TAX INFORMATION

The Tax Foundation's State Business Tax Index for 2008 rated Indiana as having the 12th most business-friendly tax system in the U.S.

Workers' Compensation

Indiana boasts the lowest workers compensation rates in the Midwest and among the very lowest in the country.

• Average rate for manufacturing is $2.46 per $100 of Indiana payroll

Inventory Tax

Indiana eliminated the inventory tax beginning in the tax year 2006 payable 2007.

Electric Rates

Indiana's costs for industrial electricity are the second lowest in the nation.

Corporate Income Tax

All corporations doing business in Indiana, except S corporations and not-for-profit corporations, pay corporate adjusted gross income tax at a rate of 8.5%.

Single-Sales Factor

Indiana is phasing in the single-sales factor for apportioning corporate income tax. Indiana had determined its share of an interstate of international corporation's taxable income by weighing the Indiana portion of a company's property and the proportion of its employees in Indiana. The single-sales factor will calculate the Indiana portion based solely on the portion of a company's sales in Indiana. This change is being phased in and will be complete by 2011.

Individual Income Tax

• Indiana's personal income tax is 3.4 percent of federal adjusted gross income (with certain exemptions and deductions).
• Jackson County Personal Income Tax is 1.6 percent.

Sales and Use Tax

Indiana's Sales and Use Tax is calculated at a rate of 7 percent. In manufacturing, the following are exempt from the sales tax: raw materials, equipment, power, electricity, and utilities. Wholesale sales, items used directly in production, and sales made in interstate commerce are exempt. In addition, the purchase of research and development equipment is exempt from the tax.

Property Tax

Real and personal property tax is assessed at 100 percent of market value. Tax rates and exemptions vary among local jurisdictions.

• Average real property net rate is 2.15%
• Average business personal property net rate is 2.48%

Unemployment Insurance

• New employer rate 2.5%
• Taxable wage base $9,500
  

Source: Indiana Economic Development Corporation
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