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Sen. Hershman: House Approves Bill to Reduce Taxes on Hoosier Employers

STATEHOUSE (March 3, 2014) — Today, the House of Representatives approved State Sen. Brandt Hershman’s (R-Buck Creek) legislation 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 63-36 vote.

As amended, Senate Bill 1 includes the following provisions:

  • Gives Indiana counties the option to exempt new property from the business personal property tax, beginning in 2015
  • Offers local government units the option to abate new personal property for up to 25 years, starting in 2015
  • Phases in a reduction of the corporate income tax rate from 7.5 percent to 4.9 percent by 2023
  • Repeals certain under-utilized state tax credits to create a fiscally responsible balance
  • Creates a state commission to study the personal property tax and business taxation

Hershman said the extended abatement options in the amended versions of both SB 1 and House Bill 1001 would allow local governments to offer larger tax reductions, attracting new business investment and job creation without sacrificing current personal property tax revenue.

“This legislation adds to Indiana’s demonstrated success in job creation,” Hershman said. “We ended 2013 with a 6.9 percent unemployment rate – one of the lowest in the Midwest – and Senate Bill 1 offers a fiscally responsible way to continue that trend, without unduly burdening local government units.”

Hershman added that the corporate income tax rate reduction would make Indiana’s rate the second-lowest in the country, bringing Indiana to a new level of economic competitiveness.

“Many economists report the corporate income tax is the most harmful tax to economic growth,” Hershman said. “While corporations foot the bill for this tax, its burden is actually paid by workers who earn lower wages, consumers who pay higher prices for goods and services, and shareholders who receive less income from their investments. This legislation would reduce these negative effects and put more money back into the economy and Hoosiers’ homes.”

SB 1 now returns to the Senate for further consideration.