Indiana has no gross receipts tax and no inventory tax.

Corporate Income Tax
The Corporate Adjusted Gross Income Tax is calculated at a flat 8.5 percent of adjusted gross income. Adjusted gross income is a company’s federal adjusted gross income with certain adjustments. This method of determination simplifies tax calculations for corporations and does not apply to S corporations and not-for-profit organizations.

Single-Sales Factor
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 is being phased in and will be complete by 2011.

Sales and Use Tax
Indiana’s Sales and Use Tax is one of the lowest in the Midwest. The tax is calculated at a rate of 6 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.

Property Tax
Real and personal property tax is assessed at 100 percent of market value. Tax rates and exemptions vary among local jurisdictions.

Individual Income Tax
Indiana’s personal income tax is 3.4 percent of federal adjusted gross income (with certain exemptions and deductions).