Financial relief is in the works for Indiana residents.
However, the details are still being decided.
How will the relief be distributed?
Governor Eric Holcomb originally proposed sending $225 rebate checks to Indiana residents from the $1billion budget surplus. The rebate plan passed in the house, but that isn’t the case with the Senate Republicans.
The Senate proposed suspending the gas and utility sales tax in June, when residents were noticing the impact of inflation– mostly on groceries and gas. This plan would save the average household about $130 and an amendment could offer $400 checks to those deemed eligible. This proposal would create a cap on sales tax for gas of 29.5 cents per gallon. This proposal would last until June 30, 2023. However, if fuel prices decrease, so would the sales tax.
Gov. Holcomb’s proposal would have distributed $225 rebates under Indiana’s automatic taxpayer refund law (ATR). The goal with this proposal was to to provide broader relief. This proposal would have returned money to taxpayers and those who didn’t file a return. It also included funding for prenatal and postnatal services and increased adoption, child tax credits, and exempted diapers from the sales tax.
The Senate proposal is different than that of the House. Senator Tim Lanane proposed an amendment that would limit the rebate to taxpayers earning less than $125,000 a year. People earning less than $40,000 would be eligible for $400 checks. Under the Senate Republicans’ bill the average household would save about $130. That is only a fraction of the original $225 rebates. This proposal would also repeal the 1 cent fuel tax increase that went into effect July 1. Sales tax on residential utilities would be suspended for six months too and would it include a seven percent sales tax on electricity, water, gas, internet, and phone bills. Other funding would include: $400million to the Teacher’s Retirement Fund, $215million for capital projects budgeted in 2021, an increase for Indiana’s adoption tax credit from $1,000 to $10,000.
While the two chambers are split over details, the vote is set to take place on Friday. That means that a compromise must be made by then.