Resources

Welcome to the Replace Don’t Erase resource center. Check back weekly as additional resource information will be added as it becomes available.

Reports & Studies

The 2022 State Business Tax Climate Index (December 2021) allows business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems and provides a road map for improvement. Indiana is ranked #9 in the 2022 Index.

The Indiana Business Personal Property Tax Analysis, commissioned by the Association of Indiana Counties, examined the property tax burdens over a 10-year period, identified the property tax revenue capacity of units of government, and identified the sensitivity of property tax revenues when business personal property is no longer taxed. In addition, the analysis looked at business personal property tax elimination, where the Indiana property tax has been, and where it might be going.

In the Brookings Institution article Improving quality of life—not just business—is the best path to Midwestern rejuvenation, the authors share compelling information that traditional economic development tools may be ineffective compared to investments in quality of life and place. The research on smaller communities has found that community amenities such as recreation opportunities, cultural activities, and excellent services (e.g., good schools, transportation options) are likely bigger contributors to healthy local economies than traditional “business-friendly” measures.

In Lessons from Business Personal Property Tax Reform in Michigcan, we look at Michigan’s decade-long process to restructure and replace its personal property tax system by 2023. Michigan grappled with a similar challenge of balancing manufacturing competitiveness and local budget priorities.

The Indiana Fiscal Policy Institute released an information brief titled The Personal Property Tax In Indiana: Its Reduction or Elimination is No Simple Task (February 2014). The report is a comprehensive look at the issue, including information about the complicating factors presented by the property tax caps enacted in 2008.

Communities are Supported by Business Personal Property Tax

With the loss of personal property tax, Angola would have to increase the city’s tax rate by 21-22%.

In Burns Harbor, business personal property makes up nearly two-thirds of the town’s assessed value.  If personal property tax is eliminated completely, the town’s tax rate would triple, overlapping taxing units’ rates would increase, and tax cap credits would cause revenue loss.

The City of Goshen worked with Baker Tilly Municipal Advisors to Illustrate the Impact of Personal Property Elimination on the city and each taxing district.

The net assessed value of Greenwood would decrease by more than 7% without business personal property tax. If personal property tax is eliminated completely, the city’s tax rate would increase by 11.6% and the fire and police tax rate would increase almost 17%.

The current net assessed value of $73M in Sullivan could drop to $56M. This would drive the city tax rate up by $0.73 (from $2.27 to $3.00 / $100 of NAV) and would likely increase circuit breaker Losses by over $130,000.

The net assessed value would decrease by over 17% in Wabash County, causing a 11.92% tax rate increase in Manchester, 8.26% tax rate increase in Wabash, 10.70% tax rate increase in Lagro, 13.35% tax rate increase in Lafontaine, and 12.91% tax rate increase in Roann.

Baker Tilly Municipal Advisors produced an Illustrative Impact of Personal Property Assessment Reduction in Warsaw. The impact assessment demonstrates reduction amounts of 25%, 75%, and 100% of personal property AV and the respective effects on the net assessed value, tax rate, cumulative fund, and increment revenue.