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Senate Republicans Present Plan To Reduce Business Tax

The Senate Republican plan calls for exemptions to the business personal property tax and a reduction of the state's corporate tax.

Hershman and Kenley

Photo: Brandon Smith/IPBS

Republican State Senators Brandt Hershman and Luke Kenley speak about a new tax plan at the Statehouse on Thursday.

Senate Republicans have come up with their own plan to address Governor Mike Pence’s challenge to eliminate the state’s business personal property tax.

The tax is a levy on business equipment and brings in about one billion dollars a year to local governments.

A Senate Republican proposal would exempt small businesses from paying the tax if they have less than $25 thousand of personal property in a county. That change would exempt up to 71%  of businesses that file the tax and cost local governments between $25 million and $30 million a year.

Buck Creek Republican Senator Brandt Hershman says the proposal also includes relief for bigger companies that will still pay the personal property tax.

Indiana is currently in the midst of cutting its corporate tax to six and a half percent.  Hershman says the GOP plan would lower it further to a little less than five percent.

“At full impact, the cost to the state would be roughly $130 million,” Hershman says. “We have paid for some of that by reducing the research and development tax credit by 50% as well as eliminating a handful of other tax credits that are either, we believe, unnecessary or little used.”

Senate Appropriations Chair Luke Kenley says reducing or eliminating tax credits will not entirely make up for the revenue lost by the corporate tax cut.

Still, Kenley says he believes cutting the corporate rate will spur job creation and economic growth.

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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