Indiana sales tax is something every Hoosier shopper deals with at the register. The state charges a flat 7% rate on most purchases. That rate applies everywhere — from Indianapolis to Gary to Bloomington. However, Indiana’s tax code also includes some valuable exemptions. Understanding what is and isn’t taxed can save you real money throughout the year. This guide breaks down everything Indiana shoppers need to know about sales tax in 2026.
Indiana Sales Tax Rate: The Basics
Indiana’s statewide sales tax rate is 7.00%. This rate has remained steady for years. It ranks among the highest state-level rates in the country. Specifically, Indiana ties with Mississippi, Rhode Island, and Tennessee for the second-highest state rate nationwide.
However, here’s the good news for shoppers. Indiana does not allow any local or county sales tax add-ons. The rate is 7% everywhere in the state. This makes Indiana sales tax refreshingly simple compared to states with layered local rates.
| Tax Component | Rate |
|---|---|
| Indiana State Sales Tax | 7.00% |
| Average Local Sales Tax | 0.00% |
| Combined Average Rate | 7.00% |
| National Average Combined Rate | ~6.60% |
As a result, a $100 purchase in Indiana always costs exactly $107. There are no surprises at checkout based on your location. For comparison, shoppers in neighboring Illinois can face combined rates above 10% in Chicago. You can explore more state-by-state comparisons in our shopping guides.
What Indiana Does and Does Not Tax
Knowing which items are exempt from Indiana sales tax is key to smart shopping. The biggest win for consumers is groceries. Unprepared food and food ingredients are completely tax-free. This includes bread, meat, dairy, produce, and pantry staples.
However, not all food items qualify for the exemption. Candy, soft drinks, and dietary supplements are taxable at the full 7%. Prepared food sold hot or with utensils is also taxable. In addition, there’s an interesting quirk worth knowing. Candy that contains flour — like Kit Kats or Twix — is classified as food, not candy. That means those items are actually tax-exempt.
Clothing and footwear are fully taxable in Indiana. Unlike some neighboring states, there is no clothing exemption here. For example, a $50 pair of jeans will cost $53.50 after tax.
On the medical side, prescription drugs are exempt. Over-the-counter medications purchased without a prescription are taxable. However, if your doctor writes a prescription for an OTC drug, it becomes exempt. Specifically, insulin is always exempt regardless of prescription status.
As of July 2025, Indiana eliminated sales tax on feminine hygiene products. Tampons, pads, menstrual cups, and similar products are now tax-free. Adult diapers and incontinence products also became exempt at that time.
| Item Category | Taxable? | Rate |
|---|---|---|
| Groceries (unprepared food) | Exempt | 0% |
| Candy | Yes | 7% |
| Soft drinks | Yes | 7% |
| Prepared / hot food | Yes | 7% |
| Clothing & footwear | Yes | 7% |
| Prescription drugs | Exempt | 0% |
| OTC drugs (no prescription) | Yes | 7% |
| Feminine hygiene products | Exempt | 0% |
| Alcohol | Yes | 7% |
| Tobacco products | Yes | 7% |
Indiana Sales Tax by City and County
Unlike most states, Indiana keeps things simple for shoppers. There are no city or county sales tax add-ons. Every location in the state charges the same 7% rate. This is a rare advantage that makes budgeting much easier.
| City | State Rate | Local Rate | Combined Rate |
|---|---|---|---|
| Indianapolis | 7.00% | 0.00% | 7.00% |
| Fort Wayne | 7.00% | 0.00% | 7.00% |
| South Bend | 7.00% | 0.00% | 7.00% |
| Evansville | 7.00% | 0.00% | 7.00% |
| Bloomington | 7.00% | 0.00% | 7.00% |
| Carmel | 7.00% | 0.00% | 7.00% |
| Fishers | 7.00% | 0.00% | 7.00% |
| Gary | 7.00% | 0.00% | 7.00% |
As a result, you never need to drive to a different city for a lower rate. The Indiana sales tax rate is the same whether you shop in downtown Indianapolis or a small town in Brown County. This uniformity is one of the simplest things about shopping in the Hoosier State.
Indiana Sales Tax Holidays
Indiana does not currently offer any sales tax holidays. There is no back-to-school weekend, no hurricane prep holiday, and no energy-efficient appliance exemption period. This means shoppers pay the full 7% Indiana sales tax year-round on taxable items.
However, shoppers near the Ohio border have an option. Ohio holds a back-to-school sales tax holiday August 7–9, 2026. During that weekend, clothing priced at $75 or less is tax-free. School supplies under $20 and instructional materials under $20 also qualify.
If you live near Cincinnati or any Ohio border town, the short drive could be worthwhile. For example, saving 7% on a $500 back-to-school shopping trip means keeping $35 in your pocket. Check our best time to buy calendar for more ways to time your purchases for maximum savings.
Online Shopping and Indiana Sales Tax
Indiana uses destination-based sourcing for sales tax. This means the tax rate is based on your shipping address. Since Indiana’s rate is a flat 7% everywhere, online shopping is straightforward.
Major retailers like Amazon, Walmart, and Target automatically collect Indiana sales tax at checkout. Marketplace platforms including eBay, Etsy, and Facebook Marketplace also collect and remit the 7% tax. Indiana requires this under its marketplace facilitator law.
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Out-of-state sellers must collect Indiana sales tax if they exceed $100,000 in annual sales delivered to Indiana. In practice, this means nearly every major online store charges you the 7% rate. You can learn more ways to offset these costs in our guide on how to stack coupons, cashback, and sales.
In addition, the same exemptions apply online as in stores. Grocery delivery services should not charge sales tax on eligible food items. However, always check your receipt to make sure exempt items weren’t taxed incorrectly.
Smart Shopping Tips for Indiana
Even with a flat 7% rate, Indiana shoppers can minimize what they pay in sales tax. Here are practical strategies to keep more money in your wallet.
Prioritize tax-free groceries. Cook at home instead of buying prepared food when possible. A rotisserie chicken from the hot case is taxable. Raw chicken from the meat counter is not. Choosing unprepared food over convenience options saves you 7% every time.
Know the candy loophole. Candy containing flour is classified as food and is tax-exempt. Items like Twix, Kit Kats, and certain cookie-based treats avoid the 7% candy tax. Specifically, check the ingredients before assuming a sweet treat is taxable.
Ask your doctor about OTC prescriptions. If you regularly buy over-the-counter medications, ask your doctor to write a prescription. A written prescription makes OTC drugs tax-exempt. This is especially valuable for allergy medicine, pain relievers, or other items you buy monthly.
Use cashback apps to offset the tax. A 7% sales tax stings less when you earn 2–5% cashback on every purchase. Apps like Rakuten, Ibotta, and Capital One Shopping can effectively cut your Indiana sales tax burden in half. Check our cashback app reviews for the best options.
Shop Ohio’s tax holiday for back-to-school. If you’re within driving distance of Ohio, plan your August school shopping around their tax-free weekend. Combined with coupons and sales, you can save significantly. Our complete guide to saving money shopping online has more strategies that work alongside tax savings.
Frequently Asked Questions
What is the sales tax rate in Indiana?
The Indiana sales tax rate is 7.00%. This rate is uniform across the entire state. There are no additional local or county taxes. Every purchase in Indiana is taxed at 7% unless the item is specifically exempt.
Are groceries taxed in Indiana?
No. Unprepared food and food ingredients are exempt from Indiana sales tax. However, candy, soft drinks, dietary supplements, and prepared food are still taxable at 7%. Items that resemble candy but contain flour — like certain chocolate bars — are classified as food and remain exempt.
Does Indiana have a sales tax holiday?
No. Indiana does not offer any sales tax holidays in 2026. Shoppers pay the full 7% rate on taxable goods year-round. However, neighboring Ohio offers a back-to-school tax-free weekend in August. Indiana shoppers near the border may benefit from making the trip.
Start Saving on Every Purchase
Now that you know your state’s sales tax rates, use that knowledge to time your purchases and stack savings. Combine tax-free shopping periods with cashback apps and coupon codes to keep more money in your pocket.
Official Sources
- Tax Foundation — state and local sales tax data
- IRS.gov — federal tax information
- FTC Consumer Information — shopping rights and protections
Rates current as of May 2026. Sales tax rates change periodically. Always verify current rates with your state’s revenue department.