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Corporate Income Taxes |
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All corporations doing business in Indiana, except S corporations and
not-for-profit organizations, pay corporate adjusted gross income tax
at a rate of 8.5%.
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Unemployment Insurance |
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New employer rate: 2.7%
Experienced employer average rate: 1.3%
Taxable wage base: $7,000.
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Workers Compensation |
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Average rate for manufacturing is $1.99 per $100 of Indiana payroll.
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Corporate Adjusted Gross Income Tax
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Taxpayer: All corporations doing business in Indiana, except S corporations and
not-for-profit organizations. |
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| Tax Base: Federal taxable income with four modifications: |
- Subtract any income that federal law or the Constitution prohibits Indiana
from taxing.
- Add deductions allowed under federal law for charitable contributions.
- Add deductions allowed under federal law for state income taxes and local
owned in Indiana, percentage of payroll paid in Indiana, and twice the
percentage of sales volume attributable to Indiana.
- Apportion income to Indiana based on the average percentage of property
property taxes. |
| Tax Rate: 8.5% |
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Major Deductions and Exemptions: Income of insurance companies who pay the insurance tax. Foreign income of foreign corporations. Financial institutions.
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Individual Adjusted Gross Income Tax
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Taxpayer: Individuals, partners, stockholders in S corporations, and nonresidents
with income from sources in Indiana. |
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Tax Base: Federal adjusted gross income with additions of the amounts subtracted
on federal returns for interest income, net operating losses derived from sources
outside Indiana, state income taxes, local property taxes and recoveries of
previously allowed deductions. |
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| Tax Rate: 3.4% |
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Major Deductions and Exemptions: Income tax that is exempt under federal law
or the Constitution. A $1,000 deduction for the taxpayer, spouse and each
dependent claimed on taxpayers federal return. An additional $1,500 exemption for
dependent children under the age of 18. Rent up to $2,000. A $1,000 exemption for
each individual age 65 and over and/or blind. A qualified employee working and
living in an enterprise zone is entitled t a tax deduction equal to the lesser of 50%
of earnings or $7,500. Net operating losses derived from sources outside of Indiana
Partial deduction of unemployment compensation costs. Property taxes paid for an
individuals principle place of residence up to $2,500. Qualified long-term care
insurance premiums. |
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| Credits: Up to 3.4% of the income taxed by other states. 50% of contributions to Indiana colleges and universities up to $100 ($200 on a joint return). 50% of amounts used to assist impoverished areas or to employ or train poor persons (up to $25,000). Increased employment expenditures in an enterprise zone equal to the lesser of 10 of the increase in wages paid over the base year or $1,500 per qualified employee. Credit for donations of qualified computer equipment ($125 per unit). Elderly credit based on age, income levels and filing status, ranging from $40 to $140. |
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Sales And Use Tax |
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| Taxpayer: Purchasers of tangible personal property and public utility service, renters of rooms or other accommodations for less than 30 days, and renters of other property. |
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| Tax Base: Sales price of the taxable transaction. |
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| Tax Rate: 6% |
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| Major Exemptions: Wholesale sales. Purchases of items used directly in the production process, including raw materials, machinery, tools and equipment directly used in direct production. Any sale of goods for resale. Sales made in interstate commerce. Power, electricity, and gas if 51% of the load is used for manufacturing. Pollution-abatement equipment if required by federal, state, or local law. Sales to governmental entities. |
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State Unemployment Insurance Rates and Regulations
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The Social Security Act of 1935 established an unemployment plan as a means of protecting workers who are unemployed through no fault of their own and who are looking for employment.
In the State of Indiana, every business that employs at least one person for 20 weeks or more, or if in any calendar quarter pays wages of at least $1, 500, is required to pay unemployment compensation taxes. All of the unemployment compensation taxes that an employer pays goes into that mployers account. This account serves as the pool from which benefits are paid to eligible persons. The accounts for all of the states employers make up the Indiana Unemployment Trust Fund. The Indiana Department of Employment and Training Service administers the program.
All employers are taxed on the first $7,000 of an employees wages for each calendar year. New businesses must contribute at the rate of 2.7%, until they have three years of experience. At that time, the new rate is determined by the employers credit reserve ratio or debt reserve ratio held in the employers account within the Unemployment Insurance trust fund.
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New employer rate: |
2.7% |
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Average experienced employer rate: |
1.21% |
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Taxable wage base: |
$7,000 |
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Minimum rate: |
0.2% |
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Maximum rate: |
5.5% |
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Workers Compensation |
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| Workers Compensation is a system of no-fault insurance that pays benefits to employees for accidental injuries or diseases arising out of and in the course of employment. Benefits are provided by private insurers (in some cases, self-insurers) and the maximum number of weeks for which a worker can receive benefits in Indiana is 125 weeks. Insurance rates for employers are determined by the Workers Compensation Rating Board, a non-profit agency, based on past experience with the same or similar jobs in Indianas workforce, and the total size of payroll. Firms having exceptional records can apply for a credit against their previous contributions. Separate job classifications are used for premium purposes. The average rate for manufacturing is $1.99 per $100 of Indiana payroll. |
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Local Taxes |
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Property Taxes |
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The 2005 pay 2006 tax rates per $100 of assessed value for selected townships in Tippecanoe County are:
2006 SPTRC 2006 SPTRC
2006 Tax Rate Rate(RE & Other PP) Rate
(Business PP) |
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Wea Township 146 |
$2.006 $27.0852 $19.0858 |
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Lafayette City 158 |
$1.9803 $27.4378 $19.3334 |
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West Lafayette 164 |
$2.9924 $28.3012 $18.9913 |
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Property tax rates are per $100 of assessed value and are applicable to both real
property and personal property. We would be happy to provide you with tax rate information and fact sheets explaining how to calculate property taxes for specific sites. |
County Option Income Tax (COIT) |
Tax Payer: Individuals who reside in or who maintain a principal place of
employment or business in a taxing county. |
| Tax Base: Indiana Adjusted Gross Income. |
| Tax Rate: Tippecanoe’s rate is 0.60%. Benton uses County Adjusted Gross Income Tax (CAGIT) in place of COIT, with a rate of 1.00% |
| Major Deductions and Exemptions: Identical to those for State Adjusted Gross Income Tax. |
| Credits: A portion of the Federal Credit for Elderly and Totally Disabled, and credit for taxed imposed by governmental entities outside of Indiana. |
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County Economic Development Income Tax (CEDIT) |
| Taxpayer: Individuals who reside in or who maintain a principle place of employment of business in a taxing county. |
| Tax Base: Indiana Adjusted Gross Income. |
| Tax Rate: Benton County: 0.25%, Carroll: 0.10%, Clinton: 0.25%, Tippecanoe: 0.40%, Warren: 0.25%, White: 0.25% |
| Major Deductions and Exemptions: Identical to those for State Adjusted Gross Income Tax. |
| Credits: A portion of the Federal Credit for Elderly and Totally Disabled. |
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For downloadable spreadsheet of Lafayette - West Lafayette Taxes, click here. |
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