INDIANAPOLIS (AP) -
Indiana should eliminate its business equipment tax for small companies in
order to spare them a burden that collects only a trivial amount for the
state each year, a panel of lawmakers said Wednesday.
The group studying
Indiana’s taxes included the recommendation along with a series of other
proposals, many dealing in changes with how farmers report taxes, in its
final report.
The study committee
chairman, Sen. Brandt Hershman, R-Lafayette, acknowledged at the start of
Wednesday’s meeting that the panel’s recommendations do not guarantee a tax
cut passing the General Assembly. Any cut is likely to face an uphill battle
in the House, where Speaker Brian Bosma, R-Indianapolis, has said the
priorities will be school funding and ethics reform.
“The goals
contained in the findings are essentially aspirational, there is no time
limit, and obviously they would have to go through the legislative process,”
Hershman said.
Supporters of
eliminating the tax that’s paid mostly by manufacturers call it onerous and
say it costs many businesses more to file each year than it collects for the
state. The panel noted that the average small business pays roughly $50 each
year and recommended that companies with less than $20,000 of business
equipment be exempt.
Indiana Chamber of
Commerce President Kevin Brinegar said that eliminating the tax for small
businesses could spare 150,000 companies the cost of filing each year.
“We look forward to
seeing legislation introduced to bring these common sense next steps to the
full General Assembly,” Brinegar said Wednesday in a statement.
Gov. Mike Pence
pushed unsuccessfully earlier this year for a complete elimination of the
tax. But local leaders mounted an aggressive campaign against it, arguing
the change would undercut them at a time when they’re already cash-strapped.
House and Senate
Republicans instead proposed a compromise allowing counties to decide
whether to cut the tax, and the measure was approved in the final hours of
the session.
The proposal also
comes as state tax collections continue to lag. Budget leaders are keeping
an eye out for a new set of tax estimates due next month.