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Senate Republicans Present Plan To Reduce Business Tax

Hershman and Kenley

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.

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