Proposal in works to eliminate all property taxes

Prescott

On Monday evening, Aug. 10, State Representative J.D. Prescot (R-Union City) came to Noblesville to speak to the public about his bill that would eliminate all property taxes for homeowners, businesses, and farms. Approximately 60 people attended and asked questions.

The main idea is to replace the current system of property taxes with a new 7 percent sales tax on services. Medical, education, and current sales tax exemptions will remain in place. In other words, the model would shift to taxing consumption rather than unrealized gains on property.

In addition to repealing property taxes, all 92 county assessor offices and any remaining township assessor offices will be eliminated, and there could be no new debt or TIF districts created tied to property taxes.

Should the bill pass during the next legislative session, the phase-in period would be two years, with 2028 being the final year payable for property taxes.

Local government & schools

This bill establishes the Local Revenue Sharing Fund into which money collected from the portion of the new 7 percent sales tax is to be deposited. The State Comptroller would then distribute to taxing units the portion of all the state sales and use tax revenue attributable to services from the fund. The bill continually appropriates money from the fund.

Because property taxes would no longer be imposed by civil taxing units and school corporations, these taxing units will instead receive monthly distributions of sales tax on services revenue from the state Local Revenue Sharing Fund.

Revenue

According to a report from the Legislative Services Agency, which you can read here, revenue from the new 7 percent tax on services would bring in between $13.3 billion and $15.38 billion in Fiscal Year 2028. Right now, property tax revenue is estimated at only $10.6 billion.

For more information on State Rep. Prescott’s proposal, go to RepealPropertyTax.com.