Democratic gubernatorial hopeful John Gregg wants to eliminate the corporate income tax for Indiana businesses. He plans to make up the lost revenue by collecting taxes from online retailers.
Gregg’s plan eliminates the corporate income tax for businesses headquartered in Indiana by providing them tax credits of anywhere between $500 and $2,000 per employee. The former Indiana House Speaker also wants to provide a tax credit to businesses that create jobs in the state – whether those businesses are headquartered in Indiana or elsewhere. And the job credits would only go to businesses in targeted, high-paying sectors, like health care, research and development, life sciences, energy and agriculture.
Gregg says targeting his tax credits, rather than across-the-board cuts, is the best way to strengthen Indiana.
“This gives them an incentive to stay here, to come here and it gives them an incentive then to invest here.”
Combined, the two tax credit programs would cost the state around 350 million dollars a year. Gregg’s plan to pay for it is to start collecting sales tax from online retailers as soon as possible. He says closing the online sales tax loophole helps level the playing field for Indiana retailers.
“We feel that we will start collecting this when we can after the passage of a law hopefully even in January of 2013.”
Estimates show Indiana could be losing anywhere from $200-$400 million a year by not collecting online sales tax. Governor Mitch Daniels made an agreement with online retailer Amazon-dot-com earlier this year to start collecting from them in 2014. Gregg’s plan isn’t limited to Amazon and speeds up that timeline.
