Tax Reform Makes Way to State House

INDIANAPOLIS (WOWO): Legislators have taken their first look at a Pence administration proposal to streamline the tax code. But changes are on the way. The bill eliminates 29 income tax credits and deductions, including credits for donating to state universities or starting businesses in enterprise zones.

Fishers Representative Todd Huston (R) says that may not be the final list. He says the goal is to start a discussion of whether little-used or small-dollar tax breaks are worth leaving on the books. In some cases, Huston says, the administration suspects the state is giving tax breaks for activity that would take place regardless. But Huston says a simplified sales tax exemption for businesses may have to be adjusted or scrapped.

The administration has pledged to keep the bill revenue neutral, and legislative analysts say redefining what‘s exempt could cost the state nearly a quarter-billion dollars a year. That alone would throw the bill out of balance, to the tune of as much as 150-million dollars in the next two-year budget.

The House Ways and Means Committee heard more than two hours of testimony on the proposal but put off a vote.