Think Tank Questions Effort To Eliminate Business Personal Property Tax
A Washington think tank on state and local taxes is cautioning legislators against joining the rush to eliminate the business personal property tax.
Legislators balked at Governor Pence‘s proposal to keep up with other states and abolish the tax, instead giving counties the option to do it. No county has done so, and a blue-ribbon commission is now studying tax reform options.
Matt Gardner with the Institute on Taxation and Economic Policy says property taxes nationwide are increasingly limited to real property. But he says for equipment that has significant value to a business‘s profit-making ability, it makes sense to tax that equipment.
"It's a rough proxy for the benefits you derive from government services," says Gardner. "Any asset of any value generates police protection needs and fire protection needs."
Gardner says the most straightforward tax reform would be another local option included in the law: exempting businesses who don‘t have enough equipment to make it worth the trouble to file the form.
He questions whether trimming business taxes plays that big a role in economic development.
Senate Tax and Fiscal Policy Chairman Brandt Hershman counters Indiana‘s lower taxes are the only reasonable explanation for the exodus of nearly 50 Illinois businesses to the Hoosier State the last few years.