What is Replace Don’t Erase?
Replace Don’t Erase is an ongoing effort to preserve local government funding at a level allowing municipal government in Indiana to continue providing Hoosiers with the quality of life they expect and deserve. Once again, the Indiana General Assembly is considering a move towards eliminating the business personal property tax, an act that will eliminate more than $1 Billion dollars from local governments and devastate their ability to provide services, infrastructure, public safety and other improvements. Growing Indiana’s economy is about more than a checklist of business taxes.
Personal Property Tax
According to the Indiana Department of Local Government Finance, personal property taxes are levied against equipment used in the production of income or held as an investment; billboards; foundations for the equipment; and all other tangible property other than real property.
This bill allows the COIT council within the county to adopt an “exemption ordinance” indicating that the county will eliminate business personal property taxes on new equipment. The equipment must not have been previously used in Indiana prior to the taxpayer acquiring it and the exemption does not apply to utility equipment. HB 1001 does not include any revenue replacement options.
This bill exempts small businesses with less than $25,000 of personal property from the personal property tax. Like, HB 1001, there isn’t a replacement revenue source designed to offset the expected $25-$30 million in reductions to local government. The Senate plan also calls for a reduction in the corporate tax and a blue ribbon study of the personal property tax.
County Income Tax Council, known as a COIT Council, is made up of the fiscal bodies of the county, cities and towns in a county, with 100 votes divided based upon their share in county population.