BY BILL DOLAN, Times of Northwest Indiana bdolan@nwitimes.com CROWN POINT | Some $24 million in property taxes are being lifted off Northwest Indiana businesses, but not everyone is cheering.
"It's extremely positive," Mike Anderson, of Mike Anderson Chevrolet in Merrillville, said Monday about the state's inventory tax, which is now off the books for his business thanks to an act by the Legislature.
He said the tax change will be an incentive for existing businesses to grow and new businesses to move in, which is a boon for customers.
Local government officials say they have less reason to be overjoyed, since they fear residential property owners will get stuck with making up the difference.
"This is just another thing that has to stick in people's craw," warns Lake County Councilman Larry Blanchard.
The inventory tax, an assessment on business goods, was a particular liability for auto dealerships who use row upon row of new cars to entice customers. The Indiana Legislature ordered counties to abolish it sometime between 2003 and last year.
Under the tax, the worth of inventory held by businesses was added to the overall assessed values of the businesses for purposes of figuring taxes.
Bill Waltz, director of taxation and public finance for the
Indiana Chamber of Commerce, said the tax put Indiana at a disadvantage in terms of economic development because neighboring states either never imposed such a tax or did away with it earlier.
Many smaller Indiana counties opted to phase out the tax over three years and replace it with a personal income tax, but Lake and Porter counties have chosen to wait until now. Lake has yet to pass an income tax.
Blanchard estimates the disappearance of inventory tax will lift about $24 million in tax burden from business, primarily in the retail business centers of Merrillville and Schererville.
"The impact is going to be on the residential taxpayers," Blanchard said. "They will have to make it up."
The impact is expected to be significant in some parts of the region.
"In our township, the inventory tax loss is like taking the Southlake mall out of a taxing unit," Ross Township Assessor Randall Guernsey said.
St. John Township Assessor Hank Adams said the evaporation of inventory assessment is more than offset by new business construction in Schererville, Dyer and St. John.
The Legislature has attempted to ease the impact by temporarily increasing residential homestead exemptions