Indiana is considered to be one of the Great Lake states, solely because the northwest most corner of the state touches Lake Michigan, but I just don’t think of it as a lake state. When someone says Indiana I almost always think of ‘industry’, it doesn’t matter if it is Indianapolis, Fort Wayne or Evansville which are the 3 most populous cities in Indiana, I think of industry. From a size standpoint, Indiana is ranked 38th in the US at 36,420 square miles, and from a population standpoint it is ranked 16th at 6.6-million residents.
Of course one other thing comes to mind when I hear Indiana and that is “men’s basketball”, the Indiana Hoosiers have won a wealth of NCAA national championships, I mean men’s basketball legends just abound (and rebound) at Assembly Hall, which in fact has been called “the Carnegie Hall of basketball.” But even the Indiana Hoosiers is not my complete mental picture of Indiana athletics, for a little school known as the Purdue ‘Boilermakers’ also plays an important role in my life since my dad was a ‘Boilermaker’ in more ways than one, not only did he attend Purdue but he actually became a real ‘boilermaker’ constructing boilers and power plants throughout his adult lifetime. Then there is that little thing called the Indianapolis 500 race that takes place every Memorial Day, what a rush that can be the first time you are there ‘in person.’
Now I realize that Indiana is famous for more than Industry, great sports teams and sporting events and one of the biggest is the agricultural influences of Corn, Grain and Soybeans. Indiana has also been home to many a feed-lot where beef was fattened up to send back east. I mentioned industry and indeed Indiana has been home to everything from electrical equipment and rubber to manufacturing equipment and automobile parts.
But Indiana is also home to Eli Lilly, one of the largest pharmaceutical companies on the planet based in Indianapolis. Back when I was growing up I remember a big push to vaccinate everyone against Polio, I actually knew kids my age who had Polio and had various afflictions that impacted them from the disease including crippling paralysis. One year my mom told me we were getting vaccinated against the dread disease, I thought “Oh not another shot”, instead we stood in line by the hundreds of us at the local school house to eat a cube of sugar in a little white cup.
Eli Lilly produced that wonder drug (known as the Salk vaccine), they were also the first mass-producers of penicillin and insulin both of which saved countless lives. The company was founded in 1876 by an American Civil War veteran who was convinced that these new found things called ‘drugs’ were the way to saving thousands of lives from all types of infections and afflictions. You can thank Colonel Lilly (and his company) for wiping out many of the diseases that might otherwise have ended our lives early.
In 1787 the US defined present-day Indiana as part of its Northwest Territory. In 1800, Congress separated Ohio from the Northwest Territory, and then designating the rest of the land as the Indiana Territory. Much of the land that makes up Indiana was defined by the Fort Wayne treaty of 1809. By 1811 steamboats on the Ohio River were arriving in Indiana regularly. Indiana became the 19th state of the United States on December 11, 1816 by enactment of President James Madison. Indiana was a major source of men and supplies supporting the Union Army during the Civil War.
- Fort Vincennes was a stopping point for the Lewis and Clark Expedition to the Northwest Territory.
- Despite acclaim for Madison County, Iowa’s covered bridges, Historic Parke County Indiana is touted as the Covered Bridge Capital of the World and boasts 32 covered bridges within its borders.
- Santa Claus, Indiana receives more than 500,000 letters at Christmas time.
- Famous folks who hail from Indiana include TV host David Letterman, comedian Red Skelton, and actor James Dean. President Abraham Lincoln also lived there for most of his childhood (from age 7).
- Indiana is home to a large population of Amish and Mennonites, who still don’t drive cars or use electricity.
- At one time, 12 different stagecoach lines ran along National Road, which is now U.S. Interstate 40.
- The first long distance auto race in the U.S. was held at the Indianapolis Motor Speedway in 1911, home to the world-renowned Indianapolis 500.
About Sales Tax and this Series:
Thanks to Avalara, the 'tax people', this article is one in a 50 part series covering sales tax issues associated with each and every state tax jurisdiction in the United States. We have been publishing a "Sales Tax Tuesday" article every week this year.
Sales tax provides critical revenue for states as well as many counties and cities. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Sales Tax Facts:
- Indiana’s state sales tax rate is 7%. It is one of the few states with a single state tax rate.
- Indiana has the second-highest statewide sales tax in the U.S., tied with four other states for this position (Mississippi, New Jersey, Rhode Island, and Tennessee). California is first (7.5%).
- Despite having a statewide sales tax rate, several localities in Indiana do charge an additional tax on food and beverages.
- Indiana is a destination sourcing state. This means that sales tax is based on the location of the buyer, not the seller.
- Indiana is a Streamlined Sales Tax (SST) member state.
- Feeling boxed in. In 2014, the Indiana Department of Revenue ruled that a cardboard box manufacturer could not claim exemption from sales and use tax for conveyor equipment because the equipment was used in post-production and therefore did not have an effect on the items produced during the manufacturing process. The company claimed the conveyor was part of the packaging process, but the state didn’t agree.
- Forgive and forget. Between September and November 2015, Indiana is offering a Tax Amnesty to taxpayers who owe past-due taxes. During this period, the state will waive penalties, interest and fees.
Did You Know?
The morbid truth. Indiana requires morticians and funeral directors to register as retail merchants and collect sales tax on any tangible property they sell. If the funeral home or mortuary doesn’t itemize this property separately from the services it provides and bills them as one lump sum to the customer, then sales tax is due on the entire transaction. If the invoices lists these services out separately from the tangible property, then sales tax is only due on the taxable goods.
Such puffery. In Indiana, marshmallows are subject to sales tax, but marshmallow crème is exempt.
Manual sales and use tax management is prone to error and consumes staff time in pass-through rather than revenue-generating activities. Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via AvaTax allows businesses to be fully sales tax compliant without sacrificing productivity.