Cyber Monday and the holidays are just around the corner. Shoppers taking
advantage of online and catalog sales will be preparing for a wonderful
holiday with online shopping opportunities galore.
But with these opportunities comes a reminder from the Indiana Department of
Revenue: 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 DOR 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 state income tax
return since 1969. Use tax is seven percent on any purchases where sales tax
was not collected.