STATEHOUSE – The governor recently signed into law a $1 billion tax-relief package, the largest tax cut in the state’s history, that was co-authored by State Rep. Chris May (R-Bedford).
According to May, House Enrolled Act 1002 will drop the state’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.
“Indiana’s surplus reached record levels and the positive momentum continues, which is due in large part to hardworking Hoosiers powering our economy through the pandemic,” May said. “Now is the time to return money to Hoosier taxpayers, especially as many families are dealing with increased costs for everyday goods and services.”
The law also helps lower utility bills for Hoosiers and businesses by eliminating the 1.46% Utility Receipts Tax currently paid on electricity, natural gas, water, steam, sewage, and telephone bills.
May said once both tax cuts are fully implemented, Hoosiers will save more than $1 billion a year.
The law also 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 the 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. A new law supported by May will ensure the maximum number of Hoosiers qualify for the refund.