The 2023 Indiana legislative session convened earlier this year, following the 2022 elections, and included bills ranging from topics, like tax credits for teacher spending, COVID-19 immunization data, tuition caps, and more. As an Indiana business owner, the following bills are ones you should understand:
House Bill 1001
Indiana’s House Bill 1001 includes approval of the following amounts:
An annual contribution of $32.75 million to the 21 Fund, which is Indiana’s venture development fund designed to help high-potential, high-growth Hoosier companies gain the capital and guidance needed to succeed.
- A new Collaborative Communities Program with $500 million of funding to be administered by the Indiana Economic Development Corporation (IEDC).
- An annual contribution of $14 million to the Indiana Destination Development Corporation (IDDC), which is dedicated to promoting, branding, and telling Indiana’s story to attract and retain businesses, talent, students, and visitors.
- Much of what was originally outlined in the budget for the IEDC’s initiatives was returned to the introduced version of the bill. $600 million has been appropriated for a deal closing fund ($300 million per year) versus the original version that passed in the house for $500 million in fiscal year 2023.
- Additionally, the original $150 million allocation for the Site Acquisition Fund has now been pushed back to 2024, versus the original start year of 2023 outlined in the House bill.
- Both the Senate and House agreed that more supervision is warranted on the tax credits and incentives administered by the IEDC, so they introduced a special provision that lowered the budget amount from $300 million to $250 million. However, this can be overruled by Budget Committee approval.
This bill is still active and awaiting signature from the governor.
House Bill 1002
House Bill 1002 would expand work-based learning, apprenticeship and internship opportunities in high schools. It would aim to increase high school relevancy by allowing quality, work-based learning to count toward graduation requirements. This legislation could expand workforce, post-secondary and career opportunities for a greater number of students by allocating new funds and accessing various state resources.
New requirements would also be imposed on all high school seniors and juniors to meet with a post-secondary institution, employer or job placement agency, intended to expand the Indiana workforce and increase the number of students who go onto college. This can, ultimately, help bridge the gap between high school students and the workforce and educate students on their options for work following graduation. This bill remains active and is awaiting final approval in the House of Representatives. This bill was passed on May 4, 2023.
Senate Bill 2
Senate Bill 2 aims to reduce tax burdens on Indiana businesses by allowing LLCs and S Corporations to deduct all state tax payments on federal tax returns, similar to C Corporations. This provides a
refundable tax credit equal to the amount of tax paid by the electing entity with regard to the owner’s share. This bill passed in the Senate and has been signed into law by the Governor – retroactive to January 1, 2022. The savings opportunity in this can maximize your state tax deduction for Federal purposes and reduce your Federal taxable income. This will ultimately provide up to $50 million in tax savings in Indiana. For additional information regarding this change, click here.
Senate Bill 281
This bill intends to increase the threshold for personal property tax deduction from $80,000 to $250,000. It would follow a mid-2019 change enacted by the Indiana General Assembly to increase the business personal property tax exemption from $20,000 to $40,000. Personal property, under the threshold proposed by Senate Bill 281, would include all items that contribute to a business’ ability to produce income, such as computers, fixtures, machinery, tools and more.
Increasing this threshold would exempt about 80% of small businesses from paying the tax, eliminate as many as 48,000 personal property tax returns, according to past legislative estimates, and decrease annual local revenues by $17 million statewide. This change would keep Indiana competitive with other surrounding states that have either cut or outright eliminated taxes on personal property. This bill is no longer active within the Senate and would need to be reintroduced for consideration to be signed into law.
house bill 1334
House Bill 1334 would establish a “Right to Start” program in Indiana to facilitate entrepreneurship by encouraging Indiana to dedicate 5% of state contracts to new and young businesses, as well as 5% of workforce and economic development funding toward programs that support entrepreneurship. The bill would also eliminate all first-year business fees for licenses or registration that apply to new businesses or an individual establishing a new business.
House bill 1334 would incentivize individuals to open their own businesses, leading to job creation and economic growth. With most start-ups bootstrapping funding and not having any tax implications within their first few years, it is a great way for Indiana to provide an entrepreneurial environment to attract businesses as well. This bill is no longer active within the House of Representatives.
Senate Bill 356
Senate Bill 356 allows for certain individuals enrolled in associate degree programs to qualify for a high value workforce ready credit-bearing grant. The grant would provide annual student loan forgiveness to eligible individuals enrolled in certain programs in advanced manufacturing, information technology, science, technology, engineering, and mathematics. The bill would also establish the corresponding Workforce Retention and Brain Gain Loan Forgiveness programs, established to provide and administer annual student loan forgiveness payments to those individuals that meet certain requirements. This bill targets certain industries that are a priority for the Indiana workforce with the hopes of retaining workers following the completion of the program. This program is ideal for employers to consider when looking to train their employees or partner with institutions in search of qualified employees. This bill is no longer active and was not voted on within either the House nor the Senate.
House Bill 1047
Lastly, House Bill 1047 dedicates funds to the Office of Small Business and Entrepreneurship to specifically expand outreach and services for minority-owned small businesses. This bill is aligned with current economic trends for minority-owned businesses and can help provide resources that business owners might not otherwise have access to. This bill is no longer active among the House of Representatives.
Each of these bills has important implications for businesses, owners, individuals and communities in Indiana. For the full line-up of bills voted on during the 2023 legislative session please click here.