Indiana republican legislative leaders are pushing to repeal business personal property tax, and several other Midwestern states are doing the same. In fact, Michigan, Ohio and Illinois have already eliminated their business personal property tax. However, if Indiana were to follow suit, it could cost local governments and schools $1 billion annually. Senate President David Long (Fort Wayne) and House Speaker Brian Bosma (Indianapolis) said that removing the business personal property tax would make the state more appealing to job creators, and the proposal is being supported by the Indiana Chamber of Commerce as one of its top legislative priorities.
“It’s the last piece of tax ‘fruit’ that you could deal with,” Long said at a legislative preview luncheon Monday, referring to the series of income, corporate and other tax breaks that the state legislature has passed in recent years, according to News and Tribune. Although legislative leaders believe minimizing taxes for businesses would help keep Indiana competitive and grow the economy, it would leave a major impact on local governments, and many are already struggling with declining revenues due to local property tax caps imposed by the General Assembly five years ago. Some communities would be more hard hit than others, specifically those that rely on large manufacturing employers, in which 30 percent of their local revenue stream is generated from business personal property tax. While there is no proposal to replace the lost revenues if the tax was to be repealed, legislators ensure they will be “sensitive” to local governments and come up with an alternative revenue source.
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