Indiana Tax

Indiana State Tax

Indiana Income Tax

State tax rates in the United States vary. The Indiana tax code has mostly lower rates compared to other state tax policies in the US.

Indiana residents are required to file federal and state taxes to the Internal Revenue Service and the Indiana Department of Revenue respectively. They must also pay county taxes on the county where they reside. Taxpayers must file and pay their federal tax and state tax returns each year. Otherwise, they may have to face penalties imposed by the state.

Unlike the federal income tax rates, the Indiana state income tax does not become higher as income becomes greater. Indiana state tax rate is fixed at 3.40% of the gross income filed by the taxpayer. Additional county taxes are likewise collected, except in Lake County. The maximum marginal income tax rate in Indiana is the second lowest in the United States.

Indiana is the 11th state with the lowest median property tax rates. The state collects an average of 0.85% of a properties estimated fair market value. Hamilton County, which levies an average 1.08% property tax yearly, has the highest property tax collection in the state.

Indiana State collects 7 percent sales tax on sale or lease of tangible personal properties, including prepared food and beverages. Counties are allowed to collect up to 2% additional local sales tax. These figures make the maximum sales tax rate in Indiana higher than in almost every state. However, the state does not collect sales taxes on certain goods such as medicine, raw food, water, and ice.