Indiana sits in the eastern United States, bordered by Michigan and Lake Michigan to the north, Ohio to the east, Kentucky to the south and Illinois to the west. The Hoosier State covers 95,000 km². Of its roughly 6.6 million residents, more than 800,000 live in the capital, Indianapolis.
The Hoosier State is the right place to start a business or expand into. Chief Executive magazine ranks it fifth nationwide as the “best state for business in the US”. Indiana has built an environment where companies can thrive and grow. Its mix of ambitious young talent and experienced workers is another big plus.
A welcoming business climate
Expanding or starting a company carries financial risk, and Indiana doesn't want that risk to stop businesses from setting up there. That's why it offers solutions such as loans for relocating your headquarters, sales tax exemptions and support for employee training programs. The state sees itself as a partner to entrepreneurs and is happy to provide the resources that help them settle in successfully. Those resources give you extra flexibility.
That support shows in the regulatory climate too, where Forbes ranks Indiana a strong fifth nationwide. The state does even better on property tax rates: the Tax Foundation puts the Hoosier State second. With conditions and a business climate this promising, it's up to companies to seize the opportunities.
Indiana competes with bigger, pricier markets and often beats them on innovation. Its local, well-connected business community has what it takes to bring big ideas to life, and entrepreneurs can truly make their mark here. There are already plenty of success stories, from life-saving medicines to zero-emission powertrains to the preservation of agricultural ecosystems.
Number one in manufacturing
Indiana has a strong heritage in car manufacturing and is the second-largest producer in the country. Its deep existing network, mature supply chains and attractive employee benefits lay the foundation for a promising future in advanced manufacturing. But reducing the Hoosier State to a bygone golden age wouldn't do it justice. According to Business Facilities magazine, Indiana already leads the nation in manufacturing. A quarter of the state's economic output comes from the sector, and 20 percent of all workers are employed in it. Indiana has the highest concentration of manufacturing jobs in the country.
Aerospace experts and outstanding engineering talent work together here to discover and drive the key developments and transformations of tomorrow. No wonder Indiana already ranks sixth nationwide for aerospace manufacturing attractiveness (PwC, 2019).
The state is an agricultural powerhouse and offers companies the ideal environment to develop and roll out breakthrough solutions, in agriculture as well as in pharmaceuticals and the life sciences. Farmers and scientists work closely together on cutting-edge research that will carry the global agricultural industry into the future.
Income tax in Indiana
Indiana levies an income tax of 2.95% (tax year 2026; in 2027 the rate drops to 2.9%). On top of that, you pay federal income tax.
Corporate income tax in Indiana
Indiana levies a corporate income tax of 4.9%. On top of that, you pay federal corporate income tax.
Sales tax in Indiana
The USA has no VAT on the European model. Instead, states, counties and municipalities levy a local sales tax on the sale of goods (but not services).
Indiana sales tax rate
Indiana's sales tax is 7% at state level. Cities and counties do not levy any sales tax.
Indiana nexus laws & sales tax
Learn more about economic nexus laws and sales tax.
Effective date:
October 1, 2018
Included transactions:
Gross revenue from sales of tangible personal property, electronically delivered products and services into the state
Treatment of exempt sales:
Exempt sales and exempt services count toward the threshold
Trigger:
Sales only (since January 1, 2024)
Sales/transaction threshold:
$100,000 (the 200-transaction threshold was eliminated as of January 1, 2024)
Evaluation period:
The threshold applies to transactions in the previous or current calendar year
Additional information:
- Registration requirements: Indiana requires remote sellers to register to collect and remit sales tax "immediately upon meeting the threshold". For more details, see the remote seller information.
- Remote seller information
- House Bill 1129
Indiana marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
Economic nexus threshold:
More than $100,000 in gross revenue from Indiana sales in the current or previous calendar year (the 200-transaction threshold was removed as of January 1, 2024). When calculating the threshold:
- Remote sellers exclude sales made through a marketplace, unless the marketplace is not required to collect tax on their behalf
- Marketplace facilitators include all sales made through the marketplace
Registration requirements:
- Remote multichannel sellers: Once you exceed the economic nexus threshold, you must register with the Indiana Department of Revenue (DOR) and collect Indiana sales tax on sales not taxed by a marketplace facilitator.
- Remote marketplace sellers: You must register with the Indiana DOR once you exceed the economic nexus threshold, even if you only sell through one or two marketplaces. Contact the Indiana DOR for more information.
- In-state multichannel sellers: You must register with the Indiana DOR and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers: You must register. Contact the Indiana DOR for more information.
Learn more here.
Find more state profiles in our overview of all US states. Which state is right for your company? Our guide Which US state is best for your company? explains. And how to run a US LLC with no US presence completely tax-free is shown by our sister site zerotax.llc.
How we help with Indiana:
Whether your Indiana business needs its own US company, and which state it should be in, is something we work out together in a consultation. You'll find entity types, options and fees under US company formation.