Indiana State Tax Guide

Indiana state tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact residents.

Indiana state flag on a flag pole against the sky
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Indiana state tax: Overview

Indiana has relatively high state income tax rates compared to other states. That's because while the Hoosier State's flat 3.15% tax rate itself isn't too bad, some counties in Indiana impose their income tax rates as well.

The state's sales and property taxes are reasonable when compared to those in other states. However, Indiana's general sales tax rate is relatively high, while the median property tax rate in Indiana is comparatively modest.

[Data for this state tax guide was gathered from a number of sources including the U.S. Census Bureau, the state’s government website, and the Sales Tax Handbook. Property taxes are cited as a rate percentage rather than the assessed value.] 

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Indiana skyline

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Indiana income taxes

Indiana currently has a flat rate of 3.15% of state adjusted gross income after modifications. (Counties also levy income taxes.)

  • Social Security benefits are not taxed by the state.
  • Starting with the 2024 tax year, all military income will be exempt from state income tax. Military pensions and Railroad Retirement benefits are also exempt. 
  • All other retirement income is taxed at the 3.15% rate.
  • 401(k) and IRA Distributions are taxable

Indiana sales tax

Indiana's state sales tax rate is 7%. There are no local sales taxes in the state.

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

Property taxes in Indiana

little model house on a table

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In Indiana, the median property tax rate is .84% of owner-occupied housing value, according to the Tax Foundation.

Indiana Property Tax Breaks for Retirees

Indiana offers two property tax breaks for older adults aged 65 or over. One is the "over 65 or surviving spouse deduction" and the other is the state's "over 65 circuit breaker credit." 

Indiana gas taxes (motor fuel)

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ProductTax Amount
Gasoline23 cents per gallon
Diesel57 cents per gallon

Indiana taxes on alcohol and tobacco

Indiana Tobacco Taxes

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ProductTax Amount
Cigarettes$1 per pack of 20
Snuff, and Alternative Nictone$0.40 per ounce
Other Tobacco Products24% of wholesale price
Vapor Products15% of gross retail income

Indiana Alcohol Taxes

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ProductTax Amount
Beer$0.12 per gallon
Wine$0.47 per gallon
Liquor$2.68 per gallon

Source: Sales Tax Handbook

Indiana estate and inheritance taxes

There are no estate or inheritance taxes in Indiana.

Kelley R. Taylor
Senior Tax Editor,

As the senior tax editor at, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist. 

With contributions from