During my tenure as state senator, I have made it a priority to craft and support legislation that is beneficial to Indiana’s many small businesses, and recently, I have been focusing on business personal property taxes.
While private citizens pay taxes on their homes and land, businesses have to pay additional taxes on their operating equipment – these are business personal property taxes. Before last year, any business that owned under $20,000 worth of equipment was exempt from this tax. The legislation I authored in 2019, Senate Enrolled Act 233, doubled that tax exemption, allowing any business with under $40,000 of property to go untaxed.
This year, I am attempting to build upon that progress by improving the way that we assess these taxes. Senate Bill 385, which I also authored, would require business personal property taxes to be based on assessed value, not acquisition cost. Under current law, these taxes are based on the price of the item when it was bought. This legislation would require taxes to more accurately reflect the value of a depreciating item, saving an estimated 52,000 small businesses a statewide total of $26 million.
In 2019, local government units collected more than $1 billion in business personal property taxes, a $63 million increase from the previous year. This legislation would provide additional tax relief for small business owners to reinvest in their businesses or hire new employees by counteracting the increasing amount of tax dollars collected around the state.
I will always advocate to help the numerous hard-working business owners in our state and I hope to see this legislation improve our already great business climate in Indiana.