Aleading small business advocacy organization is warning Indiana policymakers not to shift the state's tax burden onto businesses or consumers in their zeal to reduce the property taxes of Hoosier homeowners.
The Indiana chapter of the National Federation of Independent Business (NFIB) announced Wednesday its members overwhelmingly oppose any legislation that would transfer the cost of residential property tax relief onto small businesses.
NFIB said that includes reducing or replacing property taxes by extending the state's 7% retail sales tax to currently untaxed services, such as hair cuts and auto repairs, or increasing commercial and agricultural property taxes in tandem with residential property tax cuts because those higher costs ultimately will be borne by small business consumers.
"Our Indiana small business owners have made it clear — they do not support property tax reform that would result in shifting the tax burden to small businesses," said Natalie Robinson, NFIB Indiana state director.
"Owners are concerned that providing property tax relief would ultimately shift that tax burden onto them on top of inflation and the soaring costs of goods and services. Now is not the time to increase taxes on Indiana's Main Street."
U.S. Sen. Mike Braun, the Republican nominee for Indiana governor and self-described Main Street businessman, has proposed resetting residential property tax bills to 2021 levels, reducing the amount of a home's assessed value subject to tax, strictly limiting future property tax increases, and making it more difficult for taxing units to temporarily increase property tax revenue through a voter referendum.
Braun has yet to detail, however, except for vague claims of efficiency improvements, whether or how he would replace the property tax revenue lost by local units of government, of which a large share typically goes toward police, firefighters and other protective services.
Meanwhile, Democratic gubernatorial nominee Jennifer McCormick, a former state superintendent of public instruction, is promising to reduce both the property and income taxes Hoosiers pay — primarily through expanded access to state tax credits for homeowners, renters, senior citizens and military veterans — if she's elected Nov. 5 as the state's next chief executive.
Libertarian Donald Rainwater is seeking to eliminate property taxes altogether for Hoosiers who stay in their home at least seven years, in addition to getting rid of the state income tax, vehicle excise tax and gasoline tax used to pay for road construction.
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