From the Kokomo Tribune:
State Sen. Jim Buck, R-Kokomo, State Rep. Heath VanNatter, R-Kokomo, and State Rep. Mike Karickhoff, R-Kokomo, spent most of the hourlong forum at Indiana University Kokomo discussing Gov. Mike Pence’s proposed elimination of the personal property tax for business.
The proposal has the potential to gut public services and schools in Howard County, the second most dependent county in the state on business personal property tax. The tax is levied on business equipment, and falls heavily on manufacturing operations like Chrysler.
Karickhoff flatly said the Legislature won’t eliminate the tax this session, but held out the possibility the House could allow individual counties to eliminate the tax on new equipment.
“I can’t support elimination without a valid, dependable revenue stream to replace it,” Karickhoff said. “Its in our interest [in Howard County] to find a better revenue stream than personal property tax.”
Karickhoff is again offering the idea of redistributing local income taxes, to benefit counties like Howard which receive large numbers of commuting workers each day. So far the idea hasn’t gained much traction, but Karickhoff said he thinks things could change this session, as the Legislature wrestles with the best way to enact more cuts on business taxes.
Buck dismissed the notion that Indiana regularly ranks high on lists of “best business tax climate” ratings, saying without further cuts, Indiana could slide down the rankings.
“It’s hard to be number one, and it’s even harder to stay number one, and that’s where we are now,” Buck said.
Buck has his own business tax proposal, based on Alabama’s model, which would create a 100 percent state tax credit for all business personal property taxes paid. That means the state, rather than local governments, would absorb the impact of the tax cut.
Senate leadership is calling for a study committee to look at the business personal property tax cut, and for a further cut in the state corporate income tax rate. The tax, now at 8.5 percent, is already due to drop to 6.5 percent next year. Senate Republicans are calling for it to be dropped to 4.9 percent instead.
The estimated cost of that cut would be around $172 million a year, versus more than $1 billion for the full elimination of business personal property tax.
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http://www.kokomotribune.com/local/x12788556/Legislators-talk-taxes-at-session-start
