Citations Affected: IC 3; IC 4; IC 5; IC 6; IC 8; IC 9; IC 10; IC 12;
IC 13; IC 14; IC 15; IC 16; IC 20; IC 21; IC 22; IC 23; IC 31; IC 32;
IC 36.
Synopsis:
Eliminates the authority of the state to impose a property
tax. Eliminates the authority of a political subdivision to impose a
property tax (except for police and fire services). Authorizes political
subdivisions to impose a police and fire service fee in lieu of a property
tax. Authorizes a county to impose a local government income tax to
provide revenues for the political subdivisions (except school
corporations) in the county. Transfers financial responsibility for
certain welfare programs from local government to the state. Allows a
school corporation to impose a local income tax for education of not
more than 1.2%. Provides a state tuition support formula equal to the
difference between the school corporation's expenditure limit and the
amount that the school corporation can raise from a local income tax
for education of 1.2%. Decreases the sales tax and provides an
additional distribution to political subdivisions in the amount of 20%
of the local government income tax imposed for the political
subdivision. Establishes the state emergency reserve fund and transfers
money from the state general fund to the state emergency reserve fund.
Makes conforming changes to convert the school budget year from a
calendar year to a school year. Makes related changes. Makes an
appropriation.
Effective: Upon passage; July 1, 2004; January 1, 2005.
January 15, 2004, read first time and referred to Committee on Ways and Means.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation and to make an appropriation.
county may levy a tax in compliance with IC 6-1.1-41 on all taxable
property within the county. The tax may not exceed one and
sixty-seven hundredths cents ($0.0167) on each one hundred dollars
($100) of assessed valuation.
valuation of agricultural acreage including improvements thereon,
and the total amount of the gross assessed valuation of real estate
and the total assessed valuation of improvements thereon. The
abstract shall also include a recital of the total amount of net
valuation of real property.
(3) The total assessed valuation of personal property belonging to
steam and electric railways and to public utilities.
(4) The total number of taxpayers and the total assessed valuation
of household goods and personal effects, excluding boats subject
to the boat excise tax under IC 6-6-11.
(5) The total number of units assessed and the assessed valuation
of each of the following items of personal property:
(A) Privately owned, noncommercial passenger cars.
(B) Commercial passenger cars.
(C) Trucks and tractors.
(D) Motorcycles.
(E) Buses.
(F) Mobile homes.
(G) Boats.
(H) Airplanes.
(I) Farm machinery.
(J) Livestock.
(K) Crops.
(6) The total number of taxpayers and the total valuation of
inventories and other personal property belonging to retail
establishments, wholesale establishments, manufacturing
establishments, and commercial establishments.
(7) The names of the political subdivisions that have elected to
fund police and fire services under IC 36-8.5.
(b) The department of local government finance is hereby
authorized to prescribe and promulgate the forms as are necessary for
the obtaining of such information from local assessing officials. The
local assessing officials are directed to comply with this section.
obligations owed by the applicant to the state or any of its
departments or agencies;
(3) a statement from the county treasurer of the county in which
the applicant proposes to conduct horse racing meetings that there
are no real or personal property taxes or taxes imposed under
IC 6-3.5 owed by any of the principals seeking the permit; and
(4) a statement of obligations that are owed or being contested,
including salaries, purses, entry fees, laboratory fees, and debts
owed to vendors and suppliers.
(b) In addition to the requirements of subsection (a), the commission
may not issue a recognized meeting permit for a recognized meeting to
occur in a county unless IC 4-31-4 has been satisfied.
behalf of the county by the county auditor, and shall stipulate and agree
that the board of commissioners of the county will pay all interest on
such matured bond to the date of the maturity thereof, and that a new
bond (referred to in this chapter as a redemption bond) in the same
amount as the matured bond, will be issued to pay and retire such
matured bond, and that such redemption bond will be and continue to
be a valid and binding obligation of the county and that during the
period fixed in the contract not exceeding ten (10) years the board of
commissioners will pay annually to the owner of such redemption
bond, one-tenth (1/10) of the principal amount of such redemption
bond and, in addition thereto, will pay semiannually all interest which
shall have accrued thereon to the date when such payment is to be
made. The date on which such partial payments of the principal of such
bond will be made shall be fixed and prescribed in such contract and
may be on June 1 or December 1 of the year next succeeding the year
in which such contract is executed and signed and June 1 or December
1 of each and every year thereafter until paid. The interest accrued on
such bond shall be paid semiannually on June 1 and December 1,
beginning on the same date as the first partial payment on such bond.
The board of commissioners shall further agree to levy a tax on the
taxable property of such county in annually appropriate an amount
sufficient to make the payments on such redemption bonds as they fall
due, together with all interest which shall have accrued thereon. Any
bondholder who elects to avail himself of the provisions of this chapter
shall agree that in consideration of the privilege hereby afforded he will
not maintain or attempt to maintain a suit for the collection or the
enforcement of the lien of any such bond, other than in accordance with
the remedies afforded by the provisions of this chapter. The form of the
contract herein contemplated shall be prescribed by the state board of
accounts with the approval of the attorney general. At the time when
the contract is executed and the redemption bond is issued, the matured
bond shall be surrendered to the county auditor and shall be canceled
by writing across the face of the matured bond the words "Canceled by
issuing to ______ a redemption bond in the same principal sum as this
bond, due and payable on the ______ day of ______, 19____.
20____.".
shall be used to pay interest on the bonds and in no event may such
income be used for any other purpose except as provided in section 2
of this chapter.
revenues at any time are insufficient to pay lease rentals. The amount
in the reserve fund may be invested in the manner and to the extent
provided in the lease. All interest or other income from the investment
shall become part of the reserve fund unless the reserve fund contains
the maximum amount required to be in the reserve fund. The following
occur if the reserve fund contains the maximum amount required to be
in the reserve fund:
(1) If any of the lease rental is payable from taxes, the interest or
other income shall be transferred to the fund to be used for the
payment of the lease rental provided to be paid from taxes.
(2) If none of the lease rental is payable from taxes, the interest or
other income shall become a part of the reserve fund.
present value of the accrued liability to provide the pension and other
benefits to each person on the list.
(d) Before July 1 of each year, the state board shall determine the
total pension payments made by all units of local government for the
preceding year and shall estimate the total pension payments to be
made to all units in the calendar year in which the July 1 occurs and in
the following calendar year.
(e) Each calendar year, the state board shall, with respect to the
following calendar year, determine for each unit of local government
an amount (Dy). The state board shall, in two (2) equal installments
before July 1 and before October 2, distribute to each eligible unit of
local government the amount (Dy) determined for the unit with respect
to the following calendar year. The amount (Dy) shall be determined by
the following STEPS:
STEP ONE. Subtract the total distribution made to units (Dy-1) in the
preceding calendar year from the total pension payments made by units
(Py-1) in the preceding calendar year.
STEP TWO. Multiply the STEP ONE difference by (1+k) as (k) is
determined in STEP THREE.
STEP THREE. Determine the annual percentage increase (k) in the
STEP ONE difference which will allow the present value of all future
estimated distributions, as computed under STEP FOUR, from the
pension relief fund to equal the "k portion" of the pension relief fund
balance plus the present value of all future receipts to the "k portion"
of the fund, but which will not allow the "k portion" of the pension
relief fund balance to be negative. These present values shall be
determined based on the current long term actuarial assumptions. The
"k portion" of the pension relief fund balance is the total pension relief
fund balance less the "m portion" of the fund. The percentage increase
(k) shall be computed to the nearest one thousandth of one percent
(.001%). All years, after the year 2000, in which the receipts to the
fund plus the net pension payments by all the units equal or exceed the
total pension payments shall be ignored for the purposes of these
calculations.
STEP FOUR. Subtract the STEP TWO product from the estimated
total pension payments to be made by all units (Py) in the calendar year
for which the distribution is to be made.
STEP FIVE. Multiply the STEP FOUR difference by one-half (1/2)
of the sum of two quotients, (1) the quotient of the unit's number of
police officers and firefighters on December 31 of the year before the
year of the distribution who are members of a pension fund established
before May 1, 1977, who are retired, and who are deceased if their
beneficiaries are eligible for benefits (unit) divided by the total number
of these police officers and firefighters (total units) on December 31 of
the year before the year of the distribution in all units plus (2) the
quotient of the unit's pension payments (payments) divided by the total
pension payments (total payments) by all units.
Expressed mathematically:
Dy = (Py - ((Py-1 - Dy-1) x (1 + k))) x 1/2
(unit/(total unit) + payment/(total payment)).
(f) If in any year the distribution made to a unit of local government
is larger than the unit's pension payments to its retirees and their
beneficiaries for that year, the excess may not be distributed to the unit
but must be transferred to the 1977 police officers' and firefighters'
pension and disability fund and the unit's contributions to that fund
shall be reduced for that year by the amount of the transfer.
(g) If in any year after 2000, the STEP FOUR difference under
subsection (e) is smaller than the revenue to the pension relief fund in
that year, then the revenue plus interest plus the fund balance in that
year shall be used in STEP FIVE of subsection (e) instead of the STEP
FOUR difference.
(h) The state board shall have its actuary report annually on the
appropriateness of the actuarial assumptions used in determining the
distribution amount under subsection (e). At least every five (5) years,
the state board shall have its actuary recompute the value of (k) under
STEP TWO of subsection (e).
(i) Each calendar year the state board shall determine the amounts
to be allocated to the "m portion" of the pension relief fund under the
following STEPS, which shall be completed before July 1 of each year:
STEP ONE. The state board shall determine the following:
(1) "Excess earnings", which are the state board's projection of
earnings for the calendar year from investments of the "k portion" of
the fund that exceed the amount of earnings that would have been
earned if the rate of earnings was the rate assumed by the actuary of the
state board in his calculation of (k) under STEP THREE of subsection
(e).
(2) "Prior deficit amount", which is:
(A) the amount of earnings that would have been earned under
the rate assumed by the actuary of the state board in his
calculation of (k) under STEP THREE of subsection (e);
minus
(B) the amount of earnings received;
for a calendar year after 1981 in which (B) is less than (A).
STEP TWO. The state board shall distribute to the "m portion" the
excess earnings less any prior deficit amounts.
(j) The "m portion" of the fund shall be any direct allocations plus:
(1) amounts allocated under subsection (i); and
(2) any earnings on the "m portion" less amounts previously
distributed under subsection (l).
(k) The state board shall determine, based on actual experience and
reasonable projections, the units eligible for distribution from the "m
portion" of the pension relief fund according to the following STEPS:
STEP ONE. Determine the amount of pension payments to be paid
by the unit in the calendar year, net of the amount of the distribution to
be received by the unit under subsection (e) in that year, plus
contributions to be made under IC 36-8-8 in that year.
STEP TWO. Divide the amount determined under STEP ONE by
the amount of the maximum permissible ad valorem property tax levy
for the unit as determined under IC 6-1.1-18.5 for the calendar year.
STEP THREE. If the quotient determined under STEP TWO is
equal to or greater than one-tenth (0.1), the unit shall receive a
distribution under subsection (l).
(l) For a calendar year, the state board shall, before July 1 of the
year, distribute from the "m portion" of the pension relief fund to the
extent there are assets in the "m portion" to each eligible unit an
amount, not less than zero (0), determined according to the following
STEPS:
STEP ONE. For the first of consecutive years that a unit is eligible
to receive a distribution under this subsection, determine the amount
of pension payments paid by the unit in the calendar year two (2) years
preceding the calendar year net of the amount of distributions received
by the unit under subsection (e) in the calendar year two (2) years
preceding the calendar year.
STEP TWO. For the first of consecutive years that a unit is eligible
to receive a distribution under this subsection, divide the amount
determined under STEP ONE by the amount of the maximum
permissible ad valorem property tax levy for the unit as determined
under IC 6-1.1-18.5 for the calendar year two (2) years preceding the
calendar year or that would have applied if most property taxes had
not been eliminated.
STEP THREE. For the first and all subsequent consecutive years
that a unit is eligible to receive a distribution under this subsection,
multiply the amount of the maximum permissible ad valorem property
tax levy for the unit as determined under IC 6-1.1-18.5 for the calendar
year (or that would have applied for the unit if most property taxes
had not been eliminated) by the quotient determined under STEP
TWO.
STEP FOUR. Subtract the amount determined under STEP THREE
from the amount of pension payments to be paid by the unit in the
calendar year, net of distributions to be received under subsection (e)
for the calendar year.
replacement amount, which is the estimated property tax replacement.
(b) The department of local government finance shall certify to the
department the amount of homestead credits provided under
IC 6-1.1-20.9 which are allowed by the county for the particular
calendar year.
(c) If there are one (1) or more taxing districts in the county that
contain all or part of an economic development district that meets the
requirements of section 5.5 of this chapter, the department of local
government finance shall estimate an additional distribution for the
county in the same report required under subsection (a). This additional
distribution equals the sum of the amounts determined under the
following STEPS for all taxing districts in the county that contain all
or part of an economic development district:
STEP ONE: Estimate that part of the sum of the amounts under
section 2(g)(1)(A) and 2(g)(2) of this chapter that is attributable
to the taxing district.
STEP TWO: Divide:
(A) that part of the estimated property tax replacement amount
attributable to the taxing district; by
(B) the STEP ONE sum.
STEP THREE: Multiply:
(A) the STEP TWO quotient; times
(B) the taxes levied in the taxing district that are allocated to
a special fund under IC 6-1.1-39-5.
(d) The department of local government finance shall estimate
an additional distribution for the county in the same report
required under subsection (a). The additional distribution is equal
to twenty percent (20%) of the certified distribution for a county
under IC 6-3.5-9.
(e) The sum of the amounts determined under subsections (a)
through (c) is the particular county's estimated distribution for the
calendar year.
plus
(3) an amount for each county that has one (1) or more taxing
districts that contain all or part of an economic development
district that meets the requirements of section 5.5 of this chapter.
This amount is the sum of the amounts determined under the
following STEPS for all taxing districts in the county that contain
all or part of an economic development district:
STEP ONE: Determine that part of the sum of the amounts
under section 2(g)(1)(A) and 2(g)(2) of this chapter that is
attributable to the taxing district.
STEP TWO: Divide:
(A) that part of the subdivision (1) amount that is
attributable to the taxing district; by
(B) the STEP ONE sum.
STEP THREE: Multiply:
(A) the STEP TWO quotient; times
(B) the taxes levied in the taxing district that are allocated to
a special fund under IC 6-1.1-39-5.
(4) Twenty percent (20%) of the county's certified
distribution under IC 6-3.5-9.
(b) Except as provided in subsection (e), between March 1 and
August 31 of each year, the department shall distribute to each county
treasurer from the property tax replacement fund one-half (1/2) of the
estimated distribution for that year for the county. Between September
1 and December 15 of that year, the department shall distribute to each
county treasurer from the property tax replacement fund the remaining
one-half (1/2) of each estimated distribution for that year. The amount
of the distribution for each of these periods shall be according to a
schedule determined by the property tax replacement fund board under
section 10 of this chapter. The estimated distribution for each county
may be adjusted from time to time by the department to reflect any
changes in the total county tax levy upon which the estimated
distribution is based.
(c) On or before December 31 of each year or as soon thereafter as
possible, the department shall make a final determination of the amount
which should be distributed from the property tax replacement fund to
each county for that calendar year. This determination shall be known
as the final determination of distribution. The department shall
distribute to the county treasurer or receive back from the county
treasurer any deficit or excess, as the case may be, between the sum of
the distributions made for that calendar year based on the estimated
distribution and the final determination of distribution. The final
determination of distribution shall be based on the auditor's abstract
filed with the auditor of state, adjusted for postabstract adjustments
included in the December settlement sheet for the year, and such
additional information as the department may require.
(d) All distributions provided for in this section shall be made on
warrants issued by the auditor of state drawn on the treasurer of state.
If the amounts allocated by the department from the property tax
replacement fund exceed in the aggregate the balance of money in the
fund, then the amount of the deficiency shall be transferred from the
state general fund to the property tax replacement fund, and the auditor
of state shall issue a warrant to the treasurer of state ordering the
payment of that amount. However, any amount transferred under this
section from the general fund to the property tax replacement fund
shall, as soon as funds are available in the property tax replacement
fund, be retransferred from the property tax replacement fund to the
state general fund, and the auditor of state shall issue a warrant to the
treasurer of state ordering the replacement of that amount.
(e) Except as provided in subsection (i), the department shall not
distribute under subsection (b) and section 10 of this chapter the money
attributable to the county's property reassessment fund if:
(1) by the date the distribution is scheduled to be made, (1) the
county auditor has not sent a certified statement required to be
sent by that date under IC 6-1.1-17-1 to the department of local
government finance; or
(2) by the deadline under IC 36-2-9-20, the county auditor has
not transmitted data as required under that section; or
(2) (3) the county assessor has not forwarded to the department
of local government finance the duplicate copies of all approved
exemption applications required to be forwarded by that date
under IC 6-1.1-11-8(a).
(f) Except as provided in subsection (i), if the elected township
assessors in the county, the elected township assessors and the county
assessor, or the county assessor has not transmitted to the department
of local government finance by October 1 of the year in which the
distribution is scheduled to be made the data for all townships in the
county required to be transmitted under IC 6-1.1-4-25(b), the state
board or the department shall not distribute under subsection (b) and
section 10 of this chapter a part of the money attributable to the
county's property reassessment fund. The portion not distributed is the
amount that bears the same proportion to the total potential distribution
as the number of townships in the county for which data was not
transmitted by August 1 October 1 as described in this section bears to
the total number of townships in the county.
(g) Money not distributed under subsection (e) for the reasons
stated in subsection (e)(1) and (e)(2) shall be distributed to the county
when:
(1) the county auditor sends to the department of local
government finance the certified statement required to be sent
under IC 6-1.1-17-1; and
(2) the county assessor forwards to the department of local
government finance the approved exemption applications
required to be forwarded under IC 6-1.1-11-8(a);
with respect to which the failure to send or forward resulted in the
withholding of the distribution under subsection (e).
(h) Money not distributed under subsection (f) shall be distributed
to the county when the elected township assessors in the county, the
elected township assessors and the county assessor, or the county
assessor transmits to the department of local government finance the
data required to be transmitted under IC 6-1.1-4-25(b) with respect to
which the failure to transmit resulted in the withholding of the
distribution under subsection (f).
(i) The restrictions on distributions under subsections (e) and (f) do
not apply if the department of local government finance determines
that:
(1) the failure of:
(A) a county auditor to send a certified statement; or
(B) a county assessor to forward copies of all approved
exemption applications;
as described in subsection (e); or
(2) the failure of an official to transmit data as described in
subsection (f);
is justified by unusual circumstances.
the year of the distribution.
STEP TWO: Determine the STEP ONE amounts for all
political subdivisions in the county.
STEP THREE: Divide the STEP ONE amount by the STEP
TWO amount.
STEP FOUR: Determine the revenue available for
distribution.
STEP FIVE: Multiply the STEP THREE result by the STEP
FOUR amount.
(c) If a political subdivision that is eligible for a distribution
under this section is located in more than one (1) county,
distributions shall be made to the political subdivision based on the
assessed value of the property that is both in the political
subdivision and in the county relative to the assessed value of the
property that is both in the political subdivision and located in any
county.
(d) The revenue a county auditor receives under this section
may be used by a political subdivision to fund any lawful purpose
of the political subdivision or pledged by the receiving political
subdivision to repay an obligation of the political subdivision or a
tax increment financing district or economic development district
that is located at least in part in the boundaries of the political
subdivision. The revenue shall be treated as general money under
IC 21-10 or IC 36-1.3 (as appropriate). For purposes of the
distribution of excise taxes under IC 6-6-5 and other miscellaneous
revenue that is distributed based on the property tax levy of a
political subdivision, the amount distributed under this section
shall be treated as property taxes.
the retail merchant from renting a comparable room or lodging on the
date the complimentary room or lodging is provided. The state gross
retail tax imposed on a retail transaction described in subsection (a) is
before February 1, 2005, six percent (6%), and after January 31,
2005, five and five-tenths percent (5.5%) of the gross retail income
attributed to the transaction.
based on a period of time, not to exceed fifteen (15) consecutive days,
during the first quarter of the retail merchant's tax year. However, the
period of time may be changed if the change is requested by the retail
merchant because of his peculiar accounting procedures or marketing
factors. In addition, if a retail merchant has multiple sales locations or
diverse types of sales, the department shall permit the retail merchant
to determine the ratio on the basis of a representative sampling of the
locations and types of sales.
multiplied by
(2) before February 1, 2005, six percent (6%), and after
January 31, 2005, five and five-tenths percent (5.5%).
Unless the exemption certificate is provided, the retail merchant shall
collect the state gross retail tax prescribed in this section even if the
transaction is exempt from taxation under IC 6-2.5-5.
equal to:
(1) the sum of the prepayment amounts made during the period
covered by the retail merchant's report; minus
(2) the sum of prepayment amounts collected by the retail
merchant, in the merchant's capacity as a qualified distributor,
during the period covered by the retail merchant's report.
For purposes of this section, a prepayment of the gross retail tax is
presumed to occur on the date on which it is invoiced.
under IC 8-3-1.5-20.5:
(A) before March 1, 2005, fourteen hundredths percent
(0.14%); and
(B) after February 28, 2005, one hundred fifty-three
thousandths percent (0.153%).
taxing district shall be treated as a reference to the amount raised
by a local government income tax under IC 6-3.5-9 for the taxing
district.
(b) Any amount distributable under this chapter to a civil taxing
unit or school corporation for additional homestead credits that
exceeds the amount of property tax imposed on homesteads in the
political subdivision shall be distributed to civil taxing units in the
same manner as other money distributed under this chapter.
town bears to the population of the county. The percentage that the
county is allocated for a year equals the same percentage that the
population of all areas in the county not located in a city or town
bears to the population of the county. On or before January 1 of
each year, the county auditor shall certify to each member of the
county income tax council the number of votes, rounded to the
nearest one-hundredth (0.01), the member has for that year.
Sec. 4. (a) A member of the county income tax council may
exercise its votes by passing a resolution and transmitting the
resolution to the county auditor. However, in the case of an
ordinance to impose, rescind, increase, decrease, or freeze the
county rate of the local government income tax, the member must
transmit the resolution to the county auditor by the appropriate
time described in section 8, 9, 10, or 11 of this chapter. The form of
a resolution is as follows:
"The __________ (name of civil taxing unit's fiscal body) casts
its _____ votes _____ (for or against) the proposed ordinance
of the __________ County Income Tax Council, which reads
as follows:".
(b) A resolution passed by a member of the county income tax
council exercises all votes of the member on the proposed
ordinance, and those votes may not be changed during the year.
Sec. 5. Any member of a county income tax council may present
an ordinance for passage. To do so, the member must pass a
resolution to propose the ordinance to the county income tax
council and distribute a copy of the proposed ordinance to the
county auditor. The county auditor shall treat any proposed
ordinance presented under this section as a casting of all that
member's votes in favor of that proposed ordinance. Subject to the
limitations of section 6 of this chapter, the county auditor shall
deliver copies of a proposed ordinance the auditor receives to all
members of the county income tax council within ten (10) days
after receipt. Once a member receives a proposed ordinance from
the county auditor, the member shall vote on it within thirty (30)
days after receipt. If a member does not vote within thirty (30)
days, the county auditor shall record the member as having voted
against the proposed ordinance.
Sec. 6. (a) A county income tax council may pass only one (1)
ordinance described in section 2(b) of this chapter in one (1) year.
Once an ordinance described in section 2(b) of this chapter is
passed, the county auditor shall:
(1) cease distributing proposed ordinances of those types for
the rest of the year; and
(2) withdraw from the membership any other of those types
of proposed ordinances.
Any votes subsequently received by the county auditor on proposed
ordinances of those types during that same year are void.
(b) The county income tax council may not vote on nor may the
county auditor distribute to the members of the county income tax
council any proposed ordinance during a year if previously during
that same year the county auditor received and distributed to the
members of the county income tax council a proposed ordinance
that if passed, would have substantially the same effect.
Sec. 7. (a) Before a member of a county income tax council may
propose an ordinance or vote on a proposed ordinance, the
member must hold a public hearing on the proposed ordinance and
provide the public with notice of the date, time, and place where
the public hearing will be held.
(b) The notice required by subsection (a) must be given in
accordance with IC 5-3-1.
(c) The form of the notice required by this section must be in
substantially the following form:
of ________ (insert rate) on the resident county taxpayers of
the county. This tax takes effect July 1 of this year.".
(c) The county auditor shall record all votes taken on ordinances
presented for a vote under this section and immediately send a
certified copy of the results to the department by certified mail.
Sec. 9. (a) If on January 1 of a calendar year a local government
income tax rate is in effect for resident county taxpayers, the
county income tax council may after January 1 and before April 1
of that year pass an ordinance to increase the tax rate for resident
county taxpayers. If a county income tax council passes an
ordinance under this section, the local government income tax rate
for resident county taxpayers increases as provided in the
ordinance.
(b) The county auditor shall record any vote taken on an
ordinance proposed under the authority of this section and
immediately send a certified copy of the results to the department
by certified mail.
Sec. 10. (a) A local government income tax imposed by a county
income tax council under this chapter remains in effect until
rescinded.
(b) Subject to subsection (c), the county income tax council may
rescind the local government income tax by passing an ordinance
to rescind the tax after January 1 but before June 1 of a year.
(c) A county income tax council may not rescind the local
government income tax or take action that would result in a civil
taxing unit in the county having a smaller distributive share than
the distributive share to which it was entitled when it pledged local
government income tax, if the civil taxing unit or any commission,
board, department, or authority that is authorized by statute to
pledge local government income tax has pledged local government
income tax for any purpose permitted by IC 5-1-14 or any other
statute.
(d) The county auditor shall record all votes taken on a
proposed ordinance presented for a vote under the authority of this
section and shall immediately send a certified copy of the results to
the department by certified mail.
Sec. 11. (a) A county income tax council may adopt an ordinance
to decrease the local government income tax rate in effect.
(b) To decrease the local government income tax rate, the
county income tax council must adopt an ordinance after January
1 but before April 1 of a year. The ordinance must substantially
state the following:
calendar year basis, the fraction to be applied under this section is
one-half (1/2).
Sec. 14. (a) A special account within the state general fund shall
be established for each county that adopts a local government
income tax. Revenue derived from the imposition of the local
government income tax shall be deposited in that county's account
in the state general fund.
(b) Income earned on money held in an account under
subsection (a) becomes a part of that account.
(c) Revenue remaining in an account established under
subsection (a) at the end of a state fiscal year does not revert to the
state general fund.
Sec. 15. (a) Revenue derived from the imposition of a local
government income tax shall, in the manner prescribed by this
section, be distributed to the county that imposed it. The amount
that is to be distributed to a county during an ensuing calendar
year equals the amount of local government income tax revenue
that the department, after reviewing the recommendation of the
budget agency, estimates will be received from that county during
the twelve (12) month period beginning July 1 of the immediately
preceding calendar year and ending June 30 of the ensuing
calendar year.
(b) Before June 16 of each calendar year, the department, after
reviewing the recommendation of the budget agency, shall estimate
and certify to the county auditor of each adopting county the
amount of local government income tax revenue that will be
collected from that county during the twelve (12) month period
beginning July 1 of that calendar year and ending June 30 of the
immediately succeeding calendar year. The amount certified is the
county's certified distribution for the immediately succeeding
calendar year. The amount certified may be adjusted under
subsection (c) or (d).
(c) The department may certify to an adopting county an
amount that is greater than the estimated twelve (12) month
revenue collection if the department, after reviewing the
recommendation of the budget agency, determines that there will
be a greater amount of revenue available for distribution from the
county's account established under section 14 of this chapter.
(d) The department may certify an amount less than the
estimated twelve (12) month revenue collection if the department,
after reviewing the recommendation of the budget agency,
determines that a part of those collections needs to be distributed
during the current calendar year so that the county will receive the
full certified distribution for the current calendar year.
(e) One-twelfth (1/12) of each adopting county's certified
distribution for a calendar year shall be distributed from the
account established under section 14 of this chapter to the
appropriate county treasurer on the first day of each month of that
calendar year.
(f) Upon receipt, each monthly payment of a county's certified
distribution shall be allocated among, distributed to, and used by
the civil taxing units of the county as provided in sections 16 and 17
of this chapter.
(g) All distributions from an account established under section
14 of this chapter shall be made by warrants issued by the auditor
of state to the treasurer of state ordering the appropriate
payments.
Sec. 16. (a) The revenue a county auditor receives under this
chapter may be used by a civil taxing unit to fund any lawful
purpose of the civil taxing unit or pledged by the receiving civil
taxing unit to repay an obligation of the civil taxing unit or a tax
increment financing district or economic development district that
is located at least in part in the boundaries of the civil taxing unit.
The revenue shall be treated as general money under IC 21-10 or
IC 36-1.3 (as appropriate). For purposes of the distribution of
excise taxes under IC 6-6-5 and other miscellaneous revenue that
is distributed based on the property tax levy of a political
subdivision, the amount distributed under this section shall be
treated as property taxes.
(b) The amount of distributive shares that each civil taxing unit
in a county is entitled to receive during a month equals the product
of:
(1) the amount of revenue that is to be distributed as
distributive shares during that month; multiplied by
(2) a fraction. The numerator of the fraction equals the
revenues (as defined in IC 36-1.3-2-11), excluding revenues
from exempted sources (as defined in IC 35-1.3-2-7), minus
any distribution under this chapter that is available to the
civil taxing unit during the calendar year in which the month
falls. The denominator of the fraction equals the revenues (as
defined in IC 36-1.3-2-11), excluding revenues from exempted
sources (as defined in IC 36-1.3-2-7), minus any distributions
under this chapter that are available to all civil taxing units of
the county during the calendar year in which the month falls.
governmental entity to the extent income of the residents of the
other local governmental entity is exempt from the local
government income tax in the adopting county.
(b) A reciprocity agreement adopted under this section may not
become effective until it is also made effective in the other local
governmental entity that is a party to the agreement.
(c) The form and effective date of a reciprocity agreement
described in this section must be approved by the department.
Sec. 20. (a) Except as otherwise provided in subsection (b) and
the other provisions of 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 chapter.
(b) IC 6-3-1-3.5(a)(6), IC 6-3-3-3, IC 6-3-3-5, and IC 6-3-5-1 do
not apply to the tax imposed by this chapter.
(c) Notwithstanding subsections (a) and (b), each employer shall
report to the department and the county auditor for the adopting
county the amount of withholdings attributable to each county.
This report shall be submitted at the same time the employer
submits the employer's other withholding report to the
department.
Sec. 21. (a) Except as provided in subsection (b), if for a
particular taxable year a county taxpayer is liable for an income
tax imposed by a county, city, town, or other local governmental
entity located outside Indiana, the taxpayer is entitled to a credit
against the local government income tax liability 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 local government
income tax. However, the credit provided by this section may not
reduce a county taxpayer's local government income tax liability
to an amount less than would have been owed if the income subject
to taxation by the other governmental entity had been ignored.
business days after adopting an ordinance under this chapter.
(e) After a hearing, the department of local government finance
may reduce a rate imposed or increased under this chapter before
June 1 preceding the date when the change becomes effective in
order to implement subsection (c). If the department of local
government finance reduces a tax rate under this subsection, the
department of local government finance shall give notice of the
action to the department, the school corporation, and the county
auditor for each county in which the school corporation is located.
(f) The adoption of an ordinance under this chapter shall be
reported to the department not more than thirty (30) days after the
ordinance is adopted.
Sec. 3. (a) Before a governing body of a school corporation may
propose an ordinance or vote on a proposed ordinance, the
governing body must hold a public hearing on the proposed
ordinance and provide the public with notice of the time and place
of the public hearing.
(b) The notice required by subsection (a) must be given in
accordance with IC 5-3-1.
(c) The notice required by this section must be in substantially
the following form:
taxpayers of ________ School Corporation. The local income
tax for education is imposed at a rate of ______ on the
resident taxpayers of the school corporation. This tax takes
effect January 1 of next year.".
Sec. 5. If on July 1 of a calendar year the local income tax for
education rate is in effect for resident taxpayers, the governing
body of a school corporation may after July 1 and before October
1 of that year pass an ordinance to increase the tax rate for
resident taxpayers. If a governing body of a school corporation
passes an ordinance under this section, the local income tax for
education rate for resident taxpayers increases as provided in the
ordinance.
Sec. 6. (a) The local income tax for education imposed by a
governing body of a school corporation under this chapter remains
in effect until rescinded.
(b) Subject to subsection (c), the governing body of a school
corporation may rescind the local income tax for education by
passing an ordinance to rescind the tax after July 1 but before
December 1 of a year.
(c) A governing body of a school corporation may not rescind
the local income tax for education or take any action that would
result in the school corporation having a smaller distributive share
than the distributive share to which it was entitled when it pledged
local income tax for education if the school corporation has
pledged local income tax for education for any purpose permitted
by IC 5-1-14 or any other statute.
Sec. 7. (a) The governing body of a school corporation may
adopt an ordinance to decrease the local income tax for education
rate in effect.
(b) To decrease the local income tax for education rate, the
governing body of a school corporation must adopt an ordinance
after July 1 but before October 1 of a year. The ordinance must
substantially state the following:
"The ______________ governing body of a school corporation
decreases the local income tax for education rate from
_______ percent (___ %) to _______ percent (___ %). This
ordinance takes effect January 1 of next year.".
(c) A governing body of a school corporation may not decrease
the local income tax for education if the school corporation has
pledged the local income tax for education for any purpose
permitted by IC 5-1-14 or any other statute.
(d) An ordinance adopted under this subsection takes effect
January 1 of the calendar year immediately following the calendar
year in which the ordinance is adopted.
Sec. 8. If for any reason a resident taxpayer is subject to
different tax rates for the local income tax for education imposed
by a particular school corporation, the taxpayer's local income tax
for education rate for that school corporation and 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 January 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 December 31 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).
Sec. 9. If the local income tax for education is not in effect
during a resident taxpayer's entire taxable year, the amount of
local income tax for education that the resident taxpayer owes for
that taxable year equals the product of:
(1) the amount of local income tax for education the resident
taxpayer would owe if the tax had been imposed during the
resident taxpayer's entire taxable year; multiplied by
(2) a fraction, the numerator of which equals the number of
days in the resident taxpayer's taxable year during which the
local income tax for education was in effect, and the
denominator of which equals the total number of days in the
resident taxpayer's taxable year.
Sec. 10. (a) A special account within the state general fund shall
be established for each school corporation that adopts the local
income tax for education. Any revenue derived from the imposition
of the local income tax for education by a school corporation shall
be deposited in that school corporation's account in the state
general fund.
(b) Any income earned on money held in an account under
subsection (a) becomes a part of that account.
(c) Any revenue remaining in an account established under
subsection (a) at the end of a fiscal year does not revert to the state
general fund.
Sec. 11. (a) Revenue derived from the imposition of the local
income tax for education shall, in the manner prescribed by this
section, be distributed to the school corporation that imposed the
tax. The amount that is to be distributed to a school corporation
during an ensuing school year equals the amount of local income
tax for education revenue that the department, after reviewing the
recommendation of the budget agency, estimates will be received
from that school corporation during the twelve (12) month period
beginning January 1 of a calendar year.
(b) Before December 16 of each calendar year, the department,
after reviewing the recommendation of the budget agency, shall
estimate and certify to the county auditor of each adopting school
corporation and the school corporation the amount of local income
tax for education revenue that will be collected from that school
corporation during the twelve (12) month period beginning
January 1 of the next calendar year. The amount certified is the
school corporation's certified distribution for the immediately
succeeding school year beginning on July 1 of the next calendar
year. The amount certified may be adjusted under subsection (c)
or (d).
(c) The department may certify to an adopting school
corporation an amount that is greater than the estimated twelve
(12) month revenue collection if the department, after reviewing
the recommendation of the budget agency, determines that there
will be a greater amount of revenue available for distribution from
the school corporation's account established under section 10 of
this chapter.
(d) The department may certify an amount less than the
estimated twelve (12) month re