STATEHOUSE (Jan. 30, 2014) — Today, the Indiana Senate approved legislation authored by State Sens. Brandt Hershman (R-Buck Creek), Luke Kenley (R-Noblesville) and Travis Holdman (R-Markle) to boost Hoosier job and economic growth. The bill, which would reduce the state’s corporate income tax and business personal property tax, passed by a 35-11 vote.
The legislation includes the following provisions:
• 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 68 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.
Hershman said SB 1 is essential to helping Indiana stay ahead of the curve in job creation and ensure the state remains an attractive place to do business.
“Many economists report the corporate income tax is the most harmful tax to economic growth,” Hershman said. “Additionally, the business personal property tax is a direct obstacle for companies looking to expand their operations and invest in new technologies. The changes I’m proposing will lead more employers to take a close look at Indiana when making location decisions, bringing our state to a new level of economic competitiveness.”
Earlier this week, the Senate approved an amendment to the bill, which would provide relief to Hoosiers who may be affected by the Midwest propane shortage. The amendment eliminates the sales tax on any propane bought for more than $2.50 per gallon. If SB 1 becomes law, customers will get a credit on their next propane bills to offset the sales tax paid on any charge over $2.50 per gallon. This credit would be retroactive to Jan. 1 and would be effective through March.
“With subzero temperatures and snowstorms across the state, the propane shortage poses a serious threat to Hoosier families, business owners and farmers alike,” Kenley said. “We knew that we had to act immediately to shield propane customers from these skyrocketing costs. This amendment will give consumers the extra support they need to heat their homes through the rest of this winter.”
Holdman said he believed the bill would continue Indiana on its path of strong economic development and pro-growth tax policies.
“With Indiana’s recent ranking as one of the top 10 business tax climates in the nation, Senate Bill 1 improves our competitive status and helps create jobs,” Holdman said. “Our prior tax reforms have clearly paid off, and we ended 2013 with a 6.9 percent unemployment rate – one of the lowest in the Midwest. This bill offers a fiscally responsible way to help our state continue to compete in a global economy, without unduly burdening local government units that rely on property tax revenue.”
SB 1 now moves to the House of Representatives for further consideration.