Indiana Dept. of Revenue: Don't forget "use tax"
It's that time of year when many of us go online to hunt for Christmas bargains. But the Indiana Dept. of Revenue is reminding online shoppers to keep track of their purchases so they can pay a "use tax" if no sales tax is collected.
Many online and catalog companies do not collect Indiana sales tax when Indiana residents make purchases from their business. The Indiana Dept. of Revenue says you're still required to pay the same seven percent as a use tax, even if the company you're buying from doesn't collect Indiana's seven-percent sales tax.
At the end of the year, total your purchases, take seven percent and be prepared to declare that on your state tax return.
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 Indiana income tax return since 1969. Use tax is essentially a seven percent tax on any purchases where Indiana sales tax was not collected.