The Prescott Property Tax Plan Explained

Source: PHOTO: Donnie Burgess

STATEWIDE — Fixing Indiana’s property tax problem is a state and local issue, argues Republican State Representative J.D. Prescott.

Prescott says Indiana current collects around 8.7-billion dollars in local property tax revenue each year. He’s convinced his plan would not only offset that value, but perhaps exceed it.

“It is a repeal and replacement of the property tax system and replace the funding of local units of government with a 7-percent sales tax on services,” Prescott explains to WIBC’s Kendall and Casey program Monday, “right now, (when) you go and get your oil changed, you’re paying a sales tax currently on your oil and filter but not on the labor. This would be a 7-percent sales tax on the labor.”

Prescott estimates his plan, which would have a business-to-business transaction exemption built in, would bring in around 8.9-billion dollars in revenue.

“The other thing with this plan,” Prescott explains, “you actually get non-citizens paying as well. They’re going to be buying services in the state, and even tourists as well. Say if they’re going up to Lake Michigan and doing a charter fishing (trip) or something like that. You’re going to collect tax revenue from people coming into the state as well.”

Full interview with State Rep. Prescott here:

Prescott, who serves on the House Ways and Means Committee and deals with state budgets, tells WIBC’s Kendall and Casey his plan is not concrete, and he has considered a healthcare exemption as well.

He says the details still need to be smoothed out before presenting the bill to the General Assembly.