New Tax on Heavy Equipment Rental

The Indiana Department of Revenue published Commissioner’s Directive on January 24. The directive outlines a new tax on heavy equipment rental transactions. Beginning on January 1, heavy off road equipment held for rent, such as bulldozers, scrapers, and cranes that used to be assessed via personal property tax, will be subject to an excise tax of 2.25% at the point-of-sale. The heavy equipment rental excise tax will only apply to equipment rented from a Indiana registered retail merchant from an Indiana location for a period not longer than 365 days or without a specified rental end date.

Please review the document and consult with a tax professional if you have questions or concerns.

2018 Legislative Wrapup

Much has been made of the ending of the 2018 state legislative session, and with good reason! It was, by all accounts, chaotic and messy, leaving more than a few broadly supported issues unresolved. Governor Eric Holcomb will be calling legislators back to the Statehouse in May to finalize a couple of these issues (federal/state tax law conformity, additional school safety funding) in a short special legislative session. But what happened with ICI’s legislative issues? Let’s recap.


HB 1015 (Torr) contained two different sections aimed at changing some language in state indemnity statutes. After some early negotiating on the House side, Rep. Torr agreed to alter his approach and support changes to the law aimed at eliminating problems with vicarious liability issues on worksites – a stance the construction industry broadly supported. However, the second section of the bill contained provisions supported by design professionals that would have statutorily removed them from the private negotiation process with owners and contractors in regards to duty to defend provisions in contracts. A business coalition made up of contractors, utilities, manufacturers and other entities staunchly opposed this section of the bill to the point where the entire measure died in a conference committee. We should be prepared for this idea to come back in a future legislative session.

HB 1021 (Torr) was an attempt to make it easier for private sector project developers to “bond around” liens that have been placed on a project in order for contractors to get paid for work they have performed. After the bill passed the House, ICI members jumped into the battle and began contacting state Senators to voice concerns about taking away what little leverage contractors have in ensuring payment. And your efforts worked! Senators didn’t even hear the bill in committee.

HB 1341 (Soliday) was one of the bills caught in the last-day-of-session shenanigans. This bill, a priority of the Governor, would have set up a regulatory framework for the operation of autonomous vehicles on Indiana roads and highways. Despite some differences in the two legislative chambers, it was expected to pass, but ultimately didn’t get across the finish line. We expect this bill to come back in 2019.

SB 242 (Holdman) was the omnibus Department of Revenue bill also caught up in the final minutes of the session. The bill contained language that would have put into statute the decades-long sales tax exemption on equipment used in the manufacture of asphalt. Though elements of this bill related to federal tax law conformity are expected to be considered during this year’s special legislative session, this portion of the bill will not come back until 2019.


HBs 1301 and 1374 (Carbaugh and Soliday) both contained language asking for a summer legislative study relating to payment and performance bonds for future public-private projects. Both items are awaiting the Governor’s signature.

HR 8 (Pressel) is another measure asking for a summer study committee, this one on the use of speed cameras in work zones and increased fines for distracted drivers. Ultimately, Legislative Council will decide if these issues will make the limited list of study topics.


We want to express our appreciation to ICI members for picking up the telephone or typing out an email whenever we requested your help. Your work on these measures made a HUGE difference. Please remember this next year, and in future years, when similar requests come across your desk – your input matters!

BIC MATTERS: Action Required

Contact Your Indiana State Representative Before January 25

“Despite our standing and our ongoing momentum, we can’t afford to get complacent or take our eyes off the ball.” – Governor Eric Holcomb, during his inaugural address on taking Indiana to the next level.
“I need every one of your members to be involved!” – Speaker Brian Bosma, during remarks at an industry lunch earlier today.

BIC NOTE: As highway funding advocates, we must heed the advice from Governor Holcomb and Speaker Bosma. The stars are aligning as never before, but we cannot take the outcome for granted. As we begin this legislative session, we ask you to take action when the need arises. We seek long-term, dedicated, stable and adequate funding for Indiana’s state and local highways, roads, streets and bridges. Your contacts to legislators during the next four months will be critical to our industry’s success. Please watch for BIC MATTERS alerts and take action. We will only ask for action when we truly believe it’s warranted. And now for this week’s update…

In the last two weeks, leaders in both the Indiana House and Senate and Indiana’s newly elected Governor, Eric Holcomb, have announced long-term road funding as a top priority for the 2017 legislative session.

Indiana House Republican Leadership Announces Road Funding Plan (HB 1002)
Republican leaders in the Indiana House of Representatives have introduced a comprehensive and bold road funding bill (HB 1002) that would provide new annual road funding of at least $1.2 billion per year. HB 1002 includes new revenue as follows:

  • increases the gasoline tax, special fuels tax and motor carrier surcharge tax each by 10 cents to restore lost buying power since the taxes were last raised,
  • indexes all fuel tax rates annually using a formula that incorporates CPI-U and Indiana personal income growth,
  • transfers, over three years, the remaining 4.5 pennies of the sales tax on gasoline from the General Fund to the State Highway Fund,
  • implements a $15 annual statewide infrastructure improvement fee on all vehicles registered in Indiana,
    implements a $150 annual statewide infrastructure improvement fee on all electric vehicles registered in Indiana and increases the current alternative fuel vehicle fee to $150,
  • requires INDOT to further study tolling and submit a waiver to the federal government to allow tolling on existing interstates,
  • lowers the minimum population threshold applicable to the municipal wheel tax/surtax from 10,000 to 5,000.

You can access a fiscal summary of HB 1002 here, including how the bill allocates funds to INDOT and local governments.

The Ways and Means Committee, chaired by Representative Tim Brown (R-Crawfordsville) and the Roads and Transportation Committee, chaired by Representative Ed Soliday (R-Valparaiso) will hear the bill in a joint committee meeting on Wednesday, January 25 at 9:00 a.m. in the House Chamber. BIC is working with our road funding partners to coordinate testimony in support of the bill.

ACTION REQUIRED: BIC strongly supports HB 1002. House members in both the Republican and Democrat caucuses are discussing this bill in private meetings. House members have various concerns. Anti-tax groups that oppose the bill have already been contacting legislators. It is important that ALL House members receive a phone call or email from supporters of this bill before it is heard in Committee on January 25. Obviously, members of the two committees are very important to this first step, and you can see the lists of committee members at these links: Ways and Means Committee and Roads and Transportation Committee. However, ALL House members need to receive a contact from supporters of HB 1002. Please contact your State Representative, regardless of political affiliation, by January 25 and express your strong support for HB 1002. Also, send me an email if you get a response from your legislator. For a link to your State Representative, click here. Remember, we will focus on House members only at this time; we will focus on Senate contacts later in the session.

Governor Eric Holcomb’s Priorities Include 20-year Plan to Fund Roads and Bridges
At a press conference last week, Governor Eric Holcomb announced that his legislative agenda for the 2017 session includes creation of a 20-year plan to fund roads and bridges (click here). He noted the importance of funding for both state and local roads and bridges. He said that funding options include fuel taxes, indexing, P3s, new tolling options and fees for alternative vehicles.

Senate Leaders Say It’s Time to Address Long-Term Road Funding
In a press conference on Tuesday, Senate Republican leaders said that their priorities for the 2017 session include implementing a long-term road funding plan. President Pro Tem David Long (R-Fort Wayne) and Senator Mike Crider (R-Greenfield) spoke about the issue. Senator Long acknowledged that while it’s hard for his caucus to talk about increasing taxes, they cannot continue to fund roads from the state general fund. He noted that U.S. House Speaker Paul Ryan has said the same about the federal budget, and that states are going to have to implement solutions to address road funding shortfalls. Senator Long said Indiana is $1 billion short annually and that he wants to find a solution for 20 years. He expects the final plan will include a mix of new revenue and fees. He also said that gas tax is the accepted method to pay for road improvements and that he could support tolling for new roads or new lanes.

Bottom Line
We are thankful and encouraged that our state leaders have made this a priority. However, we cannot be complacent. Everyone must engage during this legislative session. Please take the action requested above. Call me or send an email if you have any questions, and with any feedback you get from your legislator. Thank you.