State Rep. Mike Karickhoff said he didn’t expect Howard County officials to be “jumping up and down, thrilled” with the state Legislature’s latest tax tweak.
But business personal property tax reform — the centerpiece of Gov. Mike Pence’s legislative agenda — isn’t going to fade away, Karickhoff and two other state legislators said Wednesday at a Kokomo-Howard County Chamber of Commerce lunch.
“We are an outlier,” Karickhoff said. “The states around us don’t have it, except for Kentucky, and if we don’t pay attention, we’ll be on the outside looking in.”
If there was one message on BPPT and the recently ended 118th Indiana General Assembly delivered Wednesday by Kokomo Republicans Karickhoff, State Rep. Heath VanNatter and State Sen. Jim Buck, it was that all three legislators worked to soften the impact of reforms on Howard County.
With 30 percent of all property taxes coming from levies on business equipment, Howard County stood to sustain huge cuts to local schools and government if Pence’s original proposal, a total elimination of the tax, had passed.
But starting next year, local governments will be able to waive the tax on new investment and will also be able to offer 20-year abatements on new business equipment, rather than the 10 years currently allowed. The tax also will be cut for businesses with less than $20,000 of personal property and the corporate income tax will drop over the next seven years, from 6.5 percent to 4.9 percent.
Buck said he’s had a hard time explaining the need for the additional tax cuts to constituents, many of whom faced significant property tax increases under Pence’s original plan.
“People hear how we’re among the top 10 or the top five in business tax climate,” Buck said. “It has been very hard to get to that point. It’s hard to get there, and it’s even harder to stay there.”