Indianapolis ranked third in Forbes 2008 list of “America’s Best Bang for the Buck Cities.”
Indianapolis ranks as the third-least-expensive large city in the U.S. in which to do business-and is nearly in the #1 position. Using a benchmark cost index of 100, the top four low-cost cities in the U.S. are:
- Atlanta, Georgia: 96.4
- Tampa, Florida: 96.5
- Indianapolis: 96.6
- Milwaukee, Wisconsin: 98.5
(KPMG LLP, March 2006)
Tax Structure
The state provides a variety of competitive tax and financial incentives for businesses in Indiana. These include the lowest sales and use tax in the Midwest, no inventory tax, and corporate income tax based solely a company's sales in Indiana.
Corporate Adjusted Gross Income Tax
Net Effective Rate: 8.50%
Corporate Franchise Tax
None
Personal Income Tax
- Rate: 3.40%
- Local Option Tax:
- Resident 1.65%
- Non-Resident 0.225%
Sales & Use Tax
Rate: 7.00%
Exemptions include: Manufacturing raw materials, manufacturing equipment, utilities and other consumables used in production and environmental control equipment used by manufacturers. Transactions involving the purchase, lease or operation of engines or chassis by professional racing teams may be exempt. Most services are not subject to tax.
Property Tax
- Real Property 2006 payable 2007
- Median Tax Rate: $2.09
- Range by Taxing Districts: $2.09 - $3.73
- Personal Property 2006 payable 2007
- Median Tax Rate: $3.03
- Range by Taxing Districts: $2.36 - $4.10
Inventory Tax
None (Indiana eliminated the inventory tax beginning in the tax year 2006 payable 2007)
Unemployment Insurance
- New Employer Rate: 2.70%
- Experienced Employer Average Rate: 1.30%
- Taxable Wage Base: $7,000
Workers' Compensation (per $100 of payroll)
- Average Rate for Manufacturing: $2.46
- Average Rate for Distribution: $3.71
- Average Rate for Office: $0.27
Source: Worker's Compensation Board of Indiana, Indiana Compensation Ratings Bureau, Department of Workforce Development-Unemployment Insurance Division/US Dept. of Labor, 11/7/2008
Real Estate
Indianapolis recently ranked as the 11th best real estate market for low prices and wide selection of commercial and industrial real estate. A national survey of real estate executives and a review of Indiana's record-breaking success in economic development scored the state a top five finish nationally in
Site Selection magazine's 2008 business climate survey.
Industrial Market Indianapolis MSA
As of 2nd Quarter 2009
Inventory: 232,982,000 s.f.
Vacancy Rate: 7.0%
Average Asking Rental Rate: $ 3.98 per s.f.
The overall vacancy rate of 7.0% was unchanged from the first quarter. While some vacancies occurred in the market, occupancies outnumbered vacancies. The completed construction of 837,000 SF helped elevate net absorption to 311,000 SF from what could have been the first instance of negative net absorption in four years.
Office Market Indianapolis MSA
As of 2nd Quarter 2009
Inventory: 31,400,000 s.f.
Vacancy Rate: 19.2%
Average Asking Rental Rate: $17.31 per s.f.
Over 20 buildings are currently proposed for construction in the Indianapolis Metropolitan Statistical Area.
Source: Colliers Turley Martin Tucker.
Utilities
Indianapolis energy and communications suppliers provide local businesses with outstanding customer service, competitive rates, and state-of-the-art technologies. Citizens Gas is the highest ranked Natural Gas Utility in the Midwest for overall customer satisfaction. City-owned utilities and a unique charitable trust help keep utility costs low.
Electric
- Provider: Indianapolis Power & Light Company (IPL)
- Industrial Average Rates: 4.51 cents per kWh
- Estimated Monthly Costs:
- 75 kW demand & 50,000 kW: $2,900
- 1,000 kW demand & 650,000 kWh: $33,570
- 50,000 kW demand & 32,500,000 kWh: $1,419,868
Natural Gas
- Providers: Citizens Energy Group
- Total Annual Bill:
- Retail General Heating Survey (6,972 Therms): $5,064
- Retail Large Volume Survey (1,596,710 Therms): $1,019,601
Water Treatment
- Base Monthly Rate (6" meter): $113.00
- Cost: $0.59 per 100 cubic feet
Sewer Treatment
- Base Monthly Rate (6" meter): NA
- Cost: $0.85 per 100 cubic feet
Telecommunications
- Provider: AT&T
- Switch Technology: Digital
- Fiber Service Provided: Yes