Hot Topics: Tax Restructuring
The Biggest Change in Indiana Taxes in 30 (Maybe 40) Years
1963 was a historic year for Indiana taxes. The General Assembly invented the sales tax, the individual income tax and the corporate adjusted gross income tax, and did away with the individual gross income tax.
1973 was a historic year for Indiana taxes. The General Assembly raised the sales tax, reduced the property tax, invented a supplemental corporate income tax, began a phase-out of the corporate gross income tax, invented local income taxes, and invented new property tax controls.
Now, 2002 joins this list. On June 22, 2002, the Indiana General Assembly made sweeping changes in Indiana's tax structure. How sweeping, you ask? Check this list:
They raised the sales tax from 5% to 6%, raised the cigarette tax from 15.5 cents a pack to 55.5 cents, raised the gasoline tax from 15 cents a gallon to 18 cents.
They reduced property taxes by about a billion dollars by inventing a new state aid program for schools, to replace 60% of school general fund property taxes, and by increasing the homestead credit from 10% of tax bills to 20%.
They agreed to phase out the inventory tax, which is the property tax on business inventories, eliminating it by 2007.
They made Indiana a market value assessment state (joining 48 other states) by eliminating the proposed shelter allowance.
They increased the standard property tax deduction for homeowners from $6,000 to $35,000.
They overhauled the state's corporate income tax structure, eliminating the corporate gross income tax for all corporation except utilities (the 1973 phase-out was never completed), combining the two net income taxes into one, and raising the net rate from 7.75% to 8.5%.
They created a more generous earned income credit for low income households, and increased the income tax renters deduction from $2,000 to $2,500.
They authorized dockside gaming for riverboats, and raised the wagering tax.
They revised the property tax controls on non-school local governments, restricting annual levy increases to about 5%.
They imposed spending growth controls on the state government.
It's enough to boggle the mind. Don't be boggled, though: click below for more information.
Want to know more? Click here.
Click here for a Capital Comments column about restructuring.