Indiana lawmakers draw close on business tax deal

Indiana House and Senate lawmakers are drawing closer to a compromise on a package of business tax cuts.

A pair of legislative panels approved changes Tuesday for competing House and Senate tax measures that would cut taxes on business equipment and corporate earnings.

The new House and Senate proposals would both approve "super abatements" — allowing local government to exempt specific businesses from paying property taxes on equipment for up to 20 years. They would also cut the state's corporate income tax from 6.5 percent to 4.9 percent.

But the two sides are still split on whether counties should get the option of eliminating the equipment tax on new purchases.

The proposals follow Republican Gov. Mike Pence's request that lawmakers pass some level of business tax cut this session.

The amendments came amid a continuing back and forth between House and Senate budget leaders searching for a way to cut the state's business personal property tax without potentially cutting into local budgets too deeply.

Senate Appropriations Chairman Luke Kenley, R-Noblesville, has suggested the issue might need to be reviewed by a study committee after this year's legislative session before lawmakers take any action. But other lawmakers, including House Speaker Brian Bosma, R-Indianapolis, and Senate Tax and Fiscal Policy Chairman Brandt Hershman, R-Buck Creek, have said they expect at least some cut to be approved during the 2014 session.

Gov. Mike Pence originally sought the elimination of the equipment tax, but trimmed back his request in the face of strong opposition among local government leaders, including many Republican mayors. The governor has said he is open to paying for any money lost by locals through the Senate proposal, but also said he would like to see the House plan pass.

A Pence spokeswoman said he wants at least some amount of tax cut to pass, instead of being stuck with no more than lawmakers studying the issue in a committee over the summer.