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A Bill to Eliminate Indiana Sales Tax on Low-Income Energy Assistance

February 2, 2012

INDIANAPOLIS - Federal heating assistance for low-income Hoosiers would be exempt from the 7 percent sales tax next season under a bill which passed the state House unanimously and is poised for action in the Senate.

Rep. Peggy Welch, D-Bloomington, author of House Bill 1141, says taxing the funds doesn't make sense.

"We're taxing tax dollars, because (under) the LIHEAP program - it's called the Low-Income Home Energy Assistance Program - tax dollars from the feds are sent back to the states and they are distributed through our Community Action program."

Indiana received $27 million less in LIHEAP funds than the year before, Welch says, adding that the number-one call to 211 in Indiana is from people needing help paying utility bills. She says more families are eligible for assistance than the LIHEAP program has funds to cover.

Not taxing the benefit will stretch the help for those who need it the most, says Ed Gerardot, director of the Indiana Community Action Association, which has member agencies that verify eligibility for LIHEAP recipients.

"What it really would do would be allow everyone who receives the benefit to get 7 percent more fuel than if it wasn't taxed."

The tax has been waived in the past, Gerardot says, but legislators concerned over the lack of revenue two years ago reinstated it.

Paul Chase, AARP Indiana associate state director, says many older low-income Hoosiers will try to save money by adjusting their thermostat.

"Older individuals are at increased risk of illness or death due to exposure to extreme cold or heat. And yet, each year, there's far too many low-income individuals who subject themselves to those risks."

Not all of the LIHEAP money goes to help offset heat bills, Chase says. Some of it is used for weatherization programs to better insulate homes and make them more energy efficient.

The text of HB 1141 is online at

Leigh DeNoon, Public News Service - IN