Business owners react to increased sales tax

Today marks the start of an increased sales tax in Indiana from 6 percent to 7 percent and that has prompted some action by local business owners.

Chris Linton, sales manager at York Dodge, said the dealership intends to give customers a 1-percent rebate on purchases for the month of April. He insists the dealership will still be paying the 7 percent state tax but allow the customers to remain at 6 percent.

Across the state, as reported by Indianapolis TV stations, customers have been taking the plunge early by buying a car, just to avoid paying the extra 1 percent tax on their bill.

Meanwhile, at least one local business owner is choosing a positive outlook inspite of the possibility that he, like any other business, may hear complaints from customers who will have to fork out the extra cash when making purchases.

Dennis Furr, owner of The Blue Door Café, said "the new sales tax is a positive alternative to raising property taxes."

On March 19, Indiana Governor Mitch Daniels signed legislation to raise the state sales tax. This came on the heels of the property tax outrage in 2007.

Governor Daniels promises the bill will make way for what he calls "permanent protection from future property tax increases."

The immediate relief will be an average tax cut savings of 30 percent in 2008 versus 2007 property bills, according to the governor.

The more permanent relief will put a cap on property taxes for homeowners at 1 percent of a home's assessed value in 2010.

The state will take over on $3 billion of costs that were previously paid in local property taxes.

The costs that are to be covered by the state will include covering the 15 percent of school operating costs, child welfare levies, juvenile incarceration costs in state facilities, state fair and forestry levies, health care for the indignant, preschool special education levies and costs of police and fire pensions.