Indiana governor endorses big cuts in income, business taxes

Indiana Gov. Eric Holcomb threw his full support Thursday behind major state tax cuts, saying tax collections were strong enough to overcome his previous reluctance.

Holcomb released a statement endorsing much of a plan for broad business and individual tax cuts pushed by Indiana House Republicans that has been opposed by Senate Republican leaders. Holcomb has for several months sided with those Senate Republicans, citing uncertainty in the economy, until signaling a shift in his opinion last week.

Key parts of the Republican governor’s proposal would cut Indiana’s current individual income tax rate of 3.23% to 2.9% over an unspecified period. That is a bigger cut than the reduction to 3.0% that House Republicans have sought.

Holcomb also endorsed cuts to property taxes paid on business equipment and utility company taxes similar to the House GOP plan.

Estimates on the size of Holcomb’s proposal weren’t immediately released. The House plan was estimated to cut income tax collection by $500 million a year, with the business tax cuts potentially worth $700 million to $850 million a year.

The state has seen a big jump in tax collections over the past year helped by federal COVID-19 relief funding.

“As our revenues exceed forecasts month after month, it has become clear that the time is now to act on a tax plan that gives back to our growing business community and to hardworking Hoosiers,” Holcomb said in his statement.