Taxes in Spencer County Indiana

Recent tax reform in the state of Indiana has greatly enhanced the attractiveness of doing business in Perry County.

Highlights of the 2002 tax restructuring include:

• Reduction of both business and personal property taxes
• Elimination of inventory and gross receipts taxes
• Doubling of the Research and Development (R&D) tax credit, making it the sixth highest in the nation
• Establishing new venture capital tax credits
• Creating certified technology parks throughout the state

Source: Indiana Department of Commerce, 2002 Annual Report

Corporate Income Tax
The corporate income tax rate is 8.5% of the Indiana portion of the Federal Adjusted Gross Income. Indiana no longer has a gross income tax.

Indiana uses a four part apportionment formula (Property, Payroll, and a double weighting of Sales) to determine the Indiana portion of Federal adjusted gross.

Personal Income Tax
3.4% of Adjusted Gross Income; $1,000 per person exemption.

Corporate Franchise Tax
None in Indiana

Sales and Use Tax
6% - Raw materials and energy used in manufacturing are exempt from sales tax

Unemployment Tax
New Employer rate (in place the first three years of business) $189 per employee per year. Indiana's average after first 3 years - $119 per employee per year.

Workers Compensation
At $1.85 per $100 of payroll Indiana ranks 2nd in the nation in Workers Compensation costs.

Workman's Compensation Rate for Mfg.
Per $100 of Payroll (Sept. 2003)
Source: Indiana Department of Commerce per the U.S. Bureau of Labor Statistics; U.S. Department of Labor; Actuarial & Technical Solutions Inc.; & CCH Incorporated

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Property Taxes
When calculating property taxes, multiply the assessed value times the net tax rate. To each property taxpayer the State of Indiana will rebate a percentage of taxes back to the taxpayer; this is called the State Property Tax Replacement Credit (SPTRC). The net property tax rate is the gross rate minus the SPTRC percentage.

Average Net Real Property Tax Rate
2.0059% ($2.01 per $100 assessed valuation) (With Ten-Year Abatement the average annual Effective Real Property Tax Rate is 1.0130% (.010130).)

Average Net Personal Property Tax Rate
2.2935% ($2.29 per $100 assessed valuation) (With Ten-Year Abatement the average annual Effective Equipment Property Tax Rate is .2981% (.002981).)

Real Property Tax
In 2003 Indiana went to a market-based real property valuation.

Personal Property Taxes
Indiana employs an accelerated depreciation schedule for the assessment of equipment. Full depreciation in Indiana is 30%. Most manufacturing equipment is fully depreciated within five years. Note: 10-year property tax abatement will be granted for manufacturing equipment.

Used equipment brought to Indiana is eligible for full property tax abatement. Indiana values used equipment according to its age using the accelerated depreciation schedule.

Special equipment, such as dies and molds, is assessed at 1% of its cost by year two.

Inventory Property Tax
Inventory taxes will be eliminated by the end of 2006.

Franchise/Corp. Tax
In Indiana there is no State franchise/corporation tax.

Accounts Receivables
In Indiana there is no accounts receivables tax.

Accounts Payable
In Indiana there is no accounts payable tax.

Local Income Tax
In Indiana there are no local corporate income taxes.

County Income Tax
In Indiana there are no county corporate income taxes.

Other Taxes
None

Additional Links of Interest:
Indiana Department of Commerce – Indiana Tax Information
Indiana Department of Commerce – Economic and Demographic Profile

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