Indiana’s NP-1 is the sales tax exemption certificate the Department of Revenue issues to an approved nonprofit for use with a specific vendor. To get the Indiana Form NP-1 nonprofit sales tax exemption certificate, your organization files Form NP-20A (Nonprofit Application for Sales Tax Exemption) through the INTIME online portal, attaches its IRS determination letter, and, once approved, requests an NP-1 for each vendor it buys from.1Indiana Department of Revenue. Nonprofit Tax Forms The vendor then stops charging Indiana’s 7 percent sales tax on qualifying purchases.
Which Nonprofits Qualify
Indiana Code 6-2.5-5-25 exempts purchases by certain nonprofits when the items are used to carry on or raise money for the organization’s not-for-profit purpose.2Indiana General Assembly. Indiana Code 6-2.5-5-25 – Exemption; Nonprofit Organizations The categories reach broader than 501(c)(3):
- Religious, charitable, scientific, literary, educational, or civic organizations operated exclusively for one of those purposes, with no income going to the private benefit of any member or employee.
- Fraternal organizations and business leagues, as long as no income benefits members privately.
- Hospitals licensed by the Indiana State Department of Health, plus shared hospital services organizations exempt under IRC 501(c)(3) or 501(e).
- Labor unions, churches, monasteries, and convents.
- Indiana public schools and parochial schools regularly maintained by a recognized religious denomination.
- College fraternities, sororities, and student cooperatives connected with and supervised by a postsecondary institution.
- Pension trusts created by members of a profession or business to pay pensions to one another.
Business leagues, fraternal groups, and labor unions can qualify under Indiana law even if their federal classification sits under a different subsection of IRC 501(c).
The Social-Purpose Disqualifier
Organizations operated predominantly for social purposes do not qualify. Indiana treats a group as predominantly social if more than 50 percent of its expenditures go to social activities such as food and beverage service, golf courses, swimming pools, dances, and parties. Groups the IRS classifies as “social,” including homeowners’ associations, are categorically excluded.3Indiana Department of Revenue. Sales Tax Information Bulletin 10
Filing Form NP-20A
The NP-20A is the application that starts everything. There is no filing fee. Your organization must file it within 120 days of formation, even if you have nothing to buy tax-free right away; the filing is a separate compliance obligation under Indiana’s nonprofit reporting rules.4Indiana Department of Revenue. Indiana Tax Guide – Nonprofit Organization
What to Gather First
- Your IRS Federal Determination Letter. A copy must accompany the NP-20A.4Indiana Department of Revenue. Indiana Tax Guide – Nonprofit Organization
- Your Federal Employer Identification Number (EIN).
- Your Indiana Taxpayer Identification Number (TID), a ten-digit number assigned if you have already registered with the state. New organizations receive one during the process.
- Your articles of incorporation, which the department may review to confirm your purpose matches a statutory category.
Submitting Through INTIME
Create an INTIME account if you don’t already have one.5Indiana Department of Revenue. INTIME Log in, locate Form NP-20A, and complete it. The form asks for your legal name as it appears on your founding documents, the statutory category that matches your mission, and a description of how purchases will support your nonprofit activities. Attach a copy of your IRS determination letter before submitting. Specific descriptions of your exempt purpose move faster than vague ones; something like “purchasing classroom supplies for after-school tutoring programs” gives reviewers what they need without follow-up.
How Long Approval Takes
Indiana does not publish an official timeline, but organizations should plan for roughly three months of review. You can check status through INTIME correspondence or by calling the department’s nonprofit division.
Requesting and Using the NP-1
Once the department approves your NP-20A, you request an NP-1 exemption certificate through INTIME for each vendor you plan to buy from, then present the certificate to that vendor.4Indiana Department of Revenue. Indiana Tax Guide – Nonprofit Organization
Each NP-1 works in one of two ways. It can cover a single purchase, or it can serve as a blanket exemption that the vendor keeps on file and applies to all future qualifying sales without a new certificate each time. For vendors you buy from regularly, blanket coverage saves paperwork on both sides.
Do not try to use Indiana’s ST-105 General Sales Tax Exemption Certificate for nonprofit purchases. The ST-105 form itself states it may not be issued by a nonprofit organization.6Indiana Department of Revenue. General Sales Tax Exemption Certificate The NP-1 is the only valid exemption certificate for nonprofit purchases in Indiana.
What the Exemption Does Not Cover
The exemption applies only to items used to carry on the nonprofit’s exempt purpose. Several categories stay taxable regardless of your status:3Indiana Department of Revenue. Sales Tax Information Bulletin 10
- Meals and lodging. Meals served during a meeting are taxable even when the meeting furthers the nonprofit’s purpose. Renting hotel rooms for officers or members is treated as a private benefit.
- Purchases a member pays for expecting reimbursement. Those are taxable at the point of sale, and the member pays the tax.
- Anything bought for the personal use of a member, trustee, or employee.
- Items supporting social events such as dances, parties, or recreational activities.
The meals rule catches many organizations off guard. A catered lunch at a board strategy session is still taxable, because the food benefits the individuals eating it rather than the mission.
Keeping the Exemption Active
The NP-1 is not permanent. To keep your sales tax exemption active, your organization must file Form NP-20R (Nonprofit Organization’s Report) by May 15 every five years.1Indiana Department of Revenue. Nonprofit Tax Forms Miss that deadline and your registration lapses; once the registration is inactive, NP-1 certificates you have on file with vendors stop being valid. The NP-20R is available through INTIME.
Federal Status Has to Stay Current
Your Indiana exemption depends on IRS recognition of your nonprofit status. Under IRC Section 6033(j), an organization that fails to file its required federal return (Form 990, 990-EZ, or 990-N, depending on size) for three consecutive years loses its federal tax-exempt status automatically. Revocation takes effect on the due date of the third missed return, happens by operation of law, and has no appeals process.7Internal Revenue Service. EO Update: e-News for Charities and Nonprofits While your federal status is revoked, your Indiana NP-1 exemption is invalid. Reinstatement requires filing a new federal exemption application and paying the associated fee. Small organizations with annual gross receipts normally at or below $50,000 can meet the federal requirement with Form 990-N, a short electronic notice.8Internal Revenue Service. Annual Electronic Filing Requirement for Small Exempt Organizations – Form 990-N
When Your Nonprofit Is the Seller
The NP-1 covers what your organization buys. A separate statute, Indiana Code 6-2.5-5-26, controls whether your organization’s own sales are exempt from collecting sales tax.9Indiana General Assembly. Indiana Code Title 6 Taxation 6-2.5-5-26
For most qualifying nonprofits, sales are exempt as long as the organization sells to raise money for its not-for-profit purpose and does not exceed $100,000 in sales during the current or previous calendar year. Once sales cross the threshold, the organization must begin collecting sales tax for the rest of that calendar year and continue collecting until sales fall below $100,000 for two consecutive years.
Some organizations have no dollar cap. Churches, monasteries, convents, public and parochial schools, and youth organizations focused on agriculture can sell without collecting sales tax regardless of volume.9Indiana General Assembly. Indiana Code Title 6 Taxation 6-2.5-5-26
Out-of-State Purchases
The NP-1 applies only to transactions within Indiana. Purchases in another state are governed by that state’s exemption rules, and there is no universal reciprocity. Before making a significant purchase out of state, check with that state’s revenue department to confirm whether your nonprofit qualifies and what documentation to present.