INDIANAPOLIS – Legislation to cut business taxes is coming together as House and Senate Republicans are moving closer on the details.
Both sides amended bills on the business personal property tax in separate committees Tuesday.
The House program is contained in House Bill 1001 and the Senate proposal is in Senate Bill 1.
Gov. Mike Pence started the discussion by pushing for an elimination or phase-out of the business personal property tax paid on equipment and machinery. It brings in about $1 billion in revenue annually to Indiana schools, cities, towns and other local units.
But legislative Republicans have been working around the margins on the issue.
On Tuesday, both the House and Senate inserted language creating a super abatement that local units could give to specific companies on equipment for up to 20 or 25 years. Current law limits that to 10 years.
They both agree on eliminating filing for some small businesses but are still tinkering on the formula. The latest estimate is that only 50 percent of businesses in the state would have to file, but that saves only $13 million statewide because a small number of major businesses pay the bulk of the tax.
This is a nice improvement, said Sen. Luke Kenley, R-Noblesville. It’s much more temperate to locals.
But the House Republicans continue to push a wider-scale option for counties to permanently exempt all new equipment from the business personal property tax. While there would be no immediate fiscal effect, over time the revenue would disappear as equipment is replaced.
Both bills also now include a further reduction in the state corporate income tax. Lawmakers previously passed legislation lowering it from 8.5 percent 6.5 percent by 2015. It is currently at 7.5 percent.
Both bills now would further drop the tax to 4.9 percent by 2022.
We stretched that out so it makes revenue loss less and makes the glide path into implementation a little shallower, said Sen. Brandt Hershman, R-Buck Creek.