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State Guide Last verified August 27, 2026

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

What the desk and the buyer each need to know when a 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%. 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. 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. The rules above cover retail dealer sales; most states handle leases and private-party sales separately.

Indiana car sales tax quick facts

Last verified August 27, 2026
Sales tax rate on vehicles7%[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. (valid 30 days)[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]
General information, not tax or legal advice. Rates and rules change. Before you write a check, confirm with the Indiana Department of Revenue or your accountant. Last verified August 27, 2026. 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]

On paper that means Form ST-108NR, filled out at delivery. If the form never gets signed, the dealer eats the tax, not the buyer.

Then comes the part nobody staples to the deal jacket: moving the title, issuing the temp tag, and getting the registration done in the buyer's state. That handoff chain is what Voltra's title tracking was built to watch.

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 row above. Indiana credits sales tax legally paid to another state, so the same dollars are not taxed twice.[1]

Registration and temp tags

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] 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. Validity: 30 days.[4]

Bordering states

Cross-border deals from Indiana most often involve Illinois, Kentucky, Michigan and Ohio. Treat each pairing as its own problem and put it through 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/dor/i-am-a/business-corp/tax-form-types/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/bmv/registration-plates/vehicle-registrations/temporary-permits · verified 2026-08-27

Indiana car sales tax questions

Indiana taxes vehicle sales at 7%. 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. The taxable price rides on that treatment, so identical deals can carry different tax bills depending on the state.

Indiana collects tax at the buyer's home-state rate, capped at Indiana's own rate. The exemption runs on Form ST-108NR, completed at delivery.

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

Indiana caps dealer doc fees at $262. Tax applies to the doc fee as well.