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Business equipment tax headed toward delay

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Lawmakers considering a cut to Indiana's tax on business equipment might leave the matter to a summer study committee, a move that would delay any action by at least a year.

House Republicans, who have proposed allowing counties to decide whether they will cut the tax, made their pitch to the Senate Tax and Fiscal Policy Committee on Tuesday.

But Senate Appropriations Chairman Luke Kenley, R-Noblesville, said the issue might be too complicated for this year's short legislative session. Kenley said many of the people who would be affected by such a cut, mostly local leaders, should be brought into the discussion.

"I'm wondering if this discussion isn't more complicated than we think it is and we don't need all those people at the table," Kenley said during a hearing. "And maybe the smart thing to do is to back up and pursue this and try to get it right. I'm just not sure we really got to the bottom of the whole issue here, in terms of where Indiana wants to go."

House Speaker Brian Bosma, R-Indianapolis, said Tuesday that the issue has already been highly vetted by lawmakers and some sort of cut needs to happen this year.

"We've been dealing with that issue in the House for three years. We've studied it to death. We know the effects," Bosma said. "Our plan, which is totally an option for communities, is geared just to the result of our review of this for three years."

House and Senate Republicans have advanced widely differing ways for cutting the tax. The Senate Republican plan, which proposes eliminating the tax for small businesses and cutting the state's corporate income tax from 6.5 percent to 4.9 percent, also calls for the creation of a committee to study the issue.

The proposals respond to Gov. Mike Pence's suggestion that the state phase out the equipment tax completely. Supporters say a phase-out is needed to improve the state's competitiveness. Opponents have said it would hurt local governments.

David Bottorff, executive director of the Association of Indiana Counties, said he's pretty confident lawmakers will at least study the issue over the summer, but is unsure whether they will make any cuts this session.

"I think they're still considering a merger between [the House and Senate plans]," Bottorff said. "I think everybody agrees a study committee is going to happen and I think they're trying to come up with an agreeable solution that would take parts of [both plans]."

Pence spokeswoman Kara Brooks said the governor would not support delaying a tax cut until at least next year.

"We don't believe that Hoosiers want to wait as businesses make decisions today that could bring investment and new jobs to the state," Brooks said.

Bosma noted that the state's fiscal leaders had not reached a final compromise yet. Compromises on some of the session's toughest issues are typically hammered out during the final hours and days of the session, which is scheduled to end March 15.
 

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  • be careful
    Republicans controlling this state need to figure out how to reform bsuiness taxes so that they are low and fair, and that doesn't gut revenues for counties outside Marion. Indiana is one state including a lot of farmland and rust belt areas, not just the capital and its suburban collar. Public goods need to be properly funded and they shouldn't let the libertarian mentality carry them away. Atlas Shrugged is a long fantasy/ propaganda novel for college kids and a lame movie not a political philosophy.
  • Studies: Where's the Beef?
    I 2nd Marilyn's comments. I have yet to see any study that included details about the degree to which specific counties and cities will be impacted and how they might recover the lost revenue. Bosma says the situation has been studied multiple times; if so, perhaps he could use the studies to illustrate why eliminating this tax is so great for cities and counties and how it will stimulate jobs. It is getting to the point that everything the legislature does or proposes is directly related to creating jobs. OK, where are they now that "right to work" has passed, an income tax reduction has passed, etc. etc.?
  • Send it to summer school
    My preference is to kill it, but a summer study committee is good, too. For local governments and schools to lose another billion dollars in revenue is way too complex of an issue to spring on a short legislative session. Sure, economic development is good, but if the city can't plow its streets and the schools have no transportation or advanced courses, what business would want to relocate there? Take your time and make a smart decision.

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  1. The deductible is entirely paid by the POWER account. No one ever has to contribute more than $25/month into the POWER account and it is often less. The only cost not paid out of the POWER account is the ER copay ($8-25) for non-emergent use of the ER. And under HIP 2.0, if a member calls the toll-free, 24 hour nurse line, and the nurse tells them to go to the ER, the copay is waived. It's also waived if the member is admitted to the hospital. Honestly, although it is certainly not "free" - I think Indiana has created a decent plan for the currently uninsured. Also consider that if a member obtains preventive care, she can lower her monthly contribution for the next year. Non-profits may pay up to 75% of the contribution on behalf of the member, and the member's employer may pay up to 50% of the contribution.

  2. I wonder if the governor could multi-task and talk to CMS about helping Indiana get our state based exchange going so Hoosiers don't lose subsidy if the court decision holds. One option I've seen is for states to contract with healthcare.gov. Or maybe Indiana isn't really interested in healthcare insurance coverage for Hoosiers.

  3. So, how much did either of YOU contribute? HGH Thank you Mr. Ozdemir for your investments in this city and your contribution to the arts.

  4. So heres brilliant planning for you...build a $30 M sports complex with tax dollars, yet send all the hotel tax revenue to Carmel and Fishers. Westfield will unlikely never see a payback but the hotel "centers" of Carmel and Fishers will get rich. Lousy strategy Andy Cook!

  5. AlanB, this is how it works...A corporate welfare queen makes a tiny contribution to the arts and gets tons of positive media from outlets like the IBJ. In turn, they are more easily to get their 10s of millions of dollars of corporate welfare (ironically from the same people who are against welfare for humans).

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