Alting proposing legislation to exempt military pay from state income tax

Jan 21, 2014

A bill being proposed by a Lafayette-area lawmaker would exempt military pay from Indiana’s income tax.

Military service members can currently exempt up to $5,000 of their pay.

State Senator Ron Alting’s bill would raise that exemption to 100% beginning in January 2015. 

The change would cut more than $36-million from state revenues, with that amount expected to increase each year.

Alting’s says between the governor pushing for a phase out of the business personal property tax and recent shortfalls in state tax revenue, his bill might not fare well this session.

Senate Appropriations Committee Chair Luke Kenley says the idea has merit but the timing is wrong.

Kenley believes next session will be a better time to consider Alting’s legislation, when the legislature is writing a new budget.