The first piece of a tax simplification push in next year‘s legislature may center on local income taxes.
Indiana offers counties nearly 20 different versions of a local income tax.
Most of those can only be used for specific purposes, such as economic development or jail construction.
State Representative Jeff Thompson suggests boiling that down to just three taxes: for operating revenue, property tax relief, or debt service.
State law caps the total local income tax rate, and Thompson‘s proposal wouldn‘t change that limit – it would just give local government more flexibility for spending it.
Thompson introduced the bill this year but never got a hearing.
House Ways and Means chairman Tim Brown says a study committee made no recommendation either way on the bill.
"It was just an educational opportunity for all the members so that if something like this bill gets a hearing and starts to move, we have a group of people who have a knowledge base," says Brown.
Governor Pence has said he plans to make tax simplification a priority in the upcoming session.
Administration officials say they‘re looking at a plan to create a standardized ordinance template for counties who want to levy an income tax.
