When it comes to buying candy in Indiana, residents don't have to worry about paying sales tax. The state considers candy to be a food item, and as such, it is exempt from sales tax. This includes candy bars, drops, and pieces. However, this does not include tobacco, alcoholic beverages, dietary supplements, or soft drinks.
In Indiana, unprepared foods that can be bought at a grocery store are not subject to sales tax. This includes items sold to both farmers and contractors. Sales tax exemption forms can be downloaded from the Indiana Department of Revenue website. If you buy products and the retailer does not charge you Indiana sales tax, for example with online and out-of-state purchases, you are supposed to pay 7% sales tax (minus any foreign sales tax paid) for these items as the Indiana use tax.
You are expected to voluntarily post your responsible purchases on an Indiana use tax return, which must be attached with the payment to your Indiana income tax return. It's important to note that while candy is exempt from sales tax in Indiana, other food items may not be. Prepared foods are subject to special sales tax rates under Indiana law. To learn more about how these transactions and other more complicated situations are subject to Indiana sales tax, visit the Indiana Sales Taxation FAQ page.
