Pence Signs Business Tax Cut Bill Into Law
March 26, 2014 — TheStatehouseFile.com
GREENWOOD, Ind. – 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 law allows counties in Indiana the option of eliminating their business personal property tax on new equipment, offers them the option of providing specific companies with an extended abatement, and it gives them the option of exempting entirely small businesses with less than $20,000 of business personal property.
“I believe it’s absolutely essential that we promote policies that will encourage new investment, attract new talent, and create an environment that will expand opportunities for all of our citizens,” Pence said.
The governor signed Senate Bill 1 during a visit Tuesday to Greenwood-based One Click Ventures, an online retail company where Pence was chairing a meeting of the Indiana Economic Development Corporation Board meeting.
Pence had originally pushed for a much broader tax cut and wanted to completely eliminate the business personal property tax but settled for the legislature’s scaled back version
“In a state that is known for making things, having a tax on technology, and machinery, and equipment just doesn’t make sense,” he said. “And it’s a direct tax on capital investment.”
Pence did not include the corporate tax cut in his legislative agenda but supported it. The new law will lower the corporate income tax rate from 6.5 percent to 4.9 percent over the next eight years, taking Indiana from the 25th corporate tax rate in the country to – when fully implemented – the second lowest tax rate in the nation. That assumes no other states take action to reduce their rates.
Senate Tax Chairman Brandt Hershman, R-Buck Creek, said the changes will bring Indiana to a new level of economic competitiveness.
“The corporate tax is widely recognized as the most harmful tax to economic growth,” Hershman said. “This legislation will ensure that Indiana continues its national leadership role in tax reform and that the Hoosier state will be on the short list of every major job-creating investment in the Midwest.”
Pence attributed the passage of the bill in part to the great efforts lawmakers have made in recent years to revitalize Indiana’s economy.
“We’ve been making great progress in the Hoosier state, in a little more than a year, Indiana’s unemployment rate has dropped from 8.6 percent to 6.4 percent,” he said. “Our labor force grew at the sixth fastest rate in the nation. We continue to lead the nation in job creation, manufacturing trade, and transportation.”
”Your efforts, I believe, will safe Hoosier job creators nearly $185 million per year that can be reinvested in a growing economy,” he said.
Despite the governor’s excitement, detractors of the new law voiced their concerns.
“I would hope that the governor and his super-majorities have fun celebrating their so-called ‘accomplishment’ today, because it will be the only enjoyment to come from this jobless creation program,” said Indiana House Democratic Leader Scott Pelath of Michigan City.
Pelath said the tax cuts will create tensions between counties working to attract businesses.
“The provisions enabling cuts in the business personal property taxes will enable us to watch counties fight with one another for the privilege of cutting more taxes for a select few, which will lead to increased burdens on local units of government, schools and families,” Pelath said.
Other bills signed by Gov. Mike Pence on Tuesday:
HB 1035: Demands IEDC to conduct a data-driven study on how Indiana’s regional cities can attract new investment to make them more attractive to places to locate new enterprises and attract talented entrepreneurs. IEDC will also assess the best private sector financing mechanisms to ensure long-term sustainability.HB 1198: Eases the requirements for entrepreneurs to start and grow their business by mandating executive agency participation in the Business One Stop online portal.
SB 375: Allows new fundraising tools for entrepreneurs including online crowdfunding.
SB 421: Cuts red tape and some licensing requirements for Indiana employers.
SB 111: Protects Indiana farmers from unanticipated increases in their property taxes.
HB 1005: Government reduction bill that eliminates a number of outdated, unnecessary, and overly burdensome programs and regulations.
HB 106: Creates an online transparency portal for Hoosier taxpayers and policymakers to access information regarding local governments’ financial health and performance.
HB 225: Cleanup bill that streamlines a number of state administrative functions and clarifies regulations governing the budget process and public-private agreements.
HB 338: Protects the fiscal integrity of the state by ensuring the independence of the State Board of Accounts and its financial audit processes.
TheStatehouseFile.com is a news website powered by Franklin College journalism students.