When you sell a business in Indiana, the gain is taxed at the flat 3 percent state rate for 2025 and 2.95 percent for 2026, plus a county income tax. Since 2024 a transfer of more than half the business's tangible property needs a bulk-transfer notice filed 45 days ahead.
Indiana sits in the middle of the states by number of employer businesses. The state's cut of the gain is modest, 3% at the top. Little else gets in the way of the sale.
Tax on the gain: Flat rate, plus county tax.
Today
Where you stand
The elements this touches
The deal team on what changes when you sell a business in Indiana.
Before the letter of intent
What Indiana takes
A flat 3 percent state rate on the gain, plus a county income tax, and no estate or inheritance tax; the rate keeps stepping down through 2027.
Flat rate, plus county tax.
A founder on film
On what he learned about tax on the way to the sale.
Lewis Titus Wastewater purification and manufacturing · Wyoming
Indiana taxes a gain as ordinary income at a flat 3 percent in 2025, falling to 2.95 percent in 2026 and 2.9 percent from 2027.
Counties add a local income tax on top; the Tax Foundation puts the average effective county rate at 0.49 percent of income for 2022.
Indiana has neither an estate tax nor an inheritance tax on the Tax Foundation list as of October 2025.
The rate is the state's top rate on the gain for the year shown, the same figure as the indicator in the hero, so the two can never disagree.
The elements this touches
Under contract and at closing
The rules of the sale
Since 2024 an asset sale carries a successor-liability notice and a tax clearance letter; physician non-competes with hospitals ended in 2025, with a carve-out for selling a practice.
For deals closing from 14 February 2024, a transfer of more than half a business's tangible personal property needs a Notice of Transfer in Bulk filed 45 days ahead.
Taft Law, 2024
If the seller owes nothing, the Department mails a tax clearance letter within 20 days; it is good for 60 days, and closing without it leaves the buyer liable.
Taft Law, 2024
From 1 July 2025 hospitals and hospital systems cannot bind physicians with non-competes, but one tied to selling a practice the physician majority-owned is still allowed.
Hall Render, 2025
The elements this touches
One thing you would not guess
File the bulk-transfer notice and wait: if the Department of Revenue misses its 20-day window, the buyer is off the hook for the seller's back taxes.
The Department of Revenue has 20 days to answer a bulk-transfer notice; if it stays silent, the buyer takes the business free of the seller's Indiana tax debts.
When the process opens
Who buys
Indianapolis founder firms tend to sell to out-of-state, PE-backed consolidators that keep the local name and team.
In 2025 Sheaff Brock, a $1.5 billion Indianapolis advisory firm founded in 2001 by two partners, agreed to sell to PE-backed Allworth Financial, keeping its name and 28 staff.
Indianapolis Business Journal, 2025
The elements this touches
Day 0, and the years after
After the close
Indiana has become a place to keep the money: self-settled Legacy Trusts since 2019 and, since 2024, trusts that can last 360 years.
Proceeds land. What the state keeps of them is settled above; what it lets them do from here is below.
House Bill 1209, signed 11 March 2024, lets an Indiana trust run 360 years instead of 90, opening the door to dynasty trusts.
Since 1 July 2019 an Indiana resident can fund a Legacy Trust for their own benefit and keep the assets away from future creditors.
WealthPost-exit planning is the third act of the same engagement, done with outside experts, and it starts before the letter of intent, when a move or a trust can still change the answer.
FNDRSThe elements this touches
People who walked it
Founders
From founders elsewhere
No founder in Indiana is quoted yet. These are founders in other states, quoted word for word, each described by role and state.
“I definitely don't think we'd be in the same spot without you guys.”
No founder in Indiana is on film yet. These are founders in other states who worked with FNDRS.46 founders on film
Nearby
| Midwest | Tax on the gain | Complexity | Deal volume |
|---|---|---|---|
| Illinois | 4.95% 2025 | High | Very high |
| Iowa | 3.8% 2025 | Medium | Low |
| Kansas | 5.58% 2025 | Medium | Low |
| Michigan | 4.25% 2025 | Medium | High |
| Minnesota | 9.85% 2025 | High | Medium |
| Missouri | None 2025 | Low | Medium |
| Nebraska | 5.2% 2025 | High | Low |
| North Dakota | 2.5% 2025 | Low | Very low |
| Ohio | 3% 2025 | Medium | High |
| South Dakota | None 2025 | Low | Very low |
| Wisconsin | 7.65% 2025 | Medium | Medium |
Your next step
Know where you stand in fifteen minutes, or talk the Indiana sale through with a dealmaker. Either way, no pitch and no obligation.
No pitch and no obligation. If the honest answer is not yet, we will say so, and say what to work on.