State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

Indiana State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.


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The Bottom Line
Flag of Indiana

Not Tax-Friendly

The Hoosier State dropped its flat income tax a smidge in 2017, from 3.3% to 3.23%. But many counties in Indiana also impose their own income taxes, with levies between 0.35% and 3.38%. The state's general sales tax is high, though municipalities don't get to add to it.

Income Tax Range

Indiana has a flat rate of 3.23% of state adjusted gross income after modifications. Counties also levy income taxes.

Sales Tax

7% state levy. No local taxes.

Groceries: Exempt
Clothing: Taxable
Motor Vehicles: Taxable
Prescription Drugs: Exempt

Real Property Taxes

In Indiana, the median property tax rate is $810 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 49.79¢ per gallon.
Diesel: 54¢ per gallon.

Sin Taxes

Cigarettes: $1 per pack
Snuff: $0.40 per ounce
Other tobacco products: 24% of wholesale price
Vapor products: Effective July 1, 2022, 15% of gross retail income

Beer: $0.12 per gallon
Wine: $0.47 per gallon
Liquor: $2.68 per gallon

Annual Car Taxes and Fees

An annual vehicle excise tax based on a car's sticker price (MSRP) and age is imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.