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Indiana Consumer Tax Laws

All states have their own consumer tax laws that apply to all purchases, as well as the usual vices like alcohol and cigarettes. Generally, state consumer taxes are higher for goods or services that are unhealthy or not considered essential, such as liquor, cigarettes, or gambling. Most consumer sales tax revenue goes into a state's general fund, while gasoline taxes generally fund highway maintenance and construction.

Consumer Tax Statutes in Indiana

Indiana’s tax on alcohol depends on how powerful the drink is: beer is the lowest at 11.5¢ per gallon while distilled spirits are taxed at $2.68 per gallon. The following table highlights the basic provisions of Indiana consumer tax laws.

Sales Tax

7% §§6-2.5-2-2

Cigarette Tax

55¢/pack of 20 §6-7-1-12

Gasoline Tax per Gallon

18¢ §6-6-1.1-201

Use Tax

7% §§6-2.5-3-3

Liquor Tax

Beer 11.5¢ /gal.; Wine <21% 47¢ per gal., >21% $2.68/gal.; Spirits $2.68/gal. §§7.1-4-2-1; 7.1-4-3-1; 7.1-4-5-1

Gambling Tax

Riverboat gambling tax of 20% adjusted gross receipts §4-33-13-1

More and more, we purchase goods online, which can be shipped from anywhere. And if you live in the Hoosier State and do a little online shopping, you might think you’re getting those items “tax free.” However, Indiana law requires what is known as a “use tax” which applies to taxable goods or services delivered into or used in Indiana if the vendor does not collect their own sales tax. In Indiana, the use tax rate is the same as the normal consumer sales tax rate: 7 percent. Some of the common scenarios where Indiana’s use tax might apply are:

  • If you purchase taxable property or services by phone, from catalogs, or on the Internet, and the property or services are delivered into Indiana;
  • If you purchase taxable property from a seller who is located outside of Indiana and the property is delivered into or used in Indiana; or
  • If you send or take property out of Indiana, have a taxable service performed on that property, and then have the property shipped or bring it back into Indiana.

Indiana Consumer Tax Laws: Related Resources

For us ordinary citizens, tax laws can be some of the most complicated and hard to understand. If you would like legal assistance with a consumer tax matter, you can contact an Indiana tax attorney in your area and schedule a consultation to discuss your case. If you’d like additional articles and resources, you can visit FindLaw’s sections on Indiana Tax Laws and Tax Laws and Forms.

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