Lena Savoie
Alcohol excise taxes in Indiana are monitored and controlled by the Indiana Alcohol & Tobacco Commission. The state imposes a sales tax rate of 7% on all alcohol purchases, including beer, wine, and spirits. Additionally, federal alcohol excise taxes are included in the price of alcoholic beverages, and these taxes are typically passed on to the consumer. Indiana also has specific requirements for direct-to-consumer (DTC) alcohol shipments, including mandatory electronic tax filings and payments through the Indiana Department of Revenue's (DOR) customer portal, INTIME.
| Characteristics | Values |
|---|---|
| Sales tax rate | 7% |
| Excise tax rate | $2.68 per gallon of liquor or wine containing 21% or more absolute alcohol by volume |
| Federal excise tax | Varies by type of alcohol and percentage of alcohol in the product |
| Direct-to-consumer (DTC) shipments | Allowed for wine, not permitted for beer or spirits |
| Tax payment method | Electronic payment via INTIME or electronic funds transfer (EFT) |
| Tax payment options | Bank account, ACH debit, credit or debit card |
| Convenience fees | $2.99 for payments less than $100, $3.75 for payments of $100 or more |
| Regulatory body | Indiana Alcohol & Tobacco Commission |
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What You'll Learn
Alcohol excise tax
The price of alcohol sold in Indiana includes federal alcohol excise taxes, which are generally passed on to the consumer in the beverage's price. These are collected from the brewer/distiller by the Alcohol and Tobacco Tax and Trade Bureau. Excise tax rates vary depending on the type of alcohol. For example, there is a tax of $2.68 per gallon on liquor and wine containing 21% or more of absolute alcohol by volume. There is also a sales tax rate of 7% on all alcohol purchases in the state.
Indiana also has a three-tier system for the sale of alcohol, with all sales monitored and controlled by the Indiana Alcohol & Tobacco Commission. Direct-to-consumer (DTC) shipping is allowed for wine, but not for beer or spirits. Alcohol taxes also apply to DTC shipments, with some "markup" taxes multiplied by a percentage rate and passed on to the consumer. Excise taxes are usually factored into the item's price, but in some cases must be paid by the consumer.
All customers who are required to pay alcohol excise taxes must file returns and submit payments electronically through INTIME, the Indiana Department of Revenue's customer portal.
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Federal excise tax
Alcohol sold in Indiana includes federal alcohol excise taxes in its price. These taxes are collected from the brewer or distiller by the Alcohol and Tobacco Tax and Trade Bureau and are usually passed on to the consumer. The federal excise tax rates vary depending on the type of alcohol and the percentage of alcohol in the product. For instance, an excise tax of $2.68 per gallon is imposed on liquor and wine containing 21% or more of alcohol by volume.
In addition to federal excise taxes, a sales tax rate of 7% is applied to all alcohol purchases in Indiana. This sales tax is collected by the state and is separate from the federal excise tax.
Direct-to-consumer (DTC) shipments of alcohol in Indiana may also be subject to additional taxes, such as markup taxes, where the retail value of the alcohol is multiplied by a percentage rate, or traditional "gallonage"-based excise taxes. These taxes are typically factored into the price of the item and not passed on to the consumer as a separate charge. However, in some cases, these excise taxes must be paid by the consumer.
All customers who are required to pay alcohol excise taxes in Indiana must file returns and submit payments electronically through the Indiana Department of Revenue's (DOR) customer portal, INTIME. This portal allows customers to manage their tax obligations and make payments using various methods, including bank transfers, ACH debit, and credit or debit cards. Convenience fees apply to these payment methods, with a flat fee of $2.99 for payments under $100 and $3.75 for payments of $100 or more.
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Direct-to-consumer (DTC) shipments
In Indiana, wine sold and shipped directly to consumers must be packaged in containers with clear labels indicating the alcoholic content. Additionally, the recipient must be at least 21 years old and provide a signature upon delivery. Direct-to-consumer (DTC) shipments of alcohol involve complex tax requirements. Licensed alcohol shippers are generally required to register for sales tax, and these taxes can be applied at the state, county, city, or special district levels.
Indiana has specific rules for direct wine sellers, including limits on the volume of wine that can be shipped to a consumer in a calendar year and during a permit year. Direct wine sellers must also comply with record-keeping requirements and ensure that wine is delivered by a carrier with a valid alcoholic beverage permit.
On top of sales tax, alcohol taxes, such as "markup" taxes and "gallonage"-based excise taxes, also apply to DTC shipments. Markup taxes are often passed on to the consumer, while gallonage taxes are typically factored into the item's price. However, there are instances where these excise taxes must be paid by the consumer.
To comply with tax obligations, businesses can utilize tools like Avalara for Beverage Alcohol and Indiana's INTIME customer portal. Avalara helps businesses navigate the complex world of beverage alcohol compliance. Meanwhile, INTIME allows customers to manage their tax obligations in one place, enabling electronic filing and payment of alcohol taxes.
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Alcohol tax e-file
The Indiana Department of Revenue (DOR) requires all customers who are liable for alcohol excise taxes to file returns and submit payments electronically. This can be done through INTIME, the DOR's customer portal, which allows customers to manage their tax obligations in one place, 24/7. To use INTIME, customers must create a logon using an Indiana taxpayer identification number (TID) and a Letter ID provided by the DOR. For those without a Letter ID, a "Welcome Letter" can be requested during the registration process.
INTIME accepts payments via bank account, ACH debit, and credit or debit card. Convenience fees for these options are as follows:
- Payments under $100.00: a flat fee of $2.99
- Payments of $100.00 or more: a flat fee of $3.75
Visa, MasterCard, and Discover are currently accepted.
In addition to electronic payments, the DOR also accepts XML files via INTIME. For more information on submitting these files, an INTIME Guide for Alcohol, Cigarette, and Other Tobacco Products Tax Customers is available.
It's important to note that tax rates, rules, and regulations for alcohol change frequently. While Indiana has a sales tax rate of 7% on all alcohol purchases, federal alcohol excise taxes are also included in the price of alcoholic beverages. These federal excise taxes are collected from the brewer/distiller by the Alcohol and Tax Trade Bureau and are typically passed on to the consumer. Additionally, licensed alcohol shippers are generally required to register for sales tax, and sales and use tax can be applied at the state, county, city, or special district levels.
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Alcohol sales tax rate
Direct-to-consumer (DTC) shipments of alcohol in Indiana are subject to sales tax requirements, and certain states' "markup" taxes, where the retail value of the alcohol is multiplied by a percentage rate. These "markup" taxes are often passed on to the consumer. Traditional "gallonage"-based excise taxes are also typically applied to DTC shipments and are usually included in the item's price.
The Indiana Alcohol & Tobacco Commission monitors and controls the sale of alcoholic beverages within the state. Alcohol excise taxes must be filed and paid electronically through the Indiana Department of Revenue's (DOR) customer portal, INTIME. This portal allows customers to manage their tax obligations conveniently. Payments can be made using various methods, including bank accounts, ACH debit, and credit or debit cards, with convenience fees ranging from $2.99 to $3.75 depending on the amount.
It is worth noting that tax rates, rules, and regulations can change frequently, and businesses should stay updated to ensure compliance. Licensed alcohol shippers are generally required to register for sales tax in most states, and tax rates may vary depending on the state, county, city, or special district. Address accuracy is crucial to determine the applicable tax rates and regulations.
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Frequently asked questions
There is a sales tax rate of 7% on all alcohol purchases in Indiana.
The excise tax rate varies depending on the type of alcohol. There is a federal alcohol excise tax that is generally passed on to the consumer in the beverage's price. There is also a state excise tax of $2.68 per gallon on liquor and wine that contain 21% or more alcohol by volume.
Alcohol tax payments in Indiana can be made electronically through the Indiana Department of Revenue’s (DOR) customer portal, INTIME, or via electronic funds transfer (EFT).
