More Sales Tax Changes on the Horizon for Indiana Not-for-Profits

In 2022, Indiana’s not-for-profit community saw significant changes to the way organizations purchased and sold taxable items exempt from sales tax. It appears as if the 2023 legislative session will bring further refinement to these rules via Senate Bill 417.

The sales tax law passed by the Indiana General Assembly last year changed the selling-days concept to a sales-threshold concept for triggering the collection responsibility by not-for-profits. The aim this year is to increase that sales threshold and exempt certain not-for-profits entirely. Thus, effective July 1, 2023, sales of taxable items by a not-for-profit are exempt if the organization does not make more than $100,000 in sales in the current or previous calendar year. All sales made by churches, monasteries, convents, public schools, parochial schools, and youth organizations focused on agriculture are exempt from retail tax regardless of their sales amount. Full details of the 2023 changes can be found in the bill, which has been signed by both houses and is awaiting signature by the governor.

KSM will provide updates as additional information becomes available. If you have questions in the meantime, contact your KSM advisor or complete this form.