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Can I use third-party payment processors on my website in Indiana? What are the requirements?

Using Third-Party Payment Processors on a Website in Indiana

To use third-party payment processors on your website in Indiana, you must first obtain a registered retail merchant’s certificate [1.4]. A retail merchant may not make a retail transaction in Indiana unless they have applied for a registered retail merchant’s certificate [1.4]. To obtain the certificate, a retail merchant must file an application with the department and pay a registration fee of twenty-five dollars ($25) for each place of business listed on the application [1.4]. The retail merchant shall also provide such security for payment of the tax as the department may require under IC 6-2.5-6-12 [1.4].

Once a retail merchant has obtained a registered retail merchant’s certificate, they may use third-party payment processors on their website. However, the retail merchant is responsible for collecting and remitting sales tax on all retail transactions [1.3]. If the third-party payment processor is collecting sales tax on behalf of the retail merchant, the retail merchant must ensure that the payment processor is registered with the Indiana Department of Revenue [1.3].

In addition, Indiana allows for direct payment permits [1.2][2.1]. A direct payment permit is issued by the Indiana Department of Revenue to retail merchants, manufacturers, or wholesalers, upon request [2.1]. The permit allows the holder to purchase materials without paying sales tax, but the holder is required to remit use tax on any purchase on which sales tax was due [1.2].

Conclusion

To use third-party payment processors on your website in Indiana, you must first obtain a registered retail merchant’s certificate and ensure that the payment processor is registered with the Indiana Department of Revenue. Additionally, Indiana allows for direct payment permits, which may be useful for purchasing materials without paying sales tax [1.2][2.1].

Source(s):
Jurisdiction

Indiana