Noblesville legislators introduced a bill that would provide tax breaks for small businesses in Indiana.
Senator Scott Baldwin (R-Noblesville) introduced Senate Bill 2. It changes state tax laws and allows LLCs and S Corps to deduct all state taxes from their federal tax returns. Hoosier Small Business.
“One of my main goals in the Senate is to make it easier and less expensive to start and grow a business in Indiana,” Baldwin said. Said. “SB 2 will provide significant tax breaks for small businesses by leveling the playing field and allowing these businesses to qualify for the tax credits other large businesses already receive. The bill has received widespread support from the business community, and I look forward to working with my colleagues to pass it.”
Under federal law, businesses can deduct state tax payments from their federal tax liabilities. For businesses that pay income tax as a corporation, such as C corporations, which are usually large corporations, the deduction is unlimited. However, for corporations whose owners or shareholders pay personal income tax, such as LLCs and S Corps, the deduction is limited to $10,000.
The law allows LLCs and S Corps to receive unlimited federal deductions for state tax payments, similar to C Corps.
Baldwin’s bill has been identified as a priority bill by the Indiana Senate Republican Caucus and is supported by a wide range of business organizations, including:
- Indiana Chamber of Commerce
- National Federation of Independent Business (NFIB)
- Indiana Technology and Innovation Association (ITIA)
- Indiana Manufacturers Association
- Indiana Builders Association
- main street employer
- Indiana Restaurant & Lodging Association
- Indiana Real Estate Association
- Indiana Beverage Retailers Association
- Indiana Bar Association
- Indiana Institute of Certified Public Accountants
- S society
- Indiana/Kentucky affiliate builders and contractors; and
- Indiana Automobile Dealers Association.
said David Ober, vice president of tax and public finances at the Indiana Chamber of Commerce. “Furthermore, this tax cut will cost the state nothing, so it benefits both business owners and the state of Indiana.”
ITIA Executive Director Jennifer Hallowell said:
If SB 2 becomes law, Indiana will join at least 29 states that have changed their tax laws to minimize federal taxes.
SB 2 has been referred to the Senate Tax and Fiscal Policy Committee, awaiting public hearings for further consideration. For billing details, iga.in.gov/legislative/2023/bills/senate/2.