Indiana – Taxability of Food

SALT Report 1278 – Indiana has updated its sales tax guidelines regarding food sales.  The bulletin addresses the specific items that have been added to the lists of taxable or exempt food items and conforms to the Streamlined Sales and Use Tax Agreement.

Generally, the sale of food and food ingredients for human consumption is exempt from Indiana sales tax.  Primarily, the exemption is limited to the sale of food and food ingredients commonly referred to as “grocery” food.  The purpose of this bulletin is to assist retailers in the proper application of the exemption.

The bulletin addresses the following topics:

  • Nontaxable food items
  • Taxable grocery items
  • Candy, soft drinks, and dietary supplements
  • Prepared food
  • Unitary transactions where taxable and nontaxable items are sold together
  • Coupons, redemption certificates and bottle deposits; and
  • Purchases by retailers for resale and packaging
All grocers and general merchandise retailers are required to file an application for a registered retail merchant’s certificate for each location. Upon application with the Department of Revenue and the payment of a $25 fee, a certificate will be issued that must be displayed on the premises at all times.
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