INDIANAPOLIS – Gov. Mike Pence on Tuesday signed into law a recently passed business tax package, though much of it is delayed.
Job creation is job one in Indiana, and the legislation signed today will strengthen our competitive edge to attract new businesses and good-paying jobs to our state, he said. We are in a national and global competition for jobs, and these important reforms will improve our pro-business tax environment and bring good jobs for Hoosiers.
Senate Enrolled Act 1 gives local units of government three options in reducing the business personal property tax charged on equipment and other machinery. The first is a superabatement for up to 20 years on individual business projects; the second exempts new equipment from the tax; and the third eliminates many small businesses from filing.
The business personal property tax generates about $1 billion annually for Indiana schools and local governments. Mayors from around the state opposed the bill, saying they are already strapped from property tax caps put in the Indiana Constitution several years ago.
Indiana House Democratic Leader Scott Pelath of Michigan City maintained that the provisions will enable us to watch counties fight with one another for the privilege of cutting more taxes for a select few which will lead to increased burdens on local units of government, schools and families.
The business personal property tax provisions do not take effect until July 2015. In the meantime, a comprehensive study commission will look at business taxation broadly.
The legislation also lowers the state corporate tax rate, eventually giving Indiana the second-lowest corporate tax rate in the nation, and lowers the financial institutions tax. Those changes will save Hoosier job-creators $185 million a year when fully implemented, according to a written statement.
Lawmakers previously passed legislation lowering the corporate tax rate from 8.5 percent to 6.5 percent by fiscal year 2016. The corporate tax rate is currently 7.5 percent; under the new law, it will drop to 4.9 percent by fiscal year 2022.
Pelath called it a jobless creation program, adding: Of course, there will be high-fives in the corporate boardrooms of our state as they gleefully add taxpayer giveaways to their balance sheets.
There will be no such bounty for the people who need it the most – the middle class of our state.