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First 2023 bill signed into law by Gov. Holcomb will help give small businesses a tax cut

Tax Filing
Posted at 9:07 PM, Feb 23, 2023
and last updated 2023-02-23 21:07:58-05

INDIANAPOLIS —If you are a small business owner and you haven't filed your taxes, listen up. A bill Governor Eric Holcomb just signed into law will save small business owners money.

Senate Bill 2reduces federal taxes for local businesses. It does so by allowing small businesses to fully deduct the state and local taxes they have paid.

Before, businesses were only allowed to deduct $10,000 of the state and local taxes they paid.

This legislation was a top priority for the Indiana Chamber of Commerce. It's something they say will keep millions of dollars in the state.

"The low end [impact] is $50 million statewide, high end upwards of $150-200 million. That's money that they can put back in their companies, back in to the Indiana economy, " Kevin Brinegar the President and CEO of the Indiana Chamber of Commerce, said.

Indiana has a labor shortage. Brinegar says for every two jobs available in Indiana, there is only one person looking for work. He says this tax cut can help businesses offer more competitive compensation and innovate.

"They will have more money in their pockets to decide what's the best use for that,” Brinegar said. “It could be increasing compensation to not only retain, but attract new employees. It could be investing in automation to stay competitive."

Business owners can take advantage of this new policy for this tax season. The Chamber of Commerce recommends discussing this with your tax professional. The same policy has been adopted by 29 other states.

Brinegar says there more than half a million business owners who are eligible.

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