INDIANAPOLIS (AP) — The Indiana Senate's tax committee
approved a package of business tax cuts Tuesday, including a further
reduction to the state's corporate income tax.
The Senate Tax and Fiscal Policy Committee approved decreasing the corporate
income tax rate from 6.5 percent to 4.9 percent by 2019 and eliminating
state's business equipment tax for small businesses. The plan was crafted by
Senate Republican leaders as an alternative to calls from Republican Gov.
Mike Pence and business lobbyists to eliminate the business equipment tax
Local leaders, rallied by lobbyists for the Indiana's counties and
municipalities, argued that a complete elimination of the tax could short
them $1 billion collectively and force them to raise taxes elsewhere. That
outcry spurred Pence and Republican legislative leaders to promise the hit
to locals would be mitigated.
The governor threw his support behind a House Republican plan last week that
would give counties the choice to eliminate the tax on new equipment
purchases. Chris Atkins, Pence's director of the Office Budget and
Management, announced Tuesday that the governor would also support the
The Senate measure won tepid support from South Bend Mayor Pete Buttigieg, a
Democrat, who thanked lawmakers for going at the cut with a "scalpel"
instead of a "cleaver."
"I think some of the ideas that have been aired at the Statehouse this year
would come at our revenue sources with a cleaver, this one is using a
scalpel, and I appreciate that," he said.
Sen. Brandt Hershman, R-Buck Creek, and Sen. Luke Kenley, R-Noblesville,
crafted the Senate plan, in part with an eye on the state's declining tax
collections. As part of an offset, the pair proposed reducing or eliminating
some tax credits. But a lobbyist for the Indiana Manufacturers Association
asked the panel to maintain funding for the state's research and development
tax credit, a favorite among some of the state's largest businesses, like