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For additional compliance guidelines issued through SBOA Bulletins, please see this page.
- Section A - General Discussion
This section is devoted to the forms and records to be used in accounting for receipts and disbursements under the prescribed uniform accounting system. It consists of instructions in the use of the forms and records, together with exhibits illustrating the manner in which the basic records should be posted and kept.
In this section, as well as in other sections, the instructions and illustrations are based upon the records prescribed for a manually kept system; however, they are equally applicable to counties having machine accounting systems in that posting requirements and the information provided are basically the same for both systems.
To fully understand the discussion that follows it is important that the definitions and legal requirements and the accounting principles underlying the system these sections must be carefully reviewed. This is particularly true with respect to the accounting terms defined therein which are used throughout the manual.
The primary or basic accounting record is the Ledger of Receipts, Appropriations and Disbursements, which is referred to in this manual as the "General Ledger." This ledger and the forms associated with it are discussed first followed by the subsidiary ledgers and other records required to be kept.
- Section B - Ledger of Receipts, Appropriations and Disbursements
The Ledger of Receipts, Appropriations and Disbursements, or "General Ledger," as the title indicates, is the record in which an accounting is made for all receipts, appropriations, disbursements and fund balances. While subsidiary ledgers are prescribed to account for certain funds, this in no way lessens the requirement that controls over such funds also be carried in the General Ledger. This is more fully covered in the instructions that follow.
The forms prescribed to be kept as a part of the General Ledger consist of the following:
Form No. Title 24B Fund Ledger and Ledger of Receipts 24A Ledger of Appropriations, Encumbrances, Disbursements and Balances 24C Detailed Ledger of Disbursements 24ET Allocation of License Excise Tax 24F Record of Annual License Excise Tax 65-STF Surplus Tax Fund Ledger Fund Ledger and Ledger of Receipts (Form 24B) - This form serves a dual purpose. It serves as a cash control account reflecting the receipts, disbursements and balances in each fund and also as a detail receipt account or as a subaccount where the system provides for supporting accounts in any fund.
Ledger of Appropriations, Encumbrances, Disbursements and Balances (Form 24A) - This form is used to account for appropriations, encumbrances and disbursements in those funds where expenditures are limited by law to appropriations lawfully made and approved.
Detailed Ledger of Disbursements (Form 24C) - This form is used to account for disbursements by minor expense classifications under the major budget and appropriation accounts for which detail accounts are required to be kept.
Allocation of License Excise Tax (Form 24ET) - This form is used to record the allocation of license excise tax to the respective taxing districts and the totals available for distribution at the close of each month. The totals must at all times agree with the collections recorded on Form 24F discussed below. These ledger sheets should immediately follow ledger Form 24F, with a separate ledger sheet or sheets to be used for each month's collections. Counties with machine accounting systems may maintain these ledger sheets in a subsidiary ledger, if deemed desirable.
Record of Annual License Excise Tax (Form 24F) - This form is used to account for collections of license excise tax received from the State Bureau of Motor Vehicles branch offices and the State Aeronautics Commission and for the distribution of such collections at each semiannual settlement. It also serves as a control account over ledger Forms 24ET. This record serves only as a memorandum ledger account, to be reconciled with the county treasurer's records at the time of each settlement, and is not to be confused with the fund accounts carried in the General Ledger on Form 24B.
Surplus Tax Fund Ledger (Form 65-STF) - This form serves a dual purpose, in that it serves as a report from the county treasurer of surplus tax collected and settled for at each semiannual settlement and also as a county auditor's detail ledger account of the items received and disbursed. When surplus tax is reported and settled for by the treasurer the ledger sheet or sheets shall be inserted in the General Ledger immediately following the control account (Form 24B) for the Surplus Tax Fund.
Dividing General Ledger
Where, because of the large number of ledger accounts, it is deemed desirable to divide the General Ledger into two or more ledgers, it is permissible to do so; however, it should be so divided that all of the accounts pertaining to a particular fund be included in the same ledger. For example, it may be desirable to have one General Ledger for the County General Fund, because of the large number of appropriation and detail expense accounts, with a second General Ledger for all other funds and accounts; but, do not divide the ledgers in such a manner that parts of the County General Fund accounts will be in both ledgers.
The foregoing applies only to manually kept records. In those counties where machine accounting systems have been installed it may be necessary to segregate the accounts into separate groups to facilitate posting, such as (1) Fund (Cash) Accounts; (2) Detail Receipt Accounts; (3) Appropriation, Encumbrance and Disbursement Accounts; and (4) Detail Disbursement Accounts. Any systematic arrangement of the accounts which may be necessary to facilitate posting with the accounting machines in use will meet with approval of this board, providing it produces the same records as required in a manual system.
- Section C - Subsidiary Ledgers
In addition to the General Ledger, the following subsidiary ledgers are required to be kept, sup-porting accounts in the General Ledger.
Form No. Title Poor Fund Ledger: PR-1 Township Poor Relief Ledger PR-2 Township Poor Bond Redemption Ledger PR-3 Ledger - Sale of Poor Bonds PR-4 Register of Poor Relief Claims Drainage Funds Ledger: 63C General Drain Improvement Fund 63CM Drainage Maintenance Fund Investments Ledger: 350 Register of Investments Township Poor Relief Ledger (Form PR-1) - This form is used to account for the receipts, disbursements, and balances in each township poor relief fund. A separate ledger sheet must be set up for each township and the totals of the detail accounts for all townships must agree with the "County Poor Fund" control account carried in the General Ledger.
Township Poor Bond Redemption Ledger (Form PR-2) - This form is to be kept in the same manner as the township poor relief ledger, except that it is to be used only to account for the redemption of bonds issued for poor relief purposes. A separate account is to be kept for each township and the total of all such accounts should agree with the "County Poor Bond Redemption Fund" control account in the General Ledger.
Ledger - Sale of Poor Bonds (Form PR-3) - This form is to be used to account for funds received from the sale of poor bonds. A separate account is to be set up for each township and the totals of the receipts, disbursements, and balances for all townships should agree with the "Sale of Poor Bonds Fund" control account in the General Ledger.
The law contemplates that when advancement fund bonds are issued by the county the funds be advanced only as needed by the townships. For that reason this form has been prescribed to account for the bond proceeds and for transfers to the Township Poor Relief Fund as funds are needed.
Register of Poor Relief Claims (Form PR-4) - This form is used to register claims submitted by township trustees for payment. While it is not strictly a ledger form, it is used to account for the detail appropriations supporting disbursements from the Township Poor Relief Fund. A separate register is required for each township and the total disbursements posted to the register should agree with the disbursements in payment of claims posted to the Township Poor Relief Fund (Form PR-1).
General Drain Improvement Fund Ledger (Form 63C) - This form is used to account for receipts, disbursements, and balances for each lawfully established drain, which is a part of the General Drain Improvement Fund. It is also used to account for assessments and collections on each drain. The totals of receipts, disbursements, and balances of all such drains must agree with the "General Drain Improvement Fund" control account carried in the General Ledger. Detail instructions for keeping this ledger will be found in the "Accounting Manual for Public Drainage Funds."
Drainage Maintenance Fund (Form 63CM) - This form is used to account for the receipts, disbursements, and balances for each drainage maintenance fund. It is also used to account for assessments and collections for maintenance. The totals of receipts, disbursements, and balances in all such accounts must agree with the "Drainage Maintenance Fund" control account in the General Ledger.
Register of Investments (Form 350) - This form is used to account for investments purchased and the receipts from such investments. The accounting system provides for "memorandum" accounts to be carried in the Auditor's General Ledger for investments purchased, matured or sold, using Form 24B, and this register should contain details supporting the investment accounts in the General Ledger.
- Section D - Opening Ledger Accounts
A new ledger must be set up at the beginning of each calendar year. Do not remove and bring forward any ledger sheets from the prior year's ledger, except for the detail accounts supporting the balance in the Surplus Tax Fund (Form 65-STF). The latter exception is made only to enable a complete record of the surplus items of each settlement to be maintained as a part of the General Ledger until all items are disbursed and to eliminate the need to recopy the detail items each year.
Fund Ledger Accounts
A separate ledger sheet (Form 24B) must be set up for each fund appearing on the Financial Statement (Form 61). In addition, where the fund carried on the financial statement is a control account over detail "funds" a separate ledger sheet will also be required for each detail fund account. An example is cemetery trust funds where the financial statement should carry only the control account, with separate ledger accounts being maintained for the detail cemetery trust funds.
In opening the ledger the balance in each fund at the close of the prior calendar year shall be brought forward and entered in the "Balance" column of the corresponding sheet of the new ledger, showing the date of "January 1" and entering in the description column the words "Brought Forward." (See Exhibits 1 and 2, Page 6-12) The same procedure must be followed for any detail fund accounts over which a fund control account is maintained.
Detail Receipt Accounts
Detail receipt accounts shall be set up on Form 24B for each source of receipts in keeping with the chart of accounts.. Detail receipt accounts will be required for the County General Fund, the County Welfare Fund and any other fund having a number of sources of receipts. (See Exhibit 3, Page 6-13)
Appropriation Accounts
A separate ledger sheet (Form 24A) must be set up for each appropriation appearing in the Ordinance for Appropriations adopted by the county council, or as modified as a result of action taken thereon by the county board of tax adjustment and the State Board of Tax Commissioners. It is not permissible under the budget laws to combine two or more appropriations appearing in the ordinance into a single appropriation account.
In opening each ledger sheet enter the amount of the appropriation in the "Amount" column of the section headed "Appropriation" showing the date "January 1." If any appropriations for the prior year were lawfully encumbered by contract, bring forward the amounts thereof to the extent of the encumbrances and enter such amounts in the same manner, except that you should also enter in the description column the words "Brought Forward" and enter a detail of the purchase orders "issued" and the total "outstanding" in the encumbrances section of each ledger sheet affected. (See Exhibit 6, Page 6-14)
Appropriation Control Account
In all funds where expenditures are controlled by appropriations, an "Appropriation Control" account shall be set up for each such fund in the General Ledger. This control account will carry the total appropriations, including appropriations brought forward to cover encumbrances, for the particular fund.
The purpose of this account is not only to control the accuracy of postings and the extension of balances in the appropriation accounts but will also serve to show at all times the total unexpended appropriations for the calendar year. The account is also useful in preparing budgets and in preparing financial statements required to be submitted in support of additional appropriations requested for each fund. (See Exhibit 4, Page 6-13)
Detail Disbursement Accounts
A separate ledger sheet (Form 24C) must be set up for each appropriation where the prescribed budget estimate forms provide for detail expenditure accounts. Since this form will be used only to account for "disbursements" for each expenditure account, all that is necessary is to enter the headings on the form showing the expenditure account number and a brief description of its purpose. In setting up the ledger you should be guided by the detail accounts carried in the prior year's ledger, although additional detail accounts may need to be added during the year. (See Exhibits 7 and 8, Page 6-15)
Where expenditures from an appropriation fall entirely within a single detail expenditure classification it is not required that the appropriation account be supported by a ledger Form 24C. For example, if an appropriation for "200-Supplies" is used entirely for office supplies or an appropriation for "100- Personal Services" is used only for the officer's salary the appropriation account need not be supported by this form. However, where disbursements from an appropriation fall within two or more detail expenditure classifications the form must be used.
In those counties where a machine accounting system has been installed, either a subsidiary "Detailed Ledger of Disbursements" shall be maintained on County Form 24C or a separate ledger sheet shall be maintained for each expenditure account using the same form as used for appropriations, encumbrances, and disbursements; however, as previously stated, the detail expenditure accounts will record only the disbursements and not the appropriations and encumbrances.
Other General Ledger Accounts
The surplus tax fund ledger sheets, Form 65-STF, as previously mentioned, should be removed from the prior year's ledger and transferred to the new ledger, to provide a continuous record of detail surplus tax items. Where the volume of such items is such as to make it desirable to maintain a subsidiary ledger of all such ledger sheets this is permissible; however, in all instances a "Control" account of the Surplus Tax Fund shall be maintained in the General Ledger on Form 24B.
Arrangement of General Ledger Accounts
All ledger accounts should be systematically arranged in the ledger to facilitate locating and posting the accounts. The accounts should be arranged in the following manner for each fund:
- Fund Control Account
- Detail Receipt Accounts - arranged in accordance with the numerical coding system in the chart of accounts.
- Appropriation Control
- Appropriation Accounts - with each such appropriation account being followed by detail disbursements accounts where the appropriation requires detail accounts to be kept.
As previously stated, all ledger sheets should be arranged in the same manner as the funds appear on the financial statement and, in the case of the County General Fund, in the order the offices and departments are listed in the ordinance for appropriations.
The ledger sheets for license excise tax should appear at the close of the fund ledger accounts.
Subsidiary Ledgers
The procedure set out herein shall also be followed for the subsidiary ledgers discussed on pages 6-2 and 6-3, in that the balance in each such fund shall be brought forward from the prior year's ledger. The only exception is the investments ledger, Form 350, which is a continuing register and is not to be opened with a new set of accounts or register sheets at the beginning of the year; however, it will be required that a "Memorandum" account of investments be carried in the General Ledger for funds invested, with the principal balance of such investments to be brought forward on January 1.
Divider Sheets and Index Tabs
The use of divider sheets and index tabs for each fund (or group of funds), for the revenue (receipts) section of the ledger, and for each office or department within the County General Fund, is strongly recommended. Not only will this facilitate locating and posting the ledger accounts but will materially assist others who have reason to refer to the ledger. Accounts should also be set up on Forms 24ET and 24F, described on pages 6-1 and 6-2 for bank, building and loan and license excise tax. In opening the account, any balance not settled for in the prior calendar year shall be brought forward and entered in the applicable ledger accounts. As previously mentioned, these accounts are not "fund" accounts, within the definition of that term, and do not appear on the monthly financial statement, but are used only to account for such receipts and the amounts settled for by the county treasurer at each semiannual settlement. The divider sheets and tabs should be left in each ledger and not transferred and used in a succeeding year, at least until the records are audited. The use of inexpensive plastic (acetate) index tabs is recommended instead of gold leaf leather tabs because of the limited expense involved.
- Section E - Posting Ledgers
Posting to ledger accounts should be made directly from the source documents, such as copies of purchase orders, copies of applications to pay (receipts) and duplicate copies of warrants; however, in the case of payrolls, where a payroll fund has been established for convenience in issuing payroll warrants, posting will be made from the detail payroll vouchers and the payroll summaries for each fund. There may also be other instances where it will be necessary to refer to the claims or other documents in posting warrants and such practice is acceptable, providing the posting entries are proved to the amount of each warrant issued.
Receipts
In all instances, receipts should be posted directly from the copies of the applications to pay (receipts). The receipts should clearly show thereon the source and the applicable funds and accounts, including the numerical codes for such funds and accounts, to be posted.
In the case of the County General Fund, the County Welfare Fund and any other fund for which detail revenue (receipt) accounts are maintained, posting will be made only to the detail accounts, with the total receipts posted to all such accounts to be entered on the fund control at the close of the calendar month. (See Exhibits 1 and 3, Pages 6-12 and 6-13) Where no detail revenue accounts are required to be kept, posting of the receipts will be made directly to the fund account. (See Exhibit 2, Page 6-12) Receipts may be grouped and posted in one amount if issued on the same date and are in numerical sequence; however, if a fund has two or more sources of receipts and detail revenue accounts are not maintained for the fund, the source of the receipt should be entered in the column headed "Description" following the receipt number, as shown in Exhibit 2.
Purchase Orders
Where a purchase order is issued against an appropriation, it will be posted as an encumbrance to the appropriation account (Form 24A). When the purchase order is later paid, it will then be liquidated in the same amount for which the order was issued, notwithstanding that the actual disbursement may be more or less than the amount for which the order was issued. This is illustrated in Exhibit 6, Page 6-14.
The encumbrance section of the appropriation account is merely to record the purchase orders issued and liquidated, showing the outstanding encumbrances at the close of any period. To determine the unencumbered appropriation balance at any time, it is necessary to deduct the total of "outstanding" encumbrances from the "balance" of the appropriation shown on the ledger account.
Disbursements
As stated, disbursements should be posted from the duplicate warrants and, where necessary, from the claims supporting such warrants. In those funds subject to appropriations the disbursement shall be posted directly to the appropriations and non-budgeted accounts of the applicable fund. At the close of the month the amounts posted to all such amounts will then be added, footed and posted to the fund control. (See Exhibit 1, Page 6-12) The totals posted to the budget classifications, 100 to 400 accounts, will also be posted to the appropriation control account for that fund. (See Exhibit 4, Page 6-13)
In posting disbursements to appropriation accounts, warrants may be grouped and entered in a single amount, provided they were issued on the same date and are in a continuous numerical sequence. (See Exhibits 5 and 6, Page 6-14) However, where purchase orders are issued against an appropriation and the encumbrance section of the ledger sheet is used, the warrants will have to be posted in detail to identify the specific purchase order liquidated by the payment, as illustrated in Exhibit 6.
Detail Disbursements Accounts
In addition to posting the appropriation account, disbursements shall also be posted to the detail disbursement accounts (or minor expenditure accounts) under each appropriation for which such detail is required. Posting may be in detail by each warrant, or warrants may be group posted if issued on the same date and are in numerical sequence. (See Exhibits 7 and 8, Page 6-15)
Subsidiary Ledgers
The posting instructions in this section equally apply to all subsidiary ledgers supporting the General Ledger (Ledger of Receipts, Appropriations and Disbursements) such as the Township Poor Relief Ledgers and the Drainage Ledgers; however, the following instructions should be observed with respect to the latter ledgers:
- Township Poor Relief Ledgers - Posting of receipts and disbursements should be made directly to each individual township account (Ledger Forms PR-1, PR-2 or PR-3), with only a "Control" account to be carried in the General Ledger on Form 24B over each applicable fund. Posting to the fund control may be made in total for each month, from the totals posted to the detail township accounts, as shown in Exhibit 1 for the County General Fund, or may be posted from the receipts and duplicate warrants. Appropriations for township poor relief are accounted for in the "Register of Poor Relief Claims," Form PR-4, and are not accounted for by the use of appropriation ledger Form 24A. See Exhibit 9, Page 6-16, for instructions in posting poor relief accounts.
- Drainage Ledgers - The General Ledger should contain a "Control" account on ledger Form 24B for the General Drain Improvement Fund and for the Drainage Maintenance Fund. The detail drainage accounts for each drain will be maintained on drainage ledger Forms 63C and 63CM, and the totals of all such detail accounts must agree with the respective fund control account in the General Ledger. The manner in which drainage funds should be handled and accounted for are fully covered in the "Accounting Manual for Public Drainage Funds" and, therefore, are not covered in this manual.
Posting Appropriations
The opening of appropriation ledger accounts is discussed on Pages 6-4 and the posting to such accounts is illustrated in Exhibits 4, 5, and 6, Pages 6-13 and 6-14.
The posting of appropriations from the "Ordinance of Appropriations" adopted in conjunction with the annual budget and the posting of emergency (additional) appropriations should offer no problem if the discussion on Pages 6-4 and 6-5 and the exhibits are carefully observed. Experience has shown, however, that there is a lack of uniformity in posting transfers from the appropriation account to another appropriation account.
Pursuant to IC 6-1.1-18-6 transfers of appropriations may be made from one major budget classification to another within a department or office; also, pursuant to this law, additional appropriations may be made which are wholly or partially covered by reductions in existing appropriations.
In all instances where transfers or additional appropriations are made and existing appropriations reduced, entries should be made of the additional or increased appropriations and the reductions in the "Amount" column of the appropriation section of the ledger sheet. Simply enter the additional or increased appropriation in that column, with the reductions to be entered either in red ink or by a minus (-) entry. This is illustrated in Exhibit 4, Page 6-13. Do not make any appropriation entries in the disbursements column or handle transfers and/or reductions in appropriations in any other manner.
Posting Refunds of Expenditures
Pursuant to IC 6-1.1-18-9, when a refund of an erroneous or excess disbursement is made within the current budget year, such refund may be credited to the appropriation from which the disbursement was made; however, where the refund is for an expenditure made in a prior year, there is no authority to credit the appropriation.
Pursuant to IC 6-1.1-18-7, when any funds are received from an insurance company because of any damage to the property of the county and when the appropriating body (county council) approves the expenditure of such proceeds to repair or replace said property, such proceeds are considered to be appropriated for such purpose provided the funds are expended within twelve months following their receipt.
When refunds are made of excess or erroneous disbursements within the same current budget year, or funds are received from an insurance company, and the use of such funds is authorized to be used to repair or replace the damaged property, pursuant to the law cited, the receipt should be posted in the same manner as any other receipt, by entering it in the detail receipt accounts and to the fund control; and, in addition thereto, the receipt should be posted to the applicable appropriation account and appropriation control account. This is illustrated in Exhibit 4, Page 6-13.
Correcting Entries
Errors made in posting records will fall in two categories: (1) those made in the current fiscal (calendar) year and (2) those made in a prior fiscal year. Errors made also affect appropriation accounts, receipt accounts or fund accounts and require different handling in each instance.
Where an error is made and the increase affects only appropriation, detail disbursement or detail receipt accounts, without affecting the fund (cash) account, correction should be made under the current date of correction by posting the item in the correct account and by reversing the entry in the account to which it was erroneously posted by entering the amount in red ink or as a minus (-) amount. In addition, proper notation should be made to show that the entry is to "correct posting error," making a cross reference to each applicable account and, if necessary, the source document from which the entry was originally posted should be noted to show the error and the date it was corrected. Do not attempt to correct such errors by changing the original entries and all footings and balances to date; a better record is shown if the correction is enter under the current date it is made.
Where an error is made in posting the fund (cash) accounts, the correcting entry will affect the records of the county treasurer and require a different handling than for appropriation and detail receipt accounts. If the error is made and corrected in the same current budget year, it may be corrected in the same manner as outlined for appropriation and receipt accounts, providing the correcting entry to be made is given the county treasurer and can be handled on the treasurer's records without the issuance of a warrant and receipt. In such instances, the correcting entry may be made by posting the amount under current date to the proper account and by reversing the erroneous posting by entry in red ink or as a minus (-) amount, in the same manner as outlined for corrections in appropriation and receipt accounts. If, however, the correction cannot be handled in this manner by the treasurer, because of the entries affecting more than one bank account or other reason, the correction should be made by the issuance of a warrant and receipt in the same manner as discussed under "Transfers Between Funds" in Section G.
Where an error is made in a prior year and it affects the fund accounts, it can only be corrected by the issuance of a warrant and receipt. Errors found in posting appropriation and receipt accounts of a prior year should not be corrected after the records for that year are closed and the financial statements and reports have been made. In such instances, simply enter a note on each of the applicable ledger sheets of the existence of the error and, if it affected the fund accounts, show the date the fund accounts were corrected.
- Section F - Footing and Proving Ledgers
All ledgers must be footed and proved at the close of each month. The footings should be entered in pencil on all ledger sheets, showing the totals for the month and the totals for the year to date, except that only year to date totals need be entered on the detail disbursement accounts, Form 24C. (See Exhibits 1 to 9, Pages 6-12 to 6-16) In proving the ledger at the close of each month, the following steps should be taken:
- Add the detail receipt accounts in those funds where such details are kept and enter the total receipts in the fund control.
- Add the receipts entered in the controls of all funds and see that the total agrees with the total applications to pay (receipts) issued during the month. In making such proof, add the applications to pay and enter the total thereof after the last application issued for the month.
- Add the disbursements posted to all appropriation accounts and to the non-budgeted accounts for each fund and see that it agrees with the total posted to the fund control.
- Add the disbursements posted to the fund controls of all funds and see that the total agrees with the total of the warrants issued. In making such proof, the duplicate warrants should be added and the total thereof entered in the register of warrants after the last warrant issued for the month.
- In those funds subject to appropriation verify that the total disbursements from the appropriation accounts (account numbers 100 through 400) agree with the amount posted to the appropriation control account. Additional appropriations or reductions in appropriations should also be added and proved to entries in the appropriation control account. After this proof is made, also verify that the balances in all appropriations agree with the unexpended balance shown on the appropriation control account.
- Verify that the totals of the detail disbursement accounts agree with the total disbursements posted to each appropriation account.
- Prepare the monthly financial statement from the Funds Ledger (Form 24B), proving the totals of receipts and disbursements for the month to the register of receipts (application to pay) and the registers of warrants. Verify the financial statement with the statement prepared by the county treasurer.
- Section G - State Grants
If a political subdivision receives state grant money requiring local matching money, the political subdivision shall create a special fund and deposit the grant money and matching money into the special fund. The money in the fund may be used only for the purposes of the grant.
If a political subdivision completes the project for which the grant money was provided and money remains in the fund:
- The political subdivision shall transfer the state’s share of the remaining money to the Treasurer of State for deposit in the fund from which the grant was made; and
- The political subdivision’s pro rata share of the remaining money reverts to the political subdivision’s general fund. [IC 36-1-18-12]
- Section H - Accounting for Receipts
All money payable to the county treasury must be received and deposited by the county treasurer. The only money the auditor is authorized to accept is fees for services, discussed in this section under "Auditor's Fees," which are deposited monthly with the treasurer.
All money, except for taxes and special assessments paid direct to the treasurer, shall be receipted into the records by the use of the four-part Form 20-21, "Combination Quietus, Application to Pay, Treasurer's Receipt and Auditor's Copy." This form, which serves as the media for posting to the fund ledger accounts, is sometimes referred to in this manual as an "application to pay and quietus," as a "quietus" and as a "receipt."
The form is designed to meet the requirements of IC 36-2-9-12 and IC 36-2-10-10 and to insure proper accountability for all such receipts. The following steps should be followed:
- The county auditor prepares the four-part form, to show the date, fund or funds to be credited, amount, the person applying to pay the money into the county treasury, and in the space "on account of" shall show the source of the payment and the specific account number or numbers to be credited.
- The auditor hands to such person the "Application to Pay" and "Receipt" copies and the person makes payment direct to the treasurer, receiving from the treasurer the signed receipt copy. The treasurer retains the application to pay for the records of that office.
- The person returns the receipt copy to the auditor who thereupon issues the "Quietus" to such person to complete the transaction. The receipt copy is retained for the auditor's records.
There will be instances, such as state distributions and payments received by mail, where the auditor will have to deliver the payment to the treasurer. However, this procedure should be avoided where possible to not only comply with the law but to effect proper internal control over all such receipts.
The form of Quietus, Application to Pay, Treasurer's Receipt and Auditor's Copy is required to be prenumbered by the printer. Under no circumstances shall unnumbered receipts be purchased or used, nor shall any other form of receipt be used by the auditor.
Reports of Officials
When any public official pays fees or other collections into the county treasury, the remittance must be accompanied with a prescribed report form. The forms required to be used by the city and town courts are listed on page 4-5. All other county offices and departments should report collections on General Form 362. It is important such reports be filed, not only to meet statutory requirements but so the sources of receipts are identified for proper posting to the fund and detail receipt accounts.
Many other payments are also supported by reports or will be accompanied with some other type of remittance advice. All reports or other supporting documents which accompany payments must be carefully preserved and filed in a systematic manner as a part of the records of the office.
When a payment is not supported by a report or other document, be sure to enter in the space "on account of" a complete description of the source of the receipt. For example, if it is a refund, refer to the specific claim or warrant on which the refund is based or show the reason for the refund.
Transfers Between Funds
When funds are transferred from one fund to another fund, such as loans, advances, reimbursements and payroll deductions, a warrant should be issued in favor of the "Treasurer of _______ County" and an application to pay, receipt and quietus should be immediately issued in favor of the treasurer for the receipt of such funds. Both the warrant and the receipt must clearly show the funds and accounts to be charged and credited and the reason for the transfer.
The use of "Journal Vouchers" to effect fund transfers is not authorized. Experience has shown that a clearer and more accurate record is provided where transfers are made by warrant and receipt and this procedure materially assists in reconciling receipts and disbursements in the treasurer's office with the records of depositories; also, there are instances where a transfer will affect depository accounts which precludes the use of a journal voucher.
Auditor's Fees
All fees received by the county auditor for services of that office are the property of the county and shall be paid into the county treasury at the close of each month. [IC 36-2-7-2]
The laws provide for fees to be charged by the auditor for the following services:
- For each application for exemption filed on Form No. 136 prescribed by State Board of Tax Commissioners, two dollars ($2.00). [IC 6-1.1-11-10]
- The fiscal body shall establish a fee schedule for the certification, copying, or facsimile machine transmission of documents. The fee may not exceed the actual cost of certifying, copying, or facsimile transmission of the document by the agency and the fee must be uniform throughout the public agency and uniform to all purchasers. [IC 5-14-3-8]
- If authorized by an ordinance enacted by the Board of County Commissioners, not to exceed $5.00 for each endorsement made on a deed to be recorded to be receipted to the Plat Book Fund. [IC 36-2-11-14 and IC 36-2-9-18]
Auditor's Fee Book
All fees collected shall be entered in the Auditor's Fee Book, Form No. 1, the fees totaled at the close of the month and paid into the county treasury by application to pay and quietus. Fees collected may be paid in more often, if desired, such as during the period of collecting fees for applications for mortgage deductions.
- Section I - Accounting for Disbursements
All disbursements must be made on warrants issued by the county auditor and countersigned by the county treasurer.
Warrant Forms
The following warrant forms have been prescribed for use of counties:
- Form 16 Warrant and Warrant Register
- Form 16PR Payroll Warrant and Register Form
- 16W Welfare Warrant and Register
Form 16 is to be used for all disbursements, except for payrolls and disbursements from county welfare funds; Form 16PR is to be used for payrolls; and Form 16W for all welfare disbursements, except for payrolls of the welfare department which shall be paid on Form 16PR. These forms shall be used in all counties, unless alternate forms have been approved for use of the county.
Forms 16 and 16W are three-part forms consisting of the original for the payee, duplicate for the county treasurer and auditor's copy. Form 16PR is a four-part form, consisting of the original for the payee, a non-negotiable duplicate for the payee as an earnings statement, triplicate for the county treasurer and auditor's copy. The auditor's copies are to be placed in a post binder and such bound copies are generally referred to as the "Register of Warrants."
Where two or more banks have been designated as depositories for county funds, a separate series of warrants may need to be printed for each depository to meet Federal Reserve Board requirements for encoding bank routing numbers and this is permissible, providing the format of the prescribed or approved form is not changed. In such instances, a prefix number or letter should be used with the warrant numbers of each series to distinguish the warrants from other series."
Each series of warrants shall be prenumbered by the printer and issued in numerical sequence. It is not necessary to begin a new series of numbers each calendar year; in fact, less confusion will exist if a continuous numerical series is used for three or more years before beginning a new series with number one (1). The numerical series may be changed at any time during a year, if desired. Under no circum-stances should unnumbered warrants be purchased and care should be taken to safeguard the supply of warrants to avoid their falling into unauthorized hands.
Authority for Issuance
The auditor is responsible for the issuance of each warrant and must determine that it is supported by a proper claim, duly filed and allowed in the manner provided by law, or that other statutory authority exists for its issuance. The statutory requirements to be met in the issuance of warrants are more fully covered in other sections.
Funds and Appropriations
Each warrant must show the fund on which it is drawn and, if applicable, the appropriation account or accounts to be charged. It is unlawful to overdraw any fund or to issue a warrant in excess of the appropriation available, where an appropriation is required. Penalties are provided in IC 36-2-6-12 where an auditor is convicted of violating these requirements.
For further information regarding appropriations, including instances where warrants may be issued without appropriation, see the section entitled "Budgets and Appropriations."
Transfers Between Funds
When funds are transferred from one fund to another fund, it should be made by issuance of a warrant and a receipt. See page 6-18 for instructions in handling transfers between funds.
Transfers Between Bank Accounts
Occasionally it may be necessary for the county treasurer to transfer funds from one depository to another. If such a situation occurs and a request is made by the treasurer, a county warrant should be used to effect the transfer. The warrant should be made payable to "(Name of Depository) for deposit only to the account of the Treasurer of ______________ County," and should clearly show on its face that it is for "Transfer of Funds Between Depositories." The warrant is not to be posted to the ledger accounts as a receipt or a disbursement, since its only purpose is to transfer funds between banks. The warrant will, however, affect the records of the county treasurer and shall be entered as a withdrawal and as a deposit in the Daily Balance of Cash and Depositories record in that office, to the accounts of the applicable depositories.
Cancellation of Warrants
When a warrant is not to be used for the purpose intended or for any other reason is to be canceled or voided, it must be receipted back to the fund on which it was drawn by the use of an Application to Pay, Receipt and Quietus and accounted for on the records of the auditor and treasurer in the same manner as any other receipt. The receipt, in addition to showing the fund and account to be credited, must also show the warrant number or numbers.
In the case of a payroll warrant, from which deductions have been made, it will also be necessary that a warrant be drawn against each applicable payroll deduction fund. The warrant should be issued in favor of the county treasurer, describing thereon "Cancellation of Payroll Warrant No. _____" and must show the amount disbursed from each payroll deduction fund. The "net" payroll warrant and the warrant issued for the deductions must then be receipted into the records by application to pay and quietus, in the same manner as any other receipt, and credited to the fund from which the payroll was paid. In addition, appropriate entries must be made in the detail and control accounts of the "Employee's Earnings Record." The entries should be made in this record as of the date the warrant or warrants are receipted into the records and should be entered in red ink or as a minus (-) amounts.
If the payroll warrant was issued in a prior year, after withholding statements have been prepared and/or deductions remitted, the same procedure should be observed; however, in such case it will also require corrected withholding statements being issued and proper documents being submitted to the appropriate federal and state agencies to obtain credit for the excess deductions remitted.
Warrants Outstanding and Unpaid
Pursuant to IC 5-11-10.5 all warrants outstanding and unpaid for a period of two or more years, as of the last day of December of each year, are void. This law further provides that the county treasurer within 60 days thereafter shall prepare a list in triplicate of all such warrants, showing the date of issue of each warrant, the fund upon which it was drawn, the name of the payee, the amount of the warrant, and the total amount of the warrants for each fund. The original copy of such list shall be filed with the county board of finance, the duplicate filed with the auditor and the triplicate copy retained by the treasurer. Upon receipt of such list, the auditor shall issue an Application to Pay, Receipt and Quietus for such warrants, in the same manner as for any other receipt, and the warrants shall thereupon be removed by the treasurer from the outstanding list.
Warrants to be canceled pursuant to IC 5-11-10.5 will fall in two categories: (1) those that have not been claimed and are in physical custody of the auditor, and (2) those that have been lost or misplaced or for some other reason have never been submitted for payment by the depository. Regardless of the category in which the warrants fall, they shall be handled in the same manner on the treasurer's records by simply crediting the depository account of each of the depositories on which the warrants are outstanding, on the Treasurer's Daily Balance of Cash and Depositories record, and by removing the warrants from the outstanding list. Those warrants in physical custody of the auditor should then have entered on their face the words "Canceled and Receipted to Fund on Which Originally Drawn" showing the date and receipt number, and be firmly attached to the copy of each warrant in the auditor's Register of Warrants.
If any warrant shall be presented for payment which has been canceled pursuant to IC 5-11-10.5, the holder of the warrant shall deliver it to the auditor and shall file a claim stating that he/she is the owner of the warrant, that the money is justly due him/her and relating the circumstances that prevented the warrant from being presented for payment within a reasonable time. If the auditor shall find the claim in order, he/she shall issue a warrant against the fund to which the original warrant was receipted, without appropriation being made therefor.
Warrants Voided
The foregoing applies only to warrants issued and posted to the records and thereafter canceled. It does not apply to a warrant erroneously written which is voided before being issued and posted. In the latter case the word "VOID" should be written across the face of the warrant and each copy, the treasurer's copy given to that office, and the original warrant firmly attached to the copy of the Register of Warrants. It is also recommended that the signature of the auditor be torn-off to prevent the possible misuse of a voided warrant.
Issuance of Duplicate Warrant
When a county warrant is lost or for some other reason has not been presented for payment by the depository on which drawn, and evidence of this fact is submitted, the county auditor is authorized to issue a duplicate warrant to replace the original warrant; however, certain safeguards should be exercised before the duplicate warrant is issued, as recommended in the following outline:
- The person, firm or corporation requesting the duplicate warrant should submit to the county auditor an affidavit setting out all pertinent information with reference to such war-rant. A separate affidavit should be furnished by the payee and by each party to whom it was endorsed. A suggested form of affidavit will be found on page 6-23.
- Immediately upon receipt of the affidavit, the auditor should request the county treasurer to issue a stop payment order on the original warrant to the bank on which it was drawn.
- Delay issuing the duplicate warrant until the warrants for the month in which the stop payment order was issued are returned by the bank and the county treasurer has verified that the original warrant has not been cashed.
- Issue the duplicate warrant on the next warrant number of the current series, under current date (not the date it was originally issued), bearing the payee's name, amount and other details shown on the original warrant, but clearly indicate thereon that it is "issued to replace warrant number ___, dated ________, 20__." In this manner no problems should arise when the warrant is presented to the bank for payment, which sometimes happens when it is given the date and number of the original warrant on which payment was stopped. It is not permissible to have unnumbered warrants furnished by the printer for this purpose; always use the next warrant number in the current series but show thereon the warrant number it replaces.
- The duplicate warrant is not to be posted to the auditor's ledgers since it is issued only for the purpose of replacing the original warrant. To identify it as a duplicate so it will not be posted and added with the disbursements for the month, simply circle the copy in the warrant register or otherwise identify it as a "Duplicate."
A duplicate warrant might, under emergency conditions, be issued within a short time after the stop payment order is given the bank where the bank furnishes a statement that they have checked the paid warrants to date and the warrant in question has not been paid; however, a safe position is to wait until the canceled warrants for the month in which the stop payment order was issued are returned by the bank and the county treasurer has verified the warrant has not been paid.
PROCEDURES
Replacement of Lost, Stolen, or Forged Assistance (AFDC, IV E Foster Care and Adoption Assistance) WarrantsWhenever a recipient notifies the county department of the loss or theft of his/her assistance warrant, the county bookkeeper should:
- Issue a stop-payment order within seventy-two (72) hours of the notification of loss or theft from the recipient.
- Inform the recipient that he must immediately complete and sign DPW Form 204, Affidavit for Issuance of Duplicate Warrant before a replacement warrant will be issued, and that failure to immediately execute said affidavit will delay the replacement of the warrant.
- Request a replacement warrant from the county auditor within twenty-four (24) hours after DPW Form 204 is executed and notarized by the recipient.
- Inform the recipient of the right to appeal to the State Department of Family and Social Services if a replacement warrant is not issued within seventeen (17) working days after the date the recipient signed the DPW Form 204. (470 IAC 2-4-12)
During the seventy-two (72) hour period allowed county departments for issuance of the stop-payment order, it should be determined that a warrant was actually mailed to the recipient and that adequate time for delivery of the warrant has passed. Under no circumstances should the county department refuse to allow the recipient to execute the affidavit when he/she requests to do so.
If the warrant has been cashed and the recipient believes that the signature is not his/her own (forged), a hand written letter stating this fact must be delivered to the county department.
If fraud is suspected, the county department should conduct an investigation. However, the issuance of a replacement warrant is NOT to be delayed because of the fraud investigation.
Note: If the payee did not receive payment, strike out paragraph 3b. If the payee and any subsequent endorser received payment, strike out paragraph 3a. In the latter instance the last party to whom the warrant was endorsed should complete paragraph 3a. A separate affidavit should be obtained from the payee and from each party to whom the warrant was endorsed.
- Section J - Accounting for Payrolls
The following forms have been prescribed for use of counties in connection with the payment of salaries and wages of county officers and employees:
Form No. Description County Highway 2 County Highway Payroll Schedule General 99 Payroll Schedule and Voucher General 99A Employee's Service Record General 99B Employee's Earnings Record General 99C Employee's Weekly (Work Period) Earnings Record County 16PR Payroll Warrant and Register County Highway Payroll Schedule (Form No. 2) - This form shall be used by the county highway department in submitting payrolls, regardless of the fund from which the payroll is to be paid. The form contains printed instructions to be observed in its preparation and use. (See page 6-33 for copy of form.)
Payroll Schedule and Voucher (Form No. 99) - This form shall be used by all offices and departments, except the county highway department. A separate payroll shall be submitted by each office or department and for each fund from which payable. (See page 6-31 for copy of form.)
Employee's Service Record (Form 99A) - This record is required to be kept by each office or department to support the preparation of payrolls. A separate form shall be kept on a calendar year basis for each employee. The record is designed to show for each calendar date whether the employee worked, was absent, or was on vacation, sick or other authorized leave. (See page 6-30 for copy of form.)
If it is deemed desirable to centralize the keeping of all employees' service records in the auditor's office this may be done, with the posting to such records to be made from the payroll schedules filed for payment; however, this will in no way eliminate the need for such records to be kept by offices and departments having a large number of employees, such as the county highway department, to support the preparation of payrolls.
Employee's Earnings Record (Form 99B) - This record is required to be kept by the county auditor for each county officer and employee. It is so designed that it may accommodate all payrolls, whether employees are paid weekly, bi-weekly, semimonthly or monthly. Totals shall be entered for each quarter and for the calendar year, and all entries in such record shall agree with the totals of payroll warrants issued. The record is the basis for reporting earnings and payroll deductions of employees and for preparing earnings statements required to be furnished employees, the Federal Internal Revenue Service and the Indiana Department of Revenue at the close of each year. (See pages 6-36 and 6-37 for copy of form.)
Employee’s Weekly (Work Period) Earnings Records (Form 99C) - This record is required to be kept by the county auditor for county employees who are not exempt from the Fair Labor Standards Act and who are not on a fixed work schedule and when the county pays other than weekly. (See page 6-35 for copy of form.)
Payroll Warrant and Register (Form 16PR) - This form shall be used for the payment of all payrolls covering salaries, wages and other compensation for personal services of "county officers and employees," including within that term officers and employees of townships and other governmental units whose salaries and wages are paid by the county auditor.
The term "other compensation for personal services" will include such items as per diem of the regular judge, bailiff and court reporter in change of venue actions, compensation of the clerk of the circuit court for services on the election board and board of canvassers, per diem of board members and similar items, when such payments are made for personal services. The payment of such items on payroll warrants is necessary to insure that all earnings of officers and employees are reported for tax, social security and retirement purposes and to this end should be paid on payrolls submitted by the officer or department. The payroll should be supported by an attached schedule, where necessary to support the compensation claimed, such as per diem allowances of the court.
Items Not Payable on Payroll Warrants
The following items are not considered to be compensation for personal services or do not represent payments to "officers and employees" of the county and, therefore, should not be paid on payroll warrants:
- Mileage and travel expense allowances.
- Per diem of jurors, compensation of pauper attorneys (unless serving as an officer or employee of the court), and witness fees.
- Compensation of precinct election boards.
- Payments to attorneys, engineers and other professional persons, when serving on a contractual basis, as distinguished from being an officer or employee of the county.
All of the foregoing items, as well as any other items not representing payments to county officers and employees for personal services, should be paid on regular county warrants and not on payroll war-rants. This is true even though the items might be budgeted under the personal services classification.
Leave Benefits
Pursuant to IC 5-10-6-1, the vacation leave, sick leave, holiday leave or other leave benefits to which a county employee is entitled must be fixed by ordinance of the board of county commissioners. While this law was enacted to apply to hourly paid employees, it is generally followed in establishing leave benefits for all other employees, since there is no other law specifically governing leave for county employees.
The foregoing will not apply to those officers and departments for which some other board or agency is given authority to establish leave benefits. Included in this category are employees of the county extension service office whose employees are considered to be a part of the staff of Purdue University.
Payroll Deductions
Salaries and wages of officers and employees are subject to withholding for federal, state and county (local option) income taxes, social security and contributions to retirement programs established pursuant to Indiana laws. In addition, deductions may be made for insurance premiums, charitable contributions, purchase of United States bonds and securities and for certain other purposes enumerated in IC 22-2-6-2, where agreed to by the employer and a written assignment is personally signed by the employee.
Provision is made on all payroll forms, including the payroll warrant, for showing the gross wages of the employee, the amount and purpose of such deduction, and the net amount payable. The prescribed payroll warrant also contains a statement (non-negotiable copy of warrant) showing the employee's earnings and deductions which is required to be furnished the employee each pay period, pursuant to IC 22-2-2-8.
A separate fund shall be established for each type of payroll deduction, to which deductions shall be transferred at the time payroll warrants are issued. The handling of deductions is more fully covered in the instructions and exhibits that follow.
Garnishments of Salaries and Wages
Where the earnings of an employee are subject to garnishment, the deduction should be listed on the employee's payroll warrant and should be accounted for in the same manner as any other deduction. In this manner a "Garnishment Fund" will be established, to which deductions will be receipted and disbursed from that fund to garnishment plaintiffs, thus providing a complete record of the transactions.
Payroll Accounting Procedures
To properly account for payroll earnings and deductions and to facilitate posting of records, it is important that a systematic payroll accounting procedure be established.
Two methods of issuing payroll warrants have been prescribed for counties, either of which may be adopted by the county auditor. The two methods provide either for:
- Establishment of a "Payroll Fund" to which gross amounts required to meet the payrolls are transferred and from which fund payroll warrants will be issued. Under this method, at the option of the county, a separate bank account may also be established for the payroll fund.
- Issuance of payroll warrants directly from the fund or funds affected, without the establishment of a payroll fund.
Where method (1) is adopted, the payroll warrant shall have printed thereon the name "Payroll Fund." Where method (2) is adopted, the payroll warrants shall be printed with the name of the fund in blank, "__________ Fund."
Method No. 1 - With Payroll Fund
- Establish a "Payroll Fund" in addition to all other funds. This fund shall be used for the payment of all personal services regardless of the office or department in which a person is employed or the fund or appropriation account to be charged for such expense.
- Payroll Schedule and Voucher, Form 99, shall be filed by each office or department, except for the county highway department whose payrolls shall be submitted on County Highway Payroll Schedule, Form 2. The payroll shall include not only the salaries and wages of officers and employees but shall also include per diem allowances and other compensation for personal services of such officers and employees. Where per diem or other compensation is included it should be described and there shall be attached thereto a separate claim or itemized statement showing the dates and cases for which per diem or other compensation is claimed.
- Prepare a summary of the individual payrolls, using Form 99, but indicating thereon the word "SUMMARY." This will compile in total the payrolls for all offices and departments, showing the name of the office or department, total gross pay, the payroll deductions and the net amount of warrants to be issued. The summary should first list the offices and departments whose payrolls are chargeable to the County General Fund, followed by the payrolls chargeable to other funds.
- From the totals shown on the payroll "SUMMARY" issue a regular county warrant (not a payroll warrant) for the TOTAL GROSS PAY (before deductions), and receipt such amount to the "Payroll Fund." The warrant or warrants issued must show the amount chargeable to each fund for proper posting by the auditor and treasurer to the respective fund accounts.
- Issue payroll warrants from the Payroll Fund, based upon the individual payroll schedules and vouchers. Each warrant must be completed in full showing the gross pay and applicable payroll deductions.
- PAYROLL DEDUCTIONS - Immediately following the issuance of the payroll warrants for the pay period, issue a warrant to the "Treasurer of ___________ County" for the payroll deductions, entering the total amount of each type of deduction in the applicable spaces on the payroll warrant. The warrant shall then be receipted in by application to pay and quietus and the amounts credited to each of the applicable payroll deduction funds. Do not attempt to accumulate and account for payroll deductions within the payroll fund; instead, transfer the deductions to the separate funds for each type of deduction on the records of the auditor and treasurer.
- PROOF OF PAYROLLS - For each pay period and at the close of each month, the payroll warrants must be totaled and proved to the totals of the payroll summaries. Enter the totals of the warrants on the warrant register after the last warrant issued, showing separately the totals of gross pay, each of the payroll deduction columns, and net amount of warrants. These totals should then be carried to a "Control Account" over employees' earnings and payroll deductions, in the Employees' Earnings Record, Form 99B.
- POSTING TO LEDGER - All payroll warrants will be posted to the payroll fund. Posting to appropriation and other fund accounts will be made from the individual payroll schedules and vouchers, in GROSS AMOUNT, making reference to the warrant issued for transfer of funds to the payroll fund. The totals of amounts posted to the appropriation accounts and the respective fund accounts must agree.
- POSTING TO EMPLOYEES' EARNINGS RECORDS (Form 99B) - Posting to this record should be made from the individual payroll warrants issued. A "control account" using the same form should be placed in the front of all employees' earnings records to insure that proper posting is made to the indi-vidual records. Posting to the control account will be made from the totals shown on the payroll warrant register, as discussed in paragraph (g).
- FILING - The individual payroll vouchers shall be filed in the regular manner. The payroll "summary" may be filed with the payroll vouchers; however, if the payroll vouchers of all county offices and departments for the payroll period are not filed in a single place, it is recommended that the summaries be filed together or bound in a suitable post binder.
Method No. 2 - Without Payroll Fund
- Payrolls shall be submitted on Payroll Schedule and Voucher, Form 99, and County Highway Payroll Schedule, Form 2, in the same manner as shown in paragraph (b) under Method No. 1.
- Issue payroll warrants based upon the individual payroll schedules and vouchers, showing on each warrant the name of the fund on which it is drawn. Each warrant must be completed in full, showing the gross pay and applicable payroll deductions. It is not necessary to show on the warrant the appropriation and/or expenditure account to be charged; however, provision may be made on the payroll warrant for showing the account number, if desired.
- PAYROLL DEDUCTIONS - Immediately following the issuance of payroll warrants, issue a warrant to the "Treasurer of __________ County" for the payroll deductions and receipt such deductions into the applicable payroll deduction funds, in the same manner as discussed in paragraph (f) under Method No. 1.
- PROOF OF PAYROLLS - For each pay period and at the close of each month the payroll warrants must be totaled and the totals entered on the warrant register after the last warrant issued, showing separately the totals of gross pay, each of payroll deductions, and the net amount of warrants. These totals should then be carried to a "Control Account" over employees earnings and payroll deductions in the Employees' Earnings Record, Form 99B.
- POSTING TO LEDGER - Posting to the fund accounts will be made from the warrant register (copies of warrants issued). Posting to the appropriation and expenditure accounts will be made from the individual payroll schedules and vouchers, in GROSS AMOUNT, making reference to the warrant or warrants issued; however, if the account number is carried on the warrant, posting may be made from the warrant register. The totals of amounts posted to the appropriation accounts and the respective fund accounts must agree.
- POSTING TO EMPLOYEES' EARNINGS RECORDS - Posting to this record will be made in the same manner as discussed in paragraph (i) under Method No. 1.
- FILING - It is recommended that payroll vouchers be separately filed from other claims and vouchers paid. It is also recommended that payroll claims be entered in the Commissioners Claim and Allowance Docket in a group separate from other claims to facilitate proof of payrolls. If desired, a summary of all payrolls may be prepared in the manner discussed in paragraph (c) under Method No. 1, as a further proof of payroll warrants issued.
Accounting for Payroll Deductions
Experience has shown that one of the most difficult problems encountered by public officials is accounting for payroll deductions. That is the reason the prescribed accounting procedures provide for transfers of payroll deductions into separate funds, with a separate fund to be established for each type of deduction. Also, the establishment of such funds provides a further proof of the correctness of the deductions and remittances since the entries in each fund can be reconciled to the control account in the employees' earnings records, to the earnings statements furnished employees at the close of the year and to the reports and remittances required to be made to the various federal, state and other agencies.
Deductions for federal, state and county (local option) taxes should offer no difficulty, since remittances to the Internal Revenue Service and to the State Department of Revenue should be equal to the amounts withheld from employees. The same is true where the entire amount deducted from employees' earnings for any purpose is paid by the employees; however, where a part of the expense, such as social security contributions or group insurance, is payable by the county a different handling is required.
In all instances only the deductions from employees' payrolls should be receipted to the payroll deduction funds. When a remittance is made for such items as social security and group insurance and a part is payable by the county, the county's portion should be charged directly to the county fund or funds affected and only the employees' portion charged to the payroll deduction fund.
It is not required that a claim or voucher be filed by a state or federal agency to which withholding taxes, retirement contributions, social security or other payments are required to be made, nor is it required that claims be allowed prior to their payment, since such payments must be made in accordance with applicable laws. It is suggested, however, that reports and other information supporting each payment be attached to a claim, Form 17, so that it can be processed and filed in an orderly manner and preserved for future reference and audit.
In the case of social security contributions, where the remittance is required to be based upon the total taxable payroll, with one-half to be contributed by employees from the "Social Security Deductions" fund and one-half contributed by the county, it will usually result in there being a small difference between the amounts withheld from employees and the amount required to be contributed by the county. Also, when remittances are made, the county's contribution will be payable from the County General Fund, County Highway Fund and certain other funds, depending upon the fund to which the county's contribution is chargeable. The county's portion chargeable to each fund may be arrived at by determining the amounts withheld from employees either from: (1) the payroll summaries; (2) the totals of the payroll warrants charged to each fund; or (3) from the Employee's Earnings Record control accounts, if maintained by fund from which paid. After the amounts withheld from employees are determined, charge each fund (other than the County General Fund) with an amount equal to the amounts withheld from employees and charge the General Fund with the remaining portion of the county's contribution. This will result in any difference between the employees' and the county's contributions being reflected in the General Fund but the difference should be minimal.
State Withholding Tax
If a political subdivision’s tax liability exceeds $10,000, the taxpayer shall pay taxes due by electronic funds transfer or by delivering in person or by overnight courier a payment by cashier’s check, certified check, or money order to the Indiana Department of Revenue. The transfer or payment shall be made on or before the date the tax is due. [IC 6-2.1-5-1.1]
- Section K - Loans and Advances
Temporary Loans (Tax Anticipation Notes or Warrants)
A county may borrow funds by temporary loans, in an amount not exceeding the revenue for the current year, pursuant to IC 36-2-6-18, but all such loans shall be evidenced by "Tax Anticipation Notes or Warrants" of the county and be issued in accordance with the provisions of IC 36-2-6-18 to 36-2-6-20.
The tax anticipation notes or warrants shall be authorized by ordinance of the county council and shall be sold by the county auditor to the highest bidder therefor, but in no event at less than par and accrued interest to date of delivery, after giving notice of sale thereof by publication in accordance with IC 5-3-1-2. Where the interest rate exceeds 8%, approval of such rate must be obtained from the State Board of Tax Commissioners, pursuant to IC 6-1.1-20-7.
The notes or warrants must show the funds and revenues in anticipation of which they are issued and out of which they are payable. The principal of a temporary loan may be paid without an appropriation, but an appropriation is required for payment of the interest, where it is borrowed for a fund subject to the provisions of the budget laws.
IC 36-2-6-20 makes it the duty of the auditor, with the advice of the county attorney, to prepare the notes or warrants and deliver them to the county treasurer to complete the loan. The form of notice to be given bidders and the contents of the ordinance and notes or warrants are legal matters in which county officials should be advised by the county attorney. However, to assist in this matter, suggested forms of the notice to bidders and tax anticipation time warrant are set out on the following pages.
Loans Other Than Temporary
The county fiscal body may, by ordinance, make loans for the purpose of procuring money to be used in the exercise of county powers and for the payment of county debts other than current running expenses, and issue bonds or other county obligations to refund those loans.
The county fiscal body may, by ordinance, make loans of money for not more than five (5) years and issue notes for the purpose of refunding those loans. The loans may be made only for the purpose of procuring money to be used in the exercise of the powers of the county, and the total amount of outstanding loans may not exceed five percent (5%) of the county's total tax levy in the current year (excluding amounts levied to pay debt service and lease rentals). The ordinance authorizing the loans must pledge to their payment a sufficient amount of tax revenues over the ensuing five (5) years to provide for refunding the loans. The loans must be evidenced by notes of the county in terms designating the nature of the consideration, the time and place payable, and the revenues out of which they will be payable.
Temporary Advances (Loans) Between Funds
Whenever it becomes necessary to borrow money to enhance any depleted fund of the county and there is sufficient money on deposit to the credit of any other fund of the county which can be temporarily advanced or transferred to such depleted fund, it shall be lawful, upon the adoption of an ordinance or resolution by the county council, to make such advance for such period of time as may be prescribed in the ordinance or resolution, providing it does not extend beyond the budget year of the year in which the advancement and transfer is made. [IC 36-1-8-4] The only limitation is that any such advancement shall be made only from funds derived from the levying and collection of taxes on property, the levying and collection of special taxes, and from other revenue derived from any operation of the county. This limitation restricts advances from the proceeds of a bond issue, from trust and endowment funds, from federal grants and similar sources not meeting the authorized sources.
If the fiscal body determines that an emergency exists that requires an extension of the prescribed period of a transfer, the prescribed period may be extended for not more than six (6) months beyond the budget year of the year in which the transfer occurs if the fiscal body does the following:
- Passes an ordinance or a resolution that contain the following:
- A statement that the fiscal body has determined that an emergency exists.
- A brief description of the grounds for the emergency.
- The date the loan will be repaid that is not more than six (6) months beyond the budget year in which the transfer occurs.
- Immediately forwards the ordinance or resolution to the State Board of Accounts and the State Board of Tax Commissioners.
Upon adoption of the ordinance or resolution by the county council the auditor is authorized to make such advance. The advance should be made in the manner outlined in Section H of this section under "Transfers Between Funds" and the repayment of the advance should be handled in the same manner.
Welfare Fund Advance
If the amount of money in the County Welfare Fund is not sufficient to meet the requirements of that fund, funds may be provided by borrowing and the issuance of bonds, pursuant to IC 12-19-5 or IC 12-19-7 and other provisions of the welfare laws. Temporary loans, through the issuance of tax anticipation notes or warrants, and advances (loans) from other funds previously discussed in this section, may also be made, if authorized by the county council, where such loans and advances are repayable from current revenues.
Bond Issues
As indicated herein, bonds may be issued to meet welfare requirements. In addition, there are many other laws authorizing bonds to be issued for construction of or improvements to county buildings and structures, as well as for other purposes. Where bonds are issued there are specific statutory requirements to be met in which county officials should be guided by the advice of bond counsel, with the proceeds to be accounted for in the manner provided in the bond ordinance or in the applicable law under which the bonds are issued.
There are, however, certain uniform requirements in accounting for such funds which must be observed. These include:
- Principal of Bond Issue - Only the principal of the proceeds of the bond issue may be receipted to the "____________ Construction Fund," or to such other fund as designated in the applicable ordinance or law under which the bonds were issued.
- Premium and Accrued Interest - The premium and accrued interest received from the sale of the bonds must be receipted into the "_______________ Bond Redemption Fund" or such other fund designated for the retirement of the bonds and interest.
- Appropriations - Where the proceeds (principal) of the bonds are required to be appropriated, such as general obligation bonds of the county for any purpose, not more than the appropriation may be expended, regardless of the cash available in the fund for such purpose. An appropriation ledger sheet, Form 24A, should be set up back of the fund (cash) account in all instances where appropriations are required. Appropriations made from the proceeds of a bond issue do not lapse at the end of the year but remain in force, and the balance is carried forward each year, until the purpose for which the appropriations were made has been accomplished or abandoned. [IC 5-1-2-1]
- Investments - The proceeds of a bond issue may be invested in the same manner as other county funds. [IC 5-13-9-1] The interest thereon shall be receipted to the county general fund unless otherwise provided in the bond ordinance. The interest may be applied to the appropriate bond interest or sinking fund. [IC 5-13-9-6] The interest may not, however, be expended without appropriation as discussed in the preceding paragraph (3).
- Surplus Bond Proceeds - Any balance remaining after the purpose for which the bonds were issued has been accomplished or abandoned shall, by an order of the county council entered of record, be transferred to the bond and interest redemption fund or may be used by a political subdivision for the same purpose or type of project for which the bonds were originally issued if the fiscal officer of the political subdivision certifies before or at the time of that use that the surplus was not anticipated at the time of the issuance of the bonds and the legislative body responsible for issuing the bonds takes action approving the use of surplus bond proceeds or investment earnings for the same purpose or type of project for which the bonds were originally issued.
- Passes an ordinance or a resolution that contain the following:
- Section L - Financial Statements and Reports
Monthly Financial Statement
At the close of each calendar month a Monthly Financial Statement, County Form No. 61, shall be prepared, showing the financial transactions for the month and year to date, for each fund and in total.
The county treasurer is also required to independently prepare a Monthly Financial Statement on the same form and the two statements must be reconciled. If any differences exist between the records of the auditor and the treasurer, they must be identified and immediate steps taken to bring the records of the two offices into agreement.
The statements are prescribed to be placed in a post-binder and shall be carefully preserved as a permanent record.
Annual Financial Statement of Board of Commissioners
At its second regular meeting each year, the executive shall make an accurate statement of the county's receipt and expenditures during the preceding calendar year. The statement must include the name of and compensation paid to each county officer, deputy, and employee.
Pursuant to IC 36-2-2-19, this becomes the Annual Financial Statement of the board of county commissioners and the board shall cause the statement to be posted at the courthouse door and at two (2) other places in the county, and be published in the manner prescribed by IC 5-3-1.
To meet the posting and publication requirements, a statement should be typed in the form it is to be posted and published prior to the meeting of the board, and provision made at the bottom of the state-ment for certificate of the auditor and approval of the board of county commissioners, in substantially the following form:
"STATE OF INDIANA, ____________________ COUNTY, SS:
I hereby certify the foregoing to be a true and correct statement of the receipts, disbursements and balances of the funds of ________ County, for the calendar year 20___. Dated this _____ day of January, 20___.
/s/ (Signature of Auditor)
Auditor of ____________ County"Examined and Approved this _____ day of January, 20___.
/s/ (Signatures of
/s/ Members
/s/ of Board)
Board of County Commissioners"Report to State Board of Accounts
Pursuant to IC 5-11-1-4, the county auditor is required to prepare and file an Annual Financial Report with the State Board of Accounts. The report is prepared on forms furnished by this board and must be filed on or before January 31 after the close of the calendar year.
- Section A - General Discussion
This section is devoted to "property and excise taxes," including the assessment of property, collection and distribution of taxes, and the records related thereto.
Definitions - Taxing District and Taxing Unit
In 1975, the General Assembly enacted a complete codification and restatement of the property and excise tax laws in Public Law 47, which became effective March 18, 1975. In that law there are two definitions which changed the terminology generally applicable to the records of the county auditor and the county treasurer and must be considered in connection with the subject matters in this section. The terms are:
- "Taxing District" means a geographic area within which property is taxed by the same taxing units and at the same total rate.
- "Taxing Unit" means an entity which has the power to impose ad valorem property taxes.
Prior to the enactment of Public Law 47, the tax laws did not define these two terms. The term "taxing unit" was usually used in defining an area taxed at the same total rate, rather than the term "taxing district," with the terms "municipal corporation," "political subdivision," "county, city, town or township," or "special taxing district" being used to identify each governmental unit within the county. It should be further noted that many of the forms and records currently in use refer to "Taxing Unit," as a geographic area taxed at the same total rate rather than the term "Taxing District."
In view of the foregoing, you will find both of these terms used in this section, depending upon whether the law is cited or a particular form or record is discussed. However, where either of the terms is used they shall be considered to be synonymous, since governmental units are clearly distinguished by the use of other terms.
Duties and Responsibilities of County Auditor
The duties and responsibilities of the county auditor, with respect to the assessment of property, the allowance of deductions and exemptions, the levy and collection of taxes, and finally the settlement and distribution of taxes collected, places the auditor's office in the position of being the most important office in administering the tax laws on the local level. Among these duties and responsibilities are the following:
- Maintain real estate ownership records (transfer books) and plat books of all real property in the county.
- Provide all forms and records required to be furnished assessing officials in the performance of their duties.
- Maintain records to properly control and account for all real estate and personal property assessments and, most important, to see that such assessments, when filed by assessing officials, are not reduced or otherwise changed unless applicable statutory procedures are observed.
- To receive and act upon all applications for age 65, blind, veterans', and other deductions, to determine the eligibility of each applicant and the amount to be allowed.
- Prepare the tax duplicate and enter all taxes therein for collection by the county treasurer; also, enter all penalties and account for all taxes and penalties returned unpaid.
- Audit the tax duplicate after each semiannual tax payment date, make settlement with the county treasurer, and distribute all taxes to the respective governmental units for which collected.
These duties and responsibilities are more fully covered in the sections that follow but it cannot be overemphasized that the office plays a most important part in accounting for assessments and taxes collected and in seeing that the tax laws are properly administered.
- Section B - Assessment of Property
The first step in the levy and collection of property taxes is the assessment of real estate and personal property. The State Board of Tax Commissioners is empowered by law to establish the standards, as well as the forms and records related to assessments, and has published a "Personal Property Assessment Manual" and an "Indiana Real Property Assessment Manual." Therefore, instructions con-cerning the assessment of property by assessors are not included herein; however, forms and records related to the assessment of property will be found on pages 4-5 and 4-6 and the duties of the county auditor with the respect to accounting for assessments are discussed in this section.
Transfer Books
The county auditor shall keep a transfer book, arranged by townships, cities, and towns (taxing districts). In the transfer book the auditor shall enter a description, for the purpose of taxation, of land that is conveyed by deed or partition, the date of the conveyance, the names of the parties, and the post office address of the grantee. In addition, the auditor shall endorse on the deed or instrument of conveyance the words "duly entered for taxation subject to final acceptance for transfer," "not taxable," "has already been listed for taxation," "or duly entered for taxation." [IC 6-1.1-5-4]
County Form No. 55, Transfer Book, prescribed by the State Board of Accounts, commonly referred to as a real estate ownership record, is designed to contain a list of all real estate located in each taxing district, showing for each parcel: (1) name or names of owner; (2) description of lands and lots, including names of addition, lot and block number, or section, township and range and number of acres; (3) value of land or lot; (4) value of improvements; and (5) value of additional improvements and the year improvements were added. Some counties also include in this book the current addresses of owners for use in preparing the tax duplicate; however, most counties maintain separate records for this purpose or, in the case of counties using mechanized or computer equipment, the addresses are maintained through the use of special equipment.
The book also contains spaces for recording changes in ownership, showing: (1) from whom transferred; (2) to whom transferred, including the address of the grantee; (3) the type and date of instru-ment from which the transfer was made; and (4) the date of the transfer.
Transfer books may be either loose-leaf or a bound record. There are no statutory requirements as to how often the transfer books should be recopied; however, it is recommended that new transfer books be prepared after each periodical reassessment of real property is completed.
The transfer books are used in preparing the real estate assessors' books discussed in this section.
In those counties which have installed a mechanized tax accounting system, under which real estate is identified by a parcel number, usually referred to as a "key number," this board has approved an alternate form of transfer book, or ownership record, for use of such counties in lieu of the prescribed form. However, its use is limited to those counties for which specifically approved.
Control of Assessments - Because many persons who are not employees of the county auditor frequently use the transfer books, such as abstractors, attorneys and other persons seeking information, many county auditors maintain a "control" account over the assessed valuation of real estate for each taxing district to insure that no unauthorized changes are made in the assessments, and this practice is encouraged by the State Board of Accounts.
Such a control can be maintained by use of a simple three-column ledger or journal, with a separate sheet for each taxing district, to show in the first column any "additions," in the second column any "reductions" and in the third column the "net total assessments." To open the control account for each district, the total assessments (before deductions and exemptions) upon which the tax duplicate is prepared would be entered in the column headed "net total assessments." After each succeeding assessment period, the total value of additional assessments would be entered in the column headed "additions" and any reductions in assessment (upon petition for reassessment) would be entered in the column headed "reductions." Usually, these figures can be determined from the real estate assessors' books returned by the assessors after action thereon by the county property tax assessment board. After the assessments are fixed, should assessments be made for omitted property or reductions be made for errors in assessments, any changes made in the transfer book would be entered in this record, making reference to the particular real estate affected.
Not only does such a record control unauthorized changes being made in the assessments entered in the transfer books, but it also materially assists in preparing the tax duplicate for the succeeding year by having a predetermined total for each taxing district, to insure that no property has been omitted.
Plat Books
Except in civil townships having a population of 35,000 or more and in civil townships in which a city of the second class is situated, the auditor, or, if authorized by county ordinance, the surveyor of each county shall maintain a plat of each civil township of the county the auditor or surveyor serves. The plats shall be divided in such a manner that they clearly exhibit the ownership and assessed value of each parcel of real property. The plats shall be in the form and shall contain the information prescribed by the State Board of Tax Commissioners, and they shall be kept current. [IC 6-1.1-5-1]
Notwithstanding the foregoing provisions most county auditors maintain plat books for all taxing districts and, if being maintained by the county auditor, this practice is encouraged as an effective control over the ownership of assessment records.
When deeds are presented for transfer the legal description should be checked to the description shown in the plat books and, to comply with the provisions of IC 6-1.1-5-1 requiring the books to be kept current, the name or names of the owners should be changed each time real property is transferred. If an error is found in the deed presented for transfer, such error should be called to the attention of the person presenting the deed and, if necessary, correction should be made prior to transferring the property for taxation.
Assessors' Books and Supplies
Before the assessment date of each year, the county auditor shall deliver to each township assessor the proper assessment books and necessary blanks for the listing and assessment of personal property. [IC 6-1.1-3-5]
The State Board of Tax Commissioners has prescribed County Form No. 29, Real Estate Assessor's Book, and County Form No. 29A, Personal Property Assessor's Book, for use of township assessors in making assessments and filing the assessment lists with the county auditor at the close of the assessment period. In addition, the State Board of Tax Commissioners has prescribed County Form No. 29B, Township Assessor's Supplemental List of Personal Property Assessments, for use of township assessors in reporting personal property assessments filed after the assessor's book has been filed with the county auditor.
Real Estate Assessor's Book
The county auditor of each county shall annually prepare and deliver to the township assessor of each township, County Form No. 29, Real Estate Assessor's Book, within thirty (30) days after the assessment date, except for civil townships having a population of 35,000 or more and in civil townships in which a city of the second class is situated, where the books are prepared by the township assessor. [IC 6-1.1-5-8] The "assessment date" is March 1 which means the book is to be delivered by March 31.
A separate real estate assessor's book should be prepared for each taxing district, from the transfer book (real estate ownership record) and, pursuant to the law cited, shall be delivered to the township assessor responsible for the assessment of the real estate in such taxing district.
In preparing the assessor's book care should be taken to observe the instructions issued by the State Board of Tax Commissioners. Of particular importance is real estate transferred to a new owner on the transfer book since the last assessment period, where there is a change in the "land usage" or where land has been subdivided or rezoned, which requires the real estate to be reassessed, pursuant to the provisions of IC 6-1.1-4-12. For example, where a deed is presented for transfer of a portion of a tract of land assessed for agricultural purposes and it is to be used for another purpose, such as for construction of a residence, a proportionate reduction should be made in the assessed valuation of the land of the seller for agricultural purposes but no assessment should be entered in the name of the purchaser, since the law cited requires the land be reassessed. The same is true with respect to transfers of land from agricultural or residential to industrial or commercial. To assist assessors in maintaining current valuations according to the land usage, county auditors should be constantly alert to such changes when deeds are transferred for taxation.
Not later than May 15, each assessing official shall prepare and deliver to the county assessor a detailed list of the real property listed for taxation in the township. On or before July 1 of each year, each county assessor shall, under oath, prepare and deliver to the county auditor a detailed list of the real property listed for taxation in the county. The assessing officials and the county assessor shall prepare the list on the form prescribed by the State Board of Tax Commissioners. [IC 6-1.1-5-14] The Real Estate Assessor's Book has been prescribed to comply with this law, in which the assessments shall be listed. Any additional assessments or changes in assessments during such assessment period shall then be subject to review by the county property tax assessment board and the State Board of Tax Commissioners, as provided for by law.
The Real Estate Assessor's Book also contains columns in which all deductions and exemptions from assessments shall be entered. After the property tax assessment board has adjourned, the changes in assessments shall be entered in the transfer books and in the "controls" over real estate assessments, discussed on page 9-3, if maintained by the auditor.
After all entries have been completed in this book and the Personal Property Assessor's Book discussed herein, the books shall be totaled for use in (1) preparing the abstract of assessments required to be furnished the State Board of Tax Commissioners, (2) for compiling the net assessed valuation of taxable property required to be furnished each governmental unit for the preparation of budgets, and (3) for preparing the tax duplicate.
Personal Property Assessor's Book
On or before June 1 of each year, each township assessor of a county shall deliver to the county assessor the Personal Property Assessor's Book, which states by taxing district the personal property assessments filed with the assessor on or before the filing date of that year. [IC 6-1.1-3-17] The prescribed form is designed to show the name, address and assessment of each taxpayer for use in preparing the tax duplicate and mailing notices and statements to each taxpayer.
On or before July 1 of each year, each county assessor shall certify to the county auditor Form No. 29B, Township Assessor's Supplemental List of Personal Property Assessments. This list shall contain, by taxing district, the personal property assessments as shown on returns filed with the assessor after the filing date and before July 1 of that year and any assessment changes made before July 1 of that year by the assessor. [IC 6-1.1-3-17]
All personal property assessments are subject to review by the county property tax assessment board and by the State Board of Tax Commissioners.
Assessment of Public Utilities
The property owned or used by a public utility company, including without limitation, railroads, pipe line companies, electric, gas, steam and water utilities, telephone, telegraph and cable companies and bus companies, shall be assessed by the State Board of Tax Commissioners in the manner prescribed in IC 6-1.1-8.
As soon as the State Board of Tax Commissioners determines its final assessments of distributable property, the board shall certify to the county assessor and county auditor of each county: (1) the distributable property assessed values which the board determines are distributable to the taxing districts of the county; and (2) the assessed values, according to the board's records, of fixed property located in the taxing districts of the county. [IC 6-1.1-8-27]
In addition, if a public utility company has appealed the board's final assessment of the company's distributable property, the board shall notify the county auditor of the appeal. [IC 6-1.1-8-27]
The county assessor shall review the State Board of Tax Commissioners' certification to determine if any of a public utility company's property which has a definite situs in the county has been omitted. The county auditor shall enter for taxation the assessed valuation of a public utility company's distributable property which the board distributes to a taxing district of the county. [IC 6-1.1-8-27]
Public utility assessments are usually certified by the State Board of Tax Commissioners to each county auditor during the month of August so that the assessments will be available in compiling the net assessed valuations to be certified by the county auditor to local governmental units for use in preparing budgets. The assessments for each public utility are listed by taxing unit (district) on Form No. 11A for all utilities, except for railroads which are listed on Form No. 32-10. The assessments are also accompanied with a memorandum from the State Board of Tax Commissioners clearly explaining the manner of handling the assessments on the records. 2002 10-6
Assessment of Mobile Homes
The assessment of mobile homes is governed by 50 IAC 3.1 issued by the State Board of Tax Commissioners and IC 6-1.1-7.
The Notice of Assessment of Mobile Home, Form No. 2, shall be prepared in quadruplicate by the township assessor and the pink copy forwarded to the county auditor. Upon receipt of mobile home assessments from the township assessor, the county auditor shall enter the assessments in a separate section of the tax duplicate for each taxing district titled "Mobile Homes." The mobile homes section should be placed immediately following the regular section of the duplicate for real estate and personal property assessments and taxes reported on the March abstract. By observing this procedure, delinquencies from prior years on mobile homes, which must be reported on the previous December settlement and brought forward to the current year's duplicate, will be included on the March abstract.
The tax on a mobile home is due and payable in the same year as the assessment is made. For example, the tax on a mobile home assessed as of January 15, 2002, is due and payable in two (2) installments on May 10, 2002, and November 10, 2002, unless the entire amount of the tax is less than twenty-five dollars ($25.00) and council has adopted an ordinance requiring the owner to pay the entire tax liability in the May installment. The same penalties for delinquencies apply to mobile home taxes as apply to property taxes.
The collection of taxes on mobile homes shall be enforced by the county treasurer in the same manner as delinquent personal property taxes, by making a demand for payment and either by levy on and sale of the mobile home or other personal property of the taxpayer, or by certification of the delinquencies to the clerk of the circuit court where they become a judgment against the taxpayer.
Additional Assessments
Pursuant to IC 6-1.1-9-1, the township assessor, county assessor, or county property tax assessment board may assess any real or personal property which has been omitted from, or undervalued on, the assessment rolls or the tax duplicate for any year or years, by following the provisions of that law and subject to the limitations and further provisions of IC 6-1.1-9.
The State Board of Tax Commissioners has prescribed Form No. 122, Report of Assessment for Omitted or Undervalued Property, which form should be filed with the county auditor when a township assessor or county official assesses any omitted or undervalued property. The form provides a media for entering or changing assessments in the records of the auditor's office and in entering such assessments and the taxes due thereon in the tax duplicate.
The report is designed to show the year for which the assessment was made or, in the case of a personal property assessment return, the due date for filing the return, so that penalties which might be due for failure to file a personal property return by the due date, or interest which might be payable on the taxes charged, may be computed and entered in the tax duplicate. The State Board of Tax Commissioners has also prescribed Form No. 122A, Report of Assessment Penalties, for use of township assessors in reporting penalties on personal property returns filed after the due date.
These forms are not required when additional assessments are made by the county property tax assessment board, upon appeal to or upon action by that board, since changes in assessments will be shown in the minutes of the board. If desired, however, Form No. 122 may be used to provide a posting media for all additional assessments to insure that they are properly entered in the records.
The matter of entering additional assessments on the tax duplicate and instructions pertaining to the penalties and interest for late assessments are discussed in Section F of this section.
Reductions in Assessments
After the lists of assessments (assessors' books) are filed with the county auditor, changes in the assessments, except for omitted or undervalued property previously discussed, may be made only upon appeal to the county property tax assessment board or by filing Form No. 133, Petition for Correction of Error, which form must be approved by two of the following three officials: township assessor, county assessor, and county auditor. If less than two sign, the county auditor shall refer the matter to the county property tax assessment board of appeals for determination. There is no authority for changes to be made upon the sole request of a township assessor or other official. This matter is further discussed in Section F under "Certificates of Error."
The State Board of Tax Commissioners has also prescribed two other forms to be used in correcting (reducing) assessments. The forms are: Form No. 91A, Petition for Correction of Assessment of Property Appropriated for Public Use, and Form No. 135, Affidavit of Destroyed or Removed Property. Upon following the instructions and requirements set out on Form No. 135, the auditor is authorized to accordingly reduce the assessment on the property affected. In the case of Form No. 91A, however, this form must be attached to Form No. 134, Petition for Real Estate Reassessment, to be acted upon by the State Board of Tax Commissioners.
All such petitions must be carefully filed by the auditor to support reductions made in assessments.
Petitions for Reassessment of Real Estate
A petition for the reassessment of real property may be filed with the State Board of Tax Commissioners on or before March 31 of any year which is not a general election year and in which no general reassessment of real property is made. [IC 6-1.1-4-5] The petition must be filed on Form No. 134, Petition for Real Estate Reassessment, prescribed by the State Board of Tax Commissioners, and may be filed by the assessor of the township, the assessor of the county, or by the owner or owners of the parcel or parcels of real property.
In addition, IC 6-1.1-4 contains other provisions with respect to filing petitions for reassessment of real property, including property partially or totally destroyed as a result of a disaster. A "137R" (Petition for Survey and Reassessment - Real and Personal Property Partially or Totally Destroyed by Disaster) is used for this purpose.
Appeals to Property Tax Assessment Board
A taxpayer may obtain a review by the county property tax assessment board of a county or township official's action with respect to the assessment of the taxpayer's tangible property if the official's action requires the giving of notice to the taxpayer. In order to appeal a current assessment and have a change in the assessment effective for the most recent assessment date, the taxpayer must file a petition with the assessor of the county in which the action is taken within forty-five (45) days after the notice of a change is given the taxpayer or May 10 of that year, whichever is later. The county assessor shall notify the county auditor that the assessment is under appeal. [IC 6-1.1-15-1]
A change in assessment made as a result of an appeal filed in the same year that notice of a change in the assessment is given to the taxpayer and after the time mentioned in the previous paragraph becomes effective for the next assessment date.
A taxpayer may appeal a current real estate assessment in a year even if the taxpayer has not received a notice of assessment in the year. If an appeal is filed on or before May 10 of a year in which the taxpayer has not received notice of assessment, a change in the assessment resulting from the appeal is effective for most recent assessment date. If the appeal is filed after May 10, the change becomes effective for the next assessment date.
The petition (appeal) to the county property tax assessment board shall be filed on Form No. 130RA (Residential and Agricultural), 130CI (Commercial and Industrial), and 130PP (Personal Property), Petition to the County Property Tax Assessment Board for Review of Assessment, prescribed by the State Board of Tax Commissioners.
- Section C - County Property Tax Assessment Board
The organization of the county property tax assessment board, the duration of the session of the board and the notice required to be given by the county auditor of the time, place and purpose of the annual session are discussed in IC 6-1.1-28. The powers and duties of the board with respect to assessments are set out in IC 6-1.1-28 and 6-1.1-13. Prior to convening the board, each member of the board shall take and subscribe to the oath prescribed in IC 6-1.1-28-2, which oath shall be administered by and filed with the county auditor.
The powers granted to the county property tax assessment board under IC 6-1.1-13 apply only to the tangible property assessments made with respect to the last preceding assessment date. Before a county property tax assessment board changes any valuations or adds any tangible property and the value of it to a return or the assessment rolls under this Chapter, the board shall give prior notice by mail to the taxpayer. The notice must state a time when and place where the taxpayer may appear before the board. The time stated in the notice must be at least ten (10) days after the date the notice is mailed. [IC 6-1.1-13-1] It is important to note that this section restricts the powers of the board only to assessments made during the last preceding assessment period; the board has no authority to reduce an assessment made in a prior year, although the board does have the power to assess omitted or undervalued property for any year or years, pursuant to IC 6-1.1-9-1, by following the provisions in IC 6-1.1-9 and subject to the limitations in that chapter.
When the county property tax assessment board convenes, the county auditor shall submit to the board the assessment list of the county for the current year as returned by the township assessors and as amended and returned by the county assessor. The county assessor shall make recommendations to the board for corrections and changes in the returns and assessments. The board shall consider and act upon all the recommendations. [IC 6-1.1-13-2]
A county property tax assessment board shall, on its own motion or on sufficient cause shown by any person, add to the assessment list the names of persons, the correct assessed valuation of under-valued or omitted personal property, and the description and correct assessed valuation of real property undervalued on or omitted from the lists. [IC 6-1.1-13-3]
The board has other powers and duties enumerated in IC 6-1.1-13, 6-1.1-9, 6-1.1-15 and 6-1.1-28 and these chapters of the Code should be carefully reviewed when the board convenes.
In addition to the board's duties with respect to assessments, the board also has the duty to act upon all applications for tax exemptions, pursuant to IC 6-1.1-11, and shall also act upon all applications for mortgage deductions, pursuant to IC 6-1.1-12-4 through 6-1.1-12-7. This matter is more fully covered in Section D of this section.
The county assessor, as secretary of the board, shall keep full and accurate minutes of the proceedings of the board. A majority of the board constitutes a quorum for the transaction of business. Any question properly brought before the board may be decided by the agreement of the majority of the whole board. [IC 6-1.1-28-1] It is most important, since the board speaks from its minutes, that the minutes show the action by the board on each assessment or matter before the board.
Appeals to State Board of Tax Commissioners
A taxpayer may obtain a review by the State Board of Tax Commissioners of a county property tax assessment board's action with respect to the assessment of that taxpayer's tangible property if the county board's action requires the giving of notice to the taxpayer.
A township assessor or county assessor may obtain a review by the State Board of Tax Commissioners of any assessment which he/she has made, upon which he/she has passed, or which has been made over his/her protest.
In order to obtain a review by the State Board of Tax Commissioners under this section, the party must file a petition for review with the appropriate county assessor within thirty (30) days after notice of the county property tax assessment board's action is given to the taxpayer.
When a petition for review is filed under this section, the county assessor shall transmit the petition to the State Board of Tax Commissioners within ten (10) days after the petition for review is filed. [IC 6-1.1-15-3]
The State Board of Tax Commissioners has prescribed Form No. 131PP and 131RP, Petition to the State Board of Tax Commissioners for Review of Assessment, which should be used in filing appeals under the above cited law.
In addition, pursuant to IC 6-1.1-11-7, where an application for tax exemption has been disapproved by the county property tax assessment board, the owner may, in the manner prescribed in IC 6-1.1-15-3, within thirty (30) days after notice of disapproval is mailed, petition the State Board of Tax Commissioners to review the county board's determination. The State Board of Tax Commissioners has prescribed Form No. 132, Petition to the State Board of Tax Commissioners for Review of Exemption, for filing appeals under that law.
- Section D - Exemptions and Deductions
Powers and Duties
The State Board of Tax Commissioners has broad powers in the administration of the property tax laws. Included, without limitation, are the following:
- Promulgate rules and regulations concerning the assessment of tangible property; pre-scribe or promulgate the property tax forms and returns which taxpayers are to complete and on which the taxpayer's assessments will be based; and prescribe or promulgate the forms to be used to give taxpayers notice of assessment actions.
- Assess the property of all public utilities, including railroads.
- Hold hearings and act upon all petitions and appeals filed with the board.
- Review approved exemption applications filed with the board and to deny an exemption if the board determines the property is not tax exempt under the laws of this state.
- Review and equalize assessments, both real and personal property.
- Review the assessment or reassessment of any tangible property and to reassess the property.
- Hold hearings and review the budgets of all governmental units, following action thereon by the county board of tax adjustment, and to fix the budgets, tax levies and rates for such units.
Orders From Tax Board
When the State Board of Tax Commissioners makes a determination on any matter before the board a notice or order of the board's action, or a copy thereof, will be furnished the county auditor, if it affects the records in that office. Upon receipt, the auditor is authorized to comply with such order or notice and to accordingly make necessary changes in the records.
Appeals to Courts
The rights of taxpayers to appeal assessments are provided by IC 6-1.1-15. Pursuant to Section 5 of that Chapter, IC 6-1.1-15-5, a person may appeal the State Board of Tax Commissioners' final determination regarding an assessment to the Indiana Tax Court within forty-five (45) days after the date of the notice.
Effect of Appeals Upon Assessments
If a petition for review to any board or a proceeding for judicial review in the tax court regarding an assessment or increase in assessment is pending, the taxes resulting from the assessment or increase in assessment are, notwithstanding the provisions of IC 6-1.1-22-9, not due until after the petition for review, or the proceeding for judicial review, is finally adjudicated and the assessment or increase in assessment is finally determined. However, even though a petition for review or a proceeding for judicial review is pending, the taxpayer shall pay taxes on the tangible property when the property tax installments come due. The amount of taxes which the taxpayer is required to pay, pending the final determination of the assessment or increase in assessment, shall be based on:
- The assessed value reported by the taxpayer on his or her personal property return if a personal property assessment, or an increase in such an assessment, is involved; or
- An amount based on the immediately preceding year's assessment of real property if an assessment, or increase in assessment, of real property is involved.
If the petition for review or the proceeding for judicial review is not finally determined by the last installment date for the taxes, the taxpayer, upon showing of cause by a taxing official or at the tax court's discretion, may be required to post a bond or provide other security in an amount not to exceed the taxes resulting from the contested assessment or increase in assessment.
Each county auditor shall keep separate on the tax duplicate each contested assessment and each contested increase in assessment. The State Board of Tax Commissioners shall not consider contested assessments or contested increases in assessments when establishing rates and calculating state school support. [IC 6-1.1-15-10]
If a review or appeal authorized under this chapter results in a reduction of the amount of an assessment or if the State Board of Tax Commissioners on its own motion reduces an assessment, the taxpayer is entitled to a credit in the amount of any overpayment of tax on the next successive tax install-ment, if any, due in that year. If, after the credit is given, a further amount is due the taxpayer, he may file a claim for the amount due. If the claim is allowed by the board of county commissioners, the county auditor shall, without an appropriation being required, pay the amount due the taxpayer. The county auditor shall charge the amount refunded to the taxpayer against the accounts of the various taxing districts to which the overpayment has been paid. [IC 6-1.1-15-11]
Where taxes on an assessment are not paid while an appeal is pending and they were "not due until after the petition for review, or the appeal, is finally adjudicated," pursuant to the law quoted herein, no penalty shall attach to such taxes until the next succeeding May 10 or November 10 when such taxes are due and payable; however, the taxpayer is obligated to pay 10% interest thereon from the date the taxes for each installment would have been payable to the date of payment, or to the due date for payment of such taxes, pursuant to IC 6-1.1-37-9, which is further discussed in Section F of this section.
- Section F - Preparation of Tax Duplicate
The auditor of each county shall, before March 15 of each year, prepare a roll of property taxes payable in that year for the county. This roll shall be known as the "Tax Duplicate" and shall show:
- The value of all the assessed property of the county;
- The person liable for the taxes on the assessed property; and
- Any other information that the State Board of Accounts, with the advice and approval of the State Board of Tax Commissioners, may prescribe.
The county auditor shall comply with the instructions issued by the State Board of Accounts for the preparation, preservation, alteration, and maintenance of the tax duplicate. The county auditor shall deliver a copy of the tax duplicate to the county treasurer before March 1st of each year. [IC 6-1.1-22-3]
County Form No. 9, Tax Duplicate, has been prescribed by the State Board of Accounts, in which record all assessments and taxes shall be entered and which record shall be used in accounting for all charges, credits and taxes returned unpaid. The prescribed form of tax duplicate is illustrated on pages 9-21 and 9-22.
The State Board of Accounts has approved alternate forms of the tax duplicate, unit ledger card system and computerized systems for many counties, in lieu of the prescribed form; however, where any alternate form or system has been approved, it is required that such form or system produce the same information as the prescribed form.
The tax duplicate should be prepared from the real estate assessors' books (real estate ownership records), the personal property assessors' books and the public utility and railroad assessments certified by the State Board of Tax Commissioners, giving consideration to the modification of such assessments upon appeal or action thereon by the county property tax assessment board or by the State Board of Tax Commissioners. A separate duplicate must be prepared for each taxing district.
The initial work in preparing the duplicate, if desired, may begin as early as the assessment date (March 1) by entering the names of owners and descriptions of the real estate therein at the time the real estate assessors books are prepared for township assessors. After the property tax assessment board adjourns they may then be completed by entering the assessments, exemptions and deductions and net value of taxable property on which taxes will be computed and billed. In those counties having mechanized equipment the initial preparation of the tax duplicate may begin at a later date but every effort should be made to enter all information on the duplicate to and including the "net value of taxable property" prior to receiving the final tax rates from the State Board of Tax Commissioners, in order to expedite delivery of the duplicate to the county treasurer for collection.
The State Board of Tax Commissioners will furnish the county auditor with the tax rates on which taxes for each taxing district are to be computed and will also furnish the percentage of state property tax replacement credit and homestead credit to be given taxpayers in each such taxing district. After computing the gross tax for each installment (column 5 of the duplicate), the state property tax replacement credit and homestead credit (column 6) and the net tax for each installment (column 7), the late assessment penalties shall be entered in columns 8 and 9 and the total current tax for the year, including late assessment penalties, shall be entered in column 10. Delinquencies from former years shall be entered in columns 11 and 12 and the total of all tax, penalties and interest extended into column 13. (See page 9-21)
Each column of the duplicate shall be added to arrive at the total assessments and taxes charged for each taxing district and the accuracy of each column proved. The proof should include multiplying the net value of taxable property times one-half of the tax rate for such taxing district to verify the correctness of the tax computed for each installment. Because of fractions of cents (mills) involved in computing each item of taxes there may be a variation between this computation and the total taxes in column 5; however, such variation should be minimal and if a large difference exists, the computations should be checked. It is well to make these computations as each page of the duplicate is completed and balanced to insure the correctness of the final totals. The same proof should be made of the state property tax replacement credit and homestead credit (column 6), as applied to the gross tax for each installment.
Notice to Taxpayers of Tax Rates
Immediately upon the receipt of the tax duplicate, the county treasurer shall give notice of the rate of tax per one hundred dollars ($100) of assessed valuation to be collected in the county for each purpose and the total of the rates in each taxing district. This notice shall be published in the form prescribed by the State Board of Tax Commissioners three (3) times with each publication one (1) week apart.
The notice required by this section shall be printed in two (2) newspapers which are published in the county. However, if two (2) newspapers are not published in the county, the notice shall be printed in one (1) newspaper. [IC 6-1.1-22-4]
Abstract Filed With Auditor of State
On or before March 15 of each year, the county auditor shall prepare and deliver to the Auditor of State and the county treasurer a certified copy of an abstract of the property, assessments, taxes, deduc-tions, and exemptions for taxes payable in that year in each taxing district of the county. The county auditor shall prepare the abstract in such a manner that the information concerning property tax deductions reflect the total amount of each type of deduction. The abstract shall also contain a statement of the taxes and penalties unpaid in each taxing district at the time of the last settlement between the county auditor and county treasurer and the status of these delinquencies. The county auditor shall prepare the abstract on the form prescribed by the State Board of Accounts. The Auditor of State, county auditor, and county treasurer shall each keep a copy of the abstract in his or her office as a public record. [IC 6-1.1-22-5]
The abstract is filed on Form No. 1-A, Abstract of Property Valuations and Amount and Kind of Taxes Levied Thereon, prescribed by the State Board of Accounts. The abstract forms will be furnished county auditors by the Auditor of State at the time the December settlement forms are furnished by that office.
Taxes on Additional Assessments and Taxes Recharged
Taxes on additional assessments made or received after the tax duplicate has been completed and delivered to the county treasurer shall be entered in a separate section of the duplicate for each taxing district titled "Additional Assessments." Such assessments should not be commingled with mobile homes and tax judgments collected. This section of the duplicate will also be used for any taxes, penalties and interest recharged, resulting from certificates of error or tax refunds for assessments and taxes improperly listed in the regular tax duplicate.
Taxes on Mobile Homes
The assessment of mobile homes is discussed on page 9-6 of this manual. Taxes on mobile homes shall be entered in a separate section of the tax duplicate for each taxing district titled "Mobile Homes."
The taxes on mobile homes shall be accounted for and reported in the same manner as taxes on additional assessments. The total charges shall be reported in the December settlement and any taxes returned unpaid shall be reported in the December settlement and carried forward to the succeeding year's tax duplicate.
The enforcement of the collection of taxes on mobile homes is discussed on page 9-6.
Delinquent Tax Judgments Collected
Collections on delinquent tax judgments and the interest thereon shall be entered on the tax duplicate by the county treasurer, in a "separate section" for each taxing district reserved for that purpose. The county treasurer is also required to enter the satisfaction of all judgments paid in the tax judgment record maintained in the office of the clerk of the circuit court and in the office of the treasurer.
The entries in the duplicate for each taxing district need only show the name of the taxpayer, reference to the judgment docket, the charge for the total judgment and interest collected in the "Delinquent Tax" column, and the date of payment and amount collected. The total of amounts collected for both settlements will be entered on line 19 of the apportionment sheets and the settlement sheet for the December settlement.
When a judgment is collected, interest thereon is required to be charged and collected by the treasurer and computed from the date of certification of the judgment to the clerk of the circuit court to the date of payment. Interest on judgments shall be computed at the rate of 6% per annum to and including September 2, 1971; at the rate of 8% per annum from September 3, 1971 through December 31, 1981; at the rate of 12% per annum from January 1, 1982 through June 30, 1988; at the rate of 10% per annum from July 1, 1988 through December 31, 1993; and at the rate of 8% per annum on or after January 1, 1994. [IC 24-4.6-1-101]
Penalties and Interest on Assessments
Penalties - If a person fails to file a required personal property return on or before the due date, the county auditor shall add a penalty of twenty-five dollars ($25.00) to the person's next property tax installment. The county auditor shall also add an additional penalty to the taxes payable by the person if he fails to file the personal property return within thirty (30) days after the due date.
The amount of the additional penalty is twenty percent (20%) of the taxes finally determined to be due with respect to the personal property which should have been reported on the return.
A personal property return is not due until the expiration of any extension period granted by the township assessor under IC 6-1.1-3-7.
The penalties prescribed in this section do not apply to an individual or his or her dependents if he or she is in the military or naval forces of the United States on the assessment date; and is covered by the Federal Soldiers' and Sailors' Civil Relief Act. [IC 6-1.1-37-7]
If a person fails to include on a personal property return the information, if any, that the State Board of Tax Commissioners requires under IC 6-1.1-5-13, the county auditor shall add a penalty to the property tax installment next due for the return. The amount of the penalty is twenty-five dollars ($25.00).
If the total assessed value that a person reports on a personal property return is less than the total assessed value that the person is required by law to report and if the amount of the undervaluation exceeds five percent (5%) of the value that should have been reported on the return, then the county auditor shall add a penalty of twenty percent (20%) of the additional taxes finally determined to be due as a result of the undervaluation. The penalty shall be added to the property tax installment next due for the return on which the property was undervalued. If a person has complied with all of the requirements for claiming a deduction, an exemption, or an adjustment for abnormal obsolescence, then the increase in assessed value that results from a denial of the deduction, exemption, or adjustment for abnormal obsolescence is not considered to result from an undervaluation for purposes of this subsection.
A penalty is due with an installment whether or not an appeal is filed under IC 6-1.1-15-5 with respect to the tax due on that installment.
Interest - When an assessment is made or increased after the date or dates on which the taxes for the year for which the assessment is made were originally due, the taxpayer shall pay the taxes thereon and interest on such taxes at the rate of ten percent (10%) per year from the original due date or dates of the installment or installments to the date of payment or, if not paid, to the date on which the taxes thereon are due and payable.
The taxpayer shall pay the taxes on such assessment and the 10% interest thereon on or before the due date of the next installment, May 10 or November 10, whichever occurs first. If, however, the taxpayer did not voluntarily sign and file an assessment return for the taxes, a notice of the assessment action must be received by the taxpayer at least thirty (30) days before the payment date. If not given the assessment notice within thirty (30) days before May 10 and November 10, the taxes shall be payable on the due date of the next succeeding installment.
If the taxpayer does not pay the taxes resulting from the assessment by the due date fixed for payment thereof, 10% penalty shall attach thereto and such tax will be subject to the further penalties prescribed by law. [IC 6-1.1-37-9] No interest is to be charged after the due date when the penalties for nonpayment accrue.
Certificates of Error
Corrections of errors in the tax duplicates are to be made by the issuance of Certificates of Error, County Form No. 127-CE, and posted as a noncash credit on the tax duplicate. In addition, the certificates are required to be accounted for on County Form No. 127-CER, Register of Certificates of Error, and a copy of the register must be furnished to the Auditor of State with the December settlement.
A certificate of error may be issued for any one or more of the following reasons:
- The description of the real property was in error;
- The assessment was against the wrong person;
- Taxes on the same property were charged more than one time in the same year;
- There was mathematical error in computing the taxes or penalties on the taxes;
- There was an error in carrying delinquent taxes forward from one (1) tax duplicate to another;
- The taxes, as a matter of law, were illegal;
- There was a mathematical error in computing an assessment; or
- Through an error of omission by any state or county officer, the taxpayer was not given credit for an exemption or deduction permitted by law.
The county auditor shall correct an error described under items (1), (2), (3), (4), or (5) when he finds that the error exists.
If the tax is based on an assessment made or determined by the State Board of Tax Commissioners, the county auditor shall not correct an error described under items (6), (7), or (8) until after the correction is either approved by the State Board of Tax Commissioners or ordered by the tax court.
If the tax is not based on an assessment made or determined by the State Board of Tax Commissioners, the county auditor shall correct an error described under items (6), (7), or (8) only after Form No. 133, Petition for Correction of Error, has been filed in duplicate by the owner of the property or his or her authorized representative and the petition is approved by at least two (2) of the following officials: the township assessor, the county assessor, and the county auditor. If two (2) of these officials do not approve such a correction, the county auditor shall refer the matter to the County Property Tax Assessment Board for determination. The County Property Tax Assessment Board shall provide a copy of the determination to the taxpayer and to the county auditor. A taxpayer may appeal a determination of the County Property Tax Assessment Board to the Indiana board for a final administrative determination. An appeal must be filed with the Indiana board not more then thirty (30) days after the determination by the County Property Tax Assessment Board. The Indiana board shall review the determination of the County Property Tax Assessment Board and send a final administrative determination to the taxpayer, the county auditor, the county assessor, and the township assessor. The certificate of error should not be issued until after the order of the Indiana board or Property Tax Assessment Board, approving the correction, has been received.
If a correction or change is made in the tax duplicate after it is delivered to the county treasurer, the county auditor shall transmit a certificate of error to the county treasurer. The county treasurer shall keep the certificate as his/her voucher for settlement with the county auditor. [IC 6-1.1-15-12]
Where a certificate of error is issued under item (2) or where taxes are refunded by reason of being assessed against and paid by the wrong person, be sure such taxes are recharged in the "additional assessments" against the person from whom the taxes are due.
- Section G - License Excise Taxes
Vehicle License Excise Tax
The provisions of IC 6-6-5 impose an annual license excise tax upon any vehicle subject to annual registration as a condition of its operation on the public highways pursuant to the motor vehicle registration laws of the State of Indiana, except:
- Vehicles owned or leased and operated by the governments of the United States, the State of Indiana and its political subdivisions.
- Mobile homes and motor homes.
- Vehicles assessed under the public utility tax law.
- Trucks, the declared gross weight of which exceeds eleven thousand (11,000) pounds, trailers, semitrailers, tractors and buses.
- Vehicles owned or leased and operated by an institution of higher education as defined in IC 6-3-3-5(d).
- Vehicles owned, or leased and operated by a volunteer fire company.
- Vehicles owned, or leased and operated by a volunteer emergency ambulance service.
- Vehicles exempt from the payment of registration fees under IC 9-18-3-1.
- Farm Wagons
The amount of tax due on each vehicle is based on the list price and age of the vehicle. IC 6-6-5-4 sets out seventeen (17) classifications of vehicles according to list price and IC 6-6-5-5 establishes the amount of tax due for each classification from the first year of manufacture through the tenth year and thereafter. The tax is computed and billed annually on the preregistration application forms by the State Bureau of Motor Vehicles, or computed by the local license branch offices, and is collected and accounted for by the branch offices of the bureau.
Monies collected by the local license branch offices are transmitted electronically to the county treasurer twice each week. Each county auditor and each county treasurer should receive a REGFUDET and REGFUTOT report from each auto license branch in the county for each day's business. The county treasurer should prepare a worksheet to reconcile the amounts shown on the REGFUTOT report to the electronic transfers of funds.
The following steps should be taken by the county auditor to record, balance, and distribute excise tax:
- Compare reported totals from REGFUTOT to deposits in the county treasurer's excise tax account. For counties without wheel tax/surtax, this will be the county tax column. For counties with wheel tax/surtax, this will be the total of the county tax column, and the surtax column.
- Review the REGFUDET report, which is the detail of the registrations by taxing unit. Look for registrations that have been reported on the wrong taxing unit. We would suggest just showing your adjustments at the bottom of the unit's page, subtracting from the totals the registration(s) that does not belong in that unit and adding to the totals the registration(s) that belong in that unit.
- Post County Tax total, as adjusted in Step 2, from the REGFUDET report to County Form 24F, County Auditor's Record of Annual License Excise Tax. This should be posted in the Received From Branches column. There should be one page per taxing unit.
- Post Lottery Amount Due total, as adjusted in Step 2, from the REGFUDET report to an accumulation worksheet. This can be on any developed application that you need to use for your county. The example used in this discussion was put on the spreadsheet in Lotus 123. It could also be done manually using columnar pads. This form is not a prescribed form nor does it need to be approved. This is just a tool to help accumulate the totals to apportion the lottery distribution.
- Post County Tax total from the REGFUTOT report to County Form 24F, Control page. This form will show the county as a whole. At all times the total of all the taxing units County Form 24F should agree with the total on the County Form 24F, Control. Other terms for this would be that the Form 24F's are the subsidiary ledgers and the Form 24F, Control is the control ledger. The subsidiary ledgers should always equal the control ledger.
- The cumulative worksheet, the individual taxing units 24Fs and the 24Fs, Control, should be posted by report date from the Bureau of Motor Vehicles printout. This is not necessarily by the week or the month as was done in the past. Since two reports are supposed to be issued each week, these forms should be posted twice a week.
- You will be receiving a lottery credit check from the Auditor of State each month. This will more than likely not be for the full amount of the lottery credit that is reported by the BMV. This is just a situation that we must deal with due to the way the laws are written and the computation the Auditor of State must make. Therefore, we need to keep another work-sheet apportioning the lottery credit check to the proper taxing units. Again, this example was done on a Lotus 123 spreadsheet but may be done by you in a way that fits your county situation. This form also is not prescribed nor does it need to be approved. Post the cumulative total from your accumulating worksheet to an apportionment worksheet using the report dates of the tax cut check. Multiply the gross lottery by the factor which will be given to you by the Auditor of State. This will compute the portion of the tax cut check that will go to that taxing unit. Subtract the tax cut distribution from the gross lottery which gives you the amount of undistributed lottery credit not included in the tax cut check. It will be important to keep track of this amount for later use. The total of the lottery distribution for all taxing units should equal the amount of the check. You will probably have to round the amount up or down to equal the check, so we recommend applying that to the largest taxing unit.
- Post the apportioned lottery distribution by taxing units to the appropriate County Form 24F in the column Received From Lottery Proceeds.
- Add and foot across the collections on the Form 24F which will be the amount of excise tax that you have available for distribution either through an advance draw or the semi-annual distributions.
- Post the total tax cut check to the County Form 24F, Control and again when all the postings are made to this form and Form 24F, the total of the individual taxing units Form 24Fs equal the balance on the Form 24F, Control.
Prior to such determination, the county assessor of each county shall, from copies of registration forms, cause information pertaining to legal residence of persons owning taxable vehicles to be verified from his/her records, to the extent such verification can be so made. He/she shall further identify and verify from his/her records the several taxing districts within which such persons reside. [IC 6-6-5-10]
County Form No. 24F, County Auditor's Record of Annual License Excise Tax, has been designed to account for the amounts received, the amounts distributed at each semiannual tax settlement and the balance of license excise tax on hand.
At the time of each semiannual tax settlement the county treasurer shall report such tax collections, together with the auto rental excise tax and aircraft license excise tax collections discussed in this section, on County Form No. 49TC, County Treasurer's Certificate of Tax Collections, and the total shown by the auditor's records shall be verified with the treasurer's certificate before distribution is made.
- Section H - County Motor Vehicle Excise Surtax and County Wheel Tax
In accordance with the provisions of IC 6-3.5-4 and IC 6-3.5-5 the county council of each county may, by ordinance, impose a County Motor Vehicle Excise Surtax and a County Wheel Tax.
Collection Tax
Both the county motor vehicle excise surtax and the county wheel tax will be collected by the Bureau of Motor Vehicles and transmitted electronically to the county treasurer twice each week along with the auto license excise tax.
Upon receipt of the Bureau of Motor Vehicles, REGFUTOT Report, the county auditor shall issue a quietus to transfer the net amount of surtax and wheel tax from the county treasurer's collections of license excise tax to the "________ County Surtax Fund" and to the "________ County Wheel Tax Fund."
Allocation and Distribution of the Tax
Before the twentieth day of each month, the county auditor shall allocate the money deposited in both the County Surtax Fund and the County Wheel Tax Fund among the county and the cities and towns in the county.
The county auditor shall allocate the money to counties, cities and towns under IC 8-14-2-4(c)(1) through IC 8-14-2-4(c)(3) as follows:
- In counties having a population of more than 50,000, 60% of the monies shall be distributed on the basis of population of the city or town as a percentage of the total population of the county and 40% distributed on the basis of the ratio of city and town street mileage to county road mileage.
- In counties having a population of 50,000 or less, 20% of the monies shall be distributed on the basis of population of the city or town as a percentage of the total population of the county and 80% distributed on the basis of the ratio of city and town street mileage to county road mileage.
- For the purposes of allocating funds as provided in this section, towns which become incorporated as a town between the effective dates of decennial censuses shall be eligible for allocations upon the effectiveness of a corrected population count for the town under IC 1-1-3.5.
To allocate and distribute monies received the following steps should be taken when preparing a worksheet similar to the worksheet on page 9-30:
- Enter receipts from each license branch for the month in the proper column.
- Deduct any refunds from the preceding month on excise surtax or wheel tax only in the proper column.
- Enter the "Net Amount for Allocation" on Line A. Then enter the appropriate percentages of the net figure on Lines B and C. See Items I and II for the percentages to be used. Add Lines B and C. Total should equal Net Amount for Allocation shown on Line A.
- Enter the name, the population and the road mileage for each incorporated city and town in the county and the population and road mileage of the county outside all incorporated areas in the appropriate spaces.
(NOTE: The official population and road mileage figures for each unit may be obtained by writing to the Settlement Clerk, Auditor of State, Room 240 State House, Indianapolis, Indiana, 46204.) - Divide the population of each unit by the total population of the county to obtain the percentage of the total. (It is recommended that the decimal fraction (percentage) be carried out to at least six (6) places to insure fair and equitable distribution of the monies.)
- Divide the road mileage of each unit by the total road mileage of the county to obtain the percentage of the total. This should be done in the same manner as the population percentages were figured in Item 5 above.
(NOTE: Percentages of the total population and road mileage will only have to be refigured when there is a change in one or the other.) - Multiply percentage of total population for each unit times the applicable percentage of the net amount for allocation shown on Line B for both vehicle excise surtax and county wheel tax.
- Multiply the percentage of total road mileage for each unit times the applicable percentage of the net amount for allocation shown on Line C for both vehicle excise surtax and county wheel tax.
- Add the amounts of vehicle excise surtax computed on the basis of population and on the basis of road mileage to obtain the total vehicle excise surtax due each taxing unit. Repeat this same procedure for county wheel tax.
(NOTE: Once the population and mileage factors are obtained they may be used each month until either the mileage or population changes. Therefore, you may wish to include the actual factors in a separate place on the worksheet for easy reference. New highway mileage certifications are done in April and take effect with the May state highway distributions.)
Miscellaneous Provisions
The distributions of surtax and wheel tax to the county should be receipted to the County Highway Fund and cities and towns should receipt the distributions to the Motor Vehicle Highway Fund (Street Fund), since a county, city or town may only use the surtax and wheel tax revenues it receives to construct, reconstruct, repair or maintain streets and roads under their jurisdiction.
Refunds
Refunds of overpaid or erroneously paid county motor vehicle excise surtax and county wheel tax should be paid from the County General Fund. Such refunds can be made without an appropriation having been made for that specific purpose. However, great care should be taken to insure that the amounts so refunded are recorded in the non-budgeted expenditures and are easily distinguishable so that they can be properly deducted from the surtax and wheel tax (see Step 2 of worksheet instructions) and returned to the County General Fund.
Aircraft License Excise Tax
Pursuant to IC 6-6-6.5 all taxable aircraft, except aircraft owned by a dealer and aircraft owned and operated by an air carrier certified under the Federal Air Regulations, shall be registered by the owner with the Aeronautics Commission and an annual excise tax shall be paid in lieu of the ad valorem property tax.
The aircraft license excise tax will be collected by the Indiana Department of Revenue and remitted to the counties quarterly. The distribution shall be made on or before the fifteenth of the month following each quarter and the first distribution each year shall be made in April. In remitting the tax the Department of Revenue will submit an "Aircraft Excise Tax Report" to each county treasurer and county auditor. The state warrant remitting the tax will be mailed to the county treasurer along with the report. The report will show the taxing district in which the aircraft is usually located.
Upon receipt of the warrant from the Auditor of State, the county treasurer shall issue an Excise Tax Receipt, County Form No. 18E, and shall post the receipt to the Treasurer's Daily Balance of Cash and Depositories, in the section "Other Sources" to an account titled "Aircraft Excise Tax Fund," to comply with the provisions of IC 6-6-6.5-21(c). The county treasurer shall also furnish a copy of the receipt to the county auditor.
The county auditor, upon receipt of the report, shall allocate the tax collected in the same manner as used to allocate vehicle license excise tax. The amount received shall be posted to the County Auditor's Record of Annual License Excise Tax, County Form No. 24F, and allocated on County Form No. 24-ET, in the same manner as vehicle license excise tax. In entering the collections on County Form No. 24-ET, one of the columns in that record shall be headed "Aircraft License Excise Tax" to record separately the amount received from that source. The vehicle license excise tax, auto rental excise tax and the aircraft license excise tax shall be combined into one total and apportioned and distributed as "License Excise Tax" in making settlement, and should be so reported by the county treasurer on the County Treasurer's Certificate of Tax Collections, County Form No. 49TC.
Auto Rental Excise Tax
An excise tax, known as the auto rental excise tax, is imposed upon the rental of passenger motor vehicles and trucks in Indiana for periods of less than thirty (30) days. The tax is four percent (4%) of the gross retail income received by retail merchants for the rentals.
The auto rental excise tax will be collected by the Department of Revenue in the same manner that gross retail tax is collected. On or before May 20 and November 20 of each year, all amounts held by the state in the auto rental excise tax account shall be distributed to the county treasurers of Indiana.
The amount to be distributed to a county treasurer equals that part of the total auto rental excise taxes being distributed that were initially imposed and collected from within that treasurer's county. The Department of Revenue shall notify each county auditor of the amount of taxes to be distributed to the county treasurer. At the same time each distribution is made to a county treasurer, the Department of Revenue shall certify to the county auditor each taxing district within the county where auto rental excise taxes were collected and the amount of the county distribution that was collected with respect to each taxing district. [IC 6-6-9-11]
The county auditor, upon receipt of a copy of the certification report from the Department of Revenue, shall allocate the tax collected in the same manner as used to allocate vehicle license excise tax. The amount received shall be posted to the County Auditor's Record of Annual License Excise Tax, County Form No. 24F, and shall be allocated on County Auditor's Allocation of License Excise Tax, County Form No. 24ET. One of the columns in the latter record headed "Branch No." shall be changed to read "Auto Rental Excise Tax" to record separately the amount received from that source. The vehicle license excise tax, aircraft license excise tax, and auto rental excise tax shall be combined into one total and apportioned and distributed as "License Excise Tax" in making settlement.
- Section I - Boat Excise Tax
The provisions of IC 6-6-11-1 impose an annual excise tax on boats. Boats are defined to include any device in which a person may be transported upon water. This includes every motorboat, sailboat, pontoon boat, rowboat, skiff, dinghy, or canoe, regardless of size.
A boat may not be operated, used, docked or stored in a county unless the boat excise tax, the Department of Natural Resources fee, and the lake and river enhancement fee for that boat have been paid for that boating year, and a valid boat excise tax decal is affixed to the boat.
The following boats are exempt from the boat excise tax:
- Boats owned by the United States, the state, or one of its political subdivisions.
- Boats owned by an organization exempt from federal income taxation under 501(C)(3) of the Internal Revenue Code.
- A human powered vessel, as determined by the Department of Natural Resources.
- Boats held by a boat manufacturers, distributor or dealer for sale in the ordinary course of business and subject to assessment under IC 6-1.1.
- Boats used for the production of income and subject to assessment under IC 6-1.1.
- Boats stored in Indiana for less than twenty-two consecutive days and not operated, used, or docked in Indiana.
- Boats registered outside Indiana and operated, used, or docked in Indiana for a combined total of less than twenty-two consecutive days during the boating year.
- Boats subject to the commercial vessel tonnage tax.
The amount of the tax due on each boat is based on the boat's class and age. IC 6-6-11-10 sets out fourteen classifications for boats based on the value of the boat when it was new and IC 6-6-11-11 provides for reductions based on the age of the boat. The tax is paid to the Bureau of Motor Vehicles and license branches may be used for the collection of the tax.
Before the eleventh day of the month following the month in which the collections are made, the Bureau of Motor Vehicles shall report the excise taxes collected to the county treasurer. The Bureau shall also forward a copy of the excise tax report to the county auditor.
Upon receipt of the report and copies of the registration certificates, the county auditor shall determine the total amount of boat excise taxes collected for each taxing district in the county. The amount so collected shall be apportioned and distributed among the respective funds of each taxing district in the manner and at the same time as property taxes are apportioned and distributed. Such determination shall be made from copies of boat registration forms furnished by the Bureau of Motor Vehicles.
Collections received should be recorded in a separate section of County Form Nos. 24F, County Auditor's Record of Annual License Excise Tax, and 24-ET, County Auditor's Allocation of License Excise Tax, in the same manner as vehicle license excise tax is recorded.
At the time of each semiannual tax settlement the county treasurer shall report such tax collections on County Form No. 49BC, Report of Boat Excise Tax Received, and the total shown by the auditor's records shall be verified with the treasurer's certificate before distribution is made.
If a boat owner sells his (her) boat they are entitled to a credit of the remainder of the tax in accor-dance with the formula outlined in IC 6-6-11-17. However, no refund can be made on a credit issued because of the sale of a boat.
Tax Refunds
Every owner of a boat that is destroyed in a year in which the owner paid the tax imposed by this chapter and is not replaced by a replacement boat for which a credit is issued under this chapter, is entitled to a refund in an amount equal to ten percent (10%) of the excise tax paid for each full calendar month remaining in the registrant's tax payment year after the date of destruction.
To receive a refund, a boat owner must present and return to the Bureau of Motor Vehicles the following:
- A request for refund on a form furnished by the bureau.
- A statement of proof of destruction on an affidavit furnished by the bureau.
- The tax payment form for the boat.
A refund under this section may not exceed ninety percent (90%) of the tax paid on the destroyed boat. The amount shall be refunded by a warrant issued by the auditor of the county that received the excise tax revenue and shall be handled in the same manner as property tax refunds are handled.
- Section J - Financial Institutions' Tax
The provisions IC 6-5.5-2 include the procedure for imposing and collecting taxes on banks and savings and loan associations. These financial institutions will pay a financial institutions' tax to the Indiana Department of Revenue. Taxes collected will be receipted to a financial institutions' tax fund by the Auditor of State.
IC 6-5.5-8-2 contains a formula for determining the amount of tax to be distributed to each taxing unit. This section provides for a guaranteed distribution and a supplemental distribution to each taxing unit.
On or before February 1, May 1, August 1 and December 1 of each year the Auditor of State shall transfer to each county auditor for distribution to the taxing units (as defined in IC 6-1.1-1-21) in the county, an amount equal to one-fourth (1/4) of the sum of the guaranteed amounts for all the taxing units of the county. On or before August 1 of each year the auditor of state shall transfer to each county auditor the supplemental distribution for the county for the year.
The county auditor shall distribute to each taxing unit the taxing unit's guaranteed and supplemental distributions at the same time that the county auditor makes the semiannual distribution of real property taxes to the taxing units.
- Section K - State Property Tax Replacement Credit
Each year the taxpayers of each county shall receive a credit for property tax replacement. The credit shall be applied to each installment of taxes. The dollar amount of the credit for each taxpayer shall be determined by the county auditor, based on data furnished by the State Board of Tax Commissioners. The "tax liability" of a taxpayer for the purpose of computing the credit for a particular year shall be based upon the taxpayer's tax liability as is evidenced by the tax duplicate for the taxes payable in that year, plus the amount by which the tax payable by the taxpayer had been reduced due to the application of county adjusted gross income tax revenues to the extent the county adjusted gross income tax revenues were included in the determination of the total county tax levy for that year. [IC 6-1.1-21-5] This credit should in no way be confused with the property tax replacement credit derived from the local option tax discussed on pages 8-6 and 8-11 of this manual.
State distributions to counties from the property tax replacement fund are based on the amounts as shown on the March abstract. 16.70% of the amount is required to be distributed in each of the months of March, April, September and October and 16.60% in each of the months of July and November.
When received by the county treasurer, tax receipts shall be issued for each taxing district to which the credit is due, equal to the total received, and such receipts shall be accounted for in the Treasurer's Register of Taxes Collected and Daily Balance Records, in the same manner as other taxes.
At each semiannual settlement the amounts credited to each taxing district shall be reported by the treasurer on County Form No. 49TC, County Treasurer's Certificate of Tax Collections, and will be accounted for, apportioned and distributed, in the manner described in Section L.
- Section L - Advance Tax Draws
The provisions of IC 5-13-6-3 require the county treasurer to make advance draws of taxes col-lected to the proper officers of any municipal corporation of the county not to exceed the lesser of 95% of the total collected at the time of the advance or 95% of the amount to be distributed at the semiannual distribution. The term "taxes collected" includes property tax, license excise tax, auto rental excise tax, and boat excise tax.
Upon receipt of a written request for an advance draw the following procedure should be followed:
- The collections for each taxing district within the municipal corporation, as shown by the records of the county treasurer, should be multiplied by 95%.
- Divide the answer under (1) by the total tax rate for the taxing district to obtain the factor to be used in apportioning the tax.
- Multiply the factor by the tax rate for the fund for which the advance draw is requested, to arrive at the maximum amount which can be advanced.
- Issue an application to pay and quietus in favor of the county treasurer for the amount to be advanced to the credit of the fund for which advanced and issue a warrant therefor in favor of the proper officer of the municipal corporation.
- Section M - Settlements with Treasures - Apportionment and Distribution of Taxes
By the provisions of IC 6-1.1-27-1 and 6-1.1-27-2 the county auditor and the county treasurer, on or before June 20th and December 20th of each year, shall meet to make settlement of taxes and special assessments collected during the preceding six months periods ending May 10 and November 10, respectively, and at that time the treasurer shall also make settlement of any other collections required by law to be paid to the county treasurer. These sections are then followed by provisions in IC 6-1.1-27-3 that on or before June 30th and December 31st of each year the auditor shall send a copy of the certificate of settlement (Settlement Sheet) to the Auditor of State and pay to the Treasurer of State the money due the state as shown by the certificate of settlement.
To meet the deadlines fixed in the laws cited, there must be complete cooperation between the offices of the auditor and the treasurer. A delay in the delivery of the tax duplicate by the auditor to the treasurer and subsequent mailing of the statements by the treasurer will, of course, materially delay the collection process and closing of the treasurer's books. Conversely, delays will result by failure of the treasurer to expedite the collection process and to close and balance the books promptly at the close of each taxpaying period, so that the tax duplicate may be returned to the auditor for audit and settlement.
Some of the steps which can be taken by the auditor to expedite the process are:
- Prepare the tax duplicate well in advance of receiving the final tax levies and rates, so the only steps required for completion will be to compute and enter the current taxes, bring forward delinquencies and total and balance the duplicate, for delivery to the treasurer.
- In advance of receiving the duplicate and making settlement, prepare apportionment sheets and assemble all workpapers which will be needed.
- In the December settlement, when the duplicate must be extended and balanced for the two settlement periods, extend the duplicate only to column 27 headed "Total Delinquency at November Settlement." The after settlement penalties and amounts to be carried to the new duplicate, columns 28 through 31, can be completed after the December settlement has been made.
- Request the treasurer to turn over the duplicate after each taxing district is completed rather than after all districts are completed so that the work may begin in auditing and balancing the duplicate.
The various tax accounting systems in use will alter steps which might be taken in preparing and completing the duplicate but, as stated, careful planning and cooperation are most important and auditors and treasurers should be constantly alert to procedures which will expedite the collection and settlement process.
The procedures to be observed in accounting for and making settlement and distribution of collec-tions are covered in the sections that follow.
Treasurer's Certificate of Tax Collections
Pursuant to the provisions of IC 6-1.1-27-2 the county treasurer at each semiannual settlement is required to certify to the county auditor on the form prescribed by the State Board of Accounts the correct-ness of:
- The credits for cash collected for each taxing unit (district) appearing on the tax duplicate; and
- Any other amounts collected by the county treasurer as required by law.
The State Board of Accounts has prescribed County Form No. 49TC, County Treasurer's Certificate of Tax Collections, for use of county treasurers in complying with the provisions of this law. Complete instructions in the use of this form will be found on the form and in the illustrated entries in Exhibit 18, page 9-44.
June Settlement
After the county treasurer has completed posting collections in the duplicate and has reconciled the collections with the treasurer's register of taxes collected and the daily balance of cash and depositories record, which records reflect the collections by taxing district, the duplicate should be immediately submitted to the auditor. As previously stated, this should be done after the treasurer completes each taxing district.
In the event differences exist in the treasurer's records which the treasurer feels cannot be identified until all taxing districts are completed and the county treasurer's certificate of tax collections is completed and filed, this should not preclude a taxing district being turned over to the auditor for audit which might well assist in locating the differences. However, the apportionment and distribution of taxes should not be made until the treasurer is in agreement with the settlement figures.
Upon receipt of the duplicate, the collections shall be added by the auditor and the totals verified with the totals shown on the County Treasurer's Certificate of Tax Collections, County Form No. 49TC. If differences exist, they should be discussed with the treasurer, any errors located and corrected, and the collections reconciled with the treasurer's records, before settlement and distribution is made.
If errors cannot be found and it will delay the June settlement beyond the June 30th deadline, and the differences involved are minimal, settlement can be made on the basis of the county treasurer's certificate of collections, since the differences will be taken into consideration and adjusted in the December settlement. However, every effort should be made to locate such differences before the June settlement and, if not located at that time, they must be located before the December settlement is made.
The amounts collected in the June settlement, for each taxing district, as shown on the county treasurer's certificate of tax collections and verified, will be entered in Section A of County Form No. 102, Apportionment of Taxes Collected, and distributed in Section B of that form. The totals for all taxing districts in the county will likewise be entered in Sections A and B of the June settlement sheet and Section C of the settlement sheet shall be completed showing amounts due the state.
A copy of the apportionment sheet is illustrated in Exhibit 19, page 9-43. Instructions in completing the settlement and making distribution of taxes collected, which are applicable to both settlements, are discussed in this Section under "December Settlement."
In the June settlement and before the duplicate is returned to the treasurer, it is the further duty of the auditor to enter the 10% penalty on May installment delinquencies and the 10% penalty on prior years taxes which are delinquent. Such penalties should also be added and their correctness proved before returning the duplicate to the treasurer.
December Settlement
Proof of Tax Duplicate - After the treasurer has completed posting the collections in the tax duplicate and has reconciled the collections with other records in that office, the duplicate must be submitted to the auditor. The instructions with respect to the duplicate being returned for audit in the "June Settlement" likewise apply to the December settlement.
Upon receipt of the duplicate, the auditor shall extend the unpaid taxes into columns 21 through 27, add all columns in which figures are entered, and prove the correctness of the charges, credits and taxes and penalties returned unpaid. The proof is obtained by adding columns 13, 14, 17 and 18 (charges), deducting therefrom columns 15, 16, 19 and 20 (credits) and the results should agree with column 27; also, the total of columns 22 through 26 should agree with column 27. The totals should be entered on each page of the duplicate, grand totals entered at the close of the duplicate for each taxing district, and separate totals entered for: (1) Regular Duplicate (as reported on December Abstract); (2) Additional Assessments; (3) Mobile Homes; and (4) Delinquent Tax Judgments Collected. The totals should then be summarized at the end of the tax duplicate for each taxing district, in the manner illustrated in Exhibit 17, pages 9-39 and 9-40, for proof of the "grand totals" and for use in arriving at the amounts to be entered on lines 1 through 34, Section A-1, of the Apportionment Sheet, Form No. 102. The collections, as shown in the summary, must also be verified with the county treasurer's certificate of tax collections before proceeding further.
In some counties it is the practice to compile the charges, credits and collections for all taxing districts in a manner similar to the foregoing, for use in preparing the December Settlement Sheet, through the use of tax duplicate sheets or the use of columnar sheets. However, by entering the summary in the duplicate for each taxing district the totals are preserved and the grand totals for the settlement sheet can be obtained by simply adding each line in each column of the apportionment sheets. Either method of obtaining the totals for the settlement sheet is acceptable.
Apportionment Sheets - After the tax duplicate extensions have been proved and collections verified, lines 1 through 34, Section A-1, of the apportionment sheet for each taxing district should be completed from the summary totals of the tax duplicate; the amount settled for in the June settlement, line 2, Section A, shall be entered on line 35, with the amount to be apportioned in the December settlement to be entered on line 36.
After completing lines 1 through 36, enter on line 38 any tax refunds made from the general fund of the county since the previous December settlement and chargeable to the taxing district. A worksheet should be prepared for use in arriving at the amounts to be charged to each district and it is required that County Form No. 17TC, Certificate of Tax Refund Claims, accompany the December settlement sheet filed with the Auditor of State for credits taken on line 38. Any other deductions before apportionment shall be entered on line 39, the total deductions entered on line 40, and line 41 will show the "Net Total Property Tax for Apportionment."
The total license excise taxes collected in such taxing district, after verification of the correctness of the taxes collected, shall be entered on line 42 and the total of all taxes to be apportioned shall be entered on line 46.
The local property tax and license excise tax, as shown in Section A-1, lines 41 and 43, shall be apportioned in Section B, in the following manner:
- Divide the total amount to be apportioned by the total tax rate for the taxing district, to obtain a percentage factor. (Equal in dollars to the amount a $1.00 tax levy produces.)
- Multiply the percentage factor by the tax rate for each fund to obtain the amount due each fund.
- Total the amounts apportioned to each fund to see that such total equals the collection shown in Section A. Where fractions of cents results in a few cents difference, add or deduct such difference from the amount apportioned to the county general fund.
A copy of Form No. 102, Apportionment of Taxes Collected, is illustrated in Exhibit 19, page 9-43.
Settlement Sheet
The Settlement Sheet, State Form No. 105 (Sections A and B), is a compilation, or summary, of the apportionment sheets for all taxing districts. The line numbers and descriptions on each line are also identical to the Apportionment Sheets, County Form No. 102.
Many county auditors find it helpful to prepare a recapitulation of the apportionment sheets on a multi-column columnar sheet to obtain the totals to be entered on each line of the settlement sheet. How-ever, such totals may be obtained by simply adding the amounts on each line in each column of all apportionment sheets, if desired.
Section C of the settlement sheet is a statement to be completed showing amounts to be remitted to the Treasurer of State at each semiannual settlement. The State Fair Board tax and the State Forestry Fund tax must equal the total of the three (3) columns in Section B, lines 1 and 2, respectively. The amounts to be reported for the other accounts should be equal to the balance on hand in each such fund account, as shown by the auditor's and treasurer's ledgers. Enter on line 14 the total amount due the state for which a warrant will be issued to the Treasurer of State.
The settlement sheet shall also be accompanied by State Form No. 105A, Report of Settlement of State Property Tax Replacement and Homestead Credit, a copy of which is illustrated in Exhibit 20, page 9-44.
When the settlement sheet is completed you should carefully observe the "INSTRUCTIONS" in the lower right corner, listing the reports and number of copies of Report Form No. 105A which must accompany the settlement sheet filed with the auditor. Be sure to add and prove the settlement sheet and reports, retain one copy of each for your files, and furnish a copy of the settlement sheet to the county treasurer.
Settlement by Treasurer and Quietus - After approval of the settlement sheet by the Auditor of State, the amounts of taxes to be settled by the treasurer, less any advances made for which quietuses have been issued, shall be receipted into the fund ledger accounts of the auditor and treasurer by application to pay and quietus.
To provide a posting media for the ledger accounts of the auditor and treasurer and to further insure the correctness of the settlement figures and subsequent distribution of taxes collected, it is recommended that a worksheet be prepared in duplicate in the form illustrated in Exhibit 21, page 9-45.
Issue a single quietus for the total settlement and firmly attach the worksheet to the register of receipts (quietus) and furnish a copy thereof to the treasurer.
Distribution of Taxes - The amounts to be distributed to the State of Indiana and to the various county funds will be equal to the amounts shown on the settlement sheet, less any amounts which may have been advanced. In the case of other local governmental units, however, where two or more taxing districts are located within a governmental unit, it is suggested that worksheets be prepared for use in compiling the amounts to be distributed to each such governmental unit.
Such worksheets are usually referred to as "Unit Distribution Sheets." There are many ways of preparing the worksheets and any method used to arrive at the final result is acceptable. However, for the purpose of these instructions, the use of a standard columnar pad of sufficient columns is suggested. An illustration of a unit distribution sheet for a school corporation composed of a civil town and two townships is as follows:
Rockville Community School Corporation
General Debt Service Cumulative Building Transportation Total General Property Tax Town of Rockville $ 80,000.00 $ 40,000.00 $ 40,000.00 $ 20,000.00 $ 180,000.00 Adams Township $ 40,000.00 $ 20,000.00 $ 20,000.00 $ 10,000.00 $ 90,000.00 Union Township $ 60,000.00 $ 30,000.00 $ 30,000.00 $ 15,000.00 $ 135,000.00 Total General Property Tax $ 180,000.00 $ 90,000.00 $ 90,000.00 $ 45,000.00 $ 405,000.00 License Excise Tax Town of Rockville $ 10,000.00 $ 5,000.00 $ 5,000.00 $ 2,500.00 $ 22,500.00 Adams Township $ 5,000.00 $ 2,500.00 $ 2,500.00 $ 1,250.00 $ 11,250.00 Union Township $ 8,000.00 $ 4,000.00 $ 4,000.00 $ 2,000.00 $ 18,000.00 Total License Excise Tax $ 23,000.00 $ 11,500.00 $ 11,500.00 $ 5,750.00 $ 51,750.00 Total Distribution $ 203,000.00 $ 101,500.00 $ 101,500.00 $ 50,750.00 $ 456,750.00 Less Advance Draws $ 100,000.00 $ 50,000.00 $ 30,000.00 $ 180,000.00 Net Distribution $ 103,000.00 $ 51,500.00 $ 101,500.00 $ 20,750.00 $ 276,750.00 After the unit distribution sheets are compiled, County Form No. 22, County Auditor's Certificate of Tax Distribution, shall be prepared for each local governmental unit to which a distribution is due and for which a warrant will be issued. The figures for each fund and from each source (property taxes; bank and building and loan taxes; and license excise taxes) will be obtained from the unit distribution sheets or, in the case of governmental units located in a single taxing district, the figures will be obtained from the apportionment sheet of such taxing district. County Form No. 22 may be completed for state funds, which are covered by the settlement sheet, and for county funds retained in the county treasury, at the discretion of the county auditor.
Each column of County Form No. 22, if applicable, shall be completed to show the taxes distributed, amounts advanced, the amount due the county for examination of records and the net distribution for which a warrant is to be issued. The amount chargeable to each local governmental unit for examination of records is obtainable from the voucher submitted by the State Board of Accounts and, except for the cost of examining county offices and departments, the amounts should be deducted from the distributions and reimbursed to the county at the next semiannual settlement. The manner in which examination of records should be handled is detailed in Exhibit 21, page 9-45.
After all certificates of distribution have been completed be sure to add the amounts entered thereon, the totals of which can be proved to the worksheet prepared in support of the quietus issued (See Exhibit 21, page 9-45) and warrants may then be issued to each such governmental unit.
Issuance and Posting of Warrants - Before warrants are issued, the county treasurer should be consulted as to the bank or banks on which each warrant should be drawn, in order that the treasurer may comply with the depository law. If two or more warrants must be issued, covering the distribution to a single governmental unit, this may be done. In such instances, both warrant numbers will appear on the certificate and be referred to in posting the funds ledger.
In posting warrants to the funds ledger, it will be necessary to refer to the distribution certificates, Form No. 22, to determine the amounts to be posted to each fund. The amounts to be posted to each fund, in the case of the state warrant, will be taken from the settlement sheet unless listed on the warrant or unless a Form No. 22 was completed for state funds.
- Section N - Settlement of Other Collections by Treasurer
At the time of making the semiannual settlement of taxes the treasurer shall also account for and settle the following collections which do not appear on the settlement sheet:
- Excess (Surplus) Tax.
- Demand Fees.
- Tax Sale Costs.
- Delinquent Dog Tax.
- Conservancy District - Special Benefits Tax.
- Conservancy District - Exceptional Benefits Assessments.
- Drainage Assessments.
- Delinquent Sewer Charges.
- Delinquent Barrett Law Assessments.
- Other Special Assessments Collected.
A separate quietus should be issued for each of the foregoing items and the further instructions herein should be observed.
Excess (Surplus) Tax
Excess (surplus) tax shall be reported by the treasurer on the County Treasurer's Certificate of Tax Collections, County Form No. 49TC. The county treasurer is also required to file Ledger Form No. 65-STF, Surplus Tax Fund Ledger, listing in detail by taxing district each item of surplus tax collected, the total of which shall be receipted into the "Surplus Tax Fund." The detail ledger sheets shall be placed in the county auditor's ledger and be disbursed in the manner discussed on page 7-9.
If an excess payment is not claimed within the three (3) year period after November 10 of the year in which the payment was made and the county treasurer has given the written notice, the county auditor shall transfer the excess from the surplus tax fund to the general fund of the county. If the county treasurer has given written notice concerning the excess, the excess may not be refunded after the expiration of that three (3) year time period. [IC 6-1.1-26-6(c)]
Demand Fees and Tax Sale Costs
Demand fees and tax sale costs collected by the county treasurer will be reported on the County Treasurer's Certificate of Tax Collections, County Form No. 49TC, and shall be receipted into the county general fund.
Delinquent Dog Tax
Collections of delinquent dog tax are reported by the county treasurer on the County Treasurer's Certificate of Tax Collections, County Form No. 49TC, and the amount reported and settled by the treasurer should be verified by the auditor from the collections shown on the tax duplicate. The collections shall be receipted into a separate fund titled "Delinquent Dog Tax" and, upon receipt, a warrant shall be issued to the township trustee of each township for which the collections were made. This matter is further discussed on page 10-5.
Conservancy District
Conservancy district collections shall be reported and accounted for separately for "Special Bene-fits Tax" and "Exceptional Benefits Assessments."
Prior to settlement by the treasurer the county auditor should audit the conservancy district tax duplicate, in the same manner as the property tax duplicate, and should verify the correctness of the special benefits tax collections reported by the treasurer. The auditor should also verify collections entered in the "Exceptional Benefits Assessments Duplicate," if the district imposes assessments for exceptional benefits.
At the time of filing the abstract of property valuations and taxes with the Auditor of State the county auditor is required to complete Section 5A titled "Abstract of Conservancy District Tax Duplicate" listing for each district the special benefits tax levied on property within the district, and the collections, penalties added, and taxes and penalties returned unpaid should be reconciled with the abstract, in the same manner as the property tax duplicate.
The special benefits tax levied on property within a conservancy district and the exceptional benefits assessments which may be established by a district, and the accounting requirements related thereto, are discussed on pages 10-1 through 10-3.
Upon settlement of collections by the county treasurer a warrant should be issued to the treasurer of each conservancy district showing separately thereon the total amount collected from the special benefits tax and the total amount collected from the exceptional benefits assessments, so that such collections may be properly accounted for in the records of the conservancy district.
Drainage Assessments
The county treasurer is required to report drainage collections on County Form No. 49DC, County Treasurer's Certificate of Collections of Drainage Assessments, prescribed by the State Board of Accounts. The collections should be reported for each drain and shall show in the columns provided on the form the amount of "principal" collected and the amount of "interest and penalty" collected for each fund to which the collections are to be receipted.
The county auditor should audit and extend the Ditch Duplicate for Maintenance Assessments, County Form No. 63M, in the same manner as the property tax duplicate, to verify the correctness of col-lections on maintenance assessments and should also audit the Ditch Tax Duplicate, County Form No. 63, to verify collections.
The amounts settled by the treasurer shall be receipted into the respective funds shown on the treasurer's certificate of collections and shall be posted to the subsidiary ledger account of each affected drain, in accordance with the instructions set out in the "Accounting Manual for Public Drainage Funds" issued by the State Board of Accounts. Further instructions pertaining to the accounting requirements are set out in that manual.
Delinquent Sewer Charges
Collections of delinquent sewer charges should be reported on the County Treasurer's Certificate of Tax Collections, County Form No. 49TC, and such collections should be verified by the county auditor from an audit of the tax duplicate. The manner in which such charges and collections should be accounted for is set out on pages 10-4 and 10-5.
When collections are remitted to each city or town, it should be accompanied with a list showing the name, description of the real property and amount collected from each owner, in order that the proper officer of the city or town may credit the account of each such owner and release the lien recorded in the county recorder's office.
Delinquent Barrett Law Assessments
Collections of delinquent Barrett Law assessments should be reported and accounted for in the same manner as delinquent sewer charges, with the collections to be receipted into a "Delinquent Barrett Law Assessments" fund and remitted to the city or town for which collected. The assessments are further discussed on page 10-4.
Other Special Assessments
Any other special assessments, placed on the tax duplicate for collection, including line fence assessments, shall also be settled for by the county treasurer at each semiannual settlement. Line fence assessments are discussed on page 10-4 and weed cutting assessments and other special assessments on page 10-5.
- Section O - After Settlement Delinquencies
Immediately after the December settlement has been made, or prior thereto if time will permit, the auditor shall enter in columns 28 and 29 of the tax duplicate, 10% penalty on the November installment of taxes returned delinquent and 10% penalty on prior years' taxes returned delinquent.
After the penalties have been entered in the duplicate the "Total Delinquent Tax" shall be entered in column 30 and the "Total Penalties and Interest" shall be entered in column 31. These two columns, as well as columns 28 and 29, should be added and the total of each column proved to the respective columns of tax, penalties and interest, as indicated on the duplicate. The correctness of the penalty computations should also be verified by multiplying the total November installment of tax returned delinquent (column 21) by 10% and the total prior years' delinquent tax unpaid (column 25) by 10%. While there will be a slight variation between the total of the penalties added and the computations for each column, this proof will help insure the correctness of the computations of the penalties.
Immediately after completing the tax duplicate the delinquencies shown in column 30 and 31 shall be carried forward to the new tax duplicate and be entered in columns 11 and 12, respectively. The abstract filed with the Auditor of State provides for reconciling delinquencies carried forward to the amounts returned delinquent in the December settlement and, therefore, care must be taken to insure there is no difference between the tax, penalties and interest reported in columns 30 and 31 and the amounts carried forward to the new duplicate in columns 11 and 12.
- Section P - Tax Refund Claims
A person, or his/her heirs, personal representative, or successors, may file a claim for refund of all or a portion of a tax installment which he has paid. The claim must be filed with the auditor of the county in which the taxes were originally paid, within three (3) years after the taxes are first due, on County Form No. 17T, Claim for Refund of Taxes, prescribed by the State Board of Accounts.
The claim shall be based upon one of the following grounds: (1) taxes on the same property have been assessed and paid more than once for the same year; (2) the taxes, as a matter of law, were illegal; or (3) there was a mathematical error either in the computations of the assessment upon which the taxes were based or in the computation of the taxes. [IC 6-1.1-26-1]
If the claim is for refund of taxes paid on an assessment made or determined by the Department of Local Government Finance and the claim is based upon the grounds provided in items (2) and (3) of the above cited statute [IC 6-1.1-26-1], the county auditor shall forward the claim to the Department of Local Government Finance for approval or disapproval. [IC 6-1.1-26-2]
A refund claim which is not subject to review by the Department of Local Government Finance under IC 6-1.1-26-2 shall be either approved or disapproved by the county auditor, the county treasurer, and the county assessor. If the claim for refund is disapproved by either the county auditor, the county treasurer, or the county assessor, the claimant may appeal that decision to the Indiana Board. The claimant must initiate the appeal and the Indiana Board shall hear the appeal in the same manner as assessment appeals are initiated and heard. [IC 6-1.1-26-3]
The county auditor shall submit a refund claim to the board of county commissioners for final review after the appropriate county officials either approve or disapprove the claim. The county board of commissioners shall disallow a refund claim if one of the appropriate county officials does not approve the claim. The county board of commissioners may either allow or disallow a refund claim which is approved by the county auditor, the county treasurer and the county assessor. When the county board of commissioners disallows a claim, the claimant may appeal that decision to the Indiana Board. [IC 6-1.1-26-4]
When a claim for refund is allowed either by the county board of commissioners, the department of local government finance, the Indiana Board, or the Indiana tax court on appeal, the claimant is entitled to a refund. The amount of the refund shall equal the amount of the claim so allowed plus, with respect for claims filed after June 30, 2001, interest at four percent (4%) from the date on which the taxes were paid or payable, whichever is later, to the date of refund. The county auditor shall, without an appropriation being required, issue a warrant to the claimant payable from the county general fund for the amount due the claimant. In the June or December settlement and apportionment of taxes, or both the June and December settlement and apportionment of taxes, immediately following a refund the county auditor shall deduct the amount refunded from the gross tax collections of the taxing units (districts) for which the refunded taxes were originally paid and shall pay the amount so deducted into the general fund of the county. [IC 6-1.1-26-5] A refund of taxes resulting from invalid tax sales is discussed in Section Q, page 9-67.
The foregoing does not apply to excess (surplus) tax refunds discussed on page 9-47, which are refunded from the surplus tax fund.
All tax refunds (except surplus tax), whether made under the provisions of the laws cited in this section or as a result of invalid tax sales, shall be made without appropriation. The amounts disbursed from this account shall, at each December settlement, be scheduled by taxing district, the amount for each taxing district deducted on line 38 of the apportionment sheet for such district, and the total deducted on line 38 of the settlement. The manner of handling tax refunds in the December settlement is discussed in Section M of this section.
When a refund claim is for the full amount of taxes paid, the tax receipts, tax sale certificate or other documents supporting the payments should be surrendered by the claimant and be attached to the claim. If only a portion of the tax is refunded, this is not required; however, it is suggested a copy of the receipt be attached to the claim and when the refund is made, it is recommended the auditor enter on the taxpayer's copy a note of the date and amount claimed or refunded to preclude the possibility of a subsequent refund claim being filed for the same item.
- Section Q - Real Estate Tax Sales
On or before July 1 of each year, the county treasurer shall certify to the county auditor, a list of real property on which either any property taxes or special assessments certified to the county auditor for collection by the county treasurer from the prior years spring installment or before are delinquent as determined under IC 6-1.1-37-10 or any unpaid costs from a prior tax sale.
The county auditor shall maintain a list of all property eligible for sale. Unless the taxpayer pays to the county treasurer all the amounts listed in the preceding paragraph, the taxpayer shall remain on the list.
The list must:
- described the real property by parcel number and common address, if any;
- for a track or item or real property with a single owner, indicate the name of the owner; and
- for a tract of item with multiple owners, indicate the name of at least one (1) of the owners.
Not later than fifteen (15) days after the date of the county treasurer's certification, the county auditor shall mail by certified mail a copy of the list to each mortgagee who requests from the county auditor by certified mail a copy of the list. [IC 6-1.1-24-1]
A tract or item of real property may not be removed from the list certified before the tax sale unless all delinquent taxes, special assessments, penalties due on the delinquency, interest, and costs directly attributable to the tax sale have been paid in full. A county treasurer may accept partial payments of delinquent property taxes, assessments, penalties, interest, or costs after the list of real property is certified. [IC 6-1.1-24-1.2]
The county auditor shall prepare a notice which shall contain:
- A list of all tracts or real property eligible for sale.
- A statement that the tracts or real property included in the list will be sold at public auction to the highest bidder, subject to the right of redemption.
- A statement that the tracts or real property will not be sold for an amount which is less than the sum of:
- The delinquent taxes and special assessments on each tract or item of real property.
- The taxes and special assessments on each tract or item of real property that are due and payable in the year of the sale, whether or not they are delinquent.
- All penalties which are due on the delinquencies.
- An amount prescribed by the county auditor that equals the sum of:
- Twenty-five dollars ($25.00) for postage and publication costs;
- Any other actual costs incurred by the county that are directly attributable to the tax sale.
- Any unpaid costs from a prior tax sale.
- A statement that a person redeeming each tract or item of real property after the sale must pay:
- one hundred ten percent (110%) of the amount of the minimum bid for which the tract or item of real property was offered at the time of sale if the tract or item of real property is redeemed not more than six (6) months after the date of the sale;
- one hundred fifteen percent (115%) of the amount of the minimum bid for which the tract or item of real property was offered at the time of sale if the tract or item of real property is redeemed more than six (6) months after the date of sale;
- the amount by which the purchase price exceeds the minimum bid on the tract or item of real property plus ten percent (10%) per annum on the amount by which the purchase price exceeds the minimum bid; and
- all taxes and special assessments on the tract or item of real property paid by the purchaser after the tax sale plus interest at the rate of ten percent (10%) per annum on the amount of taxes and special assessments paid by the purchaser on the redeemed property.
- A statement, for information purposes only, of the location of each tract or item of real property by key number, if any, and street address, if any, or a common description of the property other than a legal description.
The township assessor, upon written request from the county auditor, shall provide the information to be in such notice. A misstatement of the key number or street address does not invalidate an otherwise valid sale. - A statement that the county does not warrant the accuracy of the street address or common description of the property.
- A statement indicating: (A) the name of the owner of each tract or item of real property with a single owner; or (B) the name of at least one (1) of the owners of each tract or item of real property with multiple owners.
- A statement that the county auditor and treasurer will apply on or after a date designated in the notice for a court judgment against the tracts or real property for an amount that is not less than the amount set under three (3), and for an order to sell the tracts or real property at public auction to the highest bidder, subject to the right of redemption; and indicating the date when the period of redemption will expire.
A statement that any defense to the application for judgment must be filed with the court before the date designated as the earliest date on which the application for judgment may be filed.
A statement that the court will set a date for hearing at least seven (7) days before the advertised date and that the court will determine any defenses to the application for judgment at the hearing. - A statement that the sale will be conducted at a place designated in the notice and the sale will continue until all tracts and real property have been offered for sale.
- A statement that the sale will take place at the times and dates designated in the notice. The sale must take place on or after August 1 and before November 1 of each year.
- A statement that a person redeeming each tract or item of real property after the sale must pay the costs described in IC 6-1.1-25-2(e).
- If a county auditor and county treasurer have entered into an agreement under IC 6-1.1-25-4.7, a statement that the county auditor will perform the duties of the notification and title search under IC 6-1.1-25-4.5 and the notification and petition to the court for the tax deed under IC 6-1.1-25-4.6.
- A statement that, if the tract or item or real property is sold for an amount more than the minimum bid and the property is not redeemed, the owner of record of the tract or item of real property who is divested of ownership at the time the tax deed is issued may have a right to the tax sale surplus.
If within sixty (60) days before the date of the tax sale, the county incurs costs set under (3) and those costs are not paid, the county auditor shall enter the amount of costs that remain unpaid upon the tax duplicate of the property for which the costs were set. The county treasurer shall mail notice of unpaid costs entered upon a tax duplicate to the owner of the property identified in the tax duplicate.
The amount of unpaid costs entered upon a tax duplicate must be paid no later than the date upon which the next installment of real estate taxes for the property is due. Unpaid costs entered upon a tax duplicate are a lien against the property described in the tax duplicate, and amounts remaining unpaid on the date the next installment of real estate taxes is due may be collected in the same manner that delinquent property taxes are collected. [IC 6-1.1-24-2]
When real property is eligible for sale, the county auditor shall post a copy of the notice required by IC 6-1.1-24-2 and IC 6-1.1-24-2.2 at a public place of posting in the county courthouse or in another public county building at least twenty-one (21) days before the earliest date of application for judgment. In addition, the county auditor shall publish the notice required in IC 6-1.1-24-2 and IC 6-1.1-24-2.2 in the manner prescribed in IC 5-3-1-4 once each week for three (3) consecutive weeks before the earliest date on which the application for judgment may be made. The expenses of this publication shall be paid out of the county general fund without prior appropriation.
At least twenty-one (21) days before the application for judgment is made, the county auditor shall mail a copy of the notice required by IC 6-1.1-24-2 and IC 6-1.1-24-2.2 by certified mail, return receipt requested, to any mortgagee who annually requests a copy of the notice. However, the failure of the county auditor to mail this notice or its nondelivery does not affect the validity of the judgment and order.
The advertisement published under IC 6-1.1-24-4(b) is considered sufficient notice of the intended application for judgment and of the sale of real property under the order of the court. [IC 6-1.1-24-3]
Not less than twenty-one (21) days before the earliest date on which the application for judgment and order for sale of real property eligible for sale may be made, the county auditor shall send a notice of the sale by certified mail to the owner of record of real property with a single owner; or to at least one (1) of the owners of real property with multiple owners; at the last address of the owner for the property as indicated in the records of the county auditor. The county auditor shall prepare the notice in the form prescribed by the State Board of Accounts. The notice must set forth the key number, if any, of the real property and a street address, if any, or other common description of the property other than a legal description. The notice must include the statement set forth in IC 6-1.1-24-2(a)(4). The county auditor must present proof of this mailing to the court along with the application for judgment and order for sale. Failure by an owner to receive or accept the notice does not affect the validity of the judgment and order. The owner of real property shall notify the county auditor of the owner's correct address. The notice required under this section is considered sufficient if the notice is mailed to the address required by this section.
On or before the day of sale, the county auditor shall list, on the tax sale record required by IC 6-1.1-25-8, all properties that will be offered for sale. [IC 6-1.1-24-4]
The county auditor shall also provide those agencies under IC 36-7-17, in that county, with a list of real property on which one (1) or more installments of taxes is delinquent by June 15 of the year following the date the delinquency occurred. [IC 6-1.1-24-4.5]
On the day on which the application for judgment and order for sale is made, the county treasurer shall report to the county auditor all of the tracts and real property listed in the notice required by IC 6-1.1-24-2 upon which all delinquent taxes and special assessments, all penalties due on the delinquencies, any unpaid cost due from a prior tax sale, and the amount due under IC 6-1.1-24-2(a)(3)(D) have been paid up to that time. The county auditor, assisted by the county treasurer, shall compare and correct the list, removing tracts and real property for which all delinquencies have been paid, and shall make and subscribe an affidavit in substantially the following form:
Application for judgment and order for sale shall be made as one (1) cause of action to any court of competent jurisdiction jointly by the county treasurer and county auditor. The application shall include the affidavit and corrected list as provided in IC 6-1.1-24-4.6(a).
Any defense to the application for judgment and order of sale shall be filed with the court on or before the earliest date on which the application may be made as set forth in the notice. [IC 6-1.1-24-4.6]
No later than fifteen (15) days before the advertised date of the tax sale, the court shall examine the list of tracts and real property as provided under IC 6-1.1-24-4.6.
No later than three (3) days before the advertised date of the tax sale, the court shall enter judgment for those taxes, special assessments, penalties and costs that appear to be due. This judgment is considered as a judgment against each tract or item of real property for each kind of tax, special assessments, penalty, or cost included in it. The affidavit provided under IC 6-1.1-24-4.6 is prima facie evidence of delinquency for purposes of proceedings under this section. The court shall also direct the clerk to prepare and enter an order for the sale of those tracts and real property against which judgment is entered.
Not later than seven (7) days before the advertised date of the tax sale, the court shall conduct a hearing. At the hearing, the court shall hear any defense offered by any person interested in any of the tracts or items of real property to the entry of judgment against them, hear and determine the matter in a summary manner, without pleadings, and enter its judgment. The court shall enter a judgment not later than three (3) days before the advertised date of the tax sale. The objection must be in writing, and no person may offer any defense unless the writing specifying the objection is accompanied by an original or duplicate tax receipt or other supporting documentation. At least seven (7) days before the date set for the hearing, notice of the date, time, and place of the hearing shall be provided by the court to any person filing a defense to the application for judgment and order of sale.
If judgment is entered in favor of the respondent under these proceedings, or if judgment is not entered for any particular tract, part of a tract, or items of real property because of an unresolved objection made under IC 6-1.1-24-4.7(b), the court shall remove those tracts, parts of tracts, or items of real property from the list of tracts and real property provided under IC 6-1.1-24-4.6.
A judgment and order for sale shall contain the final listing of affected properties and shall substantially follow this form:
"Whereas, notice has been given of the intended application for a judgment against these tracts and real property, and no sufficient defense has been made or cause has been shown why judgment should not be entered against these tracts for taxes, and real property special assessments, penalties, and costs due and unpaid on them, therefore, it is considered by the court that judgment is hereby entered against the below listed tracts and real property in favor of the state of Indiana for the amount of taxes, special assessments, penalties, and costs due severally on them; and it is ordered by the court that the several tracts or items of real property be sold as the law directs. Payments for taxes, special assessments, penalties, and costs made after this judgment but before the sale shall reduce the judgment accordingly."
The order of the court constitutes the list of tracts and real property that shall be offered for sale under IC 6-1.1-24-5. The court that enters judgment shall retain exclusive continuing supervisory jurisdiction over all matters and claims relating to the tax sale.
No error or informality in the proceedings of any of the officers connected with the assessment, levying, or collection of the taxes that does not affect the substantial justice of the tax itself shall invalidate or in any manner affect the tax or the assessment, levying, or collection of the tax.
Any irregularity, informality, omission, or defective act of one (1) or more officers connected with the assessment or levying of the taxes may be, in the discretion of the court, corrected, supplied, and made to conform to law by the court, or by the officer (in the presence of the court). [IC 6-1.1-24-4.7]
In the conduct of the tax sale the following shall be observed:
- The sale shall be held at the times and place stated in the notice of sale, and except as provided in IC 6-1.1-24-5.5, not extend beyond October 31 of the year of the sale.
- A tract or item of real property may not be sold for the purpose of collecting delinquent personal property taxes or for the purpose of collecting taxes or special assessments which are chargeable to other real property.
- A tract or item of real property may not be sold under this chapter if all the delinquent taxes, penalties, and special assessments and tax sale costs incurred under IC 6-1.1-24-2(a)(3)(D) on the tract or item of real property are paid before the time of sale.
- The county treasurer shall sell the tract or item of real property, subject to the right of redemption, to the highest bidder at public auction. However, a tract or item of real property may not be sold for an amount which is less than the sum of:
- the delinquent taxes and special assessments on each tract or item of real property;
- the taxes and special assessments on each tract or item of real property that are due and payable in the year of sale, regardless of whether the taxes and special assessments are delinquent;
- all penalties which are due on the delinquencies;
- the amount prescribed by IC 6-1.1-24-2(a)(3)(D) reflecting the costs incurred by the county due to the sale;
- any unpaid costs which are due under IC 6-1.1-24-2(b) from a prior tax sale; and
- other reasonable expenses of collection, including title search expenses, uniform commercial code expenses, and reasonable attorney's fees incurred by the date of the sale.
For the purposes of the sale, it is not necessary for the county treasurer to first attempt to collect the real property taxes or special assessments out of the personal property of the owner of the tract or real property.
The county auditor shall serve as the clerk of the sale. [IC 6-1.1-24-5]
A person who owes delinquent tax, special assessments, penalties, interest, or costs directly attributable to a prior tax sale on a tract of real property or a person who is an agent of that person may not purchase a tract offered for sale. If a person purchases a tract that the person was not eligible to purchase, the sale of the property is void. The county treasurer shall apply the amount of the person's bid to the person's delinquent taxes and offer the real property for sale again. [IC 6-1.1-24-5.3]
The provisions of IC 6-1.1-24-10 make it the duty of the county treasurer to endorse upon or attach to the certificate of sale a written guarantee, signed by the treasurer, warranting that the taxes and special assessments upon the real property described in the certificate of sale are delinquent and were unpaid at the time of sale and that the real property is, therefore, eligible for sale. If the county treasurer, before the time of making the guarantee required by IC 6-1.1-24-10, received payment of the delinquent taxes or special assessments for which the real property was sold, the holder of the certificate is entitled to the amount due for an invalid sale under IC 6-1.1-25-10.
If a tract or an item of real property is offered for sale and an amount is not received that is at least equal to the minimum sale price required, then the tract or an item of real property may be offered for sale a second time consistent with the provisions of IC 6-1.1-24-1 through IC 6-1.1-24-5 or the following. Notwithstanding any other law, if a tract or an item of real property is offered for sale under IC 6-1.1-24-1 through IC 6-1.1-24-5 and an amount is not received that is at least equal to the minimum sale price required and the county treasurer and the county auditor jointly agree to an expedited tax sale then the tract or item of real property may be offered for sale a second time on a date that is on or after January 1 and before March 31 of the year immediately following the year in which the property was initially offered for sale and at least ninety (90) days after the date of the initial sale. All notice and judgment requirements set forth in this chapter and IC 6-1.1-25 are applicable to the second expedited tax sale. [IC 6-1.1-24-5.5]
When a tract is offered for sale for two (2) consecutive years and no bid is received in an amount equal to or in excess of the minimum sale price, the county acquires a lien in the amount of the minimum sale price. The lien attaches on the day after the last date on which the tract is offered for sale the second time. The county auditor shall issue a tax sale certificate to the county dated the day the county acquires the lien. Upon issuance of the certificate, the county has the same rights as a purchaser; however, no money shall be paid by the county. [IC 6-1.1-24-6] All sales to the county shall be entered in the tax sale record and also in the Register of Tax Sales to the County, County Form 9S.
After each tax sale conducted, the county auditor shall prepare and deliver to the county com-missioners a list of all properties that have been offered for sale in two (2) consecutive tax sales, that have not received a bid for at least the amount required, that are not subject to the provisions of IC 6-1.1-24-6.5, on which the county has acquired a lien, and for which the county is eligible to take title. The county commissioners shall by resolution, identify the property that the county commissioners desire to transfer to a nonprofit corporation for use for the public good; and set a date, time, and place for public hearing to consider the transfer of the property to a nonprofit corporation.
Notice of the list prepared and the date, time, and place for hearing on the proposed transfer of the property on the list shall be published in accordance with IC 5-3-1. The notice must include a description of the property by:
- legal description; and
- parcel number or street address, or both.
The notice must specify that the county commissioners will accept applications submitted by nonprofit corporations and hear any opposition to a proposed transfer.
After the hearing, the county commissioners shall by resolution make a final determination concerning:
- the properties that are to be transferred to a nonprofit corporation;
- the nonprofit corporation to which each property is to be transferred; and
- the terms and conditions of the transfer.
To be eligible to receive property, a nonprofit corporation must file an application with the county commissioners. The application must state the property that the corporation desires to acquire, the use to be made of the property, and the time period anticipated for implementation of use. The application must be accompanied by documentation verifying the nonprofit status of the corporation and be signed by an officer of the corporation. If more than one (1) application for a single property is filed, the county com-missioners shall determine which application is to be accepted based on the benefit to be provided to the public and the neighborhood and the suitability of the stated use for the property and the surrounding area.
After the hearing and the final determination of properties to be transferred, whichever is applicable, the county commissioners, on behalf of the county, shall cause all delinquent taxes, special assessments, penalties, interest, and costs of sale to be removed from the tax duplicate and the county auditor to prepare a deed transferring the property to the nonprofit corporation. The deed shall provide for:
- the use to be made of the property;
- the time within which the use must be implemented and maintained;
- any other term and conditions that are established by the county commissioners; and
- the reversion of the property to the county if the grantee nonprofit corporation fails to comply with the terms and conditions.
If the grantee nonprofit corporation fails to comply with the terms and conditions of the transfer and title to the property reverts to the county, the property may be retained by the county or disposed of under any of the provisions of this chapter or IC 6-1.1-24 or both. [IC 6-1.1-24-6.7]
When real property is sold, the purchaser at the tax sale shall immediately pay the amount of the bid to the county treasurer. [A purchaser who fails to pay his/her bid shall pay a penalty of twenty-five percent (25%) of the amount of his/her bid (IC 6-1.1-24-8)]. The treasurer shall apply the payment in the following manner: First, to the taxes, special assessments, penalties, and sale cost described in IC 6-1.1-24-5(e); second, to other delinquent property taxes; and third, to a separate "tax sale surplus fund."
The owner of record of the real property at the time the tax deed is issued who is divested of ownership by the issuance of a tax deed; or tax sale purchaser or purchaser's assignee, upon redemption, may file a verified claim for money deposited in the tax sale surplus fund. If the claim is approved by the county auditor and the county treasurer, the county auditor shall issue a warrant to the claimant for the amount due.
Any amount deposited in the tax sale surplus fund and remaining unclaimed for a period of three (3) years shall be transferred to the county general fund. [IC 6-1.1-24-7]
Immediately after a tax sale purchaser pays his/her bid, as evidence by the receipt of the county treasurer, or immediately after the county acquires a lien, the county auditor shall deliver a certificate of sale to the purchaser or to the county. The certificate shall be signed by the auditor and registered in his/her office. The certificate shall contain:
- a description of real property which corresponds to the description used on the notice of sale;
- the name of: (A) the owner of record at the time of the sale of real property with a single owner; or (B) at least one (1) of the owners of real property with multiple owners;
- the mailing address of the owner of the real property sold as indicated in the records of the county auditor;
- the name of the purchaser;
- the date of sale;
- the amount for which the real property was sold;
- the amount of the minimum bid for which the tract or real property was offered at the time of sale;
- the date when the period of redemption specified in IC 6-1.1-25-4 will expire;
- the court cause number under which judgment was obtained; and
- the street address, if any, or common description of the real property.
When a certificate of sale is issued, the purchaser acquires a lien against the real property for the entire amount that he paid. The lien of the purchaser is superior to all liens against the real property which exist at the time the certificate is issued.
A certificate of sale is assignable. However, an assignment is not valid unless it is endorsed on the certificate of sale, acknowledged before an officer authorized to take acknowledgments of deeds, and registered in the office of the county auditor. When a certificate of sale is assigned, the assignee acquires the same rights and obligations that the original purchaser acquired. [IC 6-1.1-24-9]
Whenever a tract is offered for sale and no bid is received for the minimum sales price, the county auditor shall prepare a certified statement of the actual costs incurred by the county. The county auditor shall place the amount specified in the certified statement on the tax duplicate of the tract offered but not sold at the sale. The amount shall be collected as real property taxes are collected and paid into the county general fund. [IC 6-1.1-24-13]
Duties of the county treasurer or county auditor, in regards to the selling of real property at tax sale, are the responsibility of the respective officer and may not be preformed under contract or by a person or entity, unless consented to in writing by the respective officers. [IC 6-1.1-24-14]
Redemption From Tax Sale
Any person may redeem the tract at any time before the expiration of the period of redemption, specified in IC 6-1.1-25-4 by paying to the county treasurer the amount required for redemption under IC 6-1.1-25-2. [IC 6-1.1-25-1]
The total amount of money required for the redemption of real property equals the sum of (a) through (d) reduced by any amounts held in the name of the taxpayer or purchaser in the tax sale surplus fund:
- If redeemed in less than six months after the tax sale one hundred ten percent (110%) of the minimum bid for which the tract was offered at the time of sale as required by IC 6-1.1-24-5.
- If redeemed more than six months but less than one year after the tax sale one hundred fifteen percent (115%) of the minimum bid for which the tract was offered at the time of sale as required by IC 6-1.1-24-5.
- In addition to the amount required in (a), the total amount required for redemption includes the amount by which the purchase price exceeds the minimum bid on the real property plus ten percent (10%) per annum on the amount by which the purchase price exceeds the minimum bid.
- In addition to the amount required in (a) and (b), the total amount required for redemption includes all taxes and special assessments upon the property paid by the purchaser after the sale, plus ten percent (10%) interest per annum on those taxes and special assessments.
- In addition to the amounts required in (a), (b), and (c), the total amount required for redemption includes the following costs, if certified before redemption by the payor to the county auditor on a form prescribed by the State Board of Accounts, that were incurred and paid by the purchaser or the purchaser's assignee or the county before redemption:
- The attorney's fees and costs of giving notice under IC 6-1.1-24-4.5.
- The costs of a title search or examining and updating the abstract of title for the tract or item of real property. [IC 6-1.1-25-2]
A county auditor may petition a court issuing judgments and orders for sale in the county to establish a schedule of reasonable and customary attorney's fees and costs that apply to a purchaser or purchaser's assignee who submits a claim for reimbursement upon redemption.
When a court provides a schedule, the county auditor may not reimburse attorney's fees and costs in an amount higher than the attorney's fees and costs provided in the schedule, except as provided in IC 6-1.1-25-2.5(c).
A purchaser or purchaser's assignee may petition the court for a higher rate of reimbursement than the rate found on the schedule. The court shall grant the petition if the court finds that the claim is based on reasonable and customary attorney's fees and costs. [IC 6-1.1-25-2.5]
When real property is redeemed, a quietus shall be issued by the county auditor in favor of the person paying the money to the treasurer and the amount receipted into the "tax sale redemption" fund shall be held in trust for the purchaser. The county auditor shall issue a warrant to the purchaser or purchaser's assignee upon the surrendering of the certificate of sale, in an amount equal to the amount received by the treasurer for redemption. The county auditor shall endorse the certificate and preserve it as a public record. If a certificate of sale is lost and the county auditor is satisfied the certificate did exist, the county auditor may make payment to the purchaser or purchaser's assignee in the manner provided in IC 6-1.1-25-3. The name of the person who redeems the property, the date of redemption and the amount for which the property is redeemed shall also be entered in the Tax Sale Record (Form 137).
When the county acquires a lien and a tax sale certificate is issued to the county, pursuant to IC 6-1.1-24-6, the redemption should be handled in the same manner as property sold to other purchasers, by issuing a quietus for the amount required for redemption and by crediting the amount to the tax sale redemption fund. A warrant from that fund should then be issued to the "Treasurer of ______ County" for payment of the taxes, penalties, interest and costs for which a lien was acquired by the county, together with the statutory redemption penalty of ten percent (10%), fifteen percent (15%) or twenty-five percent (25%), depending upon the date of redemption. The amount of the penalty added on redemption should then be entered in the "additional assessments" section of the duplicate in the column provided for "delinquent tax" and payment thereof entered by the treasurer when the warrant is processed and a receipt (or receipts) issued for the taxes, penalties, interest and costs.
Any costs incurred by the county as described in IC 6-1.1-25.2(d) would also be required to be paid by the redeeming party.
The redemption should also be entered in the tax sale record and in the register of tax sales to the county.
If a certificate of sale is issued to a purchaser under IC 6-1.1-24-9 and the real property is not redeemed within:
- one (1) year after the date of sale;
- one hundred twenty (120) days after the county acquires a lien on the property under IC 6-1.1-24-6;
- one hundred twenty (120) days from the date of sale to a purchasing agency qualified under IC 36-7-17;
- one hundred twenty (120) days from the date of sale of real property on the list prepared under IC 6-1.1-24-1.5; or
- one hundred twenty (120) days after the date of sale under IC 6-1.1-24-5.5(b);
as extended by compliance with the notice provisions in IC 6-1.1-25-4.5, the county auditor shall, upon receipt of the certificate and subject to the limitations contained in this chapter, execute and deliver a deed for the property to the purchaser. If a certificate of sale is issued to a county under IC 6-1.1-24-9 and the real property is not redeemed within one (1) year after the date of sale, the county auditor shall, upon receipt of the certificate and subject to the limitations contained in this chapter, issue a deed for the property to the county. The county auditor shall execute deeds in the name of the state under the county auditor's name and seal. If a certificate of sale is lost before the execution of a deed, the county auditor shall, subject to the limitations in this chapter, execute and deliver a deed if the court has made a finding that the certificate did exist.
When a deed for real property is executed, the county auditor shall cancel the certificate of sale and file the canceled certificate in his/her office. If real property that appears on the list prepared under IC 6-1.1-24-1.5 is offered for sale and an amount that is at least equal to the minimum sale price required under IC 6-1.1-24-5(e) is not received, the county auditor shall issue a deed to the real property in the manner provided in IC 6-1.1-24-6.5.
When a deed is issued to a county, the taxes and special assessments for which the real property was offered for sale, and all subsequent taxes, special assessments, interest, penalties, and cost of sale shall be removed from the tax duplicate in the same manner that taxes are removed by certificate of error.
A tax deed executed vests in the grantee an estate in fee simple absolute, free and clear of all liens and encumbrances created or suffered before or after the tax sale except those liens granted priority under federal law and the lien of the state or a political subdivision for taxes and special assessments which accrue subsequent to the sale and which are not removed. However, the estate is subject to all easements, covenants, declarations, and other deed restrictions and laws governing land use including all zoning restrictions and liens and encumbrances created or suffered b the purchaser at the tax sale. The deed is prima facie evidence of:
- the regularity of the sale of the real property described in the deed;
- the regularity of all proper proceedings; and
- valid title in fee simple in the grantee of the deed.
Notwithstanding IC 6-1.1-25-4(a), a county auditor is not required to execute a deed to the county if the county executive determines that the property involved contains hazardous waste or another environmental hazard for which the cost of abatement or alleviation will exceed the fair market value of the property. The county may enter the property to conduct environmental investigations.
If the county executive makes the determination under IC 6-1.1-25-4(e) as to any interest in an oil or gas lease or separate mineral rights, the county treasurer shall certify all delinquent taxes, interest, penalties, and costs assessed under IC 6-1.1-24 to the clerk following the procedures in IC 6-1.1-23-9. After the date of the county treasurer's certification, the certified amount is subject to collection as delinquent personal property taxes under IC 6-1.1-23. Notwithstanding IC 6-1.1-4-12.4 and IC 6-1.1-4-12.6 the assessed value of such an interest shall be zero (0) until production commences.
Property Containing Hazardous Waste or Other Environmental Hazards
If the county auditor does not issue a deed to the county for property for which a certificate of sale has been issued to the county under IC 6-1.1-24-9 because the county executive determines that the property contains hazardous waste or another environmental hazard for which the cost of abatement or alleviation will exceed the fair market value of the property, the property may be transferred.
A person who desires to obtain title to and eliminate the hazardous conditions of property containing hazardous waste or another environmental hazard for which a county holds a certificate of sale but to which a deed may not be issued to the county may file a petition with the county auditor seeking a waiver of the delinquent taxes, special assessment, interest, penalties, and costs assessed against the property and transfer of the title to the property to the petitioner. The petition must:
- be on a form prescribed by the state board of accounts and approved by the state board of tax commissioners;
- state the amount of taxes, special assessments, penalties, and costs assessed against the property for which a waiver is sought;
- describe the conditions existing on the property that have prevented the sale or the transfer of title to the county;
- describe the plan of the petitioner for elimination of the hazardous condition on the property under IC 13-25-5 and the intended use of the property; and
- be accompanied by a fee established by the county auditor for completion of a title search and processing.
Upon receipt of a petition, the county auditor shall review the petition to determine whether the petition is complete. If the petition is not complete, the county auditor shall return the petition to the petitioner and describe the defects in the petition. The petitioner may correct the defects and file the completed petition with the county auditor. Upon receipt of a completed petition, the county auditor shall forward a copy of the petition to:
- the assessor of the township in which the property is located;
- the owner;
- all persons who have, as of the date of the filing of the petition, a substantial interest of public record in the property;
- the county property tax assessment board of appeals; and
- the state board of tax commissioners.
Upon receipt of a petition, the county property tax assessment board of appeals shall, at the county board's earliest opportunity, conduct a public hearing on the petition. The county property tax assessment board shall, by mail, give notice of the date, time, and place fixed for the hearing to:
- the petitioner;
- the owner;
- all persons who have, as of the date the petition was filed, a substantial interest of public record in the property; and
- the assessor of the township in which the property is located.
In addition, notice of the public hearing on the petition shall be published one (1) time at least ten (10) days before the hearing in a newspaper of county wide circulation and posted at the principal office of the county property tax assessment board or at the building where the meeting is to be held.
After the hearing and completion of any additional investigation of the property or of the petitioner that is considered necessary by the county property tax assessment board, the county board shall give notice, by mail, to the parties of the county board's recommendation as to whether the petition should be granted. The county board shall forward to the state board of tax commissioners a copy of the county board's recommendation and a copy of the documents submitted to or collected by the county board at the public hearing or during the course of the county board's investigation of the petition.
Upon receipt by the state board of tax commissioners of a recommendation by the county property tax assessment board, the state board of tax commissioners shall review the petition and all other materials submitted by the county board and determine whether to grant the petition. Notice of the determination by the state board of tax commissioners and the right to seek an appeal of the determination shall be given by mail to:
- the petitioner;
- the owner;
- all persons who have, as of the date the petition was filed, a substantial interest of public record in the property;
- the assessor of the township in which the property is located; and
- the county property tax assessment board.
Any person aggrieved by a determination of the state board of tax commissioners may file an appeal seeking additional review by the state board of tax commissioners and a public hearing. In order to obtain a review, the aggrieved person must file a petition for appeal with the county auditor in the county where the tract or item of real property is located not more than thirty (30) days after issuance of notice of the state board of tax commissioners' determination. The county auditor shall transmit the petition for appeal to the state board of tax commissioners not more than ten (10) days after the petition is filed.
Upon receipt by the state board of tax commissioners of an appeal, the state board of tax com-missioners shall set a date, time, and place for a hearing. The state board of tax commissioners shall give notice, by mail, of the date, time, and place fixed for the hearing to:
- the person filing the appeal
- the petitioner;
- the owner;
- all persons who have, as of the date the petition was filed, a substantial interest of public record in the property;
- the assessor of the township in which the property is located; and
- the county property tax assessment board.
The state board of tax commissioners shall give the notices at least ten (10) days before the day fixed for the hearing.
After the hearing, the state board of tax commissioners shall give the parties notice by mail of the state board's final determination.
If the state board of tax commissioners decides to:
- grant the petition submitted under subsection (b) after initial review of the petition under subsection (f) or after an appeal under subsection (h); and
- waive the taxes, special assessments, interest, penalties, and cost assessed against the property;
the state board of tax commissioners shall issue to the county auditor an order directing the removal from the tax duplicate of the taxes, special assessments, interest, penalties, and costs for which the waiver is granted.
After: (1) at least thirty (30) days have passed since the issuance of a notice by the state board of tax commissioners to the county property tax assessment board granting a petition filed under subsection (b), if no appeal has been filed; or (2) not more than thirty (30) days after receipt by the county property tax assessment board of a notice of a final determination of the state board of tax commissioners granting a petition filed under subsection (b) after an appeal has been filed and heard under subsection (h); the county auditor shall file a verified petition and an application for an order on the petition in the court in which the judgment of sale was entered asking the court to direct the county auditor to issue a tax deed to the real property. The petition shall contain the certificate of sale issued to the county, a copy of the petition filed under subsection (b), and a copy of the notice of the final determination of the state board of tax commissioners directing the county auditor to remove the taxes, interest, penalties, and costs from the tax duplicate. Notice of the filing of the petition and application for an order on the petition shall be given, by mail, to the owner and any person with a substantial interest of public record in the property. A person owning or having an interest in the property may appear to object to the petition.
The court shall enter an order directing the county auditor to issue a tax deed to the petitioner if the court finds that the following conditions exist:
- The time for redemption has expired.
- The property has not been redeemed before the expiration of the period of redemption.
- All taxes, special assessments, interest, penalties, and costs have been waived by the state board of tax commissioners or, to the extent not waived, paid by the petitioner.
- All notices required by law have been given.
- The petitioner has complied with all the provisions of law entitling the petitioner to a tax deed.
A tax deed issued is uncontestable except by appeal from the order of the court directing the county auditor to issue the tax deed. The appeal must be filed not later than sixty (60) days after the date of the court's order. [IC 6-1.1-25-4.1]
Issuance of Tax Title Deeds
A purchaser, purchaser's assignee, or a county is entitled to a tax deed to the property that was sold only if:
- the redemption period specified in IC 6-1.1-25-4 has expired;
- the property has not been redeemed within the period of redemption specified in IC 6-1.1-25-4; and
- not later than nine (9) months after the date of the sale:
- the purchaser or purchaser's assignee; or
- in a county where the county auditor and county treasurer have an agreement under IC 6-1.1-25-4.7, the county auditor;
gives notice of the sale to the owner of record at the time of the sale and any person with a substantial property interest of public record in the tract or real property.
The purchaser or assignee or, in a county where the county auditor and county treasurer have an agreement under IC 6-1.1-25-4.7, the county auditor shall give the notice required by subsection (a) by sending a copy of the notice by certified mail to: (1) the owner of record at the time of sale at the last address of the owner for the property sold, as indicated in the records of the county auditor; and (2) any person with substantial property interest of public record at the address for the person included in the public record that indicates the interest. However, if the address of the person with a substantial property interest of public record is not indicated in the public record that created the interest and cannot be located by ordinary means by the purchaser or assignee, a county where the county auditor and county treasurer have an agreement under IC 6-1.1-25-4.7, the county auditor may give notice by publication in accordance with IC 5-3-1-4 once each week for three (3) consecutive weeks.
The notice that this section requires shall contain the following:
- A statement that a petition for a tax deed will be filed on or after a specified date.
- The date on or after which the petitioner intends to petition for a tax deed to be issued.
- The description of the tract or real property shown on the certificate of sale.
- The date the tract or real property was sold at a tax sale.
- The name of the purchaser or purchaser's assignee.
- A statement that any person may redeem the tract or real property.
- The components of the amount required to redeem the tract or real property.
- A statement that the purchaser or the purchaser's successors or assignees are entitled to reimbursement for additional taxes or special assessments on the tract or real property that were paid by the purchaser subsequent to the tax sale and before redemption, plus interest.
- A statement that the tract or real property has not been redeemed.
- A statement that the purchaser or the purchaser's assignee is entitled to receive a deed for the tract or real property if it is not redeemed before the expiration of the period of redemption specified in IC 6-1.1-25-4.
- A statement that the purchaser or the purchaser's assignee is entitled to reimbursement for costs described in IC 6-1.1-25-2(e).
- The date of expiration of the period of redemption.
- A statement that if the property is not redeemed, the owner of record at the time the tax deed is issued may have a right to the tax sale surplus, if any.
- The street address, if any, or a common description of the tract of property.
- The key number or parcel number of the tract or real property.
The notice under this section must include not more than one (1) tract or item of real property listed and sold in one (1) description. However, when more than one (1) tract or item of real property is owned by one (1) person, all of the tracts or real property that are owned by that person may be included in one (1) notice. A single notice may be used to notify joint owners of record at the last address of the joint owners for the property sold, as indicated in the records of the county auditor. The notice is considered sufficient if the notice is mailed to the address required under IC 6-1.1-25-4.5(b). The notice under this section and the notice under IC 6-1.1-25-4.6 are not required for persons in possession not shown in the public records. [IC 6-1.1-25-4.5]
After the expiration of the redemption period specified in IC 6-1.1-25-4 but not later than six (6) months after the expiration of the period of redemption, the purchaser or the purchaser's assignee, or the county may; or, in a county where the county auditor and county treasurer have agreement under IC 6-1.1-25-4.7, the county auditor shall, upon the request of the purchaser or the purchaser's assignee; file a verified petition in the same court and under the same cause number in which the judgment of sale was entered asking the court to direct the county auditor to issue a tax deed if the real property is not redeemed from the sale. Notice of the filing of this petition shall be given to the same parties and in the same manner as provided in IC 6-1.1-24-4.5, except that only one (1) publication is required. The notice required is considered sufficient if the notice is sent to the address required by IC 6-1.1-24-4.5(b). Any person owning or having an interest in the tract or real property may file a written objection to the petition with the court not later than thirty (30) days after the date the petition was filed. If a written petition is timely filed, the court shall conduct a hearing on the objection.
Not later than sixty-one (61) days after the petition is filed, the court shall enter an order directing the county auditor (on the production of the certificate of sale and a copy of the order) to issue to the petitioner a tax deed if the court finds that the following conditions exist:
- The time of redemption has expired.
- The tract or real property has not been redeemed from the sale before the expiration of the period of redemption specified in IC 6-1.1-25-4.
- All taxes and special assessments, penalties, and costs have been paid.
- The notices required by law have been given.
- The petitioner has complied with all the provisions of law entitling the petitioner to a deed.
The county auditor shall execute deeds issued in the name of the state under the county auditor's name. If a certificate of sale is lost before the execution of a deed, the county auditor shall issue a replacement certificate if the county auditor is satisfied that the original certificate existed.
Upon application by the grantee of a valid tax deed in the same court and under the same cause number in which the judgment of sale was entered, the court shall enter an order to place the grantee of a valid tax deed in possession of the real estate. The court may enter any orders and grant any relief that is necessary or desirable to place or maintain the grantee of a valid tax deed in possession of the real estate.
If the court refuses to enter an order directing the county auditor to execute and deliver the tax deed because of the failure of the purchaser or purchaser's assignee to fulfill the requirements of IC 6-1.1-25-4.6, the court shall order the return of the purchase price minus a penalty of twenty-five percent (25%) of the amount of the purchase price. Penalties paid shall be deposited in the county general fund.
The sale shall be treated as an invalid sale in all cases in which the purchaser or the purchaser's assignee or in a county having a consolidated city, a county having a population of more than 200,000 but less than 400,000 or a county where the county auditor and county treasurer have an agreement under IC 6-1.1-25-4.7, the county auditor has made a bona fide attempt to comply with the statutory requirements for the issuance of the tax deed and the court refuses to enter an order directing the county auditor to execute and deliver the tax deed because of the failure to comply with these requirements, the county auditor shall not execute the deed but shall refund the purchase money plus six percent (6%) interest per annum to the purchaser or purchaser's successors or assignees. The tract, if it is then eligible for sale under IC 6-1.1-24, shall be placed on the delinquent list as an initial offering.
The court shall not order the return of the purchase price if:
- the purchaser has failed to provide notice or has provided insufficient notice as required by IC 6-1.1-25-4.5; and
- the sale is otherwise valid.
A tax deed is incontestable except by appeal from the order of the court directing the county auditor to issue the tax deed filed not later than sixty (60) days after the date of the court's order. [IC 6-1.1-25-4.6]
A person may, upon appeal, defeat the title conveyed by a tax deed executed by IC 6-1.1-24-4 only if:
- Tract or real property described in a deed was not subject to the taxes for which it was sold;
- The delinquent taxes or special assessments for which the tract or real property was sold were paid before the sale;
- The tract or real property was not assessed for the taxes and special assessments for which it was sold;
- The tract or real property was redeemed before the expiration of the period of redemption (as specified in section 4 of this chapter);
- The proper county officers issued a certificate within the time limited by law for paying taxes or for redeeming the tract or real property, which states either that no taxes were due at the time the sale was made or that the tract or real property was not subject to taxation;
- The description of the tract or real property was so imperfect as to fail to describe it with reasonable certainty; or
- The notices required by IC 6-1.1-24-2, IC 6-1.1-24-4, IC 6-1.1-24- 4.5 and IC 6-1.1-24-4.6 were not in substantial compliance with the manner prescribed in those sections. [IC 6-1.1-25-16]
A county auditor and county treasurer may enter into a mutual agreement for the county auditor to perform the following duties instead of the purchaser:
- Notification and title search under IC 6-1.1-25-4.5
- Notification and petition to the court for the tax deed under IC 6-1.1-25-4.6. [IC 6-1.1-26-4.7)
If the certificate was issued to the county and the property is not redeemed within one (1) year a deed shall be issued to the county. When a deed is issued to the county, the delinquent taxes and special assessments and all subsequent taxes, special assessments, interest, penalties, and cost of sale shall be removed from the tax duplicate in the same manner as taxes are removed by certificate of error. [IC 6-1.1-25-4]
However, if the board of county commissioners determines that the property involved contains hazardous waste or another environmental hazard which the cost of abatement or alleviation will exceed the fair market value of the property, a county auditor is not required to execute a deed to the county. [IC 6-1.1-25-4(e)]
If the purchaser, or the purchaser's successors or assigns, fails to file the petition within the period provided in IC 6-1.1-25-4.6, the purchaser's lien against the real property terminates at the end of that period. However, this does not apply if the county is the holder of a certificate of sale. [IC 6-1.1-25-7]
If the purchaser does not provide notice prior to the period provided in IC 6-1.1-25-4.5(a)(3), the purchaser's lien against the real property terminates at the end of that period. [IC 6-1.1-25-7]
When a deed is issued, the date of such deed and the name of the grantee in the deed shall be entered in the tax sale record.
Sale of Real Property Acquired by County
When a county acquires title to real property under IC 6-1.1-24 and IC 6-1.1-25, the county may dispose of the real property under IC 36-1-11 or IC 6-1.1-25-9(e). The proceeds of any sale under IC 36-1-11 shall be deposited as follows:
- First, to the cost of the sale or offering of sale of the real property, including the cost of maintenance; preservation; administration of the property before sale or offering of sale of the real property; unpaid costs of sales or offering of sale of the real property; preparation of the property for sale; advertising; and appraisal.
- Second, to any unrecovered cost of the sale or offering for sale of other real property in the same taxing district acquired by the county under IC 6-1.1-24 and IC 6-1.1-25, including the cost of maintenance; preservation; administration of the property before the sale or offering for sale of property; unpaid costs of the sale or offering for sale of the property; preparation of the property for sale; advertising; and appraisal.
- Third, to the payment of the taxes on the real property that were removed from the tax duplicate under IC 6-1.1-25-4(c).
- Fourth, any surplus remaining into the county general fund.
The county auditor shall file a report with the board of commissioners before January 31 of each year. The report must: (1) list the real property acquired under IC 6-1.1-24 and IC 6-1.1-25; and (2) indicate if any person resides or conducts a business on the property.
The county auditor shall mail a notice by certified mail before March 31 of each year to each person listed in the report. The notice must state that the county has acquired title to the tract the person occupies.
If the county determines under IC 36-1-11 that any real property so acquired should be retained by the county, the county shall not dispose of the real property. The county commissioners may repair, maintain, equip, alter and construct buildings upon the real property so retained in the same manner pre-scribed for other county buildings. [IC 6-1.1-25-9]
The county may transfer title to real property described in IC 6-1.1-25-9(a) to the redevelopment commission at no cost to the commission for sale or grant under IC 36-7-14-22.1 or IC 36-7-15.1-15.1. [IC 6-1.1-25-9)
Sale to Person Eligible to Redeem Tract Under IC 6-1.1-25-1 or Agent of the Person
A person who owes delinquent taxes, special assessments, penalties, interest, or costs directly attributable to a prior tax sale on a tract of real property listed under IC 6-1.1-24-1 or a person who is an agent of such person may not purchase, receive, or lease a tract that is offered in a sale, exchange, or lease.
If a person purchases, receives, or leases a tract that the person was not eligible to purchase, receive or lease, the sale, transfer or lease of the property is void and the county retains the interest in the tract it possessed before the sale, transfer, or lease of the tract. (IC 36-1-11-16)
The Register of Tax Sales to the County, County Form No. 9S, should be used to prepare the list required to be furnished the board of county commissioners.
Invalid Tax Sale - Refund of Purchase Money
If, before the court issues an order directing the county auditor to issue a tax deed to a tract or item of real property sold under IC 6-1.1-24, it is found by the county auditor and the county treasurer that the sale was invalid, the county auditor shall refund the purchase money and all taxes and special assessments on the property paid by the purchaser or the purchaser's assigns after the tax sale plus six percent (6%) interest per annum and, subject to any limitation under IC 6-1.1-25-2.5 any costs paid by the purchaser or the purchaser's assigns from the county treasury to the purchaser, or the purchaser's successors or assigns. The real property, if it is then eligible for sale, shall be placed on the delinquent list as an initial offering. A political subdivision shall reimburse the county for interest paid by the county if the validity of the sale resulted from the failure of the political subdivision to give adequate notice of a lien to property owners and the existence of the lien resulted in the sale of the property. [IC 6-1.1-25-10]
Subsequent to the issuance of the order directing the county auditor to issue a tax deed to real property sold, a county auditor shall refund the purchase money plus six percent (6%) interest per annum from the county treasury to the purchaser, or his/her successors or assigns, if it is found by the court that entered the order for the tax deed that: (1) The real property described in the deed was not subject to the taxes for which it was sold; (2) the delinquent taxes or special assessments for which the real property was sold were properly paid before the sale; or (3) the legal description of the real property in the tax deed is void for uncertainty. [IC 6-1.1-25-11]
The grantee of an invalid tax deed, including the county, to whom a refund is made under this section shall execute, acknowledge, and deliver to the owner a deed conveying whatever interest the purchaser may have acquired by the tax sale deed. If a county is required to execute a deed under this section, the deed shall be signed by the board of county commissioners and acknowledged by the clerk of the circuit court. [IC 6-1.1-25-11]
A refund may not be made under this section while a court action initiated under IC 6-1.1-25-14 or 6-1.1-25-16 is pending. [IC 6-1.1-25-11]
- Section R - Collection of Delinquent Personal Property Taxes
The county treasurer has the duty to enforce the collection of delinquent personal property taxes, including taxes on mobile homes.
Annually, after November 10 but prior to August 1 of the succeeding year, each county treasurer shall serve a written demand upon each county resident who is delinquent in the payment of personal property taxes. The written demand may be served upon the taxpayer by registered or certified mail; in person by the county treasurer or his/her deputy; or by proof of certificate of mailing. [IC 6-1.1-23-1] The demands shall be made on County Form No. 143B, Demand Notice - Personal Property Taxes, and shall be recorded in the County Treasurer's Record of Demands, County Form No. 143.
If a taxpayer does not pay the total amount due within thirty (30) days after the date the written demand is made, the county treasurer shall levy upon and sell personal property of the taxpayer which is of sufficient value to pay the delinquent taxes, penalties and anticipated collection expenses. [IC 6-1.1-23-2] The procedure to be observed in the sale of personal property for delinquent taxes and the collection expenses (including a demand fee of $5.00) are provided in IC 6-1.1-23-1 through 6-1.1-23-8.
In the year immediately following the year in which personal property taxes become delinquent, each county treasurer shall prepare a record of the delinquencies for which written demand has been made and which remain unpaid for at least sixty (60) days after the demand is made. The county treasurer shall swear to the accuracy of the record before the clerk of the circuit court and shall file the record with the clerk. When the record is so filed, the amount of delinquent taxes, penalties and collection expenses stated in the record constitute a debt of the named taxpayer and the debt in all respects has the same force and effect as a judgment. On the date the county treasurer files the record of the judgments in the office of the clerk of the circuit court, the county treasurer shall make an entry on the tax duplicate in a column headed "Certified to Clerk of Circuit Court." [IC 6-1.1-23-9]
The entry in the tax duplicate of taxes, penalties and interest certified to the clerk of the circuit court removes the charges therefor from the duplicate and the total of all such amounts shall be entered on line 30 of the apportionment sheet for each taxing district and line 30 of the settlement sheet. The auditor, as a part of his/her duties in auditing the tax duplicate, should confirm the amounts certified to the clerk of the circuit court. The manner of accounting for collections on tax judgments is discussed on page 9-19.
The county treasurer may enter into a contract, subject to the approval of the county executive, for services that the county treasurer considers necessary for the administration of IC 6-1.1-23 or the collection of delinquent personal property taxes. If delinquent personal property taxes are collected under contract entered under IC 6-1.1-23-1.5, the county treasurer may collect from the person owing the delinquent taxes a reasonable collection fee. [IC 6-1.1-23-1.5]
With respect to the collection of personal property taxes, the county treasurer shall charge collection expenses to each delinquent taxpayer. The fees collected are the property of the county and shall be deposited in the county general fund. The collection expenses incurred in connection with the levy upon and sale of personal property shall be paid from the county general fund without prior appropriation.