxable. Under Sales Tax Information Bulletin #29, food is prepared, and taxable, when the seller:

Bakery items such as bread, bagels, donuts, cookies, muffins, pies and tortillas are carved out of the prepared-food rule, so a dozen donuts from a grocery bakery is tax-free unless sold with utensils. Grocery stores with delis, convenience stores and similar "combination businesses" must tax their prepared food even though the rest of the store is exempt.

• Sells it heated, or heats it for you
• Mixes two or more ingredients and sells them as a single item (a sandwich, a deli salad)
• Provides utensils such as plates, forks or straws with the sale

Calculating Indiana sales tax, forward and backward

Forward: price × 0.07 = tax. A $250 pair of headphones costs $17.50 in tax, $267.50 in total. Backward: total ÷ 1.07 = pre-tax price. A $53.50 receipt contains $3.50 of tax on a $50.00 price.

Mixed baskets need care. Suppose a convenience store sale includes a $4.00 gallon of milk (exempt grocery food), a $6.50 hot sandwich (prepared food) and a $2.50 soda. Only the sandwich and soda are taxed: $9 × 0.07 = $0.63. In a county with a food and beverage tax, the sandwich can carry that local tax too.

Indiana use tax: what you owe on untaxed purchases

If you buy something taxable from an out-of-state seller and no Indiana tax is charged, you owe 7% use tax. Individuals report it with their income tax return on Schedule 4, Other Taxes, which the 2025 IT-40 booklet says covers purchases made outside Indiana by mail, from radio or TV advertising, or over the internet.

Effective July 1, 2025, Indiana use tax also covers services and other non-tangible items that are subject to Indiana sales tax when no sales tax was paid on them. This is easy to overlook for digital subscriptions bought from small foreign sellers.

Indiana does not hold a sales tax holiday, so there is no back-to-school window to plan purchases around.

How Indiana compares across the state line

Indiana's single 7% rate is lower than the 8.98% Illinois average and lower than Ohio's 7.29% average. The gap is clearest around Chicago, where the combined rate is 10.50%: a $1,000 appliance bought in Northwest Indiana carries $35.00 less tax than the same appliance bought in Chicago. That saving holds only for Indiana residents. An Illinois resident who brings the appliance home owes Illinois Use Tax on the difference, because Illinois credits only the tax paid to Indiana.

Because Indiana has no local layer, an online seller shipping to any Indiana address charges the same rate, which makes Indiana receipts easy to check: tax should always be exactly 7% of the taxable items.