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More Tax Changes Proposed in Indiana

by Cheri Bedwell, Dallas and Morgan Thomas, Chicago, December 2014


More positive changes may be coming for business personal property taxpayers in Indiana. A state commission released a report with 20 recommendations. At least some of the proposed changes are expected to end up as bills during the 2015 legislative session.


Mandatory Exemptions


In March, Indiana lawmakers gave local governments the option of exempting small businesses from paying personal property taxes. The Commission on Business Personal Property and Business Taxation proposes making the small business exemption mandatory for taxes payable in 2017.


The plan would exempt all businesses that have less than $20,000 in equipment. Exempting small businesses from the tax would reduce state revenues by about $13 million.


The legislature might create a flat fee for small businesses to pay in place of the tax. This would eliminate the onerous compliance costs associated with the tax, while reducing the fiscal impact to local governments.


Greater Depreciation


The commission also recommends a greater degree of depreciation for business personal property, which could bring significant tax savings for companies with older assets.


Commission chairman Senator Brandt Hershman said businesses with large, long-life equipment are paying property taxes in perpetuity, which is not good public policy and is unusual compared with other states.