Indiana car sales tax: 7% and what it applies to

• Indiana charges 7%, and that rate is the same everywhere in the state — no county or city adds to it on a vehicle purchase.

• Taxed on top of the vehicle price: the dealer doc fee and dealer-installed accessories.
• Not part of the taxable amount: extended warranties and service contracts.
• Your trade-in comes off before tax is calculated.

• Indiana sales tax is 7%, flat statewide. No county or city adds to it u2014 the county taxes you may be thinking of are income taxes, and the local vehicle charges are separate registration surtaxes rather than sales tax.
• Your trade-in reduces the taxable amount with no dollar cap, on new and used purchases alike. It has to be a like-for-like swap though: a vehicle for a vehicle. Trading a motorcycle toward a car does not qualify, and the trade has to be titled in your own name.
• Manufacturer rebates are taxed in Indiana. The Revenue Department treats a rebate as a form of payment rather than a price reduction, so tax is figured before it. A dealer's own discount does lower your taxable amount.
• The doc fee is taxable, and the effective ceiling is $261.72. That figure is re-indexed for inflation every July 1 and is published by the Secretary of State as a non-enforcement threshold rather than a hard statutory cap u2014 the statute itself still says $200.
• Extended warranties and optional service contracts are not taxed in Indiana. Optional maintenance contracts can be, which is a different product.
• Registration and plates are not included in the total above. In Indiana the dealer handles the sales tax and your title, but you register at the BMV yourself u2014 see the ownership notes for what to budget.

Source: Indiana DOR Sales Tax Information Bulletin #28S; IC 6-2.5; BMV Fee Chart · rules last verified Oct 1, 2026. Methodology.