Taxes
In Indiana there are two basic corporate taxes - Income and Property. Unlike some other States Indiana has no Franchise Tax, Intangibles Tax, Accounts Receivables Tax, or Employment Tax. Recent tax reform in the state of Indiana has greatly enhanced the attractiveness of doing business in Southwest Indiana, the Evansville Region.
Business Taxes
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 percent.
Sales and Use Tax: Five percent of gross income from retail sales. (Exemptions available)
Property Tax: Real and personal property is assessed at 33 1/3 percent of true cash value; property tax rates vary among local jurisdictions. (Exemptions available)
Additional business tax and cost comparisons are available from the Indiana Economic Development Corporation.
Taxes
Property Tax: Real and personal property is assessed at 33 1/3 percent of true cash value. Property tax rates vary among local jurisdictions. Township tax rates range from 7.34% to 10.40% in Vanderburgh County. For tax rates in a specific township in Vanderburgh County, click here.
Tangible Personal Property Tax: All equipment, which includes manufacturing and office, is depreciated by set percentage schedules.
Indiana uses the Federal Depreciating Schedule to determine the True Tax Value of Equipment. Most manufacturing equipment in Indiana falls under Federal Pool #2. Though manufacturing equipment is depreciated quickly in Indiana, its true tax value can never fall to below 30% of its cost. Special valuation procedures apply to special tooling (molds, patterns, and dies), property not placed in service, and air and water pollution control equipment.
Personal Income Tax Rate: State Income Tax is 3.4%, plus county optional income tax with a maximum of 1%
Cost of Doing Business in Southwest Indiana, the Evansville Region
The overall cost of doing business is lower in Indiana than in the surrounding Midwest states. The state’s pro-business attitude, conservative fiscal management, reasonable tax rates, low unemployment insurance and workers compensation rates make Indiana an excellent location for all types of businesses. In addition, two major taxes, the property tax on inventory and the gross receipts tax were eliminated by the legislature in 2002. At the same time, the legislature reduced property taxes for business by over 23%.
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STATE
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TOTAL BUSINESS COSTS |
| Indiana* |
$169,739 |
| Illinois* |
$267,448 |
| Ohio |
$257,124 |
| Kentucky* |
$235,725 |
| Pennsylvania |
$279,391 |
| Massachusetts |
$248,129 |
| Colorado |
$192,835 |
| California |
$625,277 |
NOTE: Total Business Costs (including Corporate State Income Tax, Workers Compensation and Unemployment Insurance) by Location Based on Net Taxable Income of $1,000,000 and 100 employees.
SOURCE: Indiana Economic Development Corporation and US Bureau of Economics, November 2004, Items indicated with * November 2006
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Two major taxes were eliminated and property taxes for businesses were reduced by over 23% in 2002!
Highlights of the 2002 tax restructuring include:
- Reduction of both business and personal property taxes
- Elimination of inventory and gross receipts taxes
- Doubling of the Research and Development (R&D) tax credit, making it the sixth highest in the nation
- Establishing new venture capital tax credits
- Creating certified technology parks throughout the state
The cost of doing business has been historically lower in Indiana than in the surrounding Midwest states, now it is even more economical!
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