Senate amends corporate tax bill, rejects Democrats' efforts to strip key provisions

Back to TopCommentsE-mailPrintBookmark and Share

Financial institutions would have to wait an additional three years to fully feel the effects of a statewide tax cut under changes made Tuesday to Indiana Senate Bill 1.

SB 1 would reduce the corporate income-tax rate to 4.9 percent by 2019, and businesses with less than $25,000 in personal property would be exempt from paying the business personal property tax.

But an amendment by Sen. Travis Holdman, R-Markle, would not fully reduce the corporate income tax for banks and credit unions until 2022. Holdman said the extension mirrors the franchise tax that financial institutions already have to pay.

Holdman also said the General Assembly used the same policy for financial institutions when it reduced the corporate income tax rate last year.

SB 1 also would create a blue-ribbon commission to study the impact the business personal property tax has on Indiana’s economy.

Sen. Karen Tallion, D-Portage, proposed an amendment that would require the commission to study the impact that reducing the business personal property tax would have on local governments. And, the commission would also have to look at property taxes that are paid by non-business organizations.

Tallian’s amendment was adopted.

The Senate also added language to the bill to exempt sales taxes for propane that costs more than $2.50 per gallon. The exemption would be retroactive to Jan. 1 and would be in effect until April 1.

It’s meant to address rising propane prices.

Opposition to SB 1 has largely focused on the bill’s lack of provisions to make up the revenue that would be lost by eliminating the business personal property tax.  Democratic Sens. John Broden of South Bend, Timothy Skinner of Terre Haute and Tallian each proposed amendments to provide ways to supplement the lost revenue.

“I think one of the things that most Democrats across the state – and I think a few Republican friends of mine, as well – have had concerns about from the very beginning are the losses of revenue to local units of government – we’re talking about cities, towns, libraries, schools,” Skinner said.

Skinner said eliminating the property tax would cost the state $25 million to $30 million each year. He proposed giving political subdivisions a replacement grant from the state’s main checking account to make up the losses.

Under the proposal, any subdivisions losing more than 20 percent of their revenue from the personal property tax would be automatically qualified to get the full 20 percent back from the grant.

Tallian proposed deleting the provision to lower the corporate income tax rate – the main focus of the bill.

“In 2012, we cut the corporate tax rate from 8.5 to 6.5 percent with the idea that we would end corporate poverty forever and create new jobs,” Tallian said.

Tallian said the total cost of cutting the tax rate in 2012 and cutting it again this year would be $644 million from 2012 to 2020. After 2020, she said the state would lose $131 million each year.

None of the amendments to replace the lost revenue were adopted.

Skinner proposed a second amendment that would eliminate the corporate income tax and create a preschool program.

“There are many ways we can invest in our state,” Skinner said. “We know that there is a return investment on providing the best education we possibly can at the youngest possible age that we can for Indiana citizens.”

Skinner said after 25 years, the returns on the economy would outweigh the cost of the program by $31 million.

The amendment was defeated. Sen. Brandt Hershman, R-Buck Creek, who authored SB 1, said the amendment did not belong with the bill.

The bill is now eligible for a full Senate vote.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Those of you yelling to deport them all should at least understand that the law allows minors (if not from a bordering country) to argue for asylum. If you don't like the law, you can petition Congress to change it. But you can't blindly scream that they all need to be deported now, unless you want your government to just decide which laws to follow and which to ignore.

  2. 52,000 children in a country with a population of nearly 300 million is decimal dust or a nano-amount of people that can be easily absorbed. In addition, the flow of children from central American countries is decreasing. BL - the country can easily absorb these children while at the same time trying to discourage more children from coming. There is tension between economic concerns and the values of Judeo-Christian believers. But, I cannot see how the economic argument can stand up against the values of the believers, which most people in this country espouse (but perhaps don't practice). The Governor, who is an alleged religious man and a family man, seems to favor the economic argument; I do not see how his position is tenable under the circumstances. Yes, this is a complicated situation made worse by politics but....these are helpless children without parents and many want to simply "ship" them back to who knows where. Where are our Hoosier hearts? I thought the term Hoosier was synonymous with hospitable.

  3. Illegal aliens. Not undocumented workers (too young anyway). I note that this article never uses the word illegal and calls them immigrants. Being married to a naturalized citizen, these people are criminals and need to be deported as soon as humanly possible. The border needs to be closed NOW.

  4. Send them back NOW.

  5. deport now