New Tax Plan Details
7% Sales Tax
Repeal Property Tax
Simple Fair Tax
We propose a 7% sales tax on services to replace Indiana's property tax system. This ensures a fairer distribution of the tax burden across all citizens.
Property taxes are unpredictable and can rise even when your income does not. Our plan repeals property taxes and replaces them with a simple 7% sales tax on services, so Hoosiers know exactly what they will pay.
A simple 7% sales tax on services is easy to understand and administer. It replaces the complex, costly property tax system with a single, transparent rate.
FAQ
What is the Fair Tax?
A fair tax system is one where people pay based on what they can afford to spend, where everyone contributes through a broad tax base at a low rate, and where the rules are simple and clear so citizens are never surprised by their tax bill.
Why repeal property taxes?
The property tax system is broken. It taxes unrealized gains and is even forcing some people out of their homes. The system lets government pick winners and losers by handing out deductions, credits, and abatements to certain property owners, while everyone else ends up paying more and more each year.
Why a 7% sales tax on services?
Indiana currently does not charge sales tax on services. By expanding the 7% sales tax to include most services, the state can generate enough revenue to replace all property tax revenue, build a healthy surplus to weather economic downturns, and move to a fair, consumption-based tax system.
Who benefits from this change?
Under this plan, most taxpayers would see their total tax bill go down. Local governments would receive stable, additional revenue through the new funding formula, while also saving money by eliminating the property tax collection system and the assessor’s office. As a rule of thumb, for every $1,000 you currently pay in property taxes, you would need to spend about $14,300 on taxable services to owe that same $1,000 under the sales tax on services—so you can quickly see whether you’d pay more or less.
Which services would be exempt from the 7% sales tax?
This plan keeps exemptions very narrow so we can maintain a broad tax base and a low rate. Essential services like healthcare and social services would be exempt, as would education. In addition, anyone who is already exempt from sales tax on goods would remain exempt from sales tax on services.
How do we ensure the property tax system is not reinstated in the future?
The best protection is a full repeal of the current property tax system, including the elimination of the county assessors’ offices that administer it. Once the entire structure is removed, it would be extremely difficult to reinstate. That said, we should follow up the initial legislation with a constitutional amendment to permanently prohibit a property tax in Indiana. This would provide the strongest long-term safeguard for Hoosier homeowners and ensure that true property ownership is protected for future generations.