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Bill to save small businesses millions in federal taxes heads to governor's desk

The southeastern exterior of the Indiana Statehouse. The government building's green dome rises above several trees that are standing on the Statehouse lawn.
Brandon Smith
IPB News
Currently, Indiana small businesses that pay individual income taxes (and not corporate income tax) are limited in how much of their state taxes they can deduct from their federal taxes.

Indiana small business owners each stand to save hundreds or even thousands of dollars in federal taxes under a bill headed to the governor’s desk.

Indiana businesses are allowed to deduct their state tax payments from their federal taxes. But if those businesses file individual income taxes (instead of corporate income taxes), that deduction is currently capped at $10,000.

The bill sponsored by Rep. Craig Snow (R-Warsaw), SB 2, would eliminate that cap. He said it will have no impact on state finances – but could have a big impact on Hoosier businesses.

“This could help up to half a million businesses in Indiana save as much as $122 million,” Snow said.

READ MORE: Indiana small businesses could save millions under bill approved by Senate committee

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The House approved the bill unanimously (after it passed the Senate with all "yes" votes two weeks ago). It's the first bill to clear both chambers of the legislature this session.

Brandon is our Statehouse bureau chief. Contact him at or follow him on Twitter at @brandonjsmith5.

Brandon Smith has covered the Statehouse for Indiana Public Broadcasting for more than a decade, spanning three governors and a dozen legislative sessions. He's also the host of Indiana Week in Review, a weekly political and policy discussion program seen and heard across the state. He previously worked at KBIA in Columbia, Missouri and WSPY in Plano, Illinois. His first job in radio was in another state capitol - Jefferson City, Missouri - as a reporter for three stations around the Show-Me State.