The Herald Bulletin

Morning Update

State News

February 6, 2014

Pence reiterates support for business tax cut

(Continued)

Terre Haute’s Bennett said that’s among the mayors’ biggest fears.

“We need to slow down and take a look at all the tax changes that have already been put in place and see how they impact local communities,” he said.

The Senate bill calls for a commission to study the issue. It also calls for eliminating the tax only for businesses with less than $25,000 worth of equipment. That would impact about 70 percent of Indiana businesses and result in lost tax revenue of about $50 million for local governments.

The House proposal gives counties the option of eliminating the tax on new business equipment, but offers no mechanism to replace the lost tax revenue.

Pence seemed to rule out the possibility of the state dipping into its surplus to directly replace lost tax revenues for local governments, as some mayors have requested. He said local governments must identify their own options.

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com. Follow her on Twitter @MaureenHayden.

Local tax impact Under analyst estimates, Madison County residents would see less than a 6 percent increase in real property taxes as a result of eliminating the personal property tax. Source: Indiana Fiscal Policy Institute

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