Cost of Doing Business

LaGrange County and the state of Indiana offer many competitive benefits and incentives to companies that are already in Indiana or that are interested in conducting business in the state. Indiana has a AAA credit rating, and has recently cut and capped business property taxes.  Indiana also does not have an inventory tax, and has instituted a number of different tax credits, exemptions, and abatements to ensure that Indiana is the place of choice for new investment.  LaGrange County has very low tax rates (some of the lowest in Indiana) and utility costs are comparable with the rest of Indiana. 
 
Listed below is information on the cost of doing business in LaGrange County and Indiana:

Local Tax Information
Local property tax rates vary by jurisdiction in LaGrange County.  Please contact Ryne Krock at (260) 499-4994 or rkrock@lagrangecountyedc.com for more information. 

Indiana Tax Information
Indiana has no gross receipts tax and no inventory tax.

Corporate Income Tax
Currently at 6.25% tax rate in 2017. Simplifies tax calculations for corporations. Does not apply to S corporations or not-for-profit corporations.

Single-Sales Factor
Indiana is phasing in the single-sales factor for apportioning corporate income tax. Indiana had determined its share of an interstate or international corporation’s taxable income by weighing the Indiana portion of a company’s property and the proportion of its employees in Indiana. The single-sales factor will calculate the Indiana portion based solely on the portion of a company’s sales in Indiana. This change was phased in and was completed in 2011.

Sales and Use Tax
Indiana’s Sales and Use Tax is tax is calculated at a rate of 7 percent. In manufacturing, the following are exempt from the sales tax: raw materials, equipment, power, electricity, and utilities. Wholesale sales, items used directly in production, and sales made in interstate commerce are exempt. In addition, the purchase of research and development equipment is exempt from the tax.

Property Tax
Real and personal property tax is assessed at 100 percent of market value. Tax rates and exemptions vary among local jurisdictions.

Research and Development Tax Credit
This credit (also known as the Research Expense Tax Credit) is based on the increase in Indiana R&D over the prior three-year base. In the base year, research expenses must have been at least half of the research expenses in the current year. The credit amounts to 10 percent of qualified research expenses on the first $1 million of investment. In 2008, the credit increased to 15 percent. The credit is applied against income tax liability and may be carried forward for fifteen years before 2008 and ten years in or after 2008. There is no carry back, and the credit is nonrefundable. This program operates under the Department of Revenue and uses the definition of “qualified research expense” from the Internal Revenue Code (which includes the costs of wages and supplies). 
 
Patent Income Exemption
Taxpayers are exempt from certain income derived from qualified utility and plant patents.  Qualified taxpayers are eligible for an exemption of 50 percent of patent income for each of the first five years. The exemption percentage decreases over the next five years to 10 percent in the tenth year.  The total amount of exemptions claimed by a taxpayer may not exceed $5 million per year. This benefit is available only to companies with 500 or fewer employees.

Individual Income Tax
Indiana’s personal income tax is 3.23 percent (with certain exemptions and deductions) as of January 1, 2017.
 
Local CAGIT
1.0 percent
 
Local CEDIT
0.4 percent
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