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Pence Plan Could Phase Out Business Personal Property Tax

By Brandon Smith

Posted December 17, 2013

Pence has been vague on specifics up to now about his plans to phase out the state's business personal property tax, saying he wants to allow the broadest range of debate in the legislature. But the governor Tuesday publicly discussed a few options for phasing out the personal property tax, a levy that generates one billion dollars a year for local governments.

One suggestion House Speaker Brian Bosma also mentioned last month would allow county governments to voluntarily eliminate the tax. Another route gradually phases out the tax by exempting new purchases. And Pence says Indiana could also look to its northern neighbor, Michigan, which is currently phasing out its personal property tax.

"Beginning by exempting personal property purchases up to a specific level and then phasing it out incrementally until all personal property tax is exempt by the year 2024," says Pence.

Indianapolis Republican Senator Jim Merritt says the legislature has a record of not engaging with local governments on issues.

"We need to do a really good job on allowing the local governments the ability to fund themselves in a different way because this is going to be a real hole in their pocket," Merritt says. "We need input from them."

Merritt says he thinks finding the right balance will take more than one session.

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