State guide · IN
Indiana sales tax and property tax
Seven percent at every register in the state, no county surcharge to look up, and a constitutional ceiling on what a homeowner's tax bill can reach.
Facts read on official Indiana pages on · Checked by Radif Partners · How we calculate
- State sales tax
- 7%
- Local sales taxes
- None
- Groceries
- Exempt from the state rate
- Clothing
- Taxed like other goods
- Median property tax
- $1,798
- Effective property rate
- 0.74% · #29 of 51
Indiana is one of the few states where the sales tax is the same at every till: 7%, in force since April 1, 2008, with no county or city sales tax on top. The only local extra is a food and beverage tax of usually 1%, or 2% where county and city both adopted it, charged on prepared food and drinks. Groceries sold unheated and without utensils are exempt, many candy bars count as food because of the flour rule, and clothing is taxed in full with no holiday. Property tax is where Indiana stands out. The constitution caps a homestead's bill at 1% of its gross assessed value, 2% for rentals and farmland, 3% for everything else, and only voter-approved referendum levies can exceed it. Census figures put the median homeowner's tax at $1,798 on a $243,500 home, 0.74% of value, rank 29 of 51. The 2025 reform (SEA 1) shrinks the homestead standard deduction to $40,000 for the 2026 assessment and to zero by 2030, while a larger supplemental deduction and a new credit take its place.
Total to pay
$107.00
Sales tax $7.00 · 7% of the price
| Price before tax | $100.00 |
| State tax · 7% | $7.00 |
| Local tax · not charged on this item | $0.00 |
| Total | $107.00 |
Rule applied: general state rate. How this is calculated.
Sales tax in Indiana
Because Indiana bars general local sales taxes, there is no rate map to consult before buying: a $900 refrigerator costs $63.00 in tax in the largest city mall and in the smallest village hardware store alike. The calculator above therefore needs no local rate for ordinary goods. Restaurants are the exception. A county, and a city inside it, can each adopt a food and beverage tax on prepared food and drinks, generally 1% each, so a $60 dinner can carry up to $5.40 instead of $4.20. Counties also levy innkeeper's taxes on short stays. The Department of Revenue's county tax information page lists which places charge what.
The grocery line follows Indiana's own definitions. Food sold unheated and without utensils is exempt, while soft drinks, dietary supplements, alcohol and prepared food are taxed at 7%. Candy is taxed too, but the state's definition leaves out anything with flour on the label or that needs refrigeration, so a candy bar with flour among its ingredients can be sold tax free while a flourless one on the same shelf is taxed. Prescription drugs are exempt. Clothing and shoes have no exemption, and Indiana holds no sales tax holiday.
If an online seller charged less than 7%, the difference is owed as use tax, reported on Schedule 4 of Form IT-40 or on Form ST-115. Remote sellers must register once their Indiana revenue passes $100,000 in a year.
What the state charges, item by item
| Item | State rate | Local tax | Rule |
|---|---|---|---|
| Most goods | 7% | no | Single statewide 7% gross retail tax; there is no general local sales tax in Indiana, so 7% is the rate everywhere (local food and beverage taxes apply only to prepared food and drinks). |
| Groceries (food for home) | 0% | no | Food and food ingredients sold unheated and without utensils are exempt; candy, soft drinks, dietary supplements, alcohol and prepared food are taxable at 7%. |
| Clothing | 7% | no | No clothing exemption: clothing is tangible personal property taxed at 7%. |
| Prescription drugs | 0% | no | |
| Prepared food and beverages in adopting counties/cities | see note | Local food and beverage tax of generally 1% (2% where county and city both levy it) on top of the 7% sales tax. |
Local sales taxes
Indiana has no local sales taxes: Food and beverage tax: generally 1% of gross retail income, 2% inside a municipality when county and municipality both adopted it (Commissioner's Directive #30).
Sales tax holidays in 2026
Indiana has no sales tax holiday; none is listed by the Department of Revenue for 2026.
Worth knowing about Indiana sales tax
- Indiana's sales tax has been 7% since April 1, 2008 (6% from December 2002 to March 2008); it was first adopted on October 24, 1963. source
- There is no county or city sales tax: the 7% rate is the same in every store in the state. source
- Restaurant meals can carry an extra local food and beverage tax of 1%, or 2% where both the county and the city adopted it. source
- Indiana's candy definition excludes anything with flour on the label or needing refrigeration, so many candy bars are exempt as food. source
- Remote sellers must register once their Indiana gross revenue exceeds $100,000 in the current or previous calendar year. source
- Bundled or unitary transactions of seven cents or less are exempt from sales tax. source
Property tax in Indiana
Counties, townships, cities and towns, school corporations and libraries all levy property tax in Indiana, and the county treasurer sends one bill for all of them. The bill is net assessed value times the local rate, then limited by the circuit breaker. On the Census median home of $243,500, a 1% cap means the homestead tax cannot exceed $2,435 a year unless voters approved a referendum levy; the typical ratio puts the actual figure near $1,797, comfortably under the ceiling. A rental house worth the same can be billed up to $4,870.
The deductions are moving. Under SEA 1-2025 the homestead standard deduction falls from $48,000 on the 2025 assessment date to $40,000 for 2026, then $30,000, $20,000, $10,000 and nothing from 2030. In the other direction, the supplemental homestead deduction climbs from 40% of the remaining assessed value toward 66.7% for taxes payable in 2031. From the 2026 bills on, every homestead also gets a credit of 10% of its tax, up to $300, with no application. Owners over 65 lost their old deduction in 2025 and now get a credit of up to $150 if their adjusted gross income is under $60,000 single or $70,000 joint; their homestead tax also cannot rise more than 2% from one year to the next.
Apply for deductions with the county auditor; filing by January 15 counts for that year's bill, and nothing needs renewing until the home changes hands. Taxes are paid in two installments, with a 5% penalty if you are up to 30 days late and 10% after that.
Property tax on a home in Indiana
Typical bill per year
$1,797
| Per month | $150 |
| Median effective rate in Indiana | 0.74% |
| Median bill paid | $1,798 |
Census median ratio; your county, city and school district set the real levy.
| Census figure | Indiana |
|---|---|
| Median home value (owner-occupied) | $243,500 |
| Median real estate taxes paid | $1,798 |
| with a mortgage | $1,882 |
| without a mortgage | $1,636 |
| Effective rate (tax ÷ value) | 0.74% |
| Rank by effective rate (1 = highest) | 29 of 51 |
| Rank by median bill | 40 of 51 |
How the taxable value is set
Property is taxed on its net assessed value (gross assessed value minus deductions) times the local rate. Indiana's constitutional circuit-breaker caps limit the bill to 1% of gross assessed value for homesteads, 2% for other residential property and farmland, and 3% for other real and personal property; voter-approved referendum levies sit outside the caps. Who levies the tax: local only: counties, cities and towns, townships, school corporations, libraries and special districts; bills are issued and collected by the county treasurer; the Department of Local Government Finance (DLGF) oversees assessments and budgets
Payment calendar: Property taxes are due twice a year; the statement with the due dates arrives in the spring. Late payment within 30 days: 5% penalty; after 30 days: 10%.
Other property tax relief
- Over 65 Credit. SEA 1-2025 replaced the Over 65 Deduction (from the January 1, 2025 assessment date) with a credit of up to $150, subject to income limits (AGI over $60,000 single / $70,000 joint disqualifies). source
- Over 65 Circuit Breaker Credit. Eligible seniors' homestead tax cannot rise more than 2% over the previous year. source
- Deduction for 2% circuit breaker properties. Automatic deduction for non-homestead residential property, long-term care property and farmland: 6% of AV for 2025 pay 2026, 12% for 2026 pay 2027, rising to 33.4% for 2030 pay 2031. source
- Veterans, blind/disabled and other credits. Disabled veteran deductions/credit and blind/disabled credit, filed with the county auditor. source
Worth knowing about Indiana property tax
- Indiana caps homestead tax bills at 1% of gross assessed value, other residential and farmland at 2%, and all other property at 3%. source
- The 2025 reform (SEA 1) phases the $48,000 homestead standard deduction down to $0 by 2030 while raising the supplemental deduction to 66.7% of assessed value by 2031. source
- Since taxes payable in 2026, homeowners automatically get a credit of 10% of their homestead tax bill, capped at $300. source
- Taxes approved by voters in a referendum are outside the 1%/2%/3% caps. source
- Deductions and credits do not need to be renewed every year, only after a sale or title change. source
- The Over 65 Deduction was repealed from the January 1, 2025 assessment date and replaced by an Over 65 Credit of up to $150. source