GREENFIELD — Indiana’s tax on business equipment should be phased out to make the state more competitive with its neighbors, Gov. Mike Pence told a large crowd of local residents Thursday in Greenfield.
But with two proposals being debated in the state Legislature and local government officials worried about how the cut would impact their budgets, just how the tax reduction or elimination would occur is still up in the air.
Pence spoke at the Rotary Club of Greenfield’s weekly luncheon Thursday, addressing education and business proposals before the Indiana General Assembly this session.
The state’s property tax on business equipment should be phased out somehow, Pence said, to make Indiana more competitive for local investment.
Personal property taxes are levied against equipment used “in the production of income or held as investment,” according to the state’s website. Taxes are paid in the spring.
“In a state where you make things, that’s just a dumb tax,” Pence said. “Manufacturing is on the move in Indiana. It just doesn’t make sense … I want to find a way to phase out business personal property tax.”
Pence pointed out that surrounding states have either lower taxes on equipment or no taxes at all. Kentucky’s tax is lower; Michigan is phasing it out; and Ohio doesn’t have the tax.
“Illinois doesn’t have a business personal property tax,” he added. “That’s one of their bragging points – they don’t have many.”
There are two proposals in the state Legislature dealing with the tax. The House plan would give counties the option of eliminating the equipment tax, while the Senate proposal would eliminate it for small businesses.
Pence acknowledged after the luncheon that many local communities rely on money from the tax to pay for infrastructure, public safety projects and more.
“We must do this in a way that doesn’t unduly burden our local communities,” he said.
Pence did not indicate which proposal could ultimately make it to his desk for signature, but he’s negotiating with lawmakers in the House and Senate to come to a compromise.
“I’d like to ultimately … give the option to every community,” Pence said. “I want this to be a win for Indiana, a win for local communities.”
Sara Joyner, president of the local Rotary Club, said she was pleasantly surprised to get a phone call Monday that Pence wanted to speak to the local group. The club focuses on business and philanthropy, and Joyner, owner of Joyner Houses and the Villas at Timber Run, said it was good to hear that Indiana is still business-focused.
Pence touched on a few other highlights in the Legislature, pointing out the commission that formed last year to boost vocational education in local high schools. He said the state continues to expand early childhood education, strengthen charter schools and promote policies to create jobs.
He did not discuss the controversial gay marriage ban that’s been at the forefront of public debate in recent weeks. Pence said last week that that he wanted lawmakers to restore language blocking civil unions in the amendment, a move that would place the issue back on the November ballot for all Hoosiers to vote on.
Pence said even though this is a short legislative session, there is still plenty of progress being made in bills that will help Indiana grow economically.
“We’re in the middle of a remarkably productive session of the General Assembly,” he said.
The Associated Press contributed to this report.