# Indiana Sales Tax Exemption Guide: What You Need to Know Canonical: https://trykintsugi.com/blog/indiana-sales-tax-exemption Published: 2025-01-21 Indiana sales tax exemptions for resale, manufacturing equipment, farm supplies, and nonprofits, and how to claim them with Form ST-105. ## Understanding Indiana Sales Tax Exemption for Businesses Indiana's sales tax exemption lets businesses pay less tax on some purchases that qualify under state law. To claim an exemption, a business must get a valid exemption certificate. Then it must give one to each of its suppliers. Keeping records of exemptions is a core part of staying compliant. Report them on your sales tax returns, and keep records for audits. This can be complex and take a lot of time. Dive deeper: Kintsugi's Sales Tax Exemptions Guide ### What qualifies for sales tax exemption in Indiana? Qualifying items for sales tax exemption in Indiana include: - Goods for resale - Manufacturing equipment - Agricultural supplies - Certain nonprofit purchases Whether an item qualifies depends on how it is used and whether it meets state rules. ### How do I get tax exempt status in Indiana? Businesses must apply through the Indiana Department of Revenue. Fill in the forms you need. Then provide any papers required, including exemption certificates. ### What is the exemption amount for Indiana? Indiana does not have a set exemption amount. Exemptions apply to the full value of qualifying purchases, based on whether they qualify under state laws. ### Common Business Types That Can Benefit from Sales Tax Exemption Retailers purchasing for resale: Businesses that buy tangible personal property (physical goods) to resell don't pay sales tax on it. The tax will be collected when the item is sold to the final buyer. Manufacturers: Companies that make goods can claim exemptions on machines, equipment, and materials used directly to make them. Agricultural producers: Farmers and farm businesses qualify for exemptions on items like seeds, fertilizers, and equipment they need to farm. Nonprofit organizations: Qualifying nonprofits, such as charities and religious groups, don't pay sales tax on purchases used for their exempt purposes. Government entities: Federal, state, and local government agencies don't pay sales tax on goods and services they use in their work. Educational institutions: Schools and universities may claim exemptions on items bought for teaching or for the school's own use. Healthcare providers: Hospitals and clinics may qualify for exemptions on medical devices and other supplies they need to care for patients. ## Key Benefits of Sales Tax Exemption for Indiana Businesses Indiana sales tax exemption offers many benefits to businesses in the state. Here are some of them. Reduced operational costs: Exemptions lower the cost of buying goods, equipment, and supplies. That lets businesses put their money where it counts. Improved cash flow: Not paying sales tax on qualifying purchases helps businesses keep more cash on hand. They can use it for daily work and to invest in growth. Increased competitiveness: Businesses that use exemptions can lower their prices or earn more on each sale. That gives them an edge in the market. Encourages industry growth: Exemptions for industries like manufacturing or farming reward businesses for growing. They also help the economy grow. Simplified compliance: Managing exemptions well helps businesses make tax reports simpler. It also lowers the risk of paying too much and helps avoid penalties. Support for nonprofits and educational institutions: Nonprofits and schools can stretch their budgets. They avoid needless tax on purchases tied directly to their exempt purposes. ## Steps to Apply for Indiana Sales Tax Exemption Determine eligibility: Does your business qualify? Check the rules set by the Indiana Department of Revenue. Common reasons to qualify include purchases for resale, manufacturing equipment, farm supplies, and some nonprofit work. Register your business: If you're not registered yet, create an account with the Indiana Taxpayer Information Management Engine (INTIME). You'll use this portal to manage your tax tasks. Complete the appropriate application: For most general business exemptions, you'll fill in Form ST-105, the General Sales Tax Exemption Certificate. It is on the DOR's website under Sales Tax Forms. Give it directly to each vendor. You don't send it to the DOR for approval. For nonprofits, you'll submit Form NP-20A. You can find it on the DOR's Nonprofit Tax Forms page. Submit the application: Once the form is filled in, submit it through the INTIME portal or as the form directs. Include all the papers it asks for to avoid delays. Await approval: For nonprofits, the DOR will review your NP-20A application and tell you its decision. If approved, you'll receive Form NP-1, the nonprofit exemption certificate. Show it to vendors when you make qualifying purchases. ## Common Mistakes and How to Avoid Them Failing to collect valid exemption certificates: If you don't have the right certificate for every exemption, an audit will find you non-compliant. Misclassifying items: Applying exemptions to goods that don't qualify, even by mistake, can lead to paying too much or to penalties. Expired certificates: Out-of-date certificates lead to invalid claims in an audit. They can also lead to needless charges to customers. Outdated information: If you don't keep up with state rules, problems and errors can pile up. Human error: Without an automated sales tax platform, you risk math errors and record-keeping problems. Managing exemptions also takes a huge amount of time. Tools like Kintsugi can automate this work. They keep your numbers accurate and make compliance simpler. ### Manage Indiana Sales Tax Exemption With Kintsugi Kintsugi makes exemptions easier to manage. Its advanced tools sort taxable and non-taxable items accurately. Features include bulk certificate upload. It checks and sorts your certificates and keeps them up to date. Kintsugi's automation cuts errors, saves time, and keeps businesses ready for an audit. It manages exemptions smoothly in real time. With Kintsugi, your business can focus on growth and stay fully compliant with tax laws. Sign up or book a demo today to experience the powerful performance of Kintsugi’s tax management solutions! --- **Related resource:** For current rates, nexus thresholds, filing deadlines, and FAQs, see Kintsugi's [Indiana Sales Tax Guide](/sales-tax-guides/usa/indiana).