Business and Economics

Governor Signs Tax Reform Bill

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March 25, 2014 — TheStatehouseFile.com

INDIANAPOLIS – Corporations will pay less in state taxes and counties will be able to cut or even eliminate property taxes on new business equipment under legislation Republican Gov. Mike Pence signed into law Tuesday.

The new law, which the General Assembly approved earlier this month, could eventually give Indiana the second lowest corporate tax rate in the nation – although that assumes other states won’t act before the reduction is fully phased in.
And it could mean substantial property tax savings for companies that move to or expand in Indiana – but only if local officials elect to act.

“Job creation is job one in Indiana and the legislation signed today will strengthen our competitive edge to attract new businesses and good-paying jobs to our state,” Pence said in a statement. “We are in a national and global competition for jobs and these important reforms will improve our pro-business tax environment and bring good jobs for Hoosiers.”

The law extends the reduction of the corporate tax rate, which was already scheduled to drop to 6.5 percent in Fiscal Year 2016. The legislation will phase in an additional reduction, reducing the rate every year through 2022, when the rate reaches 4.9 percent.

The law also gives local governments three options for reducing the personal property tax, which is levied on business equipment.

• A county can choose to exempt all businesses with less than $20,000 in personal property.

• A county can choose to eliminate the tax on all new personal property.

• A local unit of government can offer an extended personal property tax abatement for up to 20 years.

 

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