STATEHOUSE (March 22, 2022) – A $1 billion tax-relief package supported by Hendricks County lawmakers is now law.
According to State Rep. Greg Steuerwald (R-Avon), the largest tax cut in the state’s history drops Indiana’s individual income tax from 3.23% to 2.9% over seven years. He said once fully phased in, Indiana will have one of the lowest income tax rates in the nation.
“In Indiana, we want to continue building on our taxpayer-friendly and business-friendly tax structure on behalf of hardworking Hoosiers and their families,” Steuerwald said. “Any opportunity to cut taxes is worth capitalizing on, especially as it will further propel our communities and state forward even more.”
State Rep. Jeff Thompson (R-Lizton) said the law also helps lower utility bills for Hoosiers and businesses by eliminating the 1.4% Utility Receipts Tax currently paid on electricity, natural gas, water, steam, sewage and telephone bills.
“In a time of rising costs, including utilities, every bit of tax relief helps,” Thompson said. “These reductions can ease some of the strain Hoosier families are experiencing with their budgets.”
State Rep. Bob Behning (R-Indianapolis) said once both tax cuts are fully implemented, Hoosiers will save over $1 billion a year.
“Our state is fortunate to be in a position to cut taxes while still paying down debt and maintaining prudent reserves,” Behning said. “Providing a stable fiscal environment can also spur continuing economic growth throughout Indiana.”
The law includes using reserves to make a one-time, $2.5 billion payment toward pre-’96 teacher pension obligations. This comes after Indiana has paid down well over $1 billion in debt over the last year alone.
House Enrolled Act 1002, a priority for Republican lawmakers, comes as the state’s budget reserves are expected to hit a record $5 billion at the end of fiscal year 2022. As revenues continue to outpace expectations, Hoosier taxpayers can expect a $125 refund this spring as part of a combined refund of over $545 million. Another new law supported by Steuerwald, Thompson and Behning will ensure the maximum number of Hoosiers qualify for the refund.