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Kentucky has enacted wide-spread reforms to tax code policy in the recent years, improving the state’s position ranking in the Tax Foundation’s 2023 State Business Tax Climate Index to 18th, up from 33rd in 2018. In 2022, the state introduced a framework to reduce and eventually eliminate the personal income tax rate, currently at 4.5% with a further reduction scheduled to 4% in 2024. Other reforms in recent years include the repeal of the corporate license tax and the intangible property tax, as well as a reduction in the corporate income tax rate from 8.25% to the current 5%. In 2023, the state created a pass-through entity tax and credit that will reduce federal tax liability for businesses. See more information for Kentucky tax rates and collections.
Indiana ranks 9th in Tax Foundation’s 2023 Business Tax Climate Index. Indiana has made several tax reforms to maintain their ranking in the top 10, including reducing the corporate income tax rate from 6.25% to 4.90% and reducing the personal income tax rate to 3.15% in 2023, with additional triggers in place to reduce further though 2029. See more information for Indiana tax rates and collections.