State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families. Go to the Kiplinger Tax Map Indiana Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Not Tax-Friendly The Hoosier State's flat 3.23% income tax isn't too bad (and it's going down in 2023). But many counties in Indiana also impose their own income taxes. The state's general sales tax is high, though municipalities can't tack on their own additional tax. The average property tax rate in Indiana is comparatively modest, which is nice. Income Tax Range Indiana has a flat rate of 3.23% of state adjusted gross income after modifications. Counties also levy income taxes.For 2023 and 2024, the state rate is reduced to 3.15%. If state revenues reach certain thresholds, the state rate will drop to 3.1% for 2025 and 2026, to either 3% or 3.1% for 2027 and 2028, and to either 2.9%, 3% or 3.1% after 2028. Sales Tax 7% state levy. No local taxes.Groceries: ExemptClothing: TaxableMotor Vehicles: TaxablePrescription Drugs: Exempt Real Property Taxes In Indiana, the median property tax rate is $833 per $100,000 of assessed home value. Motor Fuel Taxes Gasoline: 49.79¢ per gallon (50.79¢ per gallon effective July 1, 2022). Diesel: 54¢ per gallon (56¢ per gallon effective July 1, 2022). Sin Taxes Cigarettes: $1 per packSnuff: $0.40 per ounceOther tobacco products: 24% of wholesale priceAlternative nicotine products: Effective July 1, 2022, $0.40 per ounceVapor products: Effective July 1, 2022, 15% of gross retail incomeBeer: $0.12 per gallonWine: $0.47 per gallonLiquor: $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.