South Central Indiana USA
The Place to Grow Your Business
Taxes
Indiana has a very favorable tax program. Ranked as one of the best states for its unemployment tax structure and workers' compensation rates, South Central Indiana offers relocating and expanding companies everything they need to grow and thrive.
In 2002, the Indiana General Assembly passed a revision of Indiana's tax code, which simplifies and modernizes the state's tax structure. House Enrolled Act 1001ss was passed during the 2002 Special Session of the Indiana General Assembly, and was signed into law by Governor Frank O'Bannon on June 28, 2002. This historic bill restructured Indiana's tax system in such a manner that the business taxes were simplified, real estate reassessment impacts were lessened, and additional taxes were eliminated.
State Tax Overview
State Sales Tax The Indiana sales tax (the gross retail tax) is imposed at the rate of 6%, is added to the selling price paid by a purchaser and is collected by the retail merchant as agent for the state.
Corporate Income Tax All corporations doing business in Indiana, except for S-corporations and not-for-profit organizations, pay corporate adjusted gross income tax at a rate of 8.5%.
Individual Adjusted Gross Income Tax
Individuals pay at a rate of 3.4%
Unemployment Insurance
New employer rate: 2.7%
Experienced employer average rate: 1.3%
Taxable wage base: $7,000.
Workers Compensation
Workers' Compensation (per $100 of payroll)
Average Rate for Manufacturing -- $2.46
Average Rate for Distribution -- $3.71
Average Rate for Office -- $0.27
Source: Worker's Compensation Board of Indiana, Indiana Compensation Ratings Bureau, Department of Workforce Development-Unemployment Insurance Division/US Dept. of Labor
Workers' Compensation Advantages
Low cost for employers - From highest to lowest, Indiana ranked 50 out of 51 jurisdictions with a rate of $1.24. Source: State of Oregon report 2004 Oregon Workers' Compensation Premium Ranking. Rate indices range from low of $1.06 in North Dakota to high of $6.08 in California.
Healthy market attracts competition – Indiana posts best in country accident year combined ratio of 0.90. Results range from a low of 0.90 in Indiana to a high of 142 in Kentucky. Source: NCCI Financial Call data used in Calendar-Accident Year Underwriting Results, evaluated as of 12/31/02; 37 states; NCCI website as of 9/2004.
Sales and Use Tax Taxpayer: Purchasers of tangible personal property and public utility service, renters of rooms or other accommodations for less than 30 days, and renters of other property.
Tax Base: Sales price of the taxable transaction.
Tax Rate: 6%
Major Exemptions: Wholesale sales. Purchases of items used directly in the production process, including raw materials, machinery, tools and equipment directly used in direct production. Any sale of goods for resale. Sales made in interstate commerce. Power, electricity, and gas if 51% of the load is used for manufacturing. Pollution-abatement equipment if required by federal, state, or local law. Sales to governmental entities.
State Unemployment Insurance Rates and Regulations
In the State of Indiana, every business that employs at least one person for 20 weeks or more, or if in any calendar quarter pays wages of at least $1, 500, is required to pay unemployment compensation taxes. All of the unemployment compensation taxes that an employer pays goes into that mployers account. This account serves as the pool from which benefits are paid to eligible persons. The accounts for all of the states employers make up the Indiana Unemployment Trust Fund. The Indiana Department of Employment and Training Service administers the program.
All employers are taxed on the first $7,000 of an employees wages for each calendar year. New businesses must contribute at the rate of 2.7%, until they have three years of experience. At that time, the new rate is determined by the employers credit reserve ratio or debt reserve ratio held in the employers account within the Unemployment Insurance trust fund.
New employer rate -- 2.7%
Average experienced employer rate -- 1.21%
Taxable wage base -- $7,000
Minimum rate -- 0.2%
Maximum rate -- 5.5%
Workers Center Compensation
Workers Compensation is a system of no-fault insurance that pays benefits to employees for accidental injuries or diseases arising out of and in the course of employment. Benefits are provided by private insurers (in some cases, self-insurers) and the maximum number of weeks for which a worker can receive benefits in Indiana is 125 weeks. Insurance rates for employers are determined by the Workers Compensation Rating Board, a non-profit agency, based on past experience with the same or similar jobs in Indianas workforce, and the total size of payroll. Firms having exceptional records can apply for a credit against their previous contributions. Separate job classifications are used for premium purposes. The average rate for manufacturing is $1.99 per $100 of Indiana payroll.
Local Tax Overview
Property Taxes The Indiana property tax is imposed on all real and personal property that is not expressly exempt. The assessment date is March 1 of each year and such real and personal property is to be assessed pursuant to regulations issued by the Department of Local Government Finance.
Property taxes in Indiana are imposed at the local level on real property (land and buildings) and certain types of personal property. Business personal property consists of inventories, machinery and equipment, special tooling and construction in progress. The assessment date is March 1st. The City of Madison's property tax rate for the year 2000, payable 2001, is 9.9703/$100 of assessed value. Property tax abatement is available for qualifying capital investments.
Property Tax Summary by County - Net Rate - 2003 Pay 2004
Bartholomew County -- 1.8493
Clark County -- Not Available
Decatur County --
1.4487
Floyd County -- 1.6017
Harrison County -- 1.3243
Jackson County -- 1.3991
Jefferson County -- 2.1111
Jennings County -- 1.6579
Scott County -- 1.9907
Washington County -- 1.8255
2005 County Income Tax Rates
Bartholomew County -- .01 Clark County -- .015
Decatur County -- .0133
Floyd County -- .0115
Harrison County -- .01
Jackson County -- .01475
Jefferson County -- .0035
Jennings County -- .0125
Scott County -- .0116
Washington County -- .015
For More Information:
For detailed information about Indiana's tax structure, please visit the Indiana Department of Commerce website at www.in.gov/doc
Detailed Tax Information
It's easy to get more tax information for any of the ten counties located within South Central Indiana by visiting the specific county Web sites. Simply choose your selection from the drop-down menu below. Your selection will open in a new window so when you're finished, you can close out the window and be right back here:
Indiana has a very favorable tax program. Ranked as one of the best states for its unemployment tax structure and workers' compensation rates, South Central Indiana offers relocating and expanding companies everything they need to grow and thrive.