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.
Awesome! I love this proposal, answers every problem that PropTaxes create, like evicting people from a home they thought they owned! Double the PropTax if you want to rent it out! Contributor to Mortgage Foreclosures! Getting taxed on unrealized Gain due to ever increasing assessed values!
Sounds great to me. A consumption tax is more fair than a yearly tax on appreciation.
I have to agree that the local tax assessors have routinely over-assessed property values, and then it’s left for the individual homeowner to fight to correct their errors. That process is rigged against the homeowner. That being said, that means everyone pays the consumption tax that replaces property taxes. Which means rents should go down because the taxes won’t be there to pass along to renters — but will landlords actually do that? There is the issue of the over-65 and homestead exemptions; how can those tax breaks be preserved in this new system for the seniors? Will this new tax apply to Food and medical services /Drugs? I am weary of government tax changes; this should be studied