In this second part of the halftime report for Tax Foundation Forum: Making Sense of Profit Shifting, we discuss the key takeaways from the first half of our series on profit shifting (read part I here). In this post, we...
The facts on Indiana’s Tax Climate
3.3%individual income taxFlat rate
7%corporate income taxFlat rate
$994property taxcollections per capita
Indiana's Individual Income Tax System
Indiana's personal income tax system consists of a flat rate of 3.3%. That rate ranks 10th lowest among states levying an individual income tax. Indiana's state and local income tax collections per person were $934 in 2012 which ranked 25th lowest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Indiana's Corporate Income Tax System
Indiana's corporate income tax system consists of a flat rate of 7%. That rate ranks 21st highest among states levying a corporate income tax. Indiana's state and local corporate income tax collections per person were $122 in 2012 which ranked 24th lowest nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita
50-State Table of State Corporate Income Tax Collections Per Capita
Indiana Sales and Excise Taxes
Indiana levies a 7% general sales or use tax on consumers, which is above the national median of 5.95%. Indiana's state and local governments collect $1015 per person in general sales taxes and $533 per person in excise taxes, for a combined figure of $1548, which ranks 19th highest nationally. Indiana's gasoline tax stands at 29.9¢ (19th highest nationally), while its cigarette tax stands at $1 (20th lowest nationally.)
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita
Indiana Property Tax Collections Relatively Low
Indiana's state and local governments collected approximately $994 per person in property taxes in 2012, which ranks 16th lowest nationally.
State and local property tax collections per capita by state
Tax Freedom Day Arrives on April 16th in Indiana
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2014, Indiana taxpayers worked until April 16th (24th latest nationally) to pay their total tax bill. The Tax Freedom Days of neighboring states are: Michigan, April 17th (ranked 21st latest nationally); Illinois, April 28th (ranked 7th latest nationally); Kentucky, April 8th (ranked 7th earliest nationally); and Ohio, April 14th (ranked 23rd earliest nationally).
Indiana's State and Local Tax Burden In Line with National Average
Indiana's 2011 tax burden of 9.5% ranks 22nd highest out of 50 states, and is below the national average of 9.8%. Indiana's taxpayers pay $3385 per capita in state and local taxes.
Indiana's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009
Indiana's 2015 Business Tax Climate Index Ranks 8
Indiana ranks 8th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property, including residential and commercial property. The ranks of neighboring states are as follows: Michigan, 13th, Illinois, 31st, Kentucky, 26th, and Ohio, 44th.
State Business Tax Climate Index (full study)
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