INDIANAPOLIS — With the state legislature passing several tax cuts for Hoosiers in the final hours of this year’s legislative session, business leaders in Indiana say these cuts will open them up for growth.
Indiana Chamber President Kevin Brinegar is pleased lawmakers passed the tax cuts, which he says may not be too noticeable, but nevertheless will be impactful.
“A repeal of the utility receipts tax, which will lower utility bills, which will help and maybe offset some of the increases in gas prices we’ve been seeing,” Brinegar said on Inside Indiana Business.
They also passed a reduction in what you pay in state income taxes by lowering the income tax rate from 3.3-percent to 2.9-percent. Again, not a huge reduction, but Brinegar said this will be felt in a good way the most from businesses who pay their business income tax liabilities as “pass-through entities.”
These businesses pay their businesses income taxes by passing them through the individual tax returns of their shareholders and owners.
“The one thing that the General Assembly did not do because we couldn’t get Senate leadership to agree to it was to phase out and ultimately eliminate the 30-percent depreciation floor on business machinery and equipment property taxes,” Brinegar said.
These are the taxes businesses pay on the value of the equipment they use to run their business. Calling the tax a “relic that’s been there for decades”, Brinegar said that 30-percent depreciation floor has sometimes been greater than the actual value of the equipment itself, thus had business owners paying more than what they should in property taxes.
It would have saved businesses together $400 million annually, Brinegar added.
Overall Brinegar said the state will hardly see any loss in revenue because of the tax cuts. He says the cuts are to that state’s growth rate in future years, meaning the state will still be well in the black once the tax cuts hit, but the growth will be slightly less than forecast.