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Can I collect sales tax from customers in different states without violating tax laws in Indiana? What are the requirements?

Requirements for Collecting Sales Tax from Customers in Different States without Violating Tax Laws in Indiana

To collect sales tax from customers in different states without violating tax laws in Indiana, you must comply with the tax laws of each state where you have customers. This may require registering with each state and collecting and remitting sales tax according to their laws. Some states have economic nexus laws that require out-of-state sellers to collect and remit sales tax if they meet certain sales thresholds [1.1]. Additionally, some states have different tax rates and exemptions, so it is important to understand the specific requirements of each state.

In Indiana, a seller that contracts with a certified service provider is not liable to the state for sales or use tax due on transactions processed by the certified service provider unless the seller misrepresented the type of items it sells or committed fraud [6.3]. However, if you do not use a certified service provider, you may be required to register with each state where you have customers and collect and remit sales tax according to their laws.

Additional Information

  • Purchases or shipments of gasoline to or from locations outside Indiana may have different tax requirements [2.1].
  • The Indiana Department of Revenue publishes information on its website to communicate a person’s obligation to remit use tax on the exercise of any right or power of ownership over tangible personal property in Indiana for which gross retail tax has not been paid, including purchases using the Internet or a catalog [3.1].
  • Marketplace facilitators may be relieved of liability for failure to collect sales tax under certain circumstances [4.1].
  • Relief from penalties, tax, and interest in certain transactions involving reliance on data provided by the department may be available [6.1].
  • The Indiana gasoline tax is the tax imposed under IC 6-6-1.1 [2.4].
  • Exemptions may be available for the storage, use, and consumption of tangible personal property in Indiana under certain circumstances [3.2].
  • The sale of tobacco products to the United States or an agency or instrumentality thereof is exempt from the tobacco products tax [7.1].
  • The Indiana Department of Revenue may enter into agreements with other states to simplify and modernize sales and use tax administration [6.2].

To determine your obligations in each state, you should consult with a tax professional or review the tax laws of each state where you have customers.

Source(s):
Jurisdiction

Indiana