Bill Text: IN HB1149 | 2010 | Regular Session | Introduced
Bill Title: Variable local option income taxes.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2010-01-07 - First reading: referred to Committee on Ways and Means [HB1149 Detail]
Download: Indiana-2010-HB1149-Introduced.html
Citations Affected: IC 6-1.1-20.3; IC 6-1.1-22-8.1; IC 6-8.1-1-1;
IC 6-10; IC 36-1-2-7.
Synopsis: Variable local option income taxes. Authorizes a taxing unit
to impose variable local option income taxes to replace revenue lost to
the local unit as a result of: (1) the application of the circuit breaker
credit; or (2) the elimination of property taxes on real property wholly
owned by individuals residing in the local unit where the individuals
pay a variable local option income tax. Repeals the distressed unit
appeal board statute.
Effective: July 1, 2010.
January 7, 2010, read first time and referred to Committee on Ways and Means.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
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A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
(1) except as provided in subsection (h), mail to the last known address of each person liable for any property taxes or special assessment, as shown on the tax duplicate or special assessment records, or to the last known address of the most recent owner shown in the transfer book; and
(2) transmit by written, electronic, or other means to a mortgagee maintaining an escrow account for a person who is liable for any property taxes or special assessments, as shown on the tax duplicate or special assessment records;
a statement in the form required under subsection
property taxes first due and payable in 2008, the county treasurer may
choose to use a tax statement that is different from the tax statement
prescribed by the department under subsection (c). (b). If a county
chooses to use a different tax statement, the county must still transmit
(with the tax bill) the statement in either color type or black-and-white
type.
(c) (b) The department of local government finance shall prescribe
a form, subject to the approval of the state board of accounts, for the
statement under subsection (b) (a) that includes at least the following:
(1) A statement of the taxpayer's current property taxes and
special assessments and delinquent:
(A) property taxes;
(B) taxes under IC 6-10 for the taxing district where the
property is located; and
(C) special assessments.
(2) A breakdown showing:
(A) the total property tax and special assessment liability and
the amount of the taxpayer's property tax and special
assessment liability that will be distributed to each taxing unit
in the county; and
(B) the estimated total tax liability under IC 6-10 in the
current calendar year of taxpayers in the taxing district
where the property is located and the amount of the
estimated liability that will be distributed to each taxing
unit in the county.
(3) An itemized listing for each property tax levy and tax under
IC 6-10, including:
(A) the amount of the tax rate;
(B) the entity levying the tax owed; and
(C) in the case of:
(i) property taxes and special assessments, the dollar
amount of the tax owed; and
(ii) taxes under IC 6-10, the amount raised by each
one-tenth of one percent (0.1%) in tax rate for the taxing
district where the property is located.
(4) Information designed to show the manner in which the:
(A) property taxes billed in the tax statement;
(B) taxes imposed under IC 6-10 for the taxing district
where the property is located; and
(C) special assessments billed in the tax statement;
are to be used.
(5) A comparison showing any change in the assessed valuation
for the property as compared to the previous year.
(6) A comparison showing any change in the property tax and
special assessment liability for the property as compared to the
previous year. The information required under this subdivision
must identify:
(A) the amount of the taxpayer's liability distributable to each
taxing unit in which the property is located in the current year
and in the previous year; and
(B) the percentage change, if any, in the amount of the
taxpayer's liability distributable to each taxing unit in which
the property is located from the previous year to the current
year.
(7) An explanation of the following:
(A) The Homestead credit and credits under IC 6-1.1-20.4,
IC 6-3.5-6-13, or another law that are available in the taxing
district where the property is located.
(B) All property tax deductions that are available in the taxing
district where the property is located.
(B) (C) The procedure and deadline for filing for the any
available homestead credit credits under IC 6-1.1-20.4,
IC 6-3.5-6-13, or another law and each deduction.
(C) (D) The procedure that a taxpayer must follow to:
(i) appeal a current assessment; or
(ii) petition for the correction of an error related to the
taxpayer's property tax and special assessment liability.
(D) (E) The forms that must be filed for an appeal or a petition
described in clause (C). (D).
(F) The procedure and deadline that a taxpayer must follow
and the forms that must be used if a credit or deduction has
been granted for the property and the taxpayer is no longer
eligible for the credit or deduction.
(E) (G) Notice that an appeal described in clause (C) (D)
requires evidence relevant to the true tax value of the
taxpayer's property as of the assessment date that is the basis
for the taxes payable on that property.
The department of local government finance shall provide the
explanation required by this subdivision to each county treasurer.
(8) A checklist that shows:
(A) the homestead credit credits under IC 6-1.1-20.4,
IC 6-3.5-6-13, or another law and all property tax deductions;
and
(B) whether the each homestead credit and each property tax
deduction applies in the current statement for the property
transmitted under subsection (b). (a).
(9) This subdivision applies to any property for which a
deduction or credit is listed under subdivision (8) if the notice
required under this subdivision was not provided to a taxpayer on
a reconciling statement under IC 6-1.1-22.5-12. The statement
must include in 2010, 2011, and 2012 a notice that must be
returned by the taxpayer to the county auditor with the taxpayer's
verification of the items required by this subdivision. The notice
must explain the tax consequences and applicable penalties if a
taxpayer unlawfully claims a standard deduction under
IC 6-1.1-12-37 on:
(A) more than one (1) parcel of property; or
(B) property that is not the taxpayer's principal place of
residence or is otherwise not eligible for the standard
deduction.
The notice must include a place for the taxpayer to indicate,
under penalties of perjury, for each deduction and credit listed
under subdivision (8), whether the property is eligible for the
deduction or credit listed under subdivision (8). The notice must
also include a place for each individual who qualifies the
property for a deduction or credit listed in subdivision (8) to
indicate the name of the individual and the name of the
individual's spouse (if any), as the names appear in the records
of the United States Social Security Administration for the
purposes of the issuance of a Social Security card and Social
Security number (or that they use as their legal names when they
sign their names on legal documents), and either the last five (5)
digits of each individual's Social Security number or, if an
individual does not have a Social Security number, the numbers
required from the individual under IC 6-1.1-12-37(e)(4)(B). The
notice must explain that the taxpayer must complete and return
the notice with the required information and that failure to
complete and return the notice may result in disqualification of
property for deductions and credits listed in subdivision (8), must
explain how to return the notice, and must be on a separate form
printed on paper that is a different color than the tax statement.
The notice must be prepared in the form prescribed by the
department of local government finance and include any
additional information required by the department of local
government finance. This subdivision expires January 1, 2015.
(10) A comparison showing:
(A) the aggregate tax rate under IC 6-10 for the previous
calendar year and the aggregate tax rate under IC 6-10 in
the current calendar year for the taxing district where the
property is located;
(B) the total estimated tax revenue in the taxing district
where the property is located for the previous calendar
year and the total estimated tax revenue in the taxing
district where the property is located for the current
calendar year; and
(C) the percentage change in the tax rates and revenues for
the taxing district where the property is located between
the previous calendar year and the current calendar year.
(d) (c) The county treasurer may mail or transmit the statement one
(1) time each year at least fifteen (15) days before the date on which
the first or only installment is due. Whenever a person's tax liability for
a year is due in one (1) installment under IC 6-1.1-7-7 or section 9 of
this chapter, a statement that is mailed must include the date on which
the installment is due and denote the amount of money to be paid for
the installment. Whenever a person's tax liability is due in two (2)
installments, a statement that is mailed must contain the dates on which
the first and second installments are due and denote the amount of
money to be paid for each installment. If a statement is returned to the
county treasurer as undeliverable and the forwarding order is expired,
the county treasurer shall notify the county auditor of this fact. Upon
receipt of the county treasurer's notice, the county auditor may, at the
county auditor's discretion, treat the property as not being eligible for
any deductions under IC 6-1.1-12 or any homestead credits under
IC 6-1.1-20.4 and IC 6-3.5-6-13.
(e) (d) All payments of property taxes and special assessments shall
be made to the county treasurer. The county treasurer, when authorized
by the board of county commissioners, may open temporary offices for
the collection of taxes in cities and towns in the county other than the
county seat.
(f) (e) The county treasurer, county auditor, and county assessor
shall cooperate to generate the information to be included in the
statement under subsection (c). (b).
(g) (f) The information to be included in the statement under
subsection (c) (b) must be simply and clearly presented and
understandable to the average individual.
(h) (g) After December 31, 2007, a reference in a law or rule to
IC 6-1.1-22-8 (expired January 1, 2008, and repealed) shall be treated
as a reference to this section.
(h) Transmission of statements and other information under this subsection applies in a county only if the county legislative body adopts an authorizing ordinance. Subject to subsection (i), in a county in which an ordinance is adopted under this subsection for property taxes and special assessments first due and payable after 2009, a person may direct the county treasurer and county auditor to transmit the following to the person by electronic mail:
(1) A statement that would otherwise be sent by the county treasurer to the person by regular mail under subsection (a)(1), including a statement that reflects installment payment due dates under section 9.5 or 9.7 of this chapter.
(2) A provisional tax statement that would otherwise be sent by the county treasurer to the person by regular mail under IC 6-1.1-22.5-6.
(3) A reconciling tax statement that would otherwise be sent by the county treasurer to the person by regular mail under any of the following:
(A) Section 9 of this chapter.
(B) Section 9.7 of this chapter.
(C) IC 6-1.1-22.5-12, including a statement that reflects installment payment due dates under IC 6-1.1-22.5-18.5.
(4) A statement that would otherwise be sent by the county auditor to the person by regular mail under IC 6-1.1-17-3(b).
(5) Any other information that:
(A) concerns the property taxes or special assessments; and
(B) would otherwise be sent:
(i) by the county treasurer or the county auditor to the person by regular mail; and
(ii) before the last date the property taxes or special assessments may be paid without becoming delinquent.
(i) For property with respect to which more than one (1) person is liable for property taxes and special assessments, subsection (h) applies only if all the persons liable for property taxes and special assessments designate the electronic mail address for only one (1) individual authorized to receive the statements and other information referred to in subsection (h).
(j) Before 2010, the department of local government finance shall create a form to be used to implement subsection (h). The county treasurer and county auditor shall:
(1) make the form created under this subsection available to the public;
(2) transmit a statement or other information by electronic mail
under subsection (h) to a person who, at least thirty (30) days
before the anticipated general mailing date of the statement or
other information, files the form created under this subsection:
(A) with the county treasurer; or
(B) with the county auditor; and
(3) publicize the availability of the electronic mail option under
this subsection through appropriate media in a manner
reasonably designed to reach members of the public.
(k) The form referred to in subsection (j) must:
(1) explain that a form filed as described in subsection (j)(2)
remains in effect until the person files a replacement form to:
(A) change the person's electronic mail address; or
(B) terminate the electronic mail option under subsection (h);
and
(2) allow a person to do at least the following with respect to the
electronic mail option under subsection (h):
(A) Exercise the option.
(B) Change the person's electronic mail address.
(C) Terminate the option.
(D) For a person other than an individual, designate the
electronic mail address for only one (1) individual authorized
to receive the statements and other information referred to in
subsection (h).
(E) For property with respect to which more than one (1)
person is liable for property taxes and special assessments,
designate the electronic mail address for only one (1)
individual authorized to receive the statements and other
information referred to in subsection (h).
(l) The form created under subsection (j) is considered filed with the
county treasurer or the county auditor on the postmark date. If the
postmark is missing or illegible, the postmark is considered to be one
(1) day before the date of receipt of the form by the county treasurer
or the county auditor.
(m) The county treasurer shall maintain a record that shows at least
the following:
(1) Each person to whom a statement or other information is
transmitted by electronic mail under this section.
(2) The information included in the statement.
(3) Whether the person received the statement.
only the pari-mutuel taxes (IC 4-31-9-3 through IC 4-31-9-5); the
riverboat admissions tax (IC 4-33-12); the riverboat wagering tax
(IC 4-33-13); the slot machine wagering tax (IC 4-35-8); the type II
gambling game excise tax (IC 4-36-9); the gross income tax (IC 6-2.1)
(repealed); the utility receipts and utility services use taxes (IC 6-2.3);
the state gross retail and use taxes (IC 6-2.5); the adjusted gross income
tax (IC 6-3); the supplemental net income tax (IC 6-3-8) (repealed); the
county adjusted gross income tax (IC 6-3.5-1.1); the county option
income tax (IC 6-3.5-6); the county economic development income tax
(IC 6-3.5-7); the auto rental excise tax (IC 6-6-9); the financial
institutions tax (IC 6-5.5); the gasoline tax (IC 6-6-1.1); the alternative
fuel permit fee (IC 6-6-2.1); the special fuel tax (IC 6-6-2.5); the motor
carrier fuel tax (IC 6-6-4.1); a motor fuel tax collected under a
reciprocal agreement under IC 6-8.1-3; the motor vehicle excise tax
(IC 6-6-5); the commercial vehicle excise tax (IC 6-6-5.5); the excise
tax imposed on recreational vehicles and truck campers (IC 6-6-5.1);
the hazardous waste disposal tax (IC 6-6-6.6); the cigarette tax
(IC 6-7-1); the beer excise tax (IC 7.1-4-2); the liquor excise tax
(IC 7.1-4-3); the wine excise tax (IC 7.1-4-4); the hard cider excise tax
(IC 7.1-4-4.5); the malt excise tax (IC 7.1-4-5); the petroleum
severance tax (IC 6-8-1); the various innkeeper's taxes (IC 6-9); the
various food and beverage taxes (IC 6-9); the county admissions tax
(IC 6-9-13 and IC 6-9-28); the regional transportation improvement
income tax (IC 8-24-17); a variable local income tax imposed under
IC 6-10; the oil inspection fee (IC 16-44-2); the emergency and
hazardous chemical inventory form fee (IC 6-6-10); the penalties
assessed for oversize vehicles (IC 9-20-3 and IC 9-30); the fees and
penalties assessed for overweight vehicles (IC 9-20-4 and IC 9-30); the
underground storage tank fee (IC 13-23); the solid waste management
fee (IC 13-20-22); and any other tax or fee that the department is
required to collect or administer.
ARTICLE 10. VARIABLE LOCAL INCOME TAX
Chapter 1. Purpose; Application
Sec. 1. This article applies to all taxing units.
Sec. 2. The purpose of this article is to provide taxing units with an alternative source of tax revenue to do any combination of the following:
(1) To replace property tax revenue lost from the application of property tax circuit breaker credits granted under
IC 6-1.1-20.6-7.5.
(2) To replace property tax revenue lost from the elimination
of property taxes on real property other than property taxes
imposed on real property in which one (1) or more of the
following entities have a direct or an indirect interest:
(A) A corporation (except a corporation that is exempt
from federal adjusted gross income tax under Section 1363
of the Internal Revenue Code and that complies with the
requirements in IC 6-3-4-13).
(B) A public utility company (as defined in IC 6-1.1-8-2).
(C) A trust that is not required by a trust agreement to
distribute one hundred percent (100%) of its income to
individuals who are beneficiaries of the trust.
(D) An entity that is taxed as a corporation for purposes of
the federal adjusted gross income tax.
(E) A corporation that is exempt from income tax under
Section 1363 of the Internal Revenue Code or a
partnership (including a limited liability company) if the
real property is not located where all of the shareholders,
partners, or members are subject to tax under this article.
(F) One (1) or more individuals, if the real property is not
located where all of the individuals are subject to tax under
this article.
Sec. 3. This article applies only to:
(1) the replacement of property taxes imposed for an
assessment date after January 15, 2010; and
(2) taxable years that begin after December 31, 2010.
Sec. 4. A tax imposed under this article is in addition to a tax
imposed under any other law.
Chapter 2. Definitions
Sec. 1. The definitions in IC 6-3 and this chapter apply
throughout this article.
Sec. 2. "Adjusted gross income" means adjusted gross income
(as defined in IC 6-3-1-3.5(a)), except that in the case of a taxpayer
who is a nonresident, the term includes only adjusted gross income
derived from the taxpayer's principal place of business or
employment.
Sec. 3. "Allocation area" has the meaning set forth in
IC 6-1.1-21.2-3.
Sec. 4. "Budget year" means a calendar year.
Sec. 5. "Direct or indirect interest" includes the following:
(1) An interest as an owner of property.
(2) A beneficial interest in property resulting from a trust,
guardianship, or other fiduciary relationship with an owner
of property.
(3) An ownership or beneficial interest that through a chain
of individuals or entities results in direct or indirect
ownership or beneficial interest in property.
Sec. 6. "Impose" means the following:
(1) To establish a tax.
(2) To set a tax rate for a tax.
(3) To increase or decrease the tax rate for a tax.
(4) To otherwise change the terms or conditions of a tax.
Sec. 7. "Nonresident" means an individual:
(1) who is not a resident of Indiana on the residency
determination date in the individual's taxable year; and
(2) whose principal place of business or employment is located
in Indiana on the residency determination date in the
individual's taxable year.
Sec. 8. "Political subdivision" has the meaning set forth in
IC 36-1-2-13.
Sec. 9. "Rainy day fund" refers to a rainy day fund established
under IC 6-10-11-1 or IC 36-1-8-5.1.
Sec. 10. "Residency determination date" refers to the date in a
taxpayer's taxable year on which the taxpayer's obligation to pay
taxes imposed by a particular taxing unit is determined.
Sec. 11. "Resident" means an individual who is a resident of a
taxing unit on the residency determination date in the individual's
taxable year.
Sec. 12. "Tax" refers to an adjusted gross income tax imposed
under this article.
Sec. 13. "Tax limit" refers to a tax limit imposed under
IC 6-1.1-18.5-3 or any other law on the property taxes levied by a
taxing unit.
Sec. 14. "Taxing district" means a geographic area within which
property is taxed by the same taxing units and at the same total
rate.
Sec. 15. "Taxing unit" means a political subdivision that has the
power to impose an ad valorem property tax.
Sec. 16. "Taxpayer" refers to an individual who has tax liability
under this article.
Chapter 3. Imposition of Tax
Sec. 1. A tax that is imposed under this article is imposed on the
adjusted gross income of:
(1) each individual who, on the residency determination date
for the individual's taxable year, is a resident of the taxing
unit imposing the tax; and
(2) subject to this chapter, each individual:
(A) who is not, on the residency determination date for the
individual's taxable year, a resident of any taxing unit in
Indiana; but
(B) whose principal place of business or employment, on
the residency determination date for the individual's
taxable year, is located in the taxing unit imposing the tax.
Sec. 2. For purposes of this article, an individual shall be treated
as a resident of:
(1) the taxing unit in which the individual maintains a home,
if the individual maintains only one (1) home in Indiana;
(2) if subdivision (1) does not apply, the taxing unit in which
the individual is registered to vote;
(3) if neither subdivision (1) nor (2) applies, the taxing unit in
which the individual registers the individual's personal
automobile; or
(4) if subdivisions (1), (2), and (3) do not apply, the taxing unit
in which the individual spends the majority of the individual's
time in Indiana during the taxable year in question.
Sec. 3. The residence or principal place of business or
employment of an individual is to be determined on January 1 of
the calendar year in which the individual's taxable year begins. If
an individual changes the location of the individual's residence or
principal place of employment or business to another taxing unit
in Indiana during a year, the individual's liability for the tax is not
affected.
Sec. 4. A tax on a nonresident is imposed only on the part of the
nonresident's adjusted gross income that is derived from the
individual's principal place of business or employment.
Sec. 5. In the case of a resident of Perry County, the tax may not
be imposed on the part of the individual's adjusted gross income
that is:
(1) earned in a county that is:
(A) located in another state; and
(B) adjacent to the county in which the taxpayer resides;
and
(2) subject to an income tax imposed by a county, city, town,
or other local governmental entity in the other state.
Sec. 6. A taxing unit's fiscal body may pass an ordinance (if the
taxing unit is a county, city, or town) or a resolution (if the taxing
unit is not a county, city, or town) to enter into reciprocity
agreements with the taxing authority of a city, town, municipality,
county, or other similar local governmental entity of any other
state. A reciprocity agreement must provide that the income of
Indiana residents is exempt from income taxation by the other
local governmental entity to the extent that the income of
nonresidents who reside in the other local governmental entity is
exempt from the tax in the Indiana taxing unit entering into the
agreement.
Sec. 7. A reciprocity agreement adopted under this chapter may
not become effective until it is also:
(1) adopted by the fiscal body of each of the other taxing units
raising tax revenue in the same taxing districts as the taxing
unit initiating the reciprocal agreement; and
(2) made effective in the other local governmental entity that
is a party to the agreement.
Sec. 8. The form and effective date of any reciprocity agreement
described in this chapter must be approved by the department of
state revenue. Each adopting taxing unit shall certify the
reciprocity agreement and any change in the reciprocity agreement
to the department of state revenue.
Sec. 9. If for any taxable year a taxpayer is subject to different
tax rates for the tax imposed in a taxing unit, the taxpayer's tax
rate for the taxing unit and that taxable year is the rate determined
in STEP FOUR of the following STEPS:
STEP ONE: Multiply the number of months in the taxpayer's
taxable year that precede July 1 by the rate in effect before
the rate change.
STEP TWO: Multiply the number of months in the taxpayer's
taxable year that follow June 30 by the rate in effect after the
rate change.
STEP THREE: Add the results determined under STEP ONE
and STEP TWO.
STEP FOUR: Divide the STEP THREE result by twelve (12).
Sec. 10. If the tax is not in effect during a taxpayer's entire
taxable year, the amount of tax that the taxpayer owes for that
taxable year equals the product of:
(1) the amount of tax the taxpayer would owe if the tax had
been imposed during the taxpayer's entire taxable year;
multiplied by
(2) a fraction. The numerator of the fraction equals the
number of days in the taxpayer's taxable year during which
the tax was in effect. The denominator of the fraction equals
the total number of days in the taxpayer's taxable year.
Sec. 11. (a) Except as provided in subsection (b), if for a
particular taxable year a resident is liable for an income tax
imposed by a county, city, or town located outside Indiana, that
resident is entitled to a credit against the taxpayer's total tax
liability imposed under this article for that same taxable year. The
amount of the credit equals the amount of tax imposed by the other
governmental entity on income derived from sources outside
Indiana and subject to the tax under this chapter. However, the
credit provided by this section may not reduce a resident's tax
liability under this article to an amount less than would have been
owed if the income subject to taxation by the other governmental
entity had been ignored.
(b) The credit provided by this section does not apply to a
resident to the extent that the other governmental entity provides
for a credit to the resident for the amount of taxes owed under this
article.
(c) To claim the credit provided by this section, a resident must
provide the department of state revenue with satisfactory evidence
that the taxpayer is entitled to the credit.
Sec. 12. (a) If for a particular taxable year a taxpayer is, or a
taxpayer and the taxpayer's spouse who file a joint return are,
allowed a credit for the elderly or totally disabled under Section 22
of the Internal Revenue Code, the taxpayer is, or the taxpayer and
the taxpayer's spouse are, entitled to a credit against the tax
liability under this article for that same taxable year. The amount
of the credit equals the lesser of:
(1) the product of:
(A) the credit for the elderly or totally disabled for that
same taxable year; multiplied by
(B) a fraction, the:
(i) numerator of which is the tax rate imposed under this
article against the taxpayer or the taxpayer and the
taxpayer's spouse; and
(ii) denominator of which is fifteen-hundredths (0.15); or
(2) the amount of tax imposed on the taxpayer or the taxpayer
and the taxpayer's spouse.
(b) If a taxpayer and the taxpayer's spouse file a joint return
and are subject to different taxing unit tax rates for the same
taxable year, the taxpayer and the taxpayer's spouse shall compute
the credit under this section by using the formula provided under
subsection (a), except that they shall use the average of the two (2)
tax rates imposed against them as the numerator referred to in
subsection (a)(1)(B)(i).
Sec. 13. Except as otherwise provided in this chapter, all
provisions of the adjusted gross income tax law (IC 6-3)
concerning:
(1) definitions;
(2) declarations of estimated tax;
(3) filing of returns;
(4) deductions or exemptions from adjusted gross income;
(5) remittances;
(6) incorporation of the provisions of the Internal Revenue
Code;
(7) penalties and interest; and
(8) exclusion of military pay credits for withholding;
apply to the imposition, collection, and administration of the tax
imposed by this article.
Sec. 14. IC 6-3-1-3.5(a)(6), IC 6-3-3-3, IC 6-3-3-5,
IC 6-3-4-4.1(g), IC 6-3-4-8.1(f), and IC 6-3-5-1 do not apply to the
tax imposed by this article.
Sec. 15. Each employer, including an employer making
payments by electronic funds transfer, shall report to the
department of state revenue for each reporting period the amount
of tax withholdings attributable to each taxing area. The report
must be made before the later of:
(1) the time that an employer that is not making an electronic
funds transfer is required to pay to the department of state
revenue amounts withheld during the reporting period; or
(2) the date specified by the department of state revenue.
Sec. 16. A taxpayer required to file estimated or annual state
adjusted gross income tax returns under IC 6-3-4-4.1, including
taxpayers making payments by electronic funds transfer, shall file
estimated tax returns and make payments of the tax imposed by
this article to the department of state revenue at the time or times
and in the installments specified under IC 6-3-4-4.1 for making
estimated state adjusted gross income tax returns by taxpayers not
making an electronic funds transfer.
Chapter 4. Adoption and Repeal of Tax
Sec. 1. The fiscal body of a taxing unit may adopt:
(1) in the case of a county, city, or town, an ordinance; or
(2) in the case of any other political subdivision, a resolution;
to impose a tax under this article to fund one (1) or both of the purposes described in IC 6-10-1-2.
Sec. 2. A fiscal body of a taxing unit may repeal or otherwise reverse its decision to impose a tax to fund either or both of the purposes described in IC 6-10-1-2 by the same procedures applicable to the imposition of a tax.
Sec. 3. An ordinance or a resolution adopted under this article may be adopted at any time.
Sec. 4. An ordinance or resolution adopted under this article need not identify the tax rate at which the tax will be imposed. The fiscal body of a taxing unit must state in an ordinance or resolution:
(1) the purposes for which the tax is being imposed; and
(2) that the rate shall be determined annually by the department of local government finance at the rate necessary to provide sufficient revenue to fund the purposes specified by the fiscal body.
Sec. 5. An ordinance or a resolution adopted under this article initially takes effect beginning with the second budget year after the date that the final vote is taken to adopt the ordinance or resolution. However, an ordinance or resolution that corrects a spelling, typographical, or clerical error in a previously adopted ordinance takes effect at the same time that the ordinance or resolution being corrected takes effect.
Sec. 6. An ordinance or resolution adopted under this article remains in effect until the date that an amendment or repeal by a subsequent ordinance or resolution takes effect under section 5 of this chapter.
Sec. 7. A copy of an ordinance or resolution adopted under this article must be certified to the department of local government finance, the department of state revenue, and the county auditor.
Chapter 5. Establishment of Tax Rate
Sec. 1. This chapter applies to a taxing unit if the taxing unit will have a tax in effect for a budget year. To the extent that IC 6-1.1-17 and IC 6-1.1-18 do not conflict with this article, the procedures in IC 6-1.1-17 and IC 6-1.1-18 apply to the establishment of tax rates, tax levies, and budgets and supplemental budgets related to a tax adopted under this article.
Sec. 2. Before July 2 in each year, the county fiscal officer shall send a certified statement to the fiscal officer of each taxing unit in the county containing the following information:
(1) An estimate of taxes under this article to be distributed to
the taxing unit during the last six (6) months of the current
year.
(2) The:
(A) total taxable adjusted gross income in each of the
preceding five (5) calendar years of individuals residing in
the taxing unit; and
(B) total taxable adjusted gross income in each of the
preceding five (5) calendar years derived from
employment or business in the taxing unit by nonresidents
whose principal place of business or employment is located
in the taxing unit;
as determined in conformity with the standards established by
the department of local government finance.
(3) If the taxing unit has adopted a tax to replace revenue lost
from the elimination of property taxes on real property, an
estimate of:
(A) the net assessed value of real property in the taxing
unit; and
(B) the net assessed value of real property that is located in
the taxing unit and in which one (1) or more of the
following entities have a direct or indirect interest:
(i) A corporation (except a corporation that is exempt
from federal adjusted gross income tax under Section
1363 of the Internal Revenue Code and that complies
with the requirements in IC 6-3-4-13).
(ii) A public utility company (as defined in IC 6-1.1-8-2).
(iii) A trust that is not required by a trust agreement to
distribute one hundred percent (100%) of its income to
individuals who are beneficiaries of the trust.
(iv) An entity that is taxed as a corporation for purposes
of the federal adjusted gross income tax.
(v) A corporation that is exempt from income tax under
Section 1363 of the Internal Revenue Code or a
partnership (including a limited liability company) if the
real property is not located where all of the
shareholders, partners, or members are subject to tax
under this article.
(vi) One (1) or more individuals, if the real property is
not located where all of the individuals are subject to tax
under this article.
(4) If the taxing unit has adopted a tax to replace revenue lost
from the circuit breaker credits granted under IC 6-1.1-20.6,
an estimate of the amount of revenue that will be lost to the
taxing unit from the circuit breaker credits in the ensuing
budget year if the taxing unit adopts the maximum
permissible property tax under the tax limits applicable to the
taxing unit, as determined under the standards established by
the department of local government finance.
(5) Any other information at the disposal of the county fiscal
officer that might affect the budget adoption process.
Sec. 3. In preparing budget estimates, a taxing unit's fiscal
officer and fiscal body shall estimate the amount of the tax needed
for each fund for the budget year.
Sec. 4. In the notice required under IC 6-1.1-17-3, a taxing unit
shall include the following information:
(1) The amount of the budget for each fund that the taxing
unit proposes to fund from taxes and the estimated tax rate
necessary to raise the amount.
(2) The amount of the budget that will be funded from a
distribution of the taxing unit's rainy day fund.
Sec. 5. Not later than the date on which the notice described in
section 4 of this chapter is published, a taxing unit shall submit a
copy of the notice to the county fiscal officer.
Sec. 6. In the hearing conducted under:
(1) IC 6-1.1-17-3; and
(2) IC 6-1.1-17-5 or IC 6-1.1-17-5.6;
a taxing unit shall consider public testimony concerning the part
of the budget that the taxing unit proposes to fund from taxes.
Sec. 7. Ten (10) or more individuals or entities that could be
subject to a tax under this article may object to a taxing unit's
budget in the same manner as an objection may be filed under
IC 6-1.1-17-5. The taxing unit shall make findings concerning an
objection filed under this section in the same manner as the taxing
unit is required to make findings to an objection filed under
IC 6-1.1-17-5.
Sec. 8. The taxing unit's:
(1) budget; and
(2) tax levies;
must be adopted in conformity with IC 6-1.1-17-5 or
IC 6-1.1-17-5.6, as applicable. The ordinance or resolution in which
the tax levies are adopted must estimate the tax rates necessary to
raise the tax levies and must separately state the tax levies and tax
rates that are attributable to an excessive levy appeal.
Sec. 9. If the fiscal body does not fix a budget or specify the
taxes needed to fund the budget before the date specified in
IC 6-1.1-17-5 or IC 6-1.1-17-5.6 or any later date approved by the
department of local government finance, the tax levy specified in
the most recently adopted budget shall be treated as the tax levy
adopted for the ensuing year.
Sec. 10. Each year, at least two (2) days before the first meeting
of the county board of tax adjustment held under IC 6-1.1-29-4, a
taxing unit shall file with the county auditor of each county in
which the taxing unit is located:
(1) a statement of the tax levy fixed by the taxing unit for the
ensuing budget year and the estimated tax rate needed to raise
the tax levy;
(2) two (2) copies of the budget adopted by the taxing unit for
the ensuing budget year; and
(3) two (2) copies of any findings adopted under section 7 of
this chapter.
The county auditor shall present these items to the county board of
tax adjustment at the first meeting of the county board of tax
adjustment. If a taxing unit is located in more than one (1) county,
the county determined under IC 6-1.1-17-7 has jurisdiction over
the taxing unit's budget, tax rates, and tax levies.
Sec. 11. When a county board of tax adjustment or county fiscal
officer reviews budgets, tax levies, and tax rates under
IC 6-1.1-17-6, the county board of tax adjustment or county fiscal
officer may accept, revise, or reduce the taxes, tax rates, and the
part of the budget funded from taxes proposed by the taxing unit
to enforce the tax limits imposed by law.
Sec. 12. A county board of tax adjustment or county fiscal
officer shall notify the fiscal officer of each taxing unit of the action
taken under section 11 of this chapter. The county board of tax
adjustment or county fiscal officer shall issue its determination in
the form of a written order. The written order shall be certified to
the following:
(1) The affected taxing unit.
(2) The county fiscal officer for each county in which the
taxing unit is located.
Sec. 13. In the notice required under IC 6-1.1-17-12, the county
fiscal officer shall include the following information:
(1) The tax levy and estimated tax rate for each tax imposed
under this article that will be in effect in the taxing area for
the following year.
(2) A statement briefly describing the actions that the
department of local government finance is empowered to take
with respect to the tax levies, tax rates, and budget.
Sec. 14. The county fiscal officer shall forward a copy of each
taxing unit's budget, estimated tax rates, and estimated tax levies
to the department of local government finance along with notice of
the actions taken by the county board of tax adjustment or county
fiscal officer.
Sec. 15. Based on the taxes imposed by each taxing unit located
in a taxing district, the department of local government finance,
with the assistance of the budget agency and the department of
state revenue, shall compute the appropriate aggregate tax rate for
a taxing district. The part of the tax rate imposed in a taxing
district for a taxing unit must be:
(1) uniformly applied to all taxing districts in which the taxing
unit is located; and
(2) subject to section 16 of this chapter and after the
application of revenue receivable in the budget year under
IC 6-3.5 or another law for the purposes of providing credits
against the property tax liability for which a tax is imposed
under this article, computed by dividing the tax levy for the
next calendar year in the taxing district by the total adjusted
gross income for the prior calendar year in the taxing district.
Sec. 16. The department of local government finance may
impose, for one (1) or more budget years after a taxing unit adopts
a tax under this article or changes a purpose for which a tax is
imposed, a tax rate that reflects any part of a tax imposed on
adjusted gross income that is earned in a budget year and will be
collected after the close of the budget year. If a rate is set for a
budget year under this section, the department of local government
finance may include in the rate a sufficient amount to recover the
estimated costs of issuing tax anticipation warrants repayable from
taxes collected after the end of the budget year.
Sec. 17. Tax rates must be rounded to the nearest
ten-thousandth of one percent (0.0001%).
Sec. 18. The department of local government finance shall base
tax rate computations on the best information available to the
department of local government finance at the time the
computation is made.
Sec. 19. The department of local government finance may
increase the part of a tax rate and levy imposed in a taxing district
for a taxing unit above the rate and levy advertised by the taxing
unit to raise sufficient revenue to meet the purposes of the tax.
Sec. 20. The department of local government finance shall certify the tax rates for a year to:
(1) each affected taxing unit;
(2) the county fiscal officer for the county where taxes must be raised;
(3) the department of state revenue; and
(4) the auditor of state;
before December 2 or as soon as practicable after December 1 of the year that immediately precedes the year in which a tax or a tax increase will take effect.
Sec. 21. A tax rate certified under this chapter takes effect on the later of January 1 or thirty (30) days after the tax rate is certified by the department of local government finance.
Chapter 6. Distribution of Tax Revenue
Sec. 1. The department of state revenue shall separately account within the state general fund for the taxes imposed by each taxing unit in a manner sufficient to provide each affected taxing unit and the county board of tax adjustment or county fiscal officer with jurisdiction over the taxing unit with an accounting of the amounts collected under this article in the taxing area.
Sec. 2. The auditor of state shall distribute the taxes collected for a taxing unit each month to the fiscal officer of the taxing unit.
Sec. 3. The auditor of state shall make distributions under this chapter from the state general fund.
Sec. 4. The amount necessary to make the distributions required by this chapter is annually appropriated from the state general fund.
Sec. 5. The county auditor shall promptly allocate a distribution under this chapter to the taxing unit for which the tax was imposed.
Sec. 6. The auditor of state shall distribute as required by law for deposit in the appropriate special fund any tax revenue that is to be distributed to an allocation area.
Sec. 7. (a) This section applies if:
(1) a taxing unit's legislative body adopts an ordinance (if the taxing unit is a county, city, or town) or a resolution (if the taxing unit is not a county, city, or town) authorizing the distribution of part of the taxing unit's taxes to an assignee of the taxing unit; and
(2) the assignment is permitted by law.
(b) The auditor of state shall reduce the amount of a distribution made to a taxing unit by the amount that the taxing unit directs the
auditor of state to distribute to an assignee of the taxing unit.
(c) A distribution under this section must be made to the
assignee designated in the ordinance or resolution at the assignee's
last known address, as submitted to the auditor of state by the
executive of the taxing unit before the cutoff date specified by the
auditor of state or as otherwise determined by law.
(d) A distribution under this section may be made not more than
one (1) time each month. The distribution may be made only in the
months specified in the ordinance or resolution. The distribution
for a month may not exceed the amount that the taxing unit would
otherwise be entitled to receive as a distribution in the month, after
deducting all other distribution assignments.
Sec. 8. For purposes of making distributions of:
(1) income taxes imposed under IC 6-3.5; and
(2) excise taxes imposed under any law;
that are distributed to a taxing unit based on the property tax levy
imposed by the taxing unit and for complying with any law that
sets appropriations, tax rates, or tax levies based on a calculation
involving property taxes, taxes imposed under this article shall be
treated as property taxes.
Chapter 7. Credit Against Property Taxes on Real Property
Sec. 1. This chapter applies to property tax liability imposed on
real property that is located in a taxing unit that has a tax that:
(1) is in effect for a budget year in which the property tax
liability is first due and payable; and
(2) was imposed for the purpose of replacing revenue lost
from the elimination of property taxes on real property.
Sec. 2. This chapter does not apply to property tax liability
imposed on real property in which one (1) or more of the following
entities has a direct or indirect interest:
(1) A corporation (except a corporation that is exempt from
federal adjusted gross income tax under Section 1363 of the
Internal Revenue Code and that complies with in IC 6-3-4-13).
(2) A public utility company (as defined in IC 6-1.1-8-2).
(3) A trust that is not required by a trust agreement to
distribute one hundred percent (100%) of its income to
individuals who are beneficiaries of the trust.
(4) An entity that is taxed as a corporation for purposes of the
federal adjusted gross income tax.
(5) A corporation that is exempt from income tax under
Section 1363 of the Internal Revenue Code or a partnership
(including a limited liability company) if the real property is
not located where all of the shareholders, partners, or
members are subject to tax under this article.
(6) One (1) or more individuals, if the real property is not
located where all of the individuals are subject to tax under
this article.
Sec. 3. The owners of real property are entitled to a credit
against the property tax liability imposed on real property. The
credit is equal to one hundred percent (100%) of the ad valorem
property taxes that would otherwise be first due and payable for
the budget year in which a tax is in effect.
Chapter 8. Exchange of Information
Sec. 1. Forms, notices, ordinances, and resolutions required or
permitted under this article must be prepared and used in the form
and in the manner approved by the state board of accounts.
Sec. 2. The department of state revenue shall establish a
schedule for regularly providing information to affected taxing
units, county boards, and county auditors concerning the
following:
(1) The amount of tax collections.
(2) The status of pending tax assessments, including
information concerning proposed assessments and potential
refunds.
(3) The amount of refunds made to taxpayers.
(4) Transfers in and out of a taxing unit's account that are
made to correct errors in the apportionment of taxes among
taxing units.
(5) Other information that is necessary for the fiscal officer of
a taxing unit to verify the amount of tax revenue that will be
available to the taxing unit.
Sec. 3. The department of state revenue may enter into a
confidentiality agreement with a county auditor or taxing unit to
share otherwise confidential information under the terms
determined by the department of state revenue.
Sec. 4. The department of state revenue, after reviewing the
recommendations of the budget agency, shall establish a schedule
to regularly provide revenue forecasts to county auditors and
taxing units.
Sec. 5. The department of state revenue shall conduct a program
to provide employers and taxpayers with adequate information for
the employer or taxpayer to determine the:
(1) total tax rate that applies to a particular taxing district;
and
(2) taxing district where taxpayers have an obligation to pay tax.
Chapter 9. Anticipation Loans
Sec. 1. A fiscal body for a taxing unit (by ordinance, if the taxing unit is a county, city, or town, or otherwise by resolution) may enter into temporary loans to meet the current running expenses of the taxing unit in anticipation of and not exceeding taxes imposed for a budget year.
Sec. 2. Temporary loans under this chapter must be evidenced by tax anticipation warrants of the taxing unit.
Sec. 3. An ordinance or resolution authorizing the issuance of tax anticipation warrants must:
(1) state the total amount of the issue;
(2) state the denomination of the warrants;
(3) state the date, time, and place payable;
(4) state the rate of interest;
(5) state the funds and revenues in anticipation of which the warrants are issued and out of which they are payable; and
(6) appropriate and pledge a sufficient amount of those revenues to the punctual payment of the warrants.
Sec. 4. Tax anticipation warrants issued under this chapter may be for a term that extends to any date after the close of a particular budget year on which taxes imposed for the budget year are reasonably expected to be collected.
Sec. 5. Tax anticipation warrants and the interest earned on tax anticipation warrants issued under this chapter are exempt from taxation for all purposes.
Chapter 10. Bonds
Sec. 1. Notwithstanding any other law, if a taxing unit desires to issue obligations or enter into leases, payable wholly or in part from taxes, the obligations of the taxing unit or any lessor may be sold at public sale in accordance with IC 5-1-11 or at negotiated sale.
Sec. 2. A pledge of tax revenues under this article is enforceable in accordance with IC 5-1-14.
Sec. 3. With respect to obligations for which a pledge has been made under this article, the general assembly covenants with the taxing unit and the purchasers or owners of those obligations that this article will not be repealed or amended in any manner that will adversely affect the tax collected under this article as long as the principal of or interest on those obligations is unpaid.
Chapter 11. Rainy Day Fund
Sec. 1. A rainy day fund is established in each taxing unit that has not established a rainy day fund under IC 36-1-8-5.1. The balance of a rainy day fund does not revert at the end of a budget year to any other fund.
Sec. 2. An amount shall be annually budgeted from taxes equal to the amount necessary to establish or maintain a balance in each taxing unit's rainy day fund equal to five percent (5%) of the amount distributed to the taxing unit under this article in the immediately preceding budget year.
Sec. 3. A taxing unit shall deposit the amount appropriated under section 2 of this chapter in the taxing unit's rainy day fund. In addition, tax revenues distributed for a budget year that exceed the taxing unit's budget to be funded from taxes shall be deposited in the taxing unit's rainy day fund.
Sec. 4. The amount in a rainy day fund on the date in each budget year specified by the department of local government finance that exceeds five percent (5%) of the amount distributed to the taxing unit under this article in the immediately preceding year shall be used in the following budget year to maintain lower tax rates in the new budget year than would otherwise apply if the excess rainy day fund balance was not available.
(1) auditor, for a county not having a consolidated city;
(2) controller, for a:
(A) consolidated city;
(B) county having a consolidated city, except as otherwise provided; or
(C) second class city;
(3) clerk-treasurer, for a third class city;
(4) clerk-treasurer, for a town;
(5) trustee, for a township;
(6) treasurer, for a school corporation; or
(7) individual authorized as the fiscal officer by law or the political subdivision's fiscal body, for any other political subdivision.
