STATEHOUSE (Jan. 27, 2022) – 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 area lawmakers who supported the legislation.
The state's budget reserves are expected to hit a record $5 billion at the end of fiscal year 2022. State Rep. David Abbott (R-Rome City) said if House Bill 1002 becomes law, it would be the largest tax cut in state history.
"Thanks in large part to years of fiscal responsibility, we weathered the financial impact of the pandemic and came out on the other side quicker, and in better shape than most states," Abbott said. "Now, our state's strong fiscal standing gives us an opportunity to provide tax relief. I hope the Senate considers this responsible tax-cut package, so we can reward hardworking Hoosiers and businesses."
Abbott 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.
According to State Rep. Ben Smaltz (R-Auburn), 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.
"A recurring theme from constituents that's been amplified through the pandemic is they want less government in their lives, not more," Smaltz said. "This responsible tax relief package simply returns money back to those who earned it rather than adding more government programs."
State Rep. Denny Zent (R-Angola) 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.
"Businesses around the world continue to take notice of Indiana's business-friendly tax climate," Zent said. "We're always examining how the state can stay competitive in the global economy. We want to bring in top-paying jobs for Hoosier workers, and this is just one more tool in the toolbox to help attract the best businesses to our area and state."
Zent 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.
-30-
State Rep. David Abbott (R-Rome City) represents House District 82, which includes
all of Noble County and portions of Allen, Elkhart, LaGrange and Whitley counties.
Click here for a high-resolution photo.
State Rep. Ben Smaltz (R-Auburn) represents House District 52, which
includes all of DeKalb County, and portions of Steuben and Allen counties.
Click here to download a high-resolution photo.
State Rep. Denny Zent (R-Angola) represents House District 51,
which includes most of LaGrange and Steuben counties.
Click here to download a high-resolution photo.
