Indiana Form ST-108: Vehicle Tax Certificate, Trade-Ins, and BMV Filing

Indiana Form ST-108 is the state’s Certificate of Gross Retail or Use Tax Paid on the Purchase of a Motor Vehicle or Watercraft. The selling dealer completes it after collecting Indiana’s seven percent sales tax on your purchase, and you hand the completed form to the Bureau of Motor Vehicles when you apply for a title. Without it, the BMV cannot issue the title in your name.¹

Indiana Code 6-2.5-9-6 is the reason. It bars the state from titling a vehicle or watercraft unless the buyer either presents proof that Indiana’s gross retail and use taxes have been paid, or pays the tax directly at a BMV branch.² ST-108 is that proof.

Who Fills It Out and How You Get It

The dealer completes ST-108 as part of the sale and hands you a copy along with the rest of your purchase paperwork. You do not normally download it yourself. If a dealer doesn’t provide one before you drive off, ask for it on the spot, because the BMV will require it at the title counter.

The Indiana Department of Revenue does host a fill-in PDF of the form on its sales tax forms page if you need to see it in advance or verify a copy.³ The form applies to motor vehicles, trailers, watercraft, and aircraft bought from an Indiana dealer, or from a registered out-of-state dealer that collected Indiana sales tax on your behalf.

What the Form Must Show

The dealer handles most of the fields, but check them before you leave. A mistake in the VIN or the math will get the form kicked back at the BMV, and you’ll have to return to the dealer for a corrected copy.

Buyer and Seller Information

The top of the form lists the full legal name and current address of both the buyer and the dealership. The dealer also enters the registered retail merchant certificate number that authorizes them to collect tax for the Department of Revenue. Confirm that your name matches your driver’s license exactly. Mismatched names create delays at the BMV counter.

Vehicle or Watercraft Description

This section identifies the asset: year, make, model, and either the Vehicle Identification Number (for cars, trucks, and trailers) or the Hull Identification Number (for watercraft). Copy these directly from the title or manufacturer’s certificate of origin rather than from memory. A single transposed digit means the BMV cannot match the form to the vehicle.

Purchase Price and Tax Calculation

The financial section is where most errors happen. It runs three lines:

Line 1, gross purchase price: the full price of the vehicle before any trade-in credit.
Line 2, trade-in allowance: the value of your traded-in vehicle, subtracted from the gross price.
Line 3, taxable amount: Line 1 minus Line 2, with Indiana’s seven percent tax applied to the result.

The dealer records both the taxable amount and the total tax collected, then signs and dates the form. On a $30,000 car with a $5,000 like-kind trade-in, the taxable base is $25,000 and the tax is $1,750.

Trade-In Rules That Change the Tax

Indiana only allows the trade-in deduction for like-kind exchanges: a motor vehicle for a motor vehicle, or a trailer for a trailer. Trading a motorcycle for a car or a truck for a boat does not qualify, and the full purchase price gets taxed.⁴

A few details catch buyers off guard:

The trade-in must be titled in your name. You cannot trade in a vehicle you don’t own.
Only two parties can be involved. If a third party enters the exchange, the deduction disappears.
Negative equity does not increase your taxable amount. Only the vehicle’s actual purchase price counts as taxable consideration.
If your trade-in is worth more than the new vehicle, the taxable amount is zero, not negative.
A motorized RV traded for a non-motorized RV counts as like-kind, even though one is a motor vehicle and the other a trailer.

The trade-in must happen as part of the same transaction. Selling your old car to the dealer one week and buying a new one the next does not qualify.⁴

When ST-108E Is Used Instead

If the transaction is exempt from Indiana sales tax, the dealer completes Form ST-108E rather than ST-108. Common exemptions include:

Gifts and inheritance where no money changes hands. If the recipient assumes the donor’s loan payments, that counts as consideration and the exemption does not apply unless the recipient was already on the original loan.
Purchases by federal, state, or local government entities, or by nonprofits operating exclusively for religious, charitable, or educational purposes.
New Indiana residents who already titled and registered the vehicle in another state as a resident there.
Adding or removing a spouse, child, parent, grandparent, or sibling from a title.
Vehicles bought by a licensed dealer for resale inventory.
Vehicles or watercraft used more than 50 percent in public transportation or commercial hauling.

The purchaser must provide a Social Security Number, Indiana Taxpayer Identification Number, or Federal Employer Identification Number on ST-108E for the exemption to be valid, and the purchase price lines still have to be completed even though no tax is owed.¹

Out-of-State Purchases and Use Tax

If you buy a vehicle outside Indiana, take possession in the other state, and bring it back to register here, Indiana charges use tax to make up the difference between what you already paid and Indiana’s seven percent rate. Pay five percent in another state, and you owe two percent to Indiana at the title counter.⁴

If the other state’s rate was seven percent or higher, you owe nothing more, but you still need proof you paid that tax. Bring the out-of-state dealer’s receipt or tax certificate with your title paperwork. Without it, the BMV will charge the full seven percent.

Submitting the Form at the BMV

Take the completed ST-108 to any Indiana BMV branch when you apply for the certificate of title. The clerk verifies that the form shows the full seven percent tax was collected, checks the VIN or HIN against your other paperwork, and processes the title application.

The standard title fee is $15. A speed title costs $25. Late title applications carry a $30 administrative penalty on top of the base fee.⁵ These fees are separate from the sales tax shown on your ST-108.

If You Didn’t Get an ST-108 From the Dealer

Indiana law gives you a second option. If you can’t present proof that the tax was already paid, you can pay the seven percent gross retail or use tax directly at the BMV branch when you title the vehicle.² This is how private-party sales work, since no dealer is involved to collect tax or complete an ST-108. Bring a bill of sale showing the purchase price and pay the tax at the counter.

Paying at the BMV is straightforward, but the full tax amount comes out of pocket at the branch visit rather than getting rolled into dealer financing. Seven percent of even a modest vehicle price adds up quickly, so plan for it before you go.

Keeping Your Copy

Hold onto ST-108 for as long as you own the vehicle. If you ever need to prove tax was paid, whether during an audit, when selling the vehicle, or in a title dispute, the form is your evidence. The IRS recommends keeping records related to property until the statute of limitations runs for the tax year in which you dispose of it, which for most people means keeping ST-108 at least three years after you sell or trade in the vehicle.⁶

1
Indiana Department of Revenue. Certificate of Gross Retail or Use Tax Exemption for the Purchase of a Motor Vehicle or Watercraft
2
Indiana General Assembly. Indiana Code Title 6 Taxation 6-2.5-9-6
3
Indiana Department of Revenue. Sales Tax Forms
4
Indiana Department of Revenue. Sales Tax Information Bulletin 28S
5
Indiana Bureau of Motor Vehicles. BMV Fee Chart
6
Internal Revenue Service. How Long Should I Keep Records