STATEHOUSE (March 13, 2014) — Legislation authored by State Sen. Brandt Hershman (R-Buck Creek) to boost Hoosier job and economic growth cleared its final passage in the General Assembly today. Senate Bill 1 now moves to the governor’s desk for further consideration.
SB 1 phases down the corporate income tax to 4.9 percent over six years, giving Indiana the second-lowest rate in the nation. It also gives local government units three new options for cutting the business personal property tax:
•A county can choose to exempt all businesses with less than $20,000 in personal property.
•A county can choose to eliminate the tax on all new personal property.
•A local unit can offer an extended personal property tax abatement for up to 20 years.
Hershman said these new personal property tax options would allow local governments to choose the best option for their communities.
“No two areas of Indiana are the same, and Senate Bill 1 gives local governments the flexibility to make the right choice for their residents,” Hershman said. “These options will allow communities to attract business expansion in a way that works for their financial situations.”
Hershman added that the corporate income tax rate reduction would bring Indiana to a new level of economic competitiveness.
“It’s widely recognized that 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. I’m grateful for the hard work and input from members of both the Senate and House on this important legislation, which will help Indiana better compete in a global economy.”
Hershman also noted that several other states have recently called for similar reductions. Earlier this year, Illinois House Speaker Michael Madigan and Kentucky Gov. Steve Beshear – both Democrats –introduced plans to cut their states’ corporate income tax rates.
Since prior business tax reforms, 32 Illinois companies have relocated to Indiana, including AM Manufacturing Company. The business announced this week that it plans to move its headquarters to Munster, creating up to 40 new jobs by 2016 and investing nearly $2.3 million.
Indiana has generated the second-most manufacturing jobs in the nation since 2009. The most recent data shows that Indiana was 10th in the nation for private-sector job growth through the first 11 months of 2013.