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State Tax

Indiana Tax

Modified date: October 9, 2023

FULL List to Indiana Tax Forms

There are a number of taxes applicable to the state of Indiana, which includes one of the highest sales tax rates in the nation.

Indiana state sales tax – 7%, food and drugs exempt. Increased to compensate for capping property taxes.

Indiana personal income tax

3.4% of federal adjusted gross income, flat tax

Tax returns are due on April 15

There are 92 counties in Indiana, each with a unique tax rate for residents and non-residents. These taxes can range from less than 1% to slightly over 3%. Information on these tax rates is available from the State of Indiana Department of Revenue. The highest rate is Pulaski County, at 3.14%, followed by Jasper County at 3.05%.

Indiana property taxes

Fund local governments but approved by state

No more than 1% of property value

2% cap on farmland, rentals

Indiana excise taxes

Taxes assessed on vehicles, alcohol, tobacco, gasoline and are in addition to federal excise taxes.

Funds road repair and health programs

$.99 tax on cigarettes

$2.68 tax per gallon of liquor

Indiana inheritance tax

There are no inheritance taxes on estates left to spouses or charitable organizations. Parents and children can be exempted on estate taxes, up to $100,000 each. Brothers, sisters and their children re exempted up to $500 each. There are also no taxes on amounts paid to other beneficiaries totaling less than $100. Any amounts exceeding the exemptions must be reported to the state on Form I-H6. This also applies to non-residents as well as residents of Indiana.

Indiana payroll taxes

State Disability Insurance – none

State Unemployment Insurance – .565% to 8.362%

Exemptions

$1,000 exemptions for

Federal exemptions

Persons age 65 and older

Persons suffering from blindness

There is a $1,500 tax exemption for some children and an addition $500 exemption for seniors with an income less than $40,000.

Taxable income

Wages

Salaries

Commissions

Tips

Interest

Dividends

Royalties income

Rental income

Farm income

Business income

Pensions

Annuities

Partnership/shareholder income

Gain from sale of property

Corporate income tax – 6.5%

Misc

Social Security, railroad retirement and life insurance benefits are not taxed under Indiana law. Gaming winnings from the lottery, casinos or horse racing are taxed.

Military personnel receive a 180 day extension to file taxes upon leaving a combat zone. They must write “combat zone” on the tax form above their social security number. Property tax depends on the county but will generally not be assessed for those that did not reside in the county at the start of the year.

Tax forms need not be filed if the exemptions exceed gross income. Any income that was withheld to pay taxes can be claimed as a refund by this resident. One should notify the Indiana tax authorities if this is the case to ensure that you truly do not need to file a tax return and how you can claim your tax refund.

Indiana sales tax represents a distinguished and specified area of Indiana taxes. Indiana sales tax is explained in relation to a multitude of different aspects on life within the state. Some areas we will touch upon in this article include that of the application of Indiana sales tax to meals/banquets, non-profit organizations, photography, farm markets, and barbers/beauticians. In addition there also exists an area for deduction from Indiana sales tax, one of which includes those incurred by the sale of ethanol fuel.

In general banquets, or events with the mass production of food present, will be subject to Indiana sales tax. This will be either attached to each individual payment or to the group’s total costs. Tips do not incur taxes, however, as long as they were given voluntarily by the customer or consumer.

In addition, Indiana sales tax does not accompany food delivery or beverage accompaniment. Meals held by non-profit organizations are exempt from the collection of Indiana sales tax as well. School meals from a college or university to its students are also free from such Indiana taxes. However, when holding such events within certain counties imposing taxes on beverages, for instance, they must be collected.

As we have already touched upon in the previous paragraph, non-profit organizations do most often qualify for exemptions to Indiana taxes, such as that of sales tax, which we are examining. In order for non-profit organizations to be eligible for such exemption, however, they must first register with the non-profit division of the “Indiana Department of Revenue.” They will receive a taxpayer id number following such registration.

This applies to non-profit organization making both retail purchases as well as other types. The id number they receive is meant to be used on certificates of Indiana sales tax exemption. If they fall into the category of “social” organizations, however, they may not be eligible, as specified by the IRS. This means that organizations, such as “homeowner’s associations,” will be required to pay Indiana sales tax.

A lesser known area of sales taxation includes that of individual sale, such as that of photographers. When these individuals decide to sell their photos to customers, they fall into the category of retail, and therefore, must incur Indiana sales taxes. However, additional service charges will not incur any Indiana taxes whatsoever. Any costs due to modifications in color or tinting of a photograph must also be subject to Indiana sales tax.

While we have seen the institution of Indiana sales tax, we may be equally informed to know that sales tax deduction may also occur. A deduction of that kind is available when concerning that of ethanol fuel, which is distributed by way of “metered pumps for retail sale.” In general it is usually recognized as the combination of 85% ethanol and 15% gasoline. Specifically, a retailer will be allowed to deduct that which is necessary for remission in the quantity congruent to the numerical digit acquired by multiplying 18 cents by the gallon amount of ethanol fuel sold.

Introduction

Indiana is a state in the Midwestern region of the United States. The state has a population of over 6.7 million people and a diverse economy. Like all other states in the United States, Indiana has a tax system that provides revenue to the state government. This article provides detailed information about Indiana tax and how it works.

Indiana’s Tax Structure

The Indiana tax system consists of different taxes levied by the state and local governments. These taxes include personal income tax, sales tax, property tax, corporate tax, and excise tax.

Personal Income Tax

The Indiana personal income tax is a tax on the income earned by individuals residing in the state. The income tax rate in Indiana is a flat rate of 3.23%, which means that everyone pays the same percentage rate regardless of their income level.

For example, if an individual earns $100,000 per year, they will pay $3,230 in Indiana state income tax. The income tax in Indiana is relatively low compared to other states in the United States. This makes Indiana an attractive state for business and individuals looking to save on taxes.

Sales Tax

The Indiana sales tax is a tax on the sale of goods and services in the state. The sales tax rate in Indiana is 7%, which is charged on the final price of the product or service.

However, some products and services are exempt from the Indiana sales tax. For example, groceries, prescription drugs, and medical equipment are exempt from the sales tax. Also, some cities in Indiana have a local sales tax rate, which can be up to 2.5%.

Property Tax

The Indiana property tax is a tax levied on the value of real property, such as homes, buildings, and land. The property tax rate in Indiana varies depending on the location and value of the property.

In Indiana, each county has a different property tax rate, which is determined by the county government. The rate is based on the assessed value of the property. The assessed value is the value of the property as determined by the county assessor.

Corporate Tax

The Indiana corporate tax is a tax on the income earned by corporations in the state. The corporate tax rate in Indiana is a flat rate of 5.25%. This tax is levied on the net income earned by corporations in the state.

A corporation is considered a resident of Indiana if it is incorporated in Indiana or if its principal place of business is located in the state.

Excise Tax

The Indiana excise tax is a tax on certain products and services, such as cigarettes, alcohol, and gasoline. The excise tax rate varies depending on the product or service.

For example, the excise tax on cigarettes is $1 per pack of cigarettes, while the excise tax on gasoline is 42.5 cents per gallon. The excise tax on alcohol varies depending on the type of alcohol.

Indiana Tax Laws

Indiana tax laws are governed by the Indiana State Legislature and the Indiana Department of Revenue. The Indiana Department of Revenue is responsible for collecting taxes, administering tax laws, and providing assistance to taxpayers.

Recent Indiana Tax Changes

In recent years, there have been significant changes to Indiana tax laws. Some of the changes include:

– Reduction in personal income tax rate: In 2017, the Indiana State Legislature approved a reduction in personal income tax rate from 3.3% to 3.23%. This reduction was done to make Indiana more tax-friendly and to attract businesses and individuals to the state.

– Increase in cigarette tax: In 2021, the Indiana State Legislature approved an increase in cigarette tax from $1 to $1.50 per pack of cigarettes. This increase was done to discourage smoking and to raise revenue for the state.

– Change in sales tax on software: In 2018, the Indiana Department of Revenue changed the sales tax on software to be based on the location of the end user instead of the location of the software provider. This change was done to ensure that sales taxes on software were collected in the state where it was consumed.

– Tax credit for remote workers: In 2021, the Indiana State Legislature approved a tax credit for remote workers who moved to Indiana. The tax credit is up to $5,000 per household and is meant to attract remote workers to the state.

Conclusion

Indiana has a tax system that consists of different taxes levied by the state and local governments. The taxes include personal income tax, sales tax, property tax, corporate tax, and excise tax. Indiana tax laws are governed by the Indiana State Legislature and the Indiana Department of Revenue.

Indiana tax laws are constantly changing to meet the needs of the state government and taxpayers. Therefore, it is essential for taxpayers to keep up with the latest tax laws to avoid penalties and fines. Recent changes to Indiana tax laws include a reduction in personal income tax rate, an increase in cigarette tax, change in sales tax on software, and a tax credit for remote workers.

Individual Income Tax Forms

Corporate Income Tax Forms

Sales Tax Forms

Property Tax Forms