Hamilton County lawmakers recently voted in support of passing the largest tax cut in the state’s history, sending the $1 billion tax-relief package to the governor where it could soon become law.
According to House Speaker Todd Huston (R-Fishers), House Enrolled Act 1002 will drop the state’s individual income tax from 3.23 percent to 2.9 percent over seven years. He said once fully phased in, Indiana would have one of the lowest income tax rates in the nation.
“Our state is in a historically strong fiscal position and revenues continue to outpace expectations,” Huston said. “I’m excited about providing much-needed tax relief to hardworking Hoosiers. In Indiana, we’ve recently paid down over $1 billion in debt and we’re projecting a record $5 billion in reserves. Hoosiers are facing rising inflation and now is the time to put money back into the pockets of those who earned it.”
“When you think about Indiana’s economic strengths, some of the first things that come to mind would be our pro-business climate and low cost of living,” said State Rep. Chuck Goodrich (R-Noblesville). “These tax cuts serve as another tool in our state’s toolbox to help attract talented workers and their families to the state.”
State Rep. Jerry Torr (R-Carmel) said the bill will also help lower utility bills for Hoosiers and businesses by eliminating the 1.46 percent Utility Receipts Tax currently paid on electricity, natural gas, water, steam, sewage and telephone bills.
“This legislation marks the largest tax cut in Indiana’s history,” Torr said. “We’re strengthening our state’s reputation for being fiscally responsible and finding areas to cut taxes on behalf of hardworking Hoosiers.”
State Rep. Donna Schaibley (R-Carmel) said once both tax cuts are fully implemented, Hoosiers would save over $1 billion a year.
“Because of our state’s long history of financial responsibility, we are in a position to lessen the burden on Hoosier taxpayers,” Schaibley said. “Our economy is doing really well and now is the time to support Hoosiers and return more of their hard-earned dollars.”
State Rep. Chris Jeter (R-Fishers) said the legislation includes using reserves to make a one-time $2.5 billion payment toward pre-’96 teacher pension obligations. This comes after Indiana has paid down well over $1 billion in debt over the last year alone.
“As a fiscal conservative, my focus remains on limited government spending, trimming waste and keeping taxes low,” Jeter said. “This legislation is a strong reflection of my commitment to financial responsibility, and I’m looking forward to it becoming law.”
HEA 1002, a priority for Republican lawmakers, comes as the state’s budget reserves are expected to hit a record $5 billion at the end of fiscal year 2022. As revenues continue to outpace expectations, Hoosier taxpayers can expect a $125 refund this spring as part of a combined refund of over $545 million. A new law supported by Hamilton County lawmakers will ensure the maximum number of Hoosiers qualify for the refund.