Brent Auberry Evaluates Proposed Indiana Bill to Scrutinize State Tax Incentives

During the 2014 legislative session, an Indiana lawmaker introduced a bill to examine and analyze the effectiveness of current state and local tax incentives for corporations operating in the state. Many states across the nation have been introducing, and passing, bills that place a similar scrutiny on exemptions, deductions, credits and special tax rates for various entities.

Faegre Baker Daniels tax attorney Brent Auberry, quoted in State Tax Notes and State Tax Today, said the bill "is very robust, it's very comprehensive. I do like that this bill is very clear about what it's trying to accomplish." However, Auberry added that tax evaluations in other states have proven to be problematic. "Maybe a pilot program would work better," Auberry said. "It really appears [the Indiana bill] wants to be fair and objective and to get an honest, transparent review, but it's so hard to measure sometimes whether the benefit is there. Is the benefit that you're gaining a job? Or that the employer is not leaving the state. There's always going to be that intangible. But, I don't think that means you don't try."

If passed, the bill would require the Commission on State Tax and Financing Policy to analyze state and local tax incentives from 2014 on.