The state’s budget reserves are expected to hit a record $5 billion at the end of fiscal year 2022. Snow said if House Bill 1002 becomes law, it would be the largest tax cut in state history.
“Our state’s incredible fiscal strength gives us the opportunity to responsibly cut taxes, and that’s what hardworking Hoosiers and businesses deserve,” Snow said. “As we look to the future, these changes could be a game changer when it comes to attracting new industries and jobs to our state. We’re already among the top states for manufacturing and agriculture, but we need to strengthen our economic competitiveness to keep it that way.”
Snow said the bill would deliver direct relief to working Hoosiers by phasing down Indiana’s individual income tax from 3.23% today to 3% by 2026. If passed, Hoosiers would also pay less on their utility bills with the elimination of the 1.4% Utility Receipts Tax, which would take effect in July. Currently, individuals and businesses pay the Utility Receipts Tax on their monthly electric, natural gas, water, steam, sewage and telecommunications bills.
About 4.3 million Hoosier taxpayers are set to receive a $125 refund after they file their taxes in 2022 due to higher-than-expected state revenue numbers during the 2021 fiscal year. House Bill 1002 would help streamline this process and ensure about another 900,000 taxpayers also receive a refund, according to the news release.
Snow said the bill would also encourage new investments by lowering Indiana’s business personal property taxes while ensuring homeowners and schools aren’t negatively impacted by the reduction in revenue. Specifically, the bill eliminates the 30% depreciation floor for newly purchased business personal property starting in January and creates a state income tax credit to offset a portion of the personal property taxes paid on existing equipment. Under current law, businesses pay a tax based on a minimum of 30% of the original purchase price of their business personal property, regardless of the age or the true tax value of the equipment. House Bill 1002 would also exempt more manufacturing and agricultural production inputs from the 7% state sales tax to avoid sales tax pyramiding.
Snow said Indiana has paid down well over $1 billion in debt over the last year alone.
Visit iga.in.gov for more information on House Bill 1002, which now moves to the Indiana Senate for further consideration.
