News Blog

Change to Sales Tax Collection on Sales of Motor Vehicles

Posted 9:00 PM by

The Indiana General Assembly recently enacted a change to the taxability of motor vehicles sold by Indiana dealers to residents of other states. This change became effective on July 1, 2014.

Out-of-state purchasers should now be charged a sales tax rate that is the lesser of their home state’s sales tax rate or the Indiana rate of 7%. Information Bulletin #84 published by the Indiana Department of Revenue discusses the change in detail.

There may be some confusion or practical challenges in the overall implementation of the change including issues involving the monthly sales tax reporting going forward. Members of our Dealership Services Group would be happy to discuss these issues with you and provide assistance as you develop your internal compliance standards.