Indiana has a flat 2.95 percent individual income tax rate. There are also jurisdictions that collect local income taxes. Indiana has a flat 4.90 percent corporate income tax rate, a 7.00 percent state sales tax rate, and an average combined state and local sales tax rate of 7.00 percent. Indiana has a 0.76 percent effective property tax rate on owner-occupied housing value. Indiana does not have an estate tax or inheritance tax. Indiana’s gas tax is 52.4 cents per gallon, and its cigarette excise tax is $2.995 per pack of 20 cigarettes.
Indiana raises tax revenue primarily through individual income taxes (31.5 percent of total state and local tax revenue), general sales taxes (26.9 percent), and property taxes (22.2 percent). Indiana collects $5,964 in state and local tax collections per capita, carries $6,091 in state and local debt per capita, and has an 84 percent funded ratio of public pension plans. Indiana’s tax system ranks 10th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Indiana is no exception. Use the tabs below to compare Indiana taxes with other states and to see how Indiana raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
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Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
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Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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Our updated 2019 edition of Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Explore our list of the top state tax ballot measures to watch for throughout the country.
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Our 2019 State Business Tax Climate Index compares each state on over 100 variables including corporate, individual, property, and sales taxes. How does your state rank?
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Indiana recently passed tax conformity legislation linking the state’s individual and corporate tax code to the new federal law.
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Important lessons can be learned from other state experiences with tax reform. While Kansas teaches us what not to do, Utah, Indiana, North Carolina, and the District of Columbia illustrate that smart, sensible tax reform is possible.
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While most states enact tax changes at the beginning of the calendar year, a number of them implement changes at the beginning of the fiscal year. Eight states have tax changes that will take effect on July 1, 2017, the beginning of the 2018 fiscal year.
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