House Republicans advance Brown’s $1B tax-cut package helping Hoosiers, businesses
Indiana House Republicans on Thursday advanced a responsible and sweeping tax-cut package that could put over $1.3 billion back in Hoosiers’ pockets, according to State Rep. Tim Brown (R-Crawfordsville), author of House Bill 1002 and chair of the House Ways and Means Committee.
The state’s budget reserves are expected to hit a record $5 billion at the end of fiscal year 2022. Brown said if House Bill 1002 becomes law, it would be the largest tax cut in state history.
“Hoosiers are working very hard, and they deserve to have their money returned to them,” Brown said. “We have built our state up on the backs of Indiana taxpayers. Our $5 billion in reserves, long-term roads plan, investments in public safety and historic education funding are all paid for by taxpayers. Hoosiers are the best stewards of their money, and they have needs that they can spend their money on. This is a reasonable step to return money back to where it belongs.”
According to Brown, his legislation 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.
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.
Brown 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 property taxes 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.
“In this global economy, we must compete to attract and then keep businesses in Indiana,” Brown said. “This tax cut makes our state even more attractive to job creators who are also facing increased competition. The manufacturing and agricultural sectors employing thousands of Hoosiers must make continued investments in equipment and technology in order to survive. Fortunately, we are in a position to cut taxes on behalf of everyday Hoosiers and the businesses employing them.”
Brown 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.