How To Pay Your Indiana Excise Tax

Indiana drivers must pay an annual vehicle excise tax that is determined based on the vehicle MSRP and the vehicle’s age, with a minimum of payment of $12.
Written by Jason Tushinski
Reviewed by Amy Bobinger
All motor vehicles in
must pay an annual vehicle excise tax, which is determined based on a combination of your vehicle’s class (based on the manufacturer’s suggested retail price, or MSRP) and its age, with $12 being the minimal excise tax fee you will owe.
Taxes can be confusing, but you’ll need to figure out what you owe and by when, including how much you owe for Indiana’s annual vehicle excise tax. Luckily, we’re here to guide you through what is required as per Indiana’s vehicle excise tax. 
We’ve put together this handy guide explaining how much you’ll have to pay to satisfy Indiana’s excise tax, when that payment is due, and where the fee goes. Let’s get started!

What is an excise tax in Indiana?

In Indiana, you pay a vehicle excise tax when you
register your car
for the first time, as well as every year after that with your
vehicle registration
An excise tax is one that’s levied on certain kinds of goods and services for two general purposes—to ensure revenue for the government (in this case, the State of Indiana); and to discourage the consumption and use of products deemed environmentally harmful.
This includes gas-powered motor vehicles, which emit harmful pollutants into the atmosphere. 
Here’s what you need to know about the vehicle excise tax in the Hoosier State:
  • The amount you owe is a determined based on your vehicle’s MSRP and its age, with a minimum vehicle excise tax fee of $12
  • You must pay the vehicle excise tax in Indiana when first registering your vehicle, along with every subsequent year of registration renewal
  • In order to register a vehicle, you must pay the Indiana vehicle excise tax
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Calculating your excise tax payment

To calculate the amount you owe for Indiana’s vehicle excise tax, do the following:
  • Subtract your vehicle’s model year from the calendar year that the vehicle is due to be registered
  • Match that number to the class of vehicle, which is based on the vehicle’s MSRP
Here’s an example: Let’s say you want to register your 2019 Chevrolet Silverado 1500, which carried an original MSRP of $27,895. First, you’ll subtract the model year—2019—from the year it is due to be registered—2023, which gives you the number 4
Now, using the Indiana Bureau of Motor Vehicles’s handy
Passenger Vehicles Excise Tax Fees table
, find the corresponding class to a four-year-old vehicle. With its MSRP of more than $27,895, the 2019 Silverado falls into Class 14—which means you would owe $195 to cover your vehicle excise fee.
For recreational vehicles, mini-trucks, and motor-driven cycles, the method to determine what you owe for the vehicle excise tax is slightly different than it is for passenger cars. However, coming up with what you owe is simple, as Indiana’s BMV offers a
calculation table
for each of these classes of vehicles, all in the same place. 
For some other vehicles in Indiana, you’ll pay a flat rate excise tax, as follows:
  • Vehicles with a model year of 1980 or older, trucks with a gross weight of no more than 11,000 pounds, and motorcycles: $12
  • Military vehicles: $8
  • Trailers with a gross weight of no more than 9,000 pounds: $8
All Indiana vehicle excise tax fees are payable to where you register your vehicle—your local county treasurer.

Penalties for nonpayment

Not paying your Indiana vehicle excise tax means you won’t be able to register your vehicle in the state.
If you knowingly register your vehicle without paying the excise tax, you will be charged with a Class B misdemeanor.
The Bureau of Motor Vehicles will at that time seize all evidence of registration (registration certificate, license plate, etc) until the appropriate vehicle excise tax has been paid, along with a penalty of $10, as per the
Indiana Code

How to avoid excise tax in Indiana

As of now, the State of Indiana does not offer any exemptions to the vehicle excise tax—you’ll have to pay it if you want to register your vehicle in the state. But now that you’ve gone through this helpful guide, that should be no problem!
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