Senate Bill 233 – Business Personal Property Tax Exemption
Authored by Sen. Aaron Freeman (R-Indianapolis)

This bill increases the acquisition cost threshold for the business personal property tax exemption from $20,000 to $40,000.

Chamber Position: Support

The Latest: Passed the House Ways and Means Committee 16-7.

Chamber Action/Commentary: This bill received a hearing earlier this month, but the committee chair held up the vote to allow time to consider a proposed amendment. The amendment would have substantially altered how the threshold is calculated, in addition to the original raising of the threshold. This week, the bill was taken back up and passed without that substantial change (there was a minor, unrelated amendment). Apparently, the committee chairman concluded that changing the calculation of the threshold, to base the exemption on the depreciated value of the property instead of the purchase price, was not deemed advisable. So, the bill was passed pretty much as it passed the Senate: raising the threshold to $40,000, based on the acquisition cost of the property.

While the amendment would have qualified more taxpayers for the exemption, it also would have complicated the calculation required for a taxpayer to figure out if they qualify, so something of a tradeoff. Besides, there was a good bit of concern over the loss of revenue for local government if the threshold was based on the depreciated value of the property.

The Chamber strongly advocated for the exemption when it was first implemented in 2016 and has likewise supported raising the threshold. There may yet be a need in the future to work on how the value threshold is applied, but we respect the chairman’s decision and appreciate passage of this bill, which will significantly increase the number of taxpayers who qualify for the exemption.

Resource: Bill Waltz at (317) 264-6887 or email: [email protected]