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Legislative Leaders To Target Personal Property Tax Reform

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.

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