A $1 billion tax-relief package supported by State Rep. Matt Lehman (R-Berne) is now law.
According to Lehman, the largest tax cut in the state's history drops Indiana'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.
"In a time of rising costs, every bit of tax relief helps," Lehman said. "We are in the fortunate position where we can return money back to hardworking Hoosiers while still paying down debt and maintaining prudent reserves."
The law also helps lower utility bills for Hoosiers and businesses by eliminating the 1.4% Utility Receipts Tax currently paid on electricity, natural gas, water, steam, sewage and telephone bills.
Lehman said once both tax cuts are fully implemented, Hoosiers will save over $1 billion a year.
He said the law 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 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. Another new law supported by Lehman will ensure the maximum number of Hoosiers qualify for the refund.