Indiana is poised to move up two spots on a widely watched ranking of state business tax climates, thanks to the corporate income tax cut and business personal property tax reforms signed into law last month by Gov. Mike Pence.
Economist Scott Drenkard, of the Washington, D.C.-based Tax Foundation, announced Monday that once the tax reductions begin taking effect, Indiana will jump to eighth on the nonpartisan group's rating of the best state business tax climates, up from 10th.
"As the state moves to the second-lowest corporate rate in the country (of the states that levy the tax), it will be more attractive to businesses looking to make location changes," Drenkard said.
Senate Enrolled Act 1, sponsored by state Sens. Brandt Hershman, R-Buck Creek; Ed Charbonneau, R-Valparaiso; and Sue Landske, R-Cedar Lake, steadily reduces the state's corporate income tax rate from 6.5 percent next year to 4.9 percent in 2021.
It also gives counties the option of eliminating the business personal property tax on new equipment or on companies with less than $20,000 in taxable business equipment, or keeping the tax as is.
In addition, cities and towns can abate local business taxes for up to 20 years starting in July 2015, instead of the maximum 10 years allowed under current law.
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