Indiana Tax Policy & Rates 2026
Income tax, sales tax, property tax, and overall tax burden for Indiana in 2026, with political context.
No
No Income Tax
3.05% (flat)
Income Tax Rate
#30
Tax Burden Rank (1=highest)
#21
Property Tax Rank (1=highest)
Tax Policy Overview
Indiana has one of the lowest flat income tax rates in the nation and has been cutting it gradually. The sales tax is high at 7% with no local additions. Indiana has a moderate overall tax burden and a business-friendly tax environment.
Key Tax Rates
| Tax Type | Rate / Status |
|---|---|
| Income Tax | 3.05% (flat) |
| No Income Tax | No |
| Sales Tax | 7.0% |
| No Sales Tax | No |
| Corporate Tax | 4.9% |
| Property Tax Rank | #21 nationally (1=highest) |
| Overall Tax Burden Rank | #30 nationally (1=highest) |
Political Context
Indiana Republicans have made income tax reduction a priority, gradually cutting the flat rate. The 7% sales tax (no local additions) is simpler than multi-rate systems. Indiana’s low tax approach is a key part of its manufacturing recruitment strategy.