Indiana State Rep. JD Prescott is proposing to eliminate property taxes and replace them with a 7% sales tax on many services, calling it a simpler and more equitable way to fund government. The proposal would eliminate property taxes on homes, businesses, and rental properties while exempting essential services such as medical care, education, and social services.

Details of the Proposal

The plan would also eliminate county assessor offices and reduce administrative work for local governments. To ease the transition, Prescott’s proposal includes a reserve account and a six-month overlap between the old and new systems. Service tax collections would begin July 1, 2028, with the new funding model taking effect Jan. 1, 2029.

Prescott said the proposal shifts the tax burden from property ownership to consumption. He estimated that for every $1,000 a homeowner currently pays in property taxes, they would need to spend about $14,300 on taxable services to pay the same amount under the new system.

Original reporting: 93.1 WIBC (Indianapolis) — read the source article.