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Budget Head Calls For More Comprehensive Tax Policies

By Brandon Smith

Posted September 15, 2014

Indiana's Senate budget leader today said the legislature needs to focus more on the tax climate for all Hoosiers, not just businesses.

Today was the first meeting of a study committee investigating the state's business tax code.

By most standards, Indiana's tax climate is favorable toward businesses.

A study from the Council on State Taxation reports that Indiana's tax burden on businesses is the lowest of any of its neighbors. It's also among the ten lowest in the country.

The Council's Senior Tax Counsel Fred Nicely says the one area Indiana could improve is its business personal property tax.

"But we don't advocate for complete elimination of taxes; we want a stable base," Nicely says. "That's what's important because if you have the hiccups with your revenue, it's usually going to be the business community that's going to have to quickly make up that amount."

The legislature last session passed bills giving local governments the option of eliminating the tax on small businesses and new purchases. That's after several measures were passed in previous years providing tax cuts aimed at the business sector.

But Senate Appropriations Chair Luke Kenley says lawmakers need to take a balanced approach to tax reform moving forward.

"I don't think you can just deal only with, for example, the business personal property tax in this commission and really get your work done. I think we need to look at the whole tax system for all taxpayers," Kenley says.

Kenley says he doesn't think the legislature should make any further changes to the business personal property tax for a couple years, giving local governments time to make use of the options and see what the effects are.

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