INDIANAPOLIS (AP) – A new study of Indiana’s business tax structure suggests the state’s tax code discourages the small, home-grown businesses often considered the engines of job creation.
The Ball State University study found several tax code inequities that result in larger, service-oriented businesses paying almost uniformly a smaller share of total revenue in state taxes than smaller, manufacturing-based firms.
The study by Ball State’s Center for Business and Economic Research is provocative because it suggests Indiana’s tax code discourages small, home-grown businesses that fuel job creation, said Michael Hicks, the center’s director.
“The worse thing you can be in Indiana is a small manufacturing company that has organized itself as a corporation. These are exactly the kind of companies we want to be creating jobs,” Hicks told The Indianapolis Star (http://indy.st/U4pFVf ) for a story published Saturday.
Hicks and co-author Hilary Fichter ran simulations for companies ranging in size from $1 million to $100 million in revenue and with differing legal structures, such as corporation, limited liability corporation, and not-for-profit. Their study also looked at a wide range of industries, including manufacturing, retail and personal services.
They then determined how those different companies would fare under Indiana’s tax structure, which includes income, corporate net income, real and personal property, and sales taxes.
The study essentially found that the overall business tax
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