Pandemic-related drops in sales and individual income taxes—the state’s top two revenue sources—continue to have the most significant impact on the state budget.
State, city government freeze hiring—but haven’t furloughed employees—as budgets tighten
State and local government budgets are expected to be hit hard as a result of restaurants, retailers and other businesses being closed for weeks.Read More
A former Senate budget writer said the hit to the state budget could be bigger than during the Great Recession, when state revenue dropped 15% over two years.
The tax would have the biggest impact in Greenwood, where it could generate $2.5 million in 2020 and $2.6 million in 2021.
The ruling allowing states to require retailers to collect sales taxes from online customers could mean millions of dollars of tax revenue. But a number of Hoosier companies say the ruling creates more questions than answers—and could lay a heavy burden on some small businesses.
The 5-4 ruling Thursday is a win for states, including Indiana, who said they were losing out on billions of dollars annually under two decades-old Supreme Court decisions that impacted online sales tax collection.
Advocates say removing Indiana’s sales tax on many service-based software transactions would be a step in the right direction for the state’s growing tech industry.
The Supreme Court agreed Friday to wade into the issue of sales tax collection on internet purchases in a case that could force consumers to pay more for certain purchases and allow states to recoup what they say is billions in lost revenue annually.
Gov. Eric Holcomb is asking lawmakers to clarify that the state’s sales tax doesn’t apply to software provided on the cloud. But that’s not the only tech-related legislation introduced at the General Assembly.
The mismatched identities causes problems, especially for businesses, because ZIP codes determine the city used in an address.
The plan repeals the estate tax and alternative minimum tax, lowers the corporate tax rate, and reduces the number of tax brackets while lowering the highest tax rate. One of the largest boons for the middle class would be that it doubles the standard deduction.
The state of Indiana has been clamoring to collect sales tax from out-of-state retailers. The only problem is a U.S. Supreme Court decision that says it can’t.
The report from the State Budget Agency comes as the General Assembly faces a deadline in three weeks to finish work on a new two-year state spending plan.
The proposal to extend a sales-tax exemption to equipment purchases by manufacturers was expected to cost Indiana as much as $240 million per year in tax revenue.
Sales tax is Indiana’s largest source of revenue. But it is tied to consumer spending, and Americans have become increasingly reluctant to spend as median incomes have remained virtually stagnant over the past 30 years.
Politicians in Indiana and other states hope tax cuts for businesses will boost their economies, but those and other moves could be contributing to the income gap limiting growth in U.S. consumer spending.
Growing ranks of dropout workers have nagged the economy throughout its recovery, and now Indiana’s budget forecasters feel they can’t ignore the trend. They recently revised their outlook on state revenue downward, partly because so many Hoosiers stopped looking for jobs.