 In 2008, Daniels proposed a property tax ceiling of one percent on residential properties, two percent for rental properties and three percent for businesses. The plan was approved by the Indiana General Assembly on March 14, 2008 and signed by Daniels on March 19, 2008. In 2008, Indiana homeowners had an average property tax cut of more than 30 percent; a total of $ 870 million in tax cuts. Most money collected through property taxes funds local schools and county government. To offset the loss in revenues to the municipal bodies, the state raised the sales tax from 6 % to 7 % effective April 1, 2008.
