(The Center Square) – Starting a business in Indiana is less expensive than it is in most other states. That’s according to a recent study by Zibtek, a software development consultancy business.
The study scored the states on factors such as taxes, utility costs, filing fees, the local economy, online crime and personal expenses. After compiling the scores, Indiana finished 38th overall, or the 13th least-expensive state in the study.
The Hoosier State ranked no higher than 23rd in any of the nine categories. The highest ranking came in the average monthly electric bill. According to Energybot.com, Hoosier businesses paid on average 12.57 cents per kilowatt-hour for power this month. That was 4% lower than the national average.
Indiana ranked 24th for losses incurred to internet crime and 25th for sales tax. According to the Tax Foundation, the state’s 7% sales tax was the 25th highest out of the 46 that apply such a levy.
Income taxes gave Indiana its lowest scores. The state came in 40th for personal income tax and 37th for its corporate tax. This year, Hoosiers will pay a 3.05% tax on their income, while businesses will pay a 4.9% tax.
“States with low or no income tax can attract both business owners and employees by increasing disposable income, potentially boosting consumer spending,” the company said in a statement to The Center Square. “Favorable corporate tax rates allow businesses to reinvest more earnings into growth or distribute them to shareholders, while reduced property taxes and lower monthly electric bills improve cash flow and margins, especially for energy-intensive industries.”
Compared to its neighbors, Indiana was more expensive than Kentucky (45th) and Ohio (47th) to start a business, but it was far cheaper to start one there than it was in Illinois (fifth) or Michigan (17th).
California, New Jersey, Massachusetts and New York joined Illinois as the five most expensive states for startups, according to the study. Wyoming was the least expensive state, followed by South Dakota, Nevada, Ohio and Texas.
According to the U.S. Census Bureau, there were 93,199 businesses established in Indiana in 2023, an increase of 12.1% from the previous year. More than a quarter of those, 24,674, started in Marion County. Lake County, in the northwestern corner of the state, had 7,233 new businesses last year, and 6,736 were created in Hamilton County.