CORPORATE INCOME TAX
04-2011 The Indiana Corporate Income Tax Reduction will be from 8.5% to 6.5%. The decrease will be phased in over a four year period starting on July 1, 2012 through June 30, 2015. The dates align with the state budget year versus a calendar year.
GASOLINE AND DIESEL FUEL TAXES
The combined federal, state and local tax on gasoline in Indiana is $0.501per gallon. The combined federal, state and local tax on diesel fuel in Indiana is $0.692 per gallon.
GROSS RECEIPTS AND INVENTORY TAX
Indiana has no gross receipts tax and no inventory tax.
INDIVIDUAL INCOME TAX
Indiana’s personal income tax is 3.4 percent of federal adjusted gross income (with certain exemptions and deductions).
HOOSIER HEADQUARTERS RELOCATION TAX CREDIT
When a business relocates its corporate headquarters (defined as the location of the principal office of the principal executives) to Indiana, it is entitled to a credit against its state tax liability equal to half of the costs incurred in relocating the headquarters. A company must have global annual revenue of at least $100 million to qualify.
Real and personal property tax is assessed at 100 percent of market value. Tax rates and exemptions vary among local jurisdictions. Indiana’s 2008 Property Tax Reform Act cut property taxes significantly and will provide permanent protection for homeowners and businesses. Beginning in 2010, homeowner property taxes are capped at 1 percent of a home’s assessed value, apartments and agriculture land are capped at 2 percent of assessed value, and business property taxes are capped at 3 percent of assessed value.
SALES AND USE TAX
Indiana’s Sales and Use Tax is 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.
Indiana is phasing in the single-sales factor for apportioning corporate income tax. Indiana had determined its share of an interstate or 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 will be completed by 2011.