Give Hoosiers Meta’s Utility Tax Exemption

When Hoosiers pay their electric, gas or water bills, the state gets a cut.

Never one to turn down a chance to raise hidden revenue, Indiana charges sales tax to individual customers on utility bills.

But Meta – which recently announced an $800 million data center in southern Indiana with a raft of taxpayer-funded incentives – won’t be paying such tax.

Meta was given a 35-year exemption on sales tax, as well as utility sales and use tax, by the state.

A number of other businesses are also exempt from the utility tax – especially those involved in production of goods.

This is another example of the Republican-led state government boasting about being “pro-business,” but that is not necessarily “small government.” In this case, the tax burden is simply shifted from businesses to consumers.

“Pro-business” often means state handouts, local tax abatements and other goodies, while individual taxpayers are often left making up the difference.

The utility sales tax is no exception. We the people pay, while business gets a free ride.

In 2022, the state repealed a 1.46% utility receipts tax – which, again, had a raft of exemptions for businesses – but left the sales tax in place.

One of the Libertarian Party’s legislative priorities this session is to urge the General Assembly to complete the job and repeal the state utility sales tax.

One reason is simply that it becomes another carrot for governments to dangle in front of prospective businesses to try to lure them from elsewhere, which puts the state in charge of picking winners and losers, rather than allowing the market to decide.

Another is because it imposes an undue burden on citizens, who are already overtaxed in Indiana. While the state’s income tax is relatively low, and we applaud the fact that it has decreased in recent years, it is made up with a number of other often regressive taxes borne primarily by individuals. The state sales tax has increased 40% from 5% to 7% in the last generation, while the state’s gas tax is the fourth-highest in the nation, while local referenda selectively chosen to be in low-turnout elections allow property taxes to be jacked up beyond constitutional limits.

It’s time to begin reducing and simplifying the tax burden on Hoosiers. One way to do that is to repeal the utility tax and reduce our already-high utility bills by 7%, and give individuals the same break businesses receive.

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