State Taxes at a Glance – Indiana
| Type of Tax | 2023 |
|---|
| Individual Rates | 3.15% (flat tax) + county tax |
| Corporate / Business Tax Rates | 4.9% (flat tax) |
| Gross Receipts Tax | None |
| Sales Tax | 7.00% (average) |
| Property Taxes | 0.84% as a percentage of primary home |
| Estate or Inheritance Tax | None |
State Income Taxes in Indiana
Indiana is preferrable state regarding taxes. Even though it does have personal income tax, it’s one of the few states that has a flat tax, not a progressive one. Additionally, the state of Indiana has a state tax credit for contributions to 529 plans, up to $1,000, for money put away for education.
Another thing to be aware of is that some local counties or cities do impose additional taxes that range from 0.35% to 3.38%.
State Business Taxes in Indiana
The state of Indiana has a flat Corporate Tax rate of 4.90%. For other business entities that are flow-thru entities, such as S Corporations, Partnerships, LLCs, etc., they are taxed the individual income tax rate of 3.23% + county tax.
Sales and Property Taxes in Indiana
Sales Tax – Unlike many other states Indiana has a single sales tax rate, at the state level. The state rate is 7.00%
Property Taxes – the average property tax rate for residential property in the state of Indiana is 0.84%, making it a very preferable place to own property.
Homestead Property Taxes – Additionally, they have a homestead property tax exemption (similar to Texas and Idaho). It is the lessor of $45,000 or 60% of your property value. You can learn more about it here.
Indiana DMV Fees
The state of Indiana imposes and excise tax on vehicle registrations, which is based on the value of the vehicle. That means it is deductible on your federal tax return. It ranges from $12 to $532 for most passenger vehicles. For more information, here’s a link to the Indiana DMV website.
Indiana Domicile
Indiana’s presumption is that it’s your permanent place of abode (domicile) if you’ve lived there for over 183 days during the taxable year.
State Tax on Social Security Benefits
Even though Indiana has an income tax, social security benefits are not subject to state tax in “The Hoosier State.”
Payroll taxes in Indiana
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – Indiana has a wage base of $9,500
- UI Rates – range from 0.50% to 7.40%
- Schedules – Indiana has multiple rate schedules regarding UI
Indiana Business Entities – LLCs
Indiana is one of the more inexpensive places to open an LLC in the country. Here are some important facts:
- Indiana LLC fee is bi-annual (paid once every two years) at only $30
- When you register with the state, you pay a one time fee of $95
- Secretary of State of Indiana website – click here