A key driver of Indiana’s economy is manufacturing. According to the Indiana Economic Development Corporation (IEDC), Indiana has the second-largest automotive industry in the U.S. Other major industries include logistics, advanced manufacturing, agribusiness, and mining.
Cost of doing business in Indiana
Indiana has a favorable tax climate. The corporate income tax rate is 4.9%, and the individual income tax rate is a flat 3.5% (effective January 1, 2023). There is no gross receipts tax or inventory tax. In addition, business operating and living costs are considerably lower than in other states.
Reasons for doing business in Indiana
Contributing to Indiana’s low cost of doing business are numerous tax incentives, corporate tax credits, and financial assistance that support targeted industries, as well as new business start-ups. There are also economic development programs that provide various benefits, such as streamlining regulatory processes or increasing access to job training and upgrading skills.
Indiana also has the Strategic Sites Inventory (SSI) Program that has identified over 2,000 investment-ready sites for use in industrial, distribution centers, tech parks, and more.
How is the infrastructure in Indiana?
One of the busiest states for commercial freight traffic, Indiana’s robust transportation system and central location provide businesses with easy access to domestic and international markets. According to the Indiana Department of Transportation, 724 million tons of freight makes its way through the state each year. The world’s second largest FedEx facility is located in Indianapolis. CNBC gave Indiana an A- for the category of infrastructure in its Top States for Business report.
What are the challenges of doing business in Indiana?
Indiana is dealing with a talent shortage, due in part to the out-migration of young graduates. There is also a need to improve K-12 performance overall in order to replenish the labor pool.
Companies may also find it difficult to recruit or retain talent due to state legislation concerning reproductive and LGBTQ+ rights.