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Cost of Doing Business in East Central Indiana


• Indiana ranks best in the Midwest and 8th overall  in Area Development magazine’s Top States for Doing Business survey
  (September 2016)
• Indiana’s business climate ranks best in the Midwest and 5th in the nation in Business Facilities’ 2015 State Rankings Report
  (August 2015)
• Indiana ranks 1st in the Midwest and 3rd in the nation as the best place to do business in the Pollina Corporate Top 10
  Pro-Business States study (2015)
• Indiana ranks 1st in the Midwest and 5th in the nation in Chief Executive magazine’s annual Best & Worst States survey (May 2017)
 

A Right-to-Work State
On February 1, 2012 Indiana became the 23rd state in the nation and the first state in the Midwest to pass right-to-work legislation.

AAA Credit Rating
Indiana is one of only 11 states to earn the top bond rating from all three major credit rating agencies (S&P, Fitch, Moody’s).

Tax Climate
Indiana ranks 1st in the Midwest and 8th nationally in the Tax Foundation’s 2015 State Business Tax Climate Index (Nov. 2015).

Corporate Income Tax Reduction
Indiana’s corporate income tax rate is 6.25%. It will be reduced to 4.9% by 2021. 

Single Sales Factor
Indiana is a single-factor apportionment state. For corporations with income from within and outside Indiana, corporate income tax is based solely on Indiana sales.

Personal Income Tax Reduction
Indiana’s personal income tax rate is 3.23%. 

Inventory Tax
There is no inventory tax in the state of Indiana

Sales Tax
Indiana’s sales tax is calculated at a rate of 7 percent.

Sales Tax Exemption

The state of Indiana allows sales tax exemptions for the following:

Manufacturing
The following are exempt from the sales tax: raw materials, equipment, and utilities. Wholesale sales, items used directly in production, and sales made in interstate commerce are exempt. To the extent that computer hardware will be used directly in the production of another product, its purchase is exempt from tax pursuant to the manufacturing exemption.  To claim the exemption, the purchaser must show that the computer has an immediate effect on the article being produced as the result of being an essential and integral part of the production process.  With respect to computers, this is known as computer-assisted manufacturing (CAM).

Logistics
For companies engaged in public transportation, the following qualifies for sales tax exemption:  vehicles used to escort vehicles used in public transportation; items used to disassemble, load and secure the customer’s machinery for movement in public transportation; items used in planning transportation routes and obtaining travel permits. 

Research and Development
The exemption for research and development equipment applies only to equipment purchased for the purpose of research and development activities.  Research and development activities include any activities devoted directly to experimental or laboratory research and development for new products, new uses of existing products, or improving or testing existing products. 

Patent Income
Certain income derived from qualified patents and earned by a taxpayer are exempt from taxation.  The Tax Exemption for Patent-derived Income defines qualified patents to include only utility patents and plant patents.  The total amount of exemptions claimed by a taxpayer in a taxable year may not exceed $5 million. 

Workers Compensation Rates 

The Oregon Department of Consumer and Business Services report that is published once every two years shows the 2014 median value of workers’ comp premiums paid was $1.85 per $100 of payroll, a drop of 2 percent from the $1.88 median in the 2012 study.  Indiana’s rate of $1.06 is the second lowest workers compensation rate.

Click here to use an estimator to find your company’s workers compensation tax amount. 

Unemployment Insurance

Source: Tax Policy Center, 2014 Rates

Wage Base $9,500
New Employer Rate % 2.50%
Minimum Rate 0.53%
Maximum Rate 7.90%





Local Taxes 

Local Income Tax
Local income tax varies by county within the region and is a combination of county adjusted gross income taxes (CAGIT), county economic development income taxes (CEDIT), and county option income taxes (COIT) with an overall average of 1.773%.

Property Tax
Real and personal property tax is assessed at 100 percent of market value. Tax rates and exemptions vary among local jurisdictions, but are capped at 3 percent for business property pursuant to state law.

Click here to see property tax rates for individual counties. 




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Mindy
Kenworthy
President/CEO
Caitlin
Hancock
Director of Administration & Marketing