The Indiana Department of Revenue recently published guidance on the taxability of sales at farmers' markets. It explains that food sales are generally exempt, but the exemption does not apply to items such as candy, soft drinks, or prepared food items like sandwiches or soups. Tax also applies to arts and crafts. Examples of taxable arts and crafts include potholders, bird houses, candles, cut flowers, and decorative ornaments. If a person is purchasing taxable items for the purpose of resale, that person must issue an exemption certificate.