Indiana State Tax Guide for Businesses & Individuals 2026
Indiana offers one of the most business-friendly tax environments in the Midwest, with a flat corporate income tax rate and straightforward compliance requirements. This guide covers everything businesses and individuals need to know about Indiana state taxes, filing deadlines, and registration requirements for 2026.
Quick Reference: Indiana Tax Rates at a Glance
| Tax Type | Rate / Detail |
|---|
| State Corporate Income Tax | 4.9% |
| State Individual Income Tax | 3.05% (flat rate) |
| State Sales Tax Base Rate | 7.0% |
| Average Combined Sales Tax | 7.0% (no local sales tax) |
| Unemployment Insurance (SUI/SUTA) Rate Range | 0.50% – 7.40%; New employer: 2.50% |
| Effective Property Tax Rate (Average) | 0.85% of assessed value |
| Estate / Inheritance Tax | No estate tax; Inheritance tax repealed (2013) |
Indiana Business Tax Nexus
What is Tax Nexus in Indiana?
Nexus is the connection between a business and Indiana that creates an obligation to collect and remit state taxes. Indiana recognizes both physical and economic nexus for sales tax and income tax purposes.
Physical Nexus
- Maintaining an office, store, or warehouse in Indiana
- Having employees, sales representatives, or agents working in Indiana
- Storing inventory in Indiana, including through Amazon FBA fulfillment centers
- Operating company-owned vehicles in Indiana
- Performing services within Indiana on a regular basis
Economic Nexus (Remote Sellers)
| Threshold Type | Requirement |
|---|
| Sales Threshold | $100,000 in gross revenue into Indiana |
| Transaction Count Threshold | 200 or more separate transactions |
| Effective Date | October 1, 2018 |
Click-Through and Affiliate Nexus
Indiana enforces click-through and affiliate nexus. If an out-of-state seller has agreements with Indiana residents who refer customers via links and earns more than $10,000 in sales from those referrals, nexus is established.
Indiana State Income Tax
Corporate Income Tax
| Detail | Information |
|---|
| Tax Rate | 4.9% (flat rate) |
| Apportionment Formula | Single Sales Factor (100% sales factor) |
| Combined/Unitary Reporting | Not required; separate entity filing |
| Minimum Franchise Tax | None |
Individual Income Tax
| Filing Status | Rate |
|---|
| All Filing Statuses | 3.05% (flat rate on adjusted gross income) |
| Deduction/Exemption Type | Amount |
|---|
| Standard Deduction | None (Indiana uses exemptions instead) |
| Personal Exemption (Single) | $1,000 |
| Personal Exemption (Married Filing Jointly) | $2,000 |
| Dependent Exemption | $1,500 per dependent |
| Federal Tax Code Conformity | Rolling conformity to federal IRC |
Filing Deadlines
| Return Type | Due Date |
|---|
| Corporate Return (IT-20) | 15th day of the 4th month after tax year end (April 15 for calendar year filers) |
| Individual Return (IT-40) | April 15, 2026 |
| Extension Period | Automatic 60-day extension (individual); 30-day for corporate |
| Estimated Payments (Q1) | April 15 |
| Estimated Payments (Q2) | June 15 |
| Estimated Payments (Q3) | September 15 |
| Estimated Payments (Q4) | December 15 (Indiana) / January 15 (federal) |
Indiana Sales Tax
State Sales Tax Rate
Indiana's state sales tax rate is 7.0%. Indiana does not impose local sales taxes, so the combined rate statewide is uniformly 7.0%.
Taxable vs. Exempt Goods and Services
| Category | Status | Notes |
|---|
| Tangible Personal Property | ✅ Taxable | Most physical goods are subject to sales tax |
| SaaS / Digital Products | ⚠️ Partial | Digital products taxable; SaaS taxability varies by use |
| Groceries / Food | ❌ Exempt | Unprepared food sold for home consumption is exempt |
| Prescription Drugs | ❌ Exempt | Prescription medicines are fully exempt |
| Clothing | ✅ Taxable | General clothing is subject to sales tax |
| Manufacturing Equipment | ❌ Exempt | Equipment used directly in manufacturing is exempt |
| Professional Services | ❌ Exempt | Most professional services are not subject to sales tax |
Sales Tax Permits and Registration
- Registering Agency: Indiana Department of Revenue (DOR) — www.in.gov/dor
- Cost to Register: $25 (Registered Retail Merchant Certificate)
- Renewal Requirement: Certificates must be renewed every two years for $25
Filing Frequency and Deadlines
| Annual Tax Liability | Filing Frequency | Due Date |
|---|
| Less than $1,000 | Annual | January 31 following the tax year |
| $1,000 – $25,000 | Monthly | 30 days after the end of each month |
| Over $25,000 | Monthly (accelerated) | 20 days after the end of each month |
Local Sales Tax Rates
Indiana does not impose local or county-level sales taxes. The statewide rate of 7.0% applies uniformly in all jurisdictions.
Indiana Payroll Tax and Compliance
Employer Payroll Tax Obligations
| Tax / Obligation | Rate / Detail |
|---|
| State Income Tax Withholding | 3.05% flat rate (plus county income tax where applicable) |
| County Income Tax Withholding | 0.50% – 3.38% depending on employee's county of residence |
| SUI/SUTA Rate Range | 0.50% – 7.40% |
| SUI Taxable Wage Base | $9,500 per employee |
| New Employer SUI Rate | 2.50% |
| Workers' Compensation | Private insurance required; rates vary by industry |
| Paid Family and Medical Leave | Not applicable at state level |
| State Disability Insurance | Not applicable |
Withholding Registration and Filing
- Registration Agency: Indiana Department of Revenue — www.in.gov/dor
- Filing Frequency: Monthly (if withholding $1,000–$25,000/year); Semi-weekly (if over $25,000/year); Quarterly (if under $1,000/year)
- Annual Reconciliation Deadline: January 31 (WH-3 annual reconciliation)
- New Hire Reporting Deadline: Within 20 days of hire date; report to Indiana New Hire Reporting Center
Minimum Wage
| Category | Rate |
|---|
| Standard Minimum Wage | $7.25 per hour (matches federal minimum) |
| Tipped Employee Rate | $2.13 per hour (tip credit applies) |
| Youth / Training Wage | $4.25 per hour (for workers under 20, first 90 days) |
| Next Scheduled Increase | No scheduled increase as of 2026 |
Indiana Property Tax
- Assessment Ratio: Assessed at 100% of True Tax Value (market-based)
- Effective Average Rate: Approximately 0.85% of assessed value
- Assessment Cycle: Annual assessment; notices issued by April 30
- Appeal Deadline: 45 days from receipt of assessment notice
Business Personal Property Tax
- Indiana taxes business equipment and machinery as personal property
- Form: Form 102 (Business Tangible Personal Property Return)
- Filing Deadline: May 15 each year
- Exemption Threshold: Businesses with less than $80,000 in acquisition cost of personal property are exempt
Homestead and Other Exemptions
| Exemption Type | Amount / Percentage | Eligibility |
|---|
| Homestead Deduction | 60% of assessed value (up to $45,000) | Primary residence owners |
| Supplemental Homestead | 35% of assessed value over $600,000; 25% over that | Primary residence owners with homestead deduction |
| Senior / Over-65 Deduction | Up to $14,000 reduction in assessed value | Age 65+, income under $30,000, property value under $240,000 |
| Veteran / Disabled Veteran | $24,960 deduction; up to 100% for totally disabled veterans | Eligible veterans with service-related disability |
| Agricultural Land | Assessed at lower agricultural use value | Actively farmed land meeting acreage requirements |
Property Tax Due Dates
| Installment | Due Date | Discount |
|---|
| Installment 1 | May 10, 2026 | 5% discount if full year paid by May 10 |
| Installment 2 | November 10, 2026 | No early-payment discount for second installment |
Other Key Indiana Taxes
Franchise / Privilege Tax
Indiana does not impose a separate franchise or privilege tax on corporations. Businesses are subject to the standard 4.9% corporate income tax with no additional franchise tax layer.
Gross Receipts Tax
Indiana does not impose a general gross receipts tax. Certain financial institutions are subject to the Financial Institutions Tax (FIT) at a rate of 4.9% on adjusted gross income in lieu of corporate income tax.
Excise Taxes
| Category | Rate |
|---|
| Gasoline | $0.34 per gallon |
| Diesel | $0.55 per gallon |
| Cigarettes | $0.995 per pack (20 cigarettes) |
| Beer | $0.115 per gallon |
| Wine | $0.47 per gallon |
| Cannabis | Not applicable (recreational cannabis not legal in Indiana) |
Indiana Tax Credits and Incentives
| Credit / Incentive | Value / Rate | Eligibility |
|---|
| Indiana Economic Development for a Growing Economy (EDGE) Credit | Up to 100% of payroll tax for up to 10 years | Businesses creating new jobs with wages exceeding county average |
| Headquarters Relocation Tax Credit | Up to 50% of eligible relocation costs | Companies relocating corporate headquarters to Indiana |
| Research and Development (R&D) Tax Credit | 15% of qualified research expenses exceeding base amount | Businesses conducting qualified R&D activities in Indiana |
| Venture Capital Investment Credit | 20% of qualifying investment (up to $1 million) | Investors placing capital in Indiana small businesses |
| Hoosier Business Investment (HBI) Tax Credit | Up to 10% of qualified capital investment | Businesses making new capital investments in Indiana facilities |
| Skills Enhancement Fund (SEF) | Grant-based; up to 50% of training costs | Businesses training current or new Indiana employees |
| Industrial Recovery Tax Credit (DINO) | Up to 15% of eligible investment | Businesses investing in older industrial facilities (built pre-1975) |
How to Register a Business in Indiana
- Choose Your Business Structure: Select from LLC, corporation, partnership, or sole proprietorship based on liability and tax needs.
- Register with the Indiana Secretary of State: File Articles of Organization (LLC) or Articles of Incorporation (corporation) online at www.in.gov/sos/business. Filing fee: $95 for LLCs, $90 for corporations (online).
- Obtain an EIN from the IRS: Apply for a Federal Employer Identification Number at IRS.gov — free and immediate online.
- Register for State Tax Accounts: Register for withholding tax, sales tax, and unemployment insurance through INBiz at inbiz.in.gov.
- Obtain Required Licenses and Permits: Check industry-specific licenses through the Indiana Professional Licensing Agency (IPLA) at www.in.gov/pla.
- Register for a Local Business License: Contact your city or county clerk's office for local business license requirements, which vary by municipality.
Key Indiana Tax Agencies and Resources
| Agency | Responsibility | Website |
|---|
| Indiana Department of Revenue (DOR) | Income tax, sales tax, withholding, excise taxes | www.in.gov/dor |
| Indiana Department of Workforce Development (DWD) | Unemployment insurance, SUI registration and filing | www.in.gov/dwd |
| Indiana Secretary of State | Business entity registration, name reservations, annual reports | www.in.gov/sos |
| Indiana Board of Tax Review (IBTR) | Tax appeals and dispute resolution | www.in.gov/ibtr |
Manage Your Indiana Tax Compliance with Filings.us
Staying compliant with Indiana's tax requirements doesn't have to be complicated. Filings.us helps businesses and individuals handle every step of the process — from registration to ongoing filings.
- Register your LLC or corporation in Indiana quickly and accurately
- Set up your sales tax account and manage collection and remittance
- File your state income tax and payroll returns on time
- Get automated deadline alerts so you never miss a filing
Visit https://filings.us to get started today.
Note: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a licensed tax professional for advice specific to your situation.
