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1 Scott Drenkard, Indiana's 2014 Tax Package Continues State's Pattern of Year-Over-Year Improvements 1 (2014)

handle is hein.taxfoundation/taxfaan0001 and id is 1 raw text is: TAXO Indiana's 2014 Tax Package Continues FOUNDATION State's Pattern of Year-Over-Year Apr. 2014 Improvements No. 425 By Scott Drenkard Economist Introduction Indiana tax reforms in the past few years have been impressive. In 2011, state senator Brandt Hershman addressed a weak link in the state's tax code by leading a bill that set the corporate income tax rate on a four-year phasedown from 8.5 percent to 6.5 percent.' In 2013, Governor Mike Pence worked with the legislature to maintain these corporate rate cuts while instituting a moderate cut in the state's already well-structured individual income tax and speeding up the repeal of the state's inheritance tax.2 This year, policymakers have continued the Hoosier trend toward better tax laws, as the governor signed a major tax package on March 25 that will improve the state's business tax climate further. Indiana's reforms to business personal property taxes are of particular interest, as they could serve as a template for tax reform discussions by policymakers in other states. This report lists some major changes in the tax reform bill and the impact they will have on the state economy. New Law Cuts Corporate Income Taxes and Reforms Business Personal Property Taxes The new tax law, Senate Enrolled Act No. 1, is a compromise of S.B. 1, originally authored by Sens. Brandt Hershman and Luke Kenley, and H.B. 1001, originally authored by Rep. Eric Turner. Major components of the package will: * Phase down the corporate income tax rate to 4.9 percent by 2022, which would make Indiana's the second lowest corporate tax rate of any state levying the tax. * Allow localities the option to enact a business personal property tax filing threshold for businesses with less than $20,000 in personal property (this threshold is based on acquisition cost of the property). 1 Niki Kelly, Corporate Tax Cut Praised as Jobs Bill, JOURNAL GAZETTE, May 1, 2011, hp 2 Joseph Henchman, Indiana Approves Income Tax Reduction, TAX FOUNDATION TAX POLICY BLOG, May 14, 2013,