Tax Relief Championed by Chamber Becomes Public Law 1

Indiana Chamber President Kevin Brinegar was among invited guests in attendance at the Governor’s signing of SB 2.

Senate Bill 2 gained final approval from the House (98-0) last week and because it was unamended, it was submitted to Gov. Eric Holcomb for his signature. The Governor signed Senate Enrolled Act 2 on Wednesday making it Public Law 1 of 2023. The bill, authored by Sen. Scott Baldwin (R-Noblesville), passed unanimously in both chambers.

The new law focuses on reducing federal tax burdens on businesses. Namely, the state and local tax (SALT) deduction would provide federal tax relief to most Hoosier businesses (pass-through entities) in Indiana.

Chamber President and CEO Kevin Brinegar said the following Wednesday: “This is a critical piece of legislation, and we express our gratitude to the state Legislature for advancing it so quickly and Gov. Holcomb for signing SB 2 into law. The more than half-million business owners who are eligible for this tax relief now have certainty as they prepare to file their 2022 returns. That relief is estimated to exceed $100 million and will not impact state revenues. Senate Bill 2 has been a top priority for the Indiana Chamber, and we applaud all those who made contributions towards its enactment.”

Indeed, since summer 2022, the Indiana Chamber has been gathering data, forming (and later representing) a large coalition of interested associations/parties and meeting with the Governor and state lawmakers on the matter.

Perhaps the most difficult step in this journey might be the law’s implementation. The Department of Revenue is working quickly to make necessary changes for tax professionals and software vendors to accommodate the law change for the upcoming tax filing deadline. The Indiana CPA Society will be hosting a webinar to provide information about the new law for tax preparers. The law is retroactive to January 1, 2022, which guarantees a full three years of tax relief before the SALT cap sunsets in federal law.

David Ober is the Indiana Chamber’s vice president of taxation and public finance. Ober, a native of Noble County, started with the Chamber in June 2022 and is a former state legislator and commissioner for the Indiana Utility Regulatory Commission.