This week Indiana Governor Mitch Daniels signed HB 1004 and effectively reduced his state's corporate income tax rate from 8.5 percent to 6.5 percent. Over the next four years the measure will reduce Indiana's corporate tax rate by half a percent a year, eventually reaching the new, lower rate representing a huge decrease of almost 25 percent..
"While other states are raising taxes to deal with major budget shortfalls, Governor Mitch Daniels and Indiana's General Assembly were able to cut taxes and improve our state's jobs climate, all while passing a balanced budget," said Secretary of Commerce Mitch Roob, who also serves as chief executive officer of the Indiana Economic Development Corporation. He noted that his state's business environment already ranks "near the top of the pack" in most third-party analysis, and opined that this reduction "will only strengthen our reputation as a place to invest and create jobs."
Indiana's corporate income tax reduction comes only four months after neighboring state Illinois increased its business tax burden from 7.3 percent to 9.5 percent. According to the Tax Foundation, that new rate gives Illinois the fourth-highest combined national-local corporate income tax rate in the industrialized world.
Sen. Brandt Hershman sponsored HB 1004. "By reducing the tax burden for businesses we are sending a strong message to company decision-makers from coast-to-coast, and around the world ,that Indiana is serious about competing for their business and will continue to work to make our state the best possible place to grow," he said.
This tax reduction news comes on the heels of news recently announced that Amazon.com cited Indiana's business-friendly policies as the reason it will open a 900,000-sq.-ft. Internet order fulfillment center in Indianapolis this summer, bringing hundreds of jobs.