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Indiana Department of Revenue

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Black Friday and Cyber Monday Tax Tips

November 25, 2015

En Espanol 

If you’re looking forward to shopping for the best deals this holiday shopping season, you’re not alone. According to CNN, nearly 140 million Americans flocked to stores and online retailers to snag the best Black Friday and Cyber Monday deals in 2014. 

But did you know you may be subject to different types of taxes depending on how you make your purchases? Whether you choose to shop in store or online, both carry a tax: sales tax or use tax.

So, what’s the difference between the two?

Sales tax is a tax paid on most items at retail stores. When you buy an item from a retailer, you’ll pay Indiana’s seven percent sales tax on that purchase. The retailer is responsible for collecting the tax and sending it to the state.

Use tax is owed when a sales tax is not paid on purchases. This scenario often occurs when purchasing items online. Hoosiers shopping online during Cyber Monday should check to see if they are charged a sales tax; if not, use tax is owed to Indiana. Like sales tax, Indiana’s use tax rate is seven percent. 
While sales tax is collected at the time of purchase, you usually won’t pay use tax on your purchase until you file your Indiana income tax return. 

Need help calculating the use tax owed? Follow the two-step process outlined below.

Step One: Complete the worksheet in the IT-40, IT-40EZ, or IT-40PNR instruction booklet to help figure how much use tax is owed. Forms for the 2015 tax year will be available in December at 

Step Two: Enter the amount owed on Schedule 4 of Form IT-40, on line 8 of Form IT-40EZ, or on Schedule E of Form IT-40PNR. 

To learn more about Indiana’s use tax, go to 

Sales Tax Exemptions for Nonprofits

November 18, 2015

Nonprofits are often especially active during the holiday season. During this time of year, we show the famous “Hoosier hospitality” through food kitchens, holiday craft shows, toy collections, bake sales, and much more.
As we get into the spirit of giving, it is important for nonprofits to remember the rules about when they are or aren’t exempt from sales tax. Here’s a quick refresher.

But first, are you a qualified nonprofit?

If you have an organization that buys and sells tangible personal property but does not make a financial profit, you would generally be classified as a nonprofit corporation. To register as a nonprofit and qualify to receive sales tax exemptions, you must:

  • Qualify properly as a nonprofit by securing a nonprofit, or tax exempt, status from the Internal Revenue Service (IRS). The IRS will provide you with a Federal Determination letter, showing the exemption from federal tax.
  • Nonprofits who wish to have the Indiana sales tax exemption must file a Nonprofit Application for Sales Tax Exemption (Form NP-20A) and annually file a Nonprofit Organization’s Annual Report (Form NP-20) with the Indiana Department of Revenue.

Nonprofits making sales

If you sell items for 30 days or less during a calendar year (it doesn’t matter if they are consecutive or not), your sales will be exempt from sales tax. That means during your annual ornament sale, you do not need to collect Indiana’s seven percent sales tax!
If you engage in sales for 31 or more days during a calendar year, you must register as a retail merchant and collect sales tax. Find details at if you think you’re in this category.

Nonprofits making purchases

If you’re a qualified and registered nonprofit, you will be exempt from paying sales tax on some of your purchases. Here are some of the requirements for exempt purchases:

  • The item purchased must be used for the same purpose for which your organization is exempt.
  • The transaction must be invoiced directly to your nonprofit organization and paid directly via your organization’s funds.
  • Purchases for the private benefit of any organization member, such as meals and lodgings, are not eligible for exemption.

For each of these exempt purchases, you will need to complete Form ST-105 and provide it to the vendor from whom you are purchasing an item. The form tells the vendor it is ok to not charge you sales tax. The vendor must use the form to verify you are sales tax exempt and must keep a copy to show the department if audited.
Here are a few notes about completing Form ST-105:

  • It should be signed by a responsible business representative – a board trustee, a secretary/treasurer or in some cases a pastor/minister.
  • It should be updated periodically as circumstances, staff, or other details change.
  • It can be issued to a vendor on a “blanket” basis (there is a checkbox on the form) for vendors from whom you purchase regularly. In these cases, you would not need to repeatedly provide the form.
  • It is a vendor’s responsibility to grant sales tax exemptions only to those who present qualified and correctly completed exemption certificates, so be sure your Form ST-105 is correctly and fully completed.


As always, don’t hesitate to contact the department if you have questions about your nonprofit. Here are a few resources to help:

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