IBJNews

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

ADVERTISEMENT