Bill Text: IN SB0326 | 2012 | Regular Session | Introduced
Bill Title: State income tax rate adjustment.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2012-01-09 - Senator Head added as second author [SB0326 Detail]
Download: Indiana-2012-SB0326-Introduced.html
Citations Affected: IC 6-3-2-1.
Synopsis: State income tax rate adjustment. Provides for a biennial
reduction of 0.1% in the state adjusted gross income tax rate on
residents, nonresidents, and corporations if the budget agency
determines that year-over-year revenue from the adjusted gross income
tax exceeds 3.1%. Provides that the minimum rate is 2.9% for persons
and 6% for corporations. Requires the budget agency to make the
determination before September 1of each even-numbered year and for
the rate reduction to take effect for taxable years beginning in the
immediately following odd-numbered year. Requires the department of
state revenue to publish a statement of the rates in the Indiana Register
and on the department's web site and make the statement available for
public inspection and copying.
Effective: July 1, 2012.
January 9, 2012, read first time and referred to Committee on Tax and Fiscal Policy.
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.
(b) Except as provided in section 1.5 of this chapter, each taxable year, a tax at the following rate of adjusted gross income is imposed on that part of the adjusted gross income derived from sources within Indiana of every corporation:
(1) Before July 1, 2012, eight and five-tenths percent (8.5%).
(2) After June 30, 2012, and before July 1, 2013, eight percent (8.0%).
(3) After June 30, 2013, and before July 1, 2014, seven and five-tenths percent (7.5%).
(4) After June 30, 2014, and before July 1, 2015, seven percent (7.0%).
(5) After June 30, 2015, six and five-tenths percent (6.5%).
The percentage rate shall be adjusted as provided under subsection (d).
(c) If for any taxable year a taxpayer is subject to different tax rates under subsection (b), the taxpayer's tax rate for that taxable year is the rate determined in the last STEP of the following STEPS:
STEP ONE: Multiply the number of months in the taxpayer's taxable year that precede the month the rate changed by the rate in effect before the rate change.
STEP TWO: Multiply the number of months in the taxpayer's taxable year that follow the month before the rate changed by the rate in effect after the rate change.
STEP THREE: Divide the sum of the amounts determined under STEPS ONE and TWO by twelve (12).
However, the rate determined under this subsection shall be rounded to the nearest one-hundredth of one percent (0.01%).
(d) Subject to subsection
(1) the tax rate to be used under subsection (a) is the same rate used for the preceding taxable year;
(2) the tax rate to be used under subsection (b) is the rate specified in subsection (b), minus the cumulative adjustments under subsection (e) in previous years;
unless the two (2) year average percentage increase in net adjusted gross income tax revenue collected by the state
(e) Subject to subsection (f), if the two (2) year average percentage increase in net adjusted gross income tax revenue is at least three and one-tenth percent (3.1%), the tax rate to be used for the taxable year beginning in the immediately following odd- numbered year is as follows:
(1) In the case of persons covered by subsection (a), the rate for the preceding taxable year minus one-tenth percent (0.1%).
(2) In the case of corporations covered by subsection (b):
(A) for a taxable year beginning before January 1, 2016, the tax rate specified in subsection (b) minus:
(i) the cumulative adjustments under this subsection in previous years; and
(ii) one-tenth percent (0.1%); and
(B) for a taxable year beginning after December 31, 2015,
the rate for the preceding taxable year minus one-tenth
percent (0.1%).
(f) The rate used under:
(1) subsection (a) for a taxable year beginning before January
1, 2013, is three and four-tenths percent (3.4%), and may not
be less than two and nine-tenths percent (2.9%) for a taxable
year beginning after December 31, 2012; and
(2) subsection (b) may not be less than six percent (6%) for a
taxable year beginning after December 31, 2015.
(g) Before September 1 of each even-numbered year, the budget
agency, using a two (2) year average, shall determine whether an
increase in net adjusted gross income tax revenue has occurred. In
making this determination, the following apply:
(1) Returns processed during the three (3) calendar years that
immediately precede the determination year shall be used.
(2) Net adjusted gross income tax revenue collected from all
taxpayers under this article on these returns shall be
considered.
(3) Overpayments refunded to taxpayers during these
calendar years shall be subtracted.
(4) Automatic taxpayer refunds provided to individuals as
credits under IC 4-10-22-4 during these calendar years shall
not be subtracted.
(5) The best information available to the budget agency at the
time the determination is made shall be considered.
Beginning in 2012, the budget agency shall compute and determine
whether an increase in net adjusted gross income tax revenue has
occurred and, if so, the amount of the two (2) year average
percentage increase in net adjusted gross income tax revenue. The
budget agency shall certify the results of the computation to the
department of state revenue.
(h) Before October 1 each year, the department shall submit for
publication in the Indiana Register, under IC 4-22-7-7, a statement
of the tax rate to be used under subsection (a) and the tax rate to
be used under subsection (b) for a taxable year beginning on or
after January 1 of the following year. The department shall also
publish the statement on the department's web site and make the
statement available for public inspection and copying under
IC 5-14-3.