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CyberMonday Shoppers Should Declare Use Tax

November 26, 2013
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  11/27/13 Shoppers taking advantage of online and catalog sales this holiday season are reminded to check if Indiana sales tax was collected with their purchase.

Many online and catalog companies fail to collect Indiana sales tax on Hoosier purchases. In Indiana, consumers making these purchases are expected to pay a “use tax” if no sales tax is collected.

“Use tax is essentially a seven percent tax on any purchases where the regular Indiana sales tax was not collected. If you make a purchase and the online or catalog retailer does not collect Indiana’s seven percent sales tax, you are required by law to pay that same seven percent as a use tax,” noted department spokesman Bob Dittmer.

“When preparing your 2013 individual tax return at the end of the year, simply total those purchases, take seven percent, and that’s your use tax. This does, of course, require you to either keep records of your online or catalog purchases or to rely upon your retailer to maintain a list for you (and many online retailers do that).”

Last year, 28,853 taxpayers in Indiana reported use tax on their individual tax return, amounting to more than $1.9 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.

For more information about Indiana’s use tax, read the department’s use tax liability frequently asked questions.

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