Indiana Income & Tax for eCommerce Businesses

At Tall Oak Advisors, Indiana is a state we often highlight as a model of relative simplicity — especially compared to neighboring Illinois or Ohio. Here's how it works.

💡 Transaction Threshold Eliminated: Indiana removed its 200-transaction economic nexus threshold effective January 1, 2024. Sales tax nexus is now based solely on the $100,000 revenue threshold. High-volume, low-value sellers who were previously watching transaction counts no longer need to track them in Indiana.

Part 1: Indiana Corporate Income Tax

Indiana imposes a flat corporate income tax rate on C corporations with nexus in the state. The rate has been phasing down through legislation:

• Current rate (2025): 4.9% on apportioned net income

• Indiana has enacted legislation to continue phasing down the corporate rate over the next several years, making it one of the more business-friendly income tax environments in the Midwest

• S corporations, LLCs, and partnerships are generally not subject to Indiana corporate income tax — their income passes to owners, who pay Indiana's flat individual income tax rate

What Creates Indiana Corporate Income Tax Nexus?

Indiana's corporate income tax nexus follows standard physical and economic presence standards:

• Owning, renting, or using property in Indiana — including FBA inventory in Indiana fulfillment centers

• Having employees, agents, or independent contractors operating in Indiana (including remote workers based in Indiana)

• Carrying on a trade or business in Indiana through regular, ongoing commercial activity

• Deriving income from Indiana sources through systematic sales delivered to Indiana customers

PL 86-272 in Indiana

Federal Public Law 86-272 protects C corporations from Indiana corporate income tax if their only Indiana activity is soliciting orders for tangible goods approved and shipped from outside Indiana. Indiana honors this protection, meaning a pure-solicitation FBA seller without physical presence can avoid income tax. However, FBA inventory stored in Indiana and any activities beyond order solicitation remove this protection entirely.

Part 2: Indiana Sales Tax — One of the Simplest in the Country

Economic Nexus Threshold

Indiana's sales tax economic nexus is straightforward:

• $100,000 in gross revenue from sales into Indiana in the current or previous calendar year

• Transaction count: eliminated January 1, 2024 — revenue only

• Threshold includes both taxable and exempt sales; wholesale transactions with valid resale certificates are excluded

• Marketplace sales through certified facilitators are excluded from your individual threshold — the platform is responsible for those

• Once you cross the threshold, collection begins immediately on the next taxable sale

Indiana's Biggest Seller-Friendly Feature: No Local Sales Taxes

Indiana has a uniform statewide sales tax rate of 7% with absolutely no local sales taxes. Every sale delivered anywhere in Indiana — from Indianapolis to Fort Wayne to Evansville — is taxed at the same 7%. This eliminates the need for any local rate lookup or jurisdiction-specific calculations, making Indiana one of the most compliance-friendly states for remote sellers.

The one exception: certain county-level taxes exist for specific categories like food, beverages, and hotel stays — but these do not affect standard eCommerce sales of tangible personal property.

Streamlined Sales Tax (SST) Membership

Indiana is a full member of the Streamlined Sales Tax Governing Board — one of the original members, in fact, since October 1, 2005. SST membership means:

• Indiana follows standardized definitions and rules for product taxability, making it easier to determine what's taxable

• Businesses that register through the SST system can register in Indiana and all other SST member states simultaneously

• Certified Service Providers (CSPs) registered under SST receive liability protection for errors

Registration and Compliance Details

Indiana sellers register through INBiz, the state's online business registration portal. Key details:

• Registration fee: $25 (one-time for out-of-state remote sellers)

• Registered Retail Merchant Certificate (RRMC): valid for 2 years, auto-renews as long as filings are current

• Filing frequency: monthly, quarterly, or annual based on tax volume

• Returns due by the 20th of the month following the reporting period

FBA Sellers in Indiana

Amazon operates fulfillment centers in Indiana, including major facilities in the Indianapolis area. FBA inventory stored in Indiana creates immediate physical nexus for both sales tax and corporate income tax (for C corps), regardless of annual sales volume. Indiana has been increasingly active in identifying FBA sellers with inventory in the state who have not registered.

What About Sales Tax?

Indiana's 7% flat rate with no local taxes makes it one of the simplest states to manage from a compliance standpoint.

At Tall Oak Advisors, we put together this guide as a resource for our eCommerce community. Tax rules vary significantly from state to state, and we want sellers to have the information they need to make informed decisions. More info at talloakadvisors.com

Disclaimer: This article is for general informational purposes only and does not constitute legal or tax advice. Tax laws change frequently. Consult a qualified tax advisor or CPA regarding your specific situation.

Sources: Indiana Code § 6-3 (Corporate Income Tax); Indiana DOR — Remote Seller FAQs; Economic Nexus (eff. Oct. 1, 2018; 200-transaction threshold removed Jan. 1, 2024); SST Full Member; Pub. L. No. 86-272.