How Small Indiana Manufacturers Are Recovering Big on Sales Tax
Last Updated on June 16, 2025
Even seasoned manufacturers in Indiana often overpay sales tax—especially on fixed assets and everyday expense purchases. With complex rules and gray areas around items like software, R&D, and repair parts, many businesses err on the side of caution and simply pay the tax.
That adds up.
While medium and large manufacturers are frequent candidates for sales tax recovery, smaller manufacturers like machine shops can benefit just as much. Even with a steady and predictable spend, there’s often hidden overpayment.
Take this Indiana machine shop, for example—operating in a 25,000 sq. ft. facility. Here’s what their refund uncovered:
Category |
Refund |
Notes |
|---|---|---|
| Safety Equipment | $10,986 | Safety glasses, ear plugs, face shields, gloves, welding helmets, harnesses and respirators. |
| Equipment/Repair Parts | $59,280 | Boom lifts, cranes, torque wrenches, powered hoists, valves, MIG guns, air filters, nuts and drive roll kits. |
| Electricity / Gas | $35,382 | Predominant Use Study proved full exemption on energy bills. |
| Computers / Software | $12,134 | Used for product design and development. |
| Forklifts | $540 | Used to transport work-in-progress during production. |
| TOTAL RECOVERED | $118,322 | Refund delivered 75 days from filing date. |
Indiana: A Prime State for Sales & Use Tax Refunds
If you’re a manufacturer in Indiana, you’re in one of the best states for recovering overpaid sales and use tax. A refund review (also known as a reverse audit or overpayment review) can boost cash flow, uncover savings, and help you stop overpaying tax going forward. Here’s what you need to know:
- 3-Year Lookback — Indiana’s statute runs by calendar year. You can currently recover tax paid from January 2022 onward.
- 90-Day Deadline — The state must issue a decision on your refund claim within 90 days or start paying interest.
- Utility Refunds — A predominant use study is required to claim refunds on manufacturing utilities.
- No Audit Risk — A refund review won’t automatically trigger a sales tax audit.
If you’re paying sales or use tax on purchases tied to your operations, a refund review isn’t just a smart move—it’s a peace-of-mind check to ensure you’re not overpaying. Every dollar matters, especially the ones you’re owed.
Helping Indiana Manufacturers Recover Sales Tax for 25+ Years
For more than 25 years, TaxMatrix has helped Indiana manufacturers and pharmaceutical companies recover overpaid sales & use tax and defend against audits. Our refund review service—also known as a reverse audit—is offered on a success-only basis. That means no upfront costs or fees.
We manage the entire process with minimal time required from your team. If you’ve been paying sales tax on utilities used in production, we’ll even cover the cost of the required predominant use study.
The only time we send a bill? After you’ve received your refund check from the state.
As an added bonus, our clients gain access to our free Tax Help Desk for ongoing sales and use tax support in every state we review.
Interested in learning more or scheduling a free consultation? Get in touch with us today.
