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State Guide Last verified August 30, 2026

Indiana Car Sales Tax, Trade-In Credit, and Out-of-State Rules

What the desk and the buyer each need to know when an Indiana deal crosses state lines: the rate, the trade-in math, the exemption paperwork, and the drive-home tags. Every fact links to the official source.

Check an Out-of-State Deal Jump to Quick Facts

Every fact sourced to Indiana official publications below

Short answer

Indiana taxes vehicle sales at 7%, no local add-ons. Indiana taxes the price after the trade-in is deducted. Indiana collects tax at the buyer's home-state rate, capped at Indiana's own rate. Indiana credits sales tax legally paid to another state, so the same dollars are not taxed twice. All of this describes a retail purchase from a dealer; leases and private-party sales run on different rules in most states.

Indiana car sales tax quick facts

Last verified August 30, 2026
Sales tax rate on vehicles7%, no local add-ons[1]
Trade-in creditIndiana taxes the price after the trade-in is deducted. Only like-kind exchanges qualify: a motor vehicle traded for a motor vehicle, or a trailer traded for a trailer, and the trade-in must be owned and titled in the customer's name.[1]
Selling to an out-of-state buyerIndiana collects tax at the buyer's home-state rate, capped at Indiana's own rate.[2]
Credit for tax paid to another stateIndiana credits sales tax legally paid to another state, so the same dollars are not taxed twice.[1]
Dealer doc feeCapped at $262[3] · taxable[1]
Temp tag for the drive homeIndiana BMV issues a 30-day temporary registration permit for a vehicle bought in Indiana that will be titled or registered in another state. A certificate of title or bill of sale showing proof of purchase is required.[4]
Out-of-state buyer registrationAn out-of-state buyer does not register in Indiana. The dealer collects Indiana sales tax at the buyer's home-state rate on Form ST-108NR, the BMV can issue a 30-day temporary registration permit for the drive home, and the buyer titles and registers in their own state.[4]

Indiana car sales tax calculator

Enter the sale price and any trade-in to estimate Indiana vehicle tax and the out-the-door total before title and registration. It applies the verified rate, trade-in rule and doc fee treatment from the quick facts above.

General information, not tax or legal advice. Everything on this page was compiled from official Indiana government publications (listed under Sources) and last verified August 30, 2026, but rates and rules change and errors are possible. Voltra makes no warranty as to accuracy or completeness and accepts no liability for decisions made on this data. Confirm the current rules with the Indiana Department of Revenue or a licensed professional before acting on anything here. Covers retail dealer sales; leases and private-party sales follow different rules in most states.

From the desk

Indiana runs a flat statewide rate and hands the desk a specific certificate for out-of-state buyers, taxed at their home state's rate. Clean system, but only when the form is filled before delivery, not after.

Selling to an out-of-state buyer in Indiana

Indiana collects tax at the buyer's home-state rate, capped at Indiana's own rate.[2]

What makes the exemption stick is Form ST-108NR, completed at delivery. Without it, the assessment letter goes to the dealership, not the buyer.

Either way, collecting the right tax is the easy part. The title work, the temp tag, and the out-of-state registration still have to land, and each one runs on its own clock.

Buying in Indiana from out of state

If you live in another state and buy in Indiana, the deciding rule is where the vehicle gets registered: your home state's tax applies at registration, and what happens at the Indiana sale depends on the rule above. Indiana credits sales tax legally paid to another state, so the same dollars are not taxed twice.[1]

Registration and temp tags

Indiana BMV issues a 30-day temporary registration permit for a vehicle bought in Indiana that will be titled or registered in another state. A certificate of title or bill of sale showing proof of purchase is required.[4] An out-of-state buyer does not register in Indiana. The dealer collects Indiana sales tax at the buyer's home-state rate on Form ST-108NR, the BMV can issue a 30-day temporary registration permit for the drive home, and the buyer titles and registers in their own state.[4]

Bordering states

Cross-border deals from Indiana most often involve Illinois, Kentucky, Michigan and Ohio. The combination decides the outcome, so check both states in the out-of-state checker.

Vehicle-type exceptions

Recreational vehicles and cargo trailers follow a different rule than cars: a nonresident buyer is exempt from Indiana sales tax if their home state gives Indiana buyers the same treatment, claimed on Form ST-137RV. Buyers registering in a nonreciprocal state pay Indiana tax.[1]

Sources

  1. www.in.gov/dor/files/reference/sib28s.pdf · verified 2026-08-27
  2. www.in.gov/…/vehicle-dealers · verified 2026-08-27
  3. www.in.gov/sos/dealer/files/Doc-Fees-in-2026.pdf · verified 2026-08-27
  4. www.in.gov/…/temporary-permits · verified 2026-08-27
Cite this page

“Indiana Car Sales Tax & Out-of-State Rules.” Voltra. Last verified August 30, 2026. https://voltra.ai/car-sales-tax/indiana/

More state-by-state guides: trade-in tax credit by state · recent rule changes · all states + the out-of-state checker

Indiana car sales tax questions

Indiana taxes vehicle sales at 7%, no local add-ons. It applies to the taxable price the desk calculates, and the trade-in and doc-fee rules are what shape that figure.

Indiana taxes the price after the trade-in is deducted. Only like-kind exchanges qualify: a motor vehicle traded for a motor vehicle, or a trailer traded for a trailer, and the trade-in must be owned and titled in the customer's name. Because that treatment sets the taxable price, an identical car and trade can owe different tax on either side of a state line.

Indiana collects tax at the buyer's home-state rate, capped at Indiana's own rate. The tax is figured on Form ST-108NR at the sale.

Indiana credits sales tax legally paid to another state, so the same dollars are not taxed twice.

Indiana caps dealer doc fees at $262. The doc fee is part of the taxable price.

Start with the sale price and subtract the trade-in allowance (Indiana credits it in full), then multiply by 7%, no local add-ons. The dealer doc fee is taxable in Indiana, so add it before you multiply. The Indiana calculator on this page runs those steps with the verified figures and shows the out-the-door estimate before title and registration fees.