Indiana (IN) Car Sales Tax & Fees [+ Calculator]
Michael Collado is a car buying expert and has been a professional automotive writer since 2009. He’s written about dealership sales, vehicle reviews and comparisons, and service and maintenance for over 100 national automotive dealerships. Previously, Collado was a copywriter at the ad agency TBWA/Chiat/Day where he worked on brand campaigns for Nissan, ABC Television, Sony PlayStation, and Energizer. His recognition in the ad industry includes awards from Communication Arts and The Clios.
Collado has a Bachelor’s degree from the University of South Florida, with a major in Psychology and a minor in Marketing.
Sales tax and other fees are often forgotten about in the excitement of making a new car purchase.
You can expect to pay 7% in vehicle sales tax in Indiana.
Learn everything you need to know about Indiana car sales tax so you can make an informed purchase.
Key Takeaways
- Indiana vehicle sales tax is 7% statewide.
- State sales tax applies to new and used cars, but not to the trade-in value of a car.
- You must also pay registration, plate, and title fees when you buy a car there.
Table of Contents
- Key Takeaways
- How Much Is the Car Sales Tax in Indiana?
- How to Calculate Indiana Sales Tax on a Car
- Indiana Car Sales Tax Calculator
- Do I Have to Pay Sales Tax on a Used Car?
- Which County Has the Highest Tax? Which Has the Lowest?
- Car Sales Tax for Trade-Ins in Indiana
- Car Sales Tax on Private Sales in Indiana
- How are Rebates & Dealer Incentives Taxed?
- Indiana BMV/State Fees
- When Sales Tax Is Exempt in Indiana
- Indiana EV Rebates & Incentives
- Indiana Vehicle Sales Tax: The Bottom Line
- Best Car Deals by Category
- Frequently Asked Questions
How Much Is the Car Sales Tax in Indiana?
The state sales tax on a car purchase in Indiana is 7%.
Indiana is one of the few states that does not have any additional local or county sales tax.
So you can expect to pay 7% no matter where you buy your car in Indiana.
How to Calculate Indiana Sales Tax on a Car
You can calculate the sales tax in Indiana by multiplying the final purchase price by .07%.
For example, let’s say that you want to purchase a new car for $30,000, you would use the following formula to calculate the sales tax:
$30,000 x .07= $2,100
This means that your sales tax is $2,100 on a $30,000 purchase price.
Calculate Car Sales Tax in Indiana Example:
- Initial Car Price: $30,000
- Sales Tax Rate: 7%
- Trade-In Amount: $5,000
- Manufacturer Rebate: $2,000
- Dealer Rebate: $3,000
Sales Tax = ($30,000 - $5,000 - $3,000) * .07
Sales Tax = $1,540
Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.
Indiana Car Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, in Indiana you must pay the car sales tax on a used vehicle. The sales tax rules remain the same whether the car is new or used.
Still, purchasing a used car is a wise choice for many. The overall price will be lower, which means you will pay less in sales tax than with a new vehicle.
Which County Has the Highest Tax? Which Has the Lowest?
All counties in Indiana have the same sales tax rate of 7%.
Car Sales Tax for Trade-Ins in Indiana
You don’t have to pay sales tax on trade-ins in Indiana.
In other words, be sure to subtract the trade-in amount from the car price before calculating sales tax.
As an example, let’s say you are purchasing a new SUV for $35,000 and your trade-in is worth $10,000. You will subtract the trade-in value by the purchase price and get $25,000. Therefore, your car sales tax will be based on the $25,000 amount.
Car Sales Tax on Private Sales in Indiana
A sales tax is required on all private vehicle sales in Indiana. It is the same 7% you would pay at a dealership, but you are responsible for paying the BMV when registering the vehicle.
How are Rebates & Dealer Incentives Taxed?
You do not have to pay tax on dealer rebates in Indiana.
In other words, be sure to subtract the dealer rebate amount from the car price before calculating sales tax.
As an example, if you are purchasing a new car for $30,000 with a $5,000 rebate, you will pay sales tax on the $25,000 cost of the car.
However, the same does not apply to manufacturer rebates in Indiana. You must pay tax on manufacturer rebates, or in other words, do not subtract the manufacturer rebate amount from the car price when calculating sales tax.
Indiana BMV/State Fees
There are some other state and BMV fees associated with the purchase of a vehicle in Indiana.
A few of these fees include:
- Registration Fee: $21.35/year
- Title Fee: $15
- Plate Transfer Fee: $9.50
- EV Supplemental Fee: $50
- Hybrid Supplemental Fee: $50
Indiana Dealership Fees
Dealerships apply extra fees, sometimes referred to as “doc fees,” with the sale of the car.
Though these fees vary based on the dealership, the average fee in Indiana is $150, with no statewide limit on how much dealerships can charge.
When Sales Tax Is Exempt in Indiana
Much like every state, Indiana has some sales tax exemptions for vehicle sales. Exemptions include:
- You receive the vehicle as a gift from a spouse, parent, child, grandparent, or grandchild.
- You receive the vehicle in a divorce.
- If you inherited the vehicle.
- You receive the vehicle from an individual’s revocable trust.
Indiana EV Rebates & Incentives
The possible Indiana state EV rebates and incentives are on top of the $7,500 Federal EV rebate.
Indiana Vehicle Sales Tax: The Bottom Line
Indiana charges 7% sales tax on car purchases, both new and used. However, the tax does not apply to the trade-in value, so be sure to subtract that before calculating. The sales tax also does not apply to dealership incentives, but it does apply to manufacturer rebates.
Use the Indiana car sales tax calculator above for an informed estimate.
Searching for sales tax in another state? Check out our guide on car sales tax in all 50 states.
Tax information and rates are subject to change, please be sure to verify with your local BMV.
