Understanding Indiana Sales Tax Exemption Certificates
Obtaining and Using the Exemption Certificate
To obtain a resale certificate in Indiana, fill out the Indiana General Sales Tax Exemption Certificate (ST-105). Indiana briefly addressed how to handle nontaxable sales for resale in Information Bulletin #57, dated 9/1/2011.
In order to claim an exemption from sales tax on purchases in Indiana, present the completed ST-105 to the vendor at the time of purchase. Ensure to fill in the description of items to be purchased in Section 2 and sign in Section 4.
Validity of the Certificate
A sales tax exemption certificate is an official document proving your organization’s tax-exempt status, typically required for tax-exempt purchases. In many states, including Indiana, resale certificates are valid until revoked. A purchaser may file a Blanket Exemption Certificate with the vendor for ongoing purchases of the same general type of property or service.
The issuance of a false or fraudulent Exemption Certificate with the intent to evade tax is a misdemeanor.
Registration and Verification
Indiana nonprofits making tax-exempt qualified purchases must register with the department and obtain a taxpayer identification number by filling out Form NP-20A.
To verify a resale certificate in Indiana, review it carefully to confirm the purchaser’s permit number and assure that the goods match the purchaser’s business type. Failure to appropriately verify the certificate information could result in liability for the seller.
Suppliers have the right to refuse resale certificates. If deemed invalid, the vendor is responsible for the sales tax.
Additional Registration Information
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There is a $25 registration fee to apply for a sales tax permit in Indiana, plus an additional $1 online processing fee.
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Sole proprietorships using a name other than the owner’s legal name must file a Fictitious Name Certificate with the Secretary of State; this certificate does not expire.
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The sale of grocery foods is generally exempt from Indiana sales tax. Nonprofit organizations must apply for tax-exempt status when obtaining an Indiana Tax ID number.