STATEHOUSE (Feb. 13, 2023) – The Indiana House of Representatives recently advanced legislation supported by Johnson County lawmakers that would phase in a complete state income-tax exemption for military pay earned by active-duty members.
State Rep. Michelle Davis (R-Whiteland), who co-authored the bill, said unlike active duty National Guard and reserve members who are exempt from the individual income tax, other active duty members can qualify for a maximum $5,000 exemption.
"We can never fully repay those who answered the call and those who are currently serving in the military to protect our great state and nation," Davis said. "This is a strong step to ensuring we're doing everything we can to make Indiana a welcoming state for service members to call home."
House Bill 1034 now moves to the Indiana Senate for consideration. State Rep. Craig Haggard (R-Mooresville), who also co-authored the legislation, said it would start with a 25% exemption on military pay in 2024, 50% exemption in 2025, 75% exemption in 2026, and end with a full exemption by 2027.
"Serving in the military takes tremendous commitment and sacrifice," said Haggard, a veteran of the Marines and Indiana Air National Guard. "The traits possessed by our service members are the ones employers seek and what helps our communities thrive."
State Rep. Robb Greene (R-Shelbyville), who voted in support of the bill, said Indiana is already facing a skilled labor shortage, with more than 85,000 open job opportunities. He said veterans, with the necessary leadership and technical skills, could help fill these positions and help drive the workforce.
"Businesses around the state need the skills and experience these service members possess," Greene said. "This exemption could incentivize service members to stay in or locate to Indiana."
State Rep. Peggy Mayfield (R-Martinsville) said neighboring states including Michigan and Kentucky offer a complete military income tax exemption for residents.
"With other states already offering a complete exemption from military income, we need to offer the same incentives to service members and support those looking to make a home in Indiana," said Mayfield, who voted in support of the bill. "Active-duty military should be able to keep more of their hard-earned money, and this bill would help to repay our debt to them for their service and sacrifice."
For more information and to follow legislative proceedings, visit iga.in.gov.
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State Rep. Michelle Davis (R-Whiteland) represents House District 58,
which includes a portion of Johnson County.
Click here to download a high-resolution photo.
State Rep. Robb Greene (R-Shelbyville) represents House District 47,
which includes portions of Johnson and Shelby counties.
Click here to download a high-resolution photo.
State Rep. Craig Haggard (R-Mooresville) represents House District 57,
which includes portions of Hendricks, Johnson and Morgan counties.
Click here to download a high-resolution photo.
State Rep. Peggy Mayfield (R-Martinsville) represents House District 60,
which includes portions of Johnson, Morgan and Monroe counties.
Click here to download a high-resolution photo.
