Do contractors charge sales tax in Indiana?

In Indiana it depends on how the contract is written. Under a lump-sum contract the contractor is the CONSUMER of the materials and charges the customer no sales tax. Under a separated or time-and-materials contract the contractor is a RETAILER of the materials and must charge the customer sales tax on them. Source: Ind. Code §6-2.5-4-9; 45 IAC 2.2-3-9 (lump-sum contractor is the consumer; time-and-material contractor is a retail merchant as to the materials).

WhatIndiana
Contractor’s default roleDepends on the contract
What the charge is calledSales Tax
Local rates on topNo local rates
Capital improvement exempt to the customerYes

Source

Ind. Code §6-2.5-4-9; 45 IAC 2.2-3-9 (lump-sum contractor is the consumer; time-and-material contractor is a retail merchant as to the materials). — last checked 2026-09-15.

This is a summary of a state’s published guidance, not tax or legal advice. Rates and rules change, local jurisdictions add their own, and the treatment of a specific job depends on the contract and the work. Check the citation and speak to a CPA or a state tax adviser before relying on it.

How Seayora uses this rule

Seayora resolves this rule on every invoice a contractor raises — per line, from the job site’s own address — and prints the rate, the jurisdiction and this citation on the document itself, so the estimate a customer accepts is the invoice they are billed. Where the rule is more nuanced than a single answer, Seayora refuses to guess a total rather than quoting a confident wrong one.

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