STATEHOUSE (Oct. 17, 2017) — Indiana’s business tax climate once again ranks among the top 10 in the United States, according to the nonpartisan Tax Foundation, said State Sen. Brandt Hershman (R-Buck Creek).
The 2018 State Business Tax Climate Index analyzes states’ tax codes, evaluating nearly 115 variables in five categories, including corporate, individual income, sales, property and unemployment insurance taxes.
In ninth place overall for the second year, Indiana far outranks neighboring states, with Illinois at 29, Kentucky at 33, Michigan at 12 and Ohio at 45. Indiana also performed well in many individual categories, ranking fourth in property tax, ninth in sales tax and 10th in unemployment insurance tax.
“Companies are looking for places where they can grow and develop their businesses, and we have worked hard to ensure Indiana’s tax climate is both business-friendly and fiscally sound,” Hershman said. “This has demonstrated to many out-of-state employers that they can succeed when located in our state, and based on this report, I am confident our business environment will continue to thrive.”
Scott Drenkard, the Tax Foundation’s director of state projects, praised Indiana for its well-structured tax climate.
“Indiana has made notable strides in improving their tax system each year,” Drenkard said. “Their tax reform is groundbreaking and reflects a thoughtful, mature approach to building a simple, competitive tax system.”
Hershman noted the following ways Indiana has improved its tax climate:
• Indiana’s constitutional property-tax caps, approved by 72 percent of Hoosier voters in 2010, give employers a stable fiscal environment for building and expanding operations.
• In 2011 and 2014, the General Assembly passed legislation to phase down its corporate income tax rate from 8.5 percent to 4.9 percent by 2022, moving its corporate tax from the middle of the pack nationally to among the lowest rates in the country.
• In 2013, the General Assembly approved a five percent individual-income tax cut, saving Hoosier taxpayers hundreds of millions of dollars each year.
• In 2013, Indiana eliminated the state inheritance tax. It was previously one of only eight states to levy a “death tax,” which was unnecessarily burdening family-owned farms and businesses.
• Indiana enacted nationally recognized legislation, mandating a five-year cyclical review of tax incentives to ensure tax policies have the desired economic impact. This review has led to the elimination of under-performing deductions and credits, generating revenue for more effective tax reductions.
• Indiana has instituted all these tax reforms while maintaining a balanced budget and cutting its debt. Tax cuts have contributed to Indiana’s economic growth, rather than jeopardizing it.
The Tax Foundation is the nation’s leading independent tax policy research organization. It focuses on principled research and insightful analysis to inform tax policy at the federal, state and local levels.
More information on the Tax Foundation and the State Business Tax Climate Index can be found here.
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Editor’s Note:
The initial 2017 State Business Tax Climate Index report ranked Indiana eighth overall. The 2017 Index was subsequently revised to show Indiana in ninth place.
