House Bill 1002 (Various Tax Matters), authored by Rep. Tim Brown (R-Crawfordsville), passed the full House 68-25. This is the House Republican tax package that includes the phase out of the 30% minimum valuation depreciation floor for business equipment and machinery, a top priority of the Chamber, along with two other provisions that the Chamber has long advocated for: (1) the elimination of the “double-direct” test applied to sales tax exemption of production inputs that has been the subject of much litigation over many years; and (2) the repeal of the utility receipts tax that adds to the energy bill of businesses. These changes each represent important corrections to our tax structure, will enhance capital investment and make it more possible for Indiana businesses to grow.
House Bill 1083 (Tax and Fiscal Matters – Sales Tax on Services), authored by Rep. Jeff Thompson (R-Lizton), is slated to be heard in the Ways and Means Committee on Monday. Of note in the bill is a provision for service-oriented businesses (excluding those in education and health care) to have to begin collecting sales tax on the services provided to their clients. This would trigger higher overall costs for those clients and bookkeeping responsibilities for the business in order to remit the sales tax to the state. The Chamber will testify in strong opposition to this proposal at the hearing. We will stress to legislators how this practice would negatively impact numerous Hoosier businesses and only serve to impede their ability to grow and compete. The silver lining here is that this is anticipated to be a hearing only with no vote taken; in other words, just a further airing of the concept for debate. However, the Chamber will remain vigilant regarding this issue all session.
House Bill 1260 (Department of Local Government Finance), authored by Rep. Dan Leonard (R-Huntington), is the state agency bill. It was amended to address issues raised by the Chamber when it was first heard in the Ways and Means Committee last week. We expressed concerns regarding the burden on assessors to substantiate a property tax assessment increase when an assessment is challenged on appeal. With the amendment in place, the bill now moves to the full House for consideration next week.
Senate Bill 145 (Property Tax Matters – ‘Big-Box’ Assessments), authored by Sen. Brian Buchanan (R-Lebanon) and Sen. Linda Rogers (R-Granger), is on the Tax and Fiscal Policy Committee agenda for Tuesday. The Chamber appreciates the concerns of local officials stemming from appeals of some of these type properties, being referred to as “big box” retail stores, but opposes the manner in which this bill attempts to resolve those concerns. The bill overly restricts the rights of these taxpayers to obtain a fair assessment of their property. We will convey these sentiments in Tuesday’s hearing. It is expected this bill will be favorably viewed again in the Senate (where it has passed before) but it remains to be seen what the reception might be in the House.
Senate Bill 262 (Housing Tax Credits), authored by Sen. Travis Holdman (R-Markle), passed the Tax and Fiscal Policy Committee 11-1. This bill provides a state tax credit that will piggyback on the federal credit available to qualified affordable housing development projects. The practical effect will be to make more housing projects financially feasible and result in the construction of housing, which is critical in meeting the demands of a growing workforce. Citing these reasons, the Chamber supported this legislation.
Resource: Bill Waltz at (317) 264-6887 or email: bwaltz@indianachamber.com
