Indiana Sales Tax Exemption Certificate (Form ST-105): Who Can Use It and How

If you buy goods or services in Indiana without paying sales tax, the document that usually makes that possible is Form ST-105, the Indiana General Sales Tax Exemption Certificate. People search for it as the Indiana ST-105, the Indiana form ST-105, the Indiana sales tax exemption form, or the Indiana sales tax exempt form. The names differ, but the rules are the same. The buyer completes the form, the seller keeps it on file, and the exemption holds only when every required part is in place.

This guide covers who can use the ST-105, what it cannot cover, how to complete it, and where buyers and sellers most often run into trouble.

Informational content only: This article is not legal or tax advice. Whether a particular purchase is exempt depends on its specific facts. If your situation is complicated, talk with a qualified attorney or CPA before you rely on an exemption.

What Form ST-105 Is

Form ST-105 is the Indiana General Sales Tax Exemption Certificate, State Form 49065. The current Department of Revenue version is marked R7 / 6-23. The buyer, called the purchaser on the form, gives the completed certificate to the seller. The seller must keep it on file to support any sale it treats as exempt from the state's 7% sales tax.

A valid ST-105 also works as the exemption certificate for county innkeeper's tax and local food and beverage tax. That makes the form useful for hotels, restaurants, and other businesses that handle those local taxes as well as state sales tax.

The form is a record, not a discount. An exempt purchase simply leaves off the 7% state rate. On a $10,000 equipment purchase, for example, the difference is $700 in state sales tax. That is why sellers ask for the certificate and why the rules around it are strict.

Who Can Use the ST-105

The form is built around the exemption categories in Section 4. You check the box that matches your purchase. The categories are:

• Resale: sales to a retailer, wholesaler, or manufacturer for resale only. Resale-only purchases are covered on a separate resale certificate guide, so check that guide if your purchase is strictly for resale.
• Manufacturing: machinery, tools, and equipment used in direct production.
• Public transportation: tangible personal property predominately used, meaning more than 50 percent, in public transportation. A USDOT number is required.
• Farming: items used directly in producing agricultural products for sale. Farmers also complete Form AGQ-100, a questionnaire that determines the exemption amount.
• Contractors: sales to a contractor for an exempt project, such as work for public schools, government, or nonprofit organizations.
• Indiana governmental units: sales to a unit of Indiana government.
• United States government: sales to the federal government.
• Other: an exemption that does not fit the categories above. You must explain the basis for it on the form.

If none of these categories describes your purchase, do not guess. Check the box that fits best only if you can explain it, and confirm the basis with the Department of Revenue before you rely on it.

What the ST-105 Cannot Cover

Some purchases cannot be exempted with this form, even when the buyer otherwise qualifies. The ST-105 cannot be used for:

• Utilities
• Vehicles
• Watercraft
• Aircraft
• Gasoline

Two related situations use different forms:

• Dealer-to-dealer vehicle resale uses Form ST-105D, not the ST-105.
• Nonprofit organizations may not use the ST-105 at all. See the correction below.

Correction for nonprofits: Nonprofit organizations may not use the ST-105. Older nonprofit ST-105 certificates were valid only through December 31, 2023. Nonprofits now use Form NP-1, which they file through INTIME for each vendor they buy from. If a vendor asks a nonprofit for an ST-105, the nonprofit should provide an NP-1 instead. Confirm the current NP-1 process with the Department of Revenue at 317-232-2240, since the details of the INTIME filing are not covered in this guide.

Completing the Form: The Five Sections

The ST-105 has five sections, and all five must be completed. If any section is incomplete, the seller must charge sales tax. A buyer who cannot provide all of the required information pays the tax and may then claim a refund by filing Form GA-110L.

That rule is the most common point of failure. A certificate with a blank line looks like a small problem to the buyer, but the seller has no choice but to tax the sale. Fill in every section before you hand the form over.

The Purchaser ID Number

The purchaser must provide an identification number. Which number you use depends on who you are:

• Indiana businesses: an Indiana TID, which is 10 digits, plus the 3-digit LOC number. Both come from your Registered Retail Merchant Certificate.
• Businesses registered in another state: that state's ID number.
• Farmers and federal agencies: may use a Social Security number or an FID number.

The Registered Retail Merchant Certificate costs $25 from the Department of Revenue. Anyone selling taxable goods needs one, so if you are a seller who will also buy items for resale or exempt use, you will need a TID and LOC number to complete the form. You can start the registration through the sales tax permit page at https://www.in.gov/dor/i-am-a/business-corp/business-education/register-business/.

Choosing the Exemption Box

Section 4 is where you state the reason the sale is exempt. Check the one box that matches the purchase. Checking a box that does not fit the purchase is one of the most common ways an exemption fails, even when the form itself is filled out correctly.

If you check Other, you must explain the basis for the exemption in the space provided. Keep that explanation specific. A vague note gives the seller and, if it comes to it, the state, nothing to verify.

Step by Step for Buyers

1. Confirm the purchase is eligible. Compare the purchase against the category list and the exclusions above. If it involves utilities, a vehicle, a watercraft, an aircraft, or gasoline, the ST-105 does not apply.
2. Get the current form. Locate the ST-105 through the Department of Revenue website at https://www.in.gov/dor/. Confirm you are using the current revision, which is marked R7 / 6-23.
3. Get your ID number ready. Have your Indiana TID and LOC number, or the other accepted number that fits your situation.
4. Complete all five sections. Check the Section 4 box that matches the sale, and add your explanation if you check Other.
5. Give the form to the seller. Provide it to each seller from which you claim the exemption, and keep a copy for your own records.

If you cannot provide all of the required information, expect to pay the tax at the time of sale. You can then request a refund using Form GA-110L.

Step by Step for Sellers

• Collect the completed form before you treat a sale as exempt. A verbal claim of exemption is not a substitute for the certificate.
• Check all five sections. Confirm each one is filled out and that the purchaser has provided an ID number.
• Check the exemption fits the sale. Confirm the Section 4 box matches what the buyer is purchasing, and that the item is not one the ST-105 excludes.
• Keep the form on file. The certificate is what supports the exempt sale if the sale is ever reviewed.
• Charge the tax if the form is incomplete or missing. The state sales tax rate is 7%, and the sale must carry it unless a valid, complete certificate is on file.

Sellers that also collect county innkeeper's tax or local food and beverage tax should check whether the same certificate covers those local taxes for the sale in question.

Common Mistakes That Sink an Exemption

• Nonprofits using the ST-105. Nonprofits use Form NP-1 filed through INTIME, not the ST-105.
• Leaving a section blank. An incomplete form forces the seller to charge tax, even when the purchase would otherwise qualify.
• Using the wrong ID number. The Social Security number and FID options are for farmers and federal agencies. A standard business buyer should provide its Indiana TID and LOC number or an out-of-state ID number.
• Claiming the public transportation exemption without the facts. You need a USDOT number, and the property must be predominately used, more than 50 percent, in public transportation.
• Farmers skipping AGQ-100. The exemption amount depends on the questionnaire, so the form alone is not enough.
• Trying to exempt excluded purchases. Utilities, vehicles, watercraft, aircraft, and gasoline are outside the ST-105.
• Using the ST-105 for dealer-to-dealer vehicle resale. That transaction uses Form ST-105D.

Where to Get Answers

For questions about exemptions, call the Indiana Department of Revenue at 317-232-2240. The main agency site is https://www.in.gov/dor/, where you can find the current forms and tax information.

If you are forming a business entity, the Indiana Secretary of State's Business Services Division handles that filing. Its page is at https://www.in.gov/sos/business/. Business name searches are available through https://bsd.sos.in.gov/publicbusinesssearch.

For general business planning questions, the Indiana Small Business Development Center at https://isbdc.org/ can point you to resources in your area. For a purchase that involves several tax types, a large dollar amount, or an unusual exemption category, a CPA or attorney is worth the cost before you sign the certificate.

This guide is informational content, not legal or tax advice. Exemption rules depend on the facts of each transaction, and the Department of Revenue makes the final determination on any specific exemption.