Tax Cut Bill Moves ForwardPosted: Updated:
A bill calling for business tax cuts has been passed by an Indiana Senate committee. The proposal reduces the state corporate tax and excludes some businesses from paying the personal property tax. It also calls for the establishment of a commission to study the impact of eliminating the business personal property tax. It's one of several business-related bills making their way through the legislative session. In this week's INside the Statehouse segment, Indiana Chamber of Commerce President Kevin Brinegar sizes up the action so far this year at the Statehouse. You can view Senate Bill 1 by clicking here.
Originally Posted January 9, 2014
STATEHOUSE - Senate President Pro Tem David Long (R-Fort Wayne), State Sen. Brandt Hershman (R-Buck Creek) and State Sen. Luke Kenley (R-Noblesville) unveiled legislation today to boost Hoosier job and economic growth by reducing the state’s corporate income tax and business personal property tax. The Indiana Senate Majority Caucus has designated this initiative Senate Bill 1.
SB 1, authored by Hershman, includes the following changes:
-Reduces Indiana's corporate income tax rate to 4.9 percent by July 1, 2019. Once fully implemented, this would put $132 million back into the private sector economy annually.
-Exempts small businesses from personal property tax liability if they have less than $25,000 of personal property in a county. This change is projected to exempt up to 71 percent of business personal property tax filers.
-Revises and eliminates certain tax credits to help finance these tax cuts.
-Creates an 11-member Blue Ribbon Commission to study the impact of the business personal property tax on Indiana's economic competitiveness. This commission would include representatives from state and local government and the business community.
Long said this combination of tax cuts would build on Indiana's pro-growth tax climate to make the state even more attractive to businesses that employ Hoosiers.
"Indiana was recently ranked among the top 10 business tax climates in the nation, and it's our goal as legislators to preserve and improve that status," Long said. "The plan outlined in Senate Bill 1 would achieve that goal, and I look forward to continuing to work on this issue with the House of Representatives and Governor Pence."
Hershman noted the non-partisan Tax Foundation ranks Indiana’s property-tax structure fifth-best in the nation, its individual income tax structure 10th-best and its sales tax structure 11th-best. However, the state’s corporate income tax is currently only 24th-best in the nation. The changes in SB 1 would give Indiana the second-lowest corporate income tax rate in the nation.
"It's clear that prior tax reforms have paid off for our state," Hershman said. "After capping property taxes, reducing income taxes and eliminating the death tax, Indiana has far outpaced most states in job growth. But there’s still room for improvement. Senate Bill 1 will help Hoosier employers expand their operations and create jobs in our state."
Kenley noted the bill's personal property tax changes are particularly beneficial to small businesses, many of whom would be totally exempted from the tax.
"Small businesses are the backbone of any healthy economy, and the personal property tax creates a real financial burden on these employers," Kenley said. "This bill is a fiscally responsible step toward alleviating that burden."
Hershman sponsored legislation in 2011 that began a four-year reduction in the state’s corporate income tax rate from 8.5 percent to 6.5 percent. As introduced, SB 1 would continue this phased in reduction, with the rate reaching 4.9 percent beginning July 1, 2019.
SB 1 now moves to the Senate Tax and Fiscal Policy Committee for further consideration.
Source: Indiana Senate Republicans