The department forwards the request to the state legislature where the requested rate must be approved by the Indiana General Assembly.įor most individuals working within Indiana, the state income is withheld from their paycheck. County income taxes rate are set by the county board of commissioners and submitted to the Department of Revenue. The highest county income tax in the state is 3.38% and it is charged in addition to the state income tax. Some counties within Indiana also fund their government using an income tax. Additional deductions are provided to the elderly and handicapped. The largest deductions in 2013 were a $3,000 deduction for rent paid and a deduction equal to the amount of taxes paid out of state.
The taxable amount can be lowered by applying several income tax deductions. The base taxable amount is equal to the adjusted gross income determined on a payers federal tax return. Indiana imposes a flat 3.23% tax on the personal income. Income taxes Indiana state budget forecast of 2009 The Indiana Tax Court deals with all tax disputes issues, but decisions can be appealed to the Indiana Supreme Court. The Indiana Department of Revenue collects all taxes and pays them out to the appropriate agencies and municipalities. Excise tax is the fourth form of taxation and is charged on motor vehicles, alcohol, tobacco, gasoline, and certain other forms of movable property most of the proceeds are used to fund state and local roads and health programs. Residential property tax rates are capped at maximum of 1% of property value.
Local governments are funded by a property tax that is the sum of rates set by local boards, but the total rate must be approved by the Indiana General Assembly before it can be imposed. The state also collects an additional income tax for the 92 counties. Most state level income is from a sales tax of 7% and a flat state income tax of 3.23%. The state of Indiana's income comes from four primary tax areas. Taxes in Indiana are almost entirely authorized at the state level, although the revenue is used to fund both local and state level government. Overview about the taxation in Indiana 2007 sources of Indiana's revenue
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