Last Updated on January 28, 2022 by Indiana House Republicans
SOURCE: News release from Indiana House Republicans
STATEHOUSE – Indiana House Republicans recently advanced a responsible and sweeping tax-cut package that could put over $1.3 billion back in Hoosiers’ pockets, according to Cass County lawmakers.
The state’s budget reserves are expected to hit a record $5 billion at the end of fiscal year 2022. State Rep. Don Lehe (R-Brookston) said if House Bill 1002 becomes law, it would be the largest tax cut in state history.
“Substantially paying down debt and remaining fiscally responsible put us in a unique position to put money back in the pockets of Hoosier taxpayers,” Lehe said. “This legislation will also help spur economic growth by encouraging businesses to locate, stay and grow in Indiana.”
State Rep. Ethan Manning (R-Logansport) said the bill would deliver direct relief to working Hoosiers by phasing down Indiana’s individual income tax from 3.23% today to 3% by 2026. If passed, Hoosiers would also pay less on their utility bills with the elimination of the 1.4% Utility Receipts Tax, which would take effect in July. Currently, individuals and businesses pay the Utility Receipts Tax on their monthly electric, natural gas, water, steam, sewage and telecommunications bills.
“Our state has a strong track record of paying down debt, living within our means and investing in our future,” Manning said. “As a result, Indiana is now facing a record $5 billion in reserves, and this tax-cut package delivers tax relief to Hoosiers and businesses alike. After all, Hoosiers are the reason our economy made a strong rebound after the pandemic, and the reason why we’ve been able to make record investments in critical areas like infrastructure and education.”
About 4.3 million Hoosier taxpayers are set to receive a $125 refund after they file their taxes in 2022 due to higher-than-expected state revenue numbers during the 2021 fiscal year. House Bill 1002 would help streamline this process and ensure about another 900,000 taxpayers also receive a refund.
State Rep. Heath VanNatter (R-Kokomo) said the bill would also encourage new investments by lowering Indiana’s business personal property taxes while ensuring homeowners and schools aren’t negatively impacted by the reduction in revenue. Specifically, the bill eliminates the 30% depreciation floor for newly purchased business personal property starting in January and creates a state income tax credit to offset a portion of the personal propertytaxes paid on existing equipment. Under current law, businesses pay a tax based on a minimum of 30% of the original purchase price of their business personal property, regardless of the age or the true tax value of the equipment. House Bill 1002 would also exempt more manufacturing and agricultural production inputs from the 7% state sales tax to avoid sales tax pyramiding.
“Manufacturing and agriculture are at the heart of the Hoosier economy, and these industries are facing increased overhead and competition,” VanNatter said. “With these tax cuts, we are encouraging job creators to invest in our communities and stay here.”
VanNatter said Indiana has paid down well over $1 billion in debt over the last year alone.
Visit iga.in.gov for more information on House Bill 1002, which now moves to the Indiana Senate for further consideration.