Governor Mike Pence signed legislation today that he says will reform the state’s business personal property tax and attract new investment to the state.
The tax reform bill allows local governments to either exempt new equipment from the business personal property tax, eliminate the tax on small businesses or abate the tax on specific projects for up to 20 years.
Pence says while it will be important to educate local government officials on their options he won’t push them.
“Local community leaders, mayors, county council – they know what’s best for their community,” he says. “They know what makes sense while they meet the needs of their community but work to create jobs and attract investment and we want to leave those decisions to them.”
But legislative leaders say there’s more work to be done to get local government officials more comfortable the changes.
Many local leaders have expressed concerns about the financial impact of those reforms on already thin local government budgets.
Sen. Brandt Hershman, R-Buck Creek, the bill’s author, says the legislation also creates a commission this summer to evaluate a broad range of tax issues and their impact on local governments.
“The blue ribbon commission this summer will help ease some of the concerns that local elected officials have raised by giving them a seat at the table, exploring options for them to replace revenue,” he says.
Speaker Brian Bosma says the commission will help inform the legislature as it considers any changes to the reform bill before it becomes effective next year.
“So it may have a tweak or it may have a change or we may decide a replacement is needed,” he says.
Still, Bosma says the bulk of the bill will almost certainly remain largely unchanged.
The reform options take effect in 2015.