Citations Affected: IC 6-8-1; IC 6-8.1-1-1; IC 6-10; IC 8-18-8-5;
IC 14-14-3.
January 18, 2011, read first time and referred to Committee on Ways and Means.
petroleum tax on coal bed methane and the coal and aggregate
severance tax shall be distributed as follows: (1) 50% to the state
general fund. (2) 40% to the county in which the coal bed methane,
coal, or aggregate is removed or processed and the cities and towns of
the county based on population. (3) 10% to a new fund to make grants
for parks and recreation projects throughout Indiana. Provides that the
counties, cities, and towns must use the money from the distribution
only for local road and street purposes. Establishes a seven member
board comprised of two governor appointments who are voting
members, four legislative appointments who are nonvoting members,
and the director of the department of natural resources, who is a voting
member, to decide grant awards from the new parks and recreation
grant fund.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation and to make an appropriation.
such gas is piped to a landowner's private buildings for the landowner's
own use.
(IC 6-9-13 and IC 6-9-28); the coal and aggregate severance tax
(IC 6-10); the regional transportation improvement income tax
(IC 8-24-17); 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.
the taxpayer during the reporting period by fifty cents ($0.50).
(d) For coal used for burning solid waste, the severance tax is
the lesser of:
(1) fifty cents ($0.50) per ton; or
(2) four percent (4%) of the selling price per ton.
Sec. 2. Each taxpayer shall report the gross value of the coal or
aggregate that the taxpayer severed or processed during the
preceding month at the time and in the manner prescribed by the
department. However, the department may authorize a quarterly
reporting period.
Sec. 3. (a) Gross value is determined as follows:
(1) If the coal is severed or processed, or both, during a
reporting period and sold during the same reporting period,
gross value equals the amount received or receivable by the
taxpayer for the sale of the coal.
(2) If the coal is severed or processed, or both, during a
reporting period but not sold during the same reporting
period, the gross value is determined as follows:
(A) If the coal is to be sold under the terms of an existing
contract, the contract price is used to compute gross value.
(B) If no contract exists, the fair market value for the
grade and quality of the coal is used to compute gross
value.
(3) If severed coal is purchased for processing and resale, the
gross value is the amount received or receivable during the
reporting period reduced by the amount paid or payable to
the registered taxpayer actually severing the coal.
(4) If severed coal is purchased for processing and
consumption, the gross value is the fair market value of
processed coal of similar grade and quality reduced by the
amount paid or payable to the registered taxpayer actually
severing the coal.
(5) If the aggregate is severed during a reporting period and
sold during the same reporting period, gross value equals the
amount received or receivable by the taxpayer for the sale of
the aggregate.
(6) If the aggregate is severed during a reporting period but
not sold during the same reporting period, the gross value is
determined as follows:
(A) If the aggregate is to be sold under the terms of a
contract, the contract price is used to compute gross value.
(B) If no contract exists, the fair market value for the
grade and quality of the aggregate is used to compute gross
value.
(7) If a transaction involves related parties, gross value is the
amount received or receivable from the first noncontrolled
sale by the related parties. However, if coal or aggregate is
sold to a related party for consumption, gross value is an
amount not less than the fair market value for coal or
aggregate of similar grade and quality.
(8) In the absence of a sale, gross value is the fair market
value for coal or aggregate of a similar grade and quality.
(b) Gross value may not be reduced by any taxes, including the
tax imposed under this chapter, royalties, sales commissions, or
other expenses.
Sec. 4. (a) If a contract, either written or oral, is entered into by
a person that:
(1) is engaged to sever or process coal or to sever aggregate;
and
(2) does not obtain title to or have an economic interest in the
coal or aggregate;
the party that owns the coal or aggregate or has an economic
interest in the coal or aggregate is the taxpayer.
(b) A party that receives only an arm's length royalty is not
considered to have an economic interest for purposes of subsection
(a).
Chapter 3. Certificate of Registration and Administration
Sec. 1. (a) A taxpayer engaged in severing aggregate or severing
or processing coal shall file an application for a certificate of
registration on a form prescribed by the department.
(b) Each application must be signed by the taxpayer or an agent
of the taxpayer. If the taxpayer is a partnership or association, the
application must be signed by a member. If the taxpayer is a
corporation, the application must be signed by an executive officer
or other person specifically authorized by the corporation to sign
the application.
Sec. 2. A taxpayer must submit a severance tax return on a form
prescribed by the department before the twentieth day of the
month after the reporting period in which coal is severed or
processed. The taxpayer must submit the amount of severance tax
due with the severance tax return. The taxpayer must submit a
return for each reporting period even though there may be no
severance tax liability.
Sec. 3. If a taxpayer fails to comply with this chapter or a rule
adopted under this chapter, the department may suspend or revoke
the taxpayer's certificate of registration.
Sec. 4. (a) A taxpayer, including an officer of a corporation, who
recklessly, knowingly, or intentionally severs or processes coal in
Indiana without obtaining a certificate of registration, or after a
certificate of registration has been revoked, commits a Class B
misdemeanor.
(b) A taxpayer, including an officer of a corporation, who
recklessly, knowingly, or intentionally severs aggregate in Indiana
without obtaining a certificate of registration, or after a certificate
of registration has been revoked, commits a Class B misdemeanor.
Sec. 5. (a) The department may authorize a taxpayer processing
coal to report and pay the tax that would be due from the taxpayer
severing the coal.
(b) An authorization under subsection (a) must be in the form
of an agreement executed by the taxpayer processing the coal, the
taxpayer severing the coal, and the department. The agreement
must be on a form prescribed by the department.
(c) The agreement must be signed by each taxpayer that is a
party to the agreement and by the commissioner of the
department. If a taxpayer is a partnership or association, the
application must be signed by a member. If a taxpayer is a
corporation, the application must be signed by an executive officer
or other person specifically authorized by the corporation to sign
the application.
(d) The agreement may be terminated by a party after thirty
(30) days written notice to the other parties. However, the
department may terminate the agreement immediately upon
written notice to the other parties if either the taxpayer severing
the coal or the taxpayer processing the coal fails to comply with the
terms of the agreement.
Sec. 6. (a) The department shall provide to all registered
taxpayers that sell severed or processed coal that will subsequently
be claimed as a reduction from gross value for purchased coal
under IC 6-10-2-3(a)(3) a certificate prescribed by the department
for the processor of the coal to verify the processor's reduction
from gross value for purchased coal.
(b) If a processor purchases coal that has been severed outside
Indiana, the processor shall obtain a certificate from the person
severing the coal on a form prescribed by the department to verify
the purchased coal.
Sec. 7. (a) A reduction from gross value for purchased coal
under IC 6-10-2-3(a)(3) may not be allowed for purchases of coal
originating from persons severing coal in Indiana who have not
registered to report and pay the tax imposed under this article.
(b) A reduction from gross value for purchased coal under
IC 6-10-2-3(a)(3) may not be allowed for purchases of coal that
cannot be traced to the person who severed the coal outside
Indiana.
Sec. 8. The department shall adopt rules under IC 4-22-2 to
implement this article.
Chapter 4. Payment of Tax
Sec. 1. (a) Each taxpayer charged with the duty to file reports
and pay the severance tax imposed under this article shall post a
cash or corporate surety bond in an amount prescribed by the
department.
(b) The department may bring an action for a restraining order
or a temporary or permanent injunction to restrain or enjoin the
taxpayer's business until the bond is posted. The department may
bring the action in the Marion County circuit court or in the circuit
court of the county in which the taxpayer's business is located.
Sec. 2. The department may suspend or revoke a taxpayer's
certificate of registration if the taxpayer fails to comply with this
chapter.
Sec. 3. (a) If a taxpayer:
(1) fails to pay the full amount of tax imposed under this
article as shown on the taxpayer's return by the due date for
the return or for the payment;
(2) fails to report the tax due under this article;
(3) falsifies a return required under this article; or
(4) incurs a deficiency upon the determination of the
department;
the taxpayer is subject to a penalty and interest on the unpaid tax.
(b) Interest applies at the rate established in IC 6-8.1-10-1 from
the date the tax becomes delinquent until the date the tax is paid.
(c) A taxpayer described in subsection (a) is subject to a penalty
in an amount determined by the department under IC 6-8.1-10.
Sec. 4. (a) Notwithstanding any other provisions of this article,
the president, vice president, secretary, treasurer, or other person
holding an equivalent corporate office of a corporation subject to
this article is personally liable, jointly and severally, for the tax
imposed under this article.
(b) The following events do not discharge the personal liability
of an officer described in subsection (a):