According to the Tax Foundation’s 2018 State Business Tax Climate Index, Indiana ranked ninth for its tax competitiveness, holding steady from its 2017 ranking.
The state has been a top-10 contender since 2015.
The Foundation’s annual index is designed to help business leaders, government policymakers, and taxpayers determine how their state’s tax system compares to others.
Here’s how Indiana rated on all metrics:
Corporate tax: 23rd
Individual income tax: 10th
Sales tax: 9th
Unemployment insurance tax: 10th
Property tax: 4th
The study authors pointed out the positive results of a “series of responsible tax reform efforts” in recent years.
“Indiana saw consistent rate reductions through a series of responsible tax reform efforts between 2011 and 2016,” according to the report’s authors. “Subsequent legislation established a further schedule of corporate income tax reductions through fiscal year 2022. For 2018, the corporate income tax rate declined from 6.25 to 6.0 percent. These changes, however, were not enough to improve Indiana’s already enviable ranking on the Index, where the Hoosier State and Utah are functionally tied for the best rankings among states which impose all the major taxes.”
The study’s authors also noted that the “absence of a major tax is a common factor among many of the top 10 states.” “Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax. Wyoming, Nevada, and South Dakota have no corporate or individual income tax (though Nevada imposes gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire, Montana, and Oregon have no sales tax.”
Overall, Wyoming ranked No. 1, and New Jersey ranked worst at No. 50.
Click here for more information about the study, and to see how neighboring states ranked.