Indiana’s tax structure rates as one of the best in the nation because of low rates, according to a new report from the Tax Foundation.
The 2024 State Business Tax Climate Index ranks Indiana 10th in the report that lets business leaders, government policymakers and taxpayers gauge how tax systems compare from state to state.
Indiana’s ranking is one spot below where it was last year but remains consistent with rankings since 2014.
“Taxation is inevitable, but the specifics of a state’s tax structure matter greatly. The measure of total taxes paid is relevant, but other elements of a state tax system can also enhance or harm the competitiveness of a state’s business environment,” according to the report.
The report ranked states by evaluating the corporate tax, individual income tax, sales tax, property tax and unemployment insurance tax.
Indiana ranked in the top 20 in all areas, except unemployment insurance tax, where it fell to No. 25.
The Hoosier State’s property tax rank was third, followed by corporate tax (12), individual income tax (16) and sales tax (18).
The 10 best states are Wyoming, South Dakota, Alaska, Florida, Montana, New Hampshire, Nevada, Utah, North Carolina and Indiana.
“The absence of a major tax is a common factor among many of the top 10 states,” the report said. “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. Nevada, South Dakota, and Wyoming 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 and Montana have no sales tax. This does not mean, however, that a state cannot rank in the top 10 while still levying all the major taxes. Indiana and Utah, for example, levy all the major tax types but do so with low rates on broad bases.”