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Legislative Leaders To Target Personal Property Tax Reform

Republican leaders want to reform the business personal property tax, but doing so would likely reduce revenue for local government.

Sen. Luke Kenley, R-Noblesville, chairs the Indiana Senate's Appropriations Committee.

Photo: Brandon Smith / IPBS

Sen. Luke Kenley, R-Noblesville, chairs the Indiana Senate's Appropriations Committee.

State legislative leaders say a push to reduce or eliminate Indiana’s business personal property tax will be a significant focus in the upcoming session.  But some lawmakers are questioning whether the state can afford to cut another tax.

Indiana’s personal property tax is a levy on equipment used in a business – anything from a computer to office furniture to construction tools.

Senate President Pro Tem David Long says he and Speaker Brian Bosma have spoken about reforming the tax, and the Indiana Chamber of Commerce has made personal property tax reduction one of its top legislative priorities.  Personal property taxes bring in about a billion dollars in revenue each year for local government.

“Many of them are stretched to the limit right now, if not stretched beyond the limit, because of the impact of the property tax caps,” says Senate Minority Leader Tim Lanane, D-Anderson. “[We're] going to have to be very careful about that.”

Sen. Luke Kenley, R-Noblesville,  chairs the State Budget Committee.  He says any cut to the personal property tax must be balanced by replacement revenue for local governments.

“So I think we’re just beginning a discussion and I would be skeptical that we could reach any conclusions in this coming short session,” says Kenley.

Lawmakers are sometimes hesitant to pass significant fiscal legislation in a non-budget session. If the legislature does reform the personal property tax in the 2014 session, the cut would likely not take effect until at least 2015, when a new budget is written.

Brandon Smith, IPBS

Brandon Smith, IPBS has previously worked as a reporter and anchor for KBIA Radio in Columbia, MO, and at WSPY Radio in Plano, IL as a show host, reporter, producer and anchor. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.

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  • Rachelle

    The Chamber is pushing a bill to reduce funding of education while demanding high schools teach to their particular business needs.

    Pence says businesses are telling him that business personal property tax detracts from luring business and jobs to Indiana. Why does this have to be a one sided agreement? Write the law to attract good paying jobs to offset the loss of local revenue. It makes more sense than just another giveaway to business interests which increases property taxes on everyone else.

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