Department Reminds Online Shoppers about Use Tax
INDIANAPOLIS (Nov. 19, 2012) — Cyber Monday and the holidays are just around the corner. Shoppers taking advantage online and catalog sales will be preparing for a wonderful holiday with online shopping opportunities galore. But with these opportunities comes a reminder:
All too many online and catalog companies fail to collect Indiana sales tax with Hoosier purchases. In Indiana, consumers making these purchases are expected to pay a “use tax” if no sales tax is collected.
“If you make a purchase and the online or catalog retailer does not collect Indiana’s seven percent sales tax, you are required by law to pay that same seven percent as a use tax,” noted department spokesman Bob Dittmer.
“At the end of the year, when you are preparing your 2012 individual tax return, simply total those purchases, take seven percent, and that’s your use tax. This does, of course, require you to either keep records of your online or catalog purchases or to rely upon your retailer to maintain a list for you (and many online retailers do that).”
Last year, more than 28,000 taxpayers in Indiana reported use tax on their individual tax return, amounting to more than $1.8 million. Each year, more than 3.1 million individual income-tax returns are filed in Indiana.
Indiana has required Hoosiers to pay use tax on their Indiana income tax return since 1969. Use tax is essentially a seven percent tax on any purchases where Indiana sales tax was not collected.
