Bill Text: IN HB1302 | 2010 | Regular Session | Introduced
Bill Title: Elimination of property taxes.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2010-01-13 - First reading: referred to Committee on Rules and Legislative Procedures [HB1302 Detail]
Download: Indiana-2010-HB1302-Introduced.html
Citations Affected: IC 6-1.1-10-45; IC 6-1.2; IC 6-1.6; IC 6-1.7;
IC 6-1.8; IC 6-1.9; IC 6-2.5; IC 6-3-2-1; IC 6-8.1-1-1.
Synopsis: Elimination of property taxes. Eliminates all ad valorem
property taxes. Provides for the implementation of a local residential
income tax, a local fire and safety benefit tax, a state commercial
activity tax, and a state employer payroll expense tax to replace
revenue lost to political subdivisions from the elimination of property
taxes. Increases the state gross retail and use tax. Reduces the state
adjusted gross income tax rate. Makes other changes to the tax laws.
Makes appropriations.
Effective: July 1, 2010; January 1, 2011; July 1, 2011.
January 13, 2010, read first time and referred to Committee on Rules and Legislative
Procedures.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
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A BILL FOR AN ACT to amend the Indiana Code concerning
taxation and to make an appropriation.
ARTICLE 1.2. PROCEDURES FOR FIXING AND REVIEWING BUDGETS, TAX RATES, AND TAX LEVIES
Chapter 1. Purpose; Application
Sec. 1. This article applies to the following:
(1) Any political subdivision to which a law enacted before January 1, 2010, grants authority to impose an ad valorem
property tax.
(2) Any political subdivision that is granted authority to enact
a tax under IC 6-1.6 or IC 6-1.7.
(3) A district with an allocation area.
Sec. 2. The purpose of this article, IC 6-1.6, IC 6-1.7, IC 6-1.8,
and IC 6-1.9 is to replace ad valorem property taxes with the
following alternative sources of tax revenue:
(1) Locally adopted residential income taxes distributable to
the political subdivisions providing services where a taxpayer
has the taxpayer's principal place of residence.
(2) Locally adopted fire and safety benefit taxes distributable
to the political subdivisions providing public services where
property is located.
(3) Statewide commercial activity taxes distributable to the
political subdivisions providing services where business
property is located.
(4) Statewide employer payroll expense taxes distributable to
the political subdivisions providing services where an
employer's employees have a principal place of business.
Sec. 3. Notwithstanding any other law, neither the state nor any
political subdivision may impose an ad valorem property tax for an
assessment date after January 15, 2010.
Sec. 4. Notwithstanding any other law, a county assessor or
township assessor may not carry out an assessment of property for
an assessment date after January 15, 2010. However, the county
auditor and the county assessor shall maintain a description of the
property in the county sufficient to impose taxes under IC 6-1.7.
The county assessor shall provide property information to the
department of state revenue in the form and in the manner
prescribed by the department.
Sec. 5. The procedures set forth in this article apply to budget
years beginning after December 31, 2010.
Chapter 2. Definitions
Sec. 1. The definitions in this chapter apply throughout this
article.
Sec. 2. "Allocation area" refers to an area that is established
under the authority of any of the following statutes and in which
tax increment revenues are collected:
(1) IC 6-1.1-39.
(2) IC 8-22-3.5.
(3) IC 36-7-14.
(4) IC 36-7-14.5.
(5) IC 36-7-15.1.
(6) IC 36-7-30.
(7) IC 36-7-30.5.
Sec. 3. "Budget year" means a calendar year.
Sec. 4. "County board" refers to the county board of tax
adjustment or the county auditor, if the county auditor is carrying
out the statutory functions of the county board of tax adjustment.
Sec. 5. "Department" refers to the department of state revenue.
Sec. 6. "Impose" means the following:
(1) To establish a tax.
(2) To set a tax rate for a tax.
(3) To increase or decrease the tax rate for a tax.
(4) To otherwise change the terms or conditions of a tax.
Sec. 7. "Political subdivision" has the meaning set forth in
IC 36-1-2-13.
Sec. 8. "Taxes" means taxes imposed or distributed to a political
subdivision under any of the following:
(1) IC 6-1.6.
(2) IC 6-1.7.
(3) IC 6-1.8.
(4) IC 6-1.9.
Sec. 9. "Tax increment revenues" means an allocation of:
(1) ad valorem property taxes under a law adopted before
January 1, 2011, to an allocation area based on an increase in
the assessed value, wages, sales, or other economic activity
occurring in the allocation area; or
(2) taxes to replace the revenue lost from the elimination of ad
valorem property taxes.
Sec. 10. "Tax limit" refers to a limit on property tax rates or
property tax levies imposed under IC 6-1.1-18.5 or any law other
than IC 6-1.1-20.6.
Sec. 11. "Taxing unit" means a political subdivision described
in IC 6-1.2-1-1.
Chapter 3. Adoption of Budgets, Tax Rates, and Tax Levies
Sec. 1. Except as otherwise provided in this chapter, the
procedures set forth in IC 6-1.1-17 and IC 6-1.1-18 apply to the
adoption of:
(1) the part of a budget or supplemental budgets payable from
taxes; and
(2) the setting of tax rates and levies under IC 6-1.6 and
IC 6-1.7;
to the same extent as if the taxes were ad valorem property taxes.
Sec. 2. Before August 2 in each year, the county fiscal officer
shall send a certified statement containing the following
information to the fiscal officer of each taxing unit in the county:
(1) An estimate of taxes and property tax levy amounts to be
distributed to the taxing unit during the last six (6) months of
the year.
(2) The average growth in adjusted gross income in the county
over the preceding three (3) years.
(3) The amount available in the rainy day fund established
under IC 6-1.2-7-1 to replace revenue shortfalls from a year
before the ensuing year and to reduce tax rates in the ensuing
year.
(4) Any other information at the disposal of the county fiscal
officer that might affect the budget adoption process.
Sec. 3. In formulating budget estimates, a taxing unit's fiscal
officer and fiscal body shall identify the tax needed for each fund
for the budget year.
Sec. 4. In the notice required under IC 6-1.1-17-3, a taxing unit
shall include the following information:
(1) The amount of the budget for each fund that the taxing
unit proposes to fund from taxes and the estimated tax rate
necessary to raise the amount.
(2) The amount of the budget that will be funded from a
distribution of the taxing unit's reserve in the rainy day fund
established under IC 6-1.2-7-1.
Sec. 5. Not later than the date on which the notice described in
section 4 of this chapter is published, a taxing unit shall submit a
copy of the notice to the county fiscal officer.
Sec. 6. In the hearing conducted under IC 6-1.1-17-3 and either
IC 6-1.1-17-5 or IC 6-1.1-17-5.6, a taxing unit shall consider public
testimony concerning the part of the budget that the taxing unit
proposes to fund from taxes.
Sec. 7. Ten (10) or more individuals or entities that could be
subject to a tax may object to a taxing unit's budget in the same
manner as an objection may be filed under IC 6-1.1-17-5. The
taxing unit shall make findings concerning an objection filed under
this section in the same manner as the taxing unit is required to
make findings to an objection filed under IC 6-1.1-17-5.
Sec. 8. A taxing unit's:
(1) budget; and
(2) tax levies;
must be adopted in conformity with IC 6-1.1-17-5 or
IC 6-1.1-17-5.6, as applicable. The ordinance or resolution in which
the tax levies are adopted must estimate the tax rates necessary to
raise the tax levies and must separately state the tax levies and tax
rates that are attributable to an excessive levy appeal.
Sec. 9. If a taxing unit's fiscal body does not fix a budget or
specify the taxes needed to fund the budget before the date
specified in IC 6-1.1-17-5 or IC 6-1.1-17-5.6 or any later date
approved by the department of local government finance, the tax
levy specified in the most recently adopted budget shall be treated
as the tax levy adopted for the ensuing year. The department of
local government finance shall compute the appropriate tax rate.
Sec. 10. Each year, at least two (2) days before the first meeting
of the county board held under IC 6-1.1-29-4, a taxing unit shall
file with the county auditor of each county in which the taxing unit
is located:
(1) a statement of each tax rate and levy fixed by the taxing
unit for the ensuing budget year;
(2) two (2) copies of the budget adopted by the taxing unit for
the ensuing budget year; and
(3) two (2) copies of any findings adopted under section 7 of
this chapter.
The county auditor shall present these items to the county board at
the board's first meeting. If a taxing unit is located in more than
one (1) county, the county determined under IC 6-1.1-17-7 has
jurisdiction over the taxing unit's budget, tax rates, and tax levies.
Sec. 11. When a county board reviews budgets, tax levies, and
tax rates under IC 6-1.1-17-6, the county board may accept, revise,
reduce, or increase the taxes, tax rates, and part of the budget
funded from taxes proposed by the taxing unit to enforce the tax
limits imposed by law.
Sec. 12. A county board shall notify the fiscal officer of each
taxing unit in the county of any action taken by the county board
under section 11 of this chapter. The county board or county fiscal
officer shall issue its determination under section 11 of this chapter
in the form of a written order. The written order shall be certified
to the following:
(1) The affected taxing unit.
(2) The county fiscal officer for each county in which the
taxing unit is located.
Sec. 13. In the notice required under IC 6-1.1-17-12, the county
fiscal officer shall include the following information:
(1) The tax levy and estimated tax rate that will be in effect in
the taxing unit for the following year.
(2) A statement briefly describing the actions that the
department of local government finance is empowered to take
with respect to the tax levies, tax rates, and budget of the
taxing unit.
Sec. 14. The county fiscal officer shall forward a copy of the
budget, tax rates, and tax levies for each taxing unit in the county
to the department of local government finance along with notice of
the actions taken by the county board under section 11 of this
chapter.
Sec. 15. The department of local government finance shall
certify a taxing unit's tax levies and tax rates for a year to:
(1) the affected taxing unit;
(2) the county fiscal officer for the county where taxes must be
raised, if applicable;
(3) the department; and
(4) the auditor of state;
before December 2 or as soon as practicable after December 1 of
the year that immediately precedes the year in which a tax or a tax
increase will take effect.
Sec. 16. A tax rate certified under this chapter takes effect on
the later of January 1 or thirty (30) days after the tax rate is
certified by the county board.
Sec. 17. The total amount of taxes levied and the total amount
budgeted for a taxing unit may not exceed the tax limits applicable
to the taxing unit. Tax limits applicable to property taxes shall be
treated as applying to revenues from taxes that must be budgeted
under this article to the same extent as if they were property taxes.
The county board may prescribe standards for converting a tax
limit applicable to property taxes to a tax limit applicable to the
revenues from taxes that must be budgeted under this article.
Chapter 4. Anticipation Loans
Sec. 1. The fiscal body for a taxing unit may (by ordinance, if the
taxing unit is a county, city, or town, or otherwise by resolution)
enter into temporary loans to meet the current running expenses
of the taxing unit in anticipation of and not exceeding taxes
imposed for a budget year.
Sec. 2. Temporary loans under this chapter must be evidenced
by tax anticipation warrants of the taxing unit.
Sec. 3. An ordinance or resolution authorizing the issuance of
tax anticipation warrants under this chapter must:
(1) state the total amount of the issue;
(2) state the denomination of the warrants;
(3) state the date, time, and place at which the warrants are
payable;
(4) state the rate of interest;
(5) state the funds and revenues in anticipation of which the
warrants are issued and out of which they are payable; and
(6) appropriate and pledge a sufficient amount of those
revenues to the punctual payment of the warrants.
Sec. 4. Tax anticipation warrants issued under this chapter may
be for a term that extends to any date after the close of a particular
budget year on which taxes imposed for the budget year are
reasonably expected to be collected.
Sec. 5. Tax anticipation warrants issued under this chapter are
exempt from taxation for all purposes.
Chapter 5. Bond and Lease Obligations; Allocation Areas
Sec. 1. Notwithstanding any other law, if a taxing unit desires to
issue obligations or enter into leases, payable wholly or in part
from taxes, the obligations of the taxing unit or any lessor may be
sold at a public sale in accordance with IC 5-1-11 or at a negotiated
sale.
Sec. 2. A pledge of tax revenues is enforceable in accordance
with IC 5-1-14.
Sec. 3. With respect to obligations for which a pledge has been
made from taxes, the general assembly covenants with the taxing
unit and the purchasers or owners of those obligations that the law
governing the taxes will not be repealed or amended in any manner
that will adversely affect the tax collected under the law as long as
the principal of or interest on those obligations is unpaid.
Sec. 4. Political subdivisions must fully fund the payment of
their debt service and lease obligations in an amount sufficient to
pay any debt service or lease rentals on outstanding obligations,
regardless of any reduction in tax collections or spending authority
due to the application of any tax limit. Any reduction in collections
or spending authority must be applied to the other funds of the
political subdivision after debt service or lease rentals have been
fully funded.
Sec. 5. A pledge made by a political subdivision or the governing
body of an allocation area before January 1, 2011, to pay:
(1) any bonds, loans, other obligations, or lease rentals; or
(2) any credit enhancement;
from ad valorem property taxes, including tax incentive revenues,
shall be treated after December 31, 2010, as a pledge to make the
payment from revenues from taxes.
Sec. 6. The taxing units located in an area containing an
allocation area shall raise an amount of revenue to distribute to the
governing body of the allocation area sufficient to meet the
obligations incurred by the governing body. However, the amounts
distributed from the taxes imposed for a taxing unit may not
exceed the amount of tax increment revenues attributable to the
taxing unit that would have been distributed to the allocation area
if property taxes had not been eliminated. The taxing limits that
would otherwise apply to a taxing unit are increased to the extent
and for the time necessary to comply with this section. The county
board shall provide for the method of transferring taxes to an
allocation area.
Chapter 6. Treatment of Taxes as Property Taxes
Sec. 1. For purposes of:
(1) making distributions of revenues that are distributed to a
taxing unit based on the property tax levies imposed by the
taxing unit;
(2) determining the maximum permissible taxes that may be
imposed by taxing units; and
(3) all other purposes;
taxes shall be treated as ad valorem property taxes.
Chapter 7. Rainy Day Fund
Sec. 1. A rainy day fund is established in each political
subdivision that has not established a rainy day fund under
IC 36-1-8-5.1.
Sec. 2. (a) A political subdivision annually shall determine an
amount that equals five percent (5%) of the amount distributed to
the political subdivision under this article and IC 6-1.6 in the
immediately preceding year.
(b) A political subdivision shall deposit in the political
subdivision's rainy day fund established under section 1 of this
chapter, from distributions to the political subdivision under this
article and IC 6-1.6 during a period not exceeding three (3) years
immediately after a five percent (5%) balance is determined under
subsection (a), at least the amount necessary to provide or restore
the amount determined under subsection (a).
Sec. 3. Tax revenues:
(1) received under IC 6-1.6, IC 6-1.7, IC 6-1.8, or IC 6-1.9 for
any budget year in excess of the amount budgeted from taxes
by a taxing unit for the budget year in a budget approved by
the county board; or
(2) received under IC 6-1.7 for a budget year in excess of an
amount of just and equitable taxes, as determined under
IC 6-1.7-5-7;
shall be deposited in the taxing unit's rainy day fund. Money
deposited in the rainy day fund under this section may be used only
to reduce the tax rates that would otherwise be imposed under
IC 6-1.6.
Sec. 4. In addition to the uses permitted under IC 36-1-8-5.1,
money in a political subdivision's rainy day fund may be used to:
(1) make up a shortfall in estimated revenue under IC 6-1.1,
this article, IC 6-1.6, or IC 6-1.7;
(2) provide a temporary loan to any fund for a budget year in
anticipation of the collection of tax revenue for the budget
year after the close of the budget year; or
(3) maintain tax rates lower than the tax rates that would
otherwise apply under this article if money were not available
in the rainy day fund.
Chapter 8. Exchange of Information
Sec. 1. Forms, notices, ordinances, and resolutions required or
permitted under this article must be prepared and used in the form
and in the manner approved by the state board of accounts.
Sec. 2. The department shall establish a schedule for regularly
providing information to a county board and a taxing unit
concerning the following:
(1) The amount of tax collections.
(2) The status of pending tax assessments, including
information concerning proposed assessments and potential
refunds.
(3) The amount of refunds made to taxpayers.
(4) The balance held by the state that is attributable to taxes
imposed for the taxing unit.
(5) Transfers in and out of the taxing unit's account that are
made to correct errors in the apportionment of taxes to the
taxing unit.
(6) Other information that is necessary for the fiscal officer of
the taxing unit and county board to verify the amount of tax
revenue that will be available to the taxing unit.
Sec. 3. The department may enter into a confidentiality
agreement with county boards and taxing units to share
information under the terms determined by the department.
Sec. 4. The department, after reviewing the recommendations
of the budget agency, shall establish a schedule to regularly provide
revenue forecasts to county boards and taxing units.
Sec. 5. The department shall require employers and taxpayers
to provide sufficient information to permit the department to
allocate tax revenues to taxing units under this article, IC 6-1.6,
and IC 6-1.7. The information may be consolidated with other
returns in the manner prescribed by the department.
Sec. 6. The department shall conduct a program to provide
employers and taxpayers with information adequate to enable
employers or taxpayers to accurately report the information
required under section 5 of this chapter.
ARTICLE 1.6. LOCAL RESIDENT INCOME TAX
Chapter 1. Definitions
Sec. 1. The definitions in IC 6-3 and this chapter apply throughout this article.
Sec. 2. "Adjusted gross income" has the meaning set forth in IC 6-3-1-3.5(a).
Sec. 3. "Allocation area" has the meaning set forth in IC 6-1.1-21.2-3.
Sec. 4. "Budget year" means a calendar year.
Sec. 5. "Impose" means the following:
(1) To establish a tax.
(2) To set a tax rate for a tax.
(3) To increase or decrease the tax rate for a tax.
(4) To otherwise change the terms or conditions of a tax.
Sec. 6. "Residency determination date" refers to the date in a taxpayer's taxable year on which the taxpayer's obligation to pay taxes imposed by a particular taxing unit is determined.
Sec. 7. "Resident" means an individual who is a resident of a taxing unit on the residency determination date in the individual's taxable year.
Sec. 8. "Tax" refers to the local resident income tax imposed under this article.
Sec. 9. "Tax area" refers to a tax area determined under IC 6-1.6-2.
Sec. 10. "Tax limit" refers to a tax limit imposed under IC 6-1.1-18.5 or any other law that applies to a tax or property taxes.
Sec. 11. "Taxing unit" refers to the following:
(1) Any political subdivision (as defined in IC 36-1-2-13) to
which a law enacted before January 1, 2011, grants authority
to impose an ad valorem property tax.
(2) Any political subdivision (as defined in IC 36-1-2-13) that
is granted authority to enact a tax under this article.
Sec. 12. "Taxpayer" refers to an individual who has tax liability
under this article.
Chapter 2. Determination of Tax Area
Sec. 1. A tax levy for a taxing unit shall be imposed in the tax
area determined under this chapter.
Sec. 2. The tax rate imposed by a taxing unit in the taxing unit's
tax area shall be uniformly applied to the adjusted gross income of
all taxpayers in the taxing area.
Sec. 3. (a) This section applies to a school corporation.
(b) The taxing area for a school corporation is the area within
the boundaries of the school corporation.
Sec. 4. (a) This section applies to the following:
(1) A city or town.
(2) Any taxing unit that has boundaries that do not extend
beyond the boundaries of a particular city or town.
(b) The taxing area of a taxing unit is the area served by the city
or town.
Sec. 5. (a) This section applies to a taxing unit, other than a
taxing unit described in section 3 or 4 of this chapter.
(b) The taxing area of the taxing unit is the entire area of each
county where the taxing unit provides services.
Chapter 3. Imposition of Tax
Sec. 1. The fiscal body of a taxing unit may impose a tax on the
adjusted gross income of taxpayers in the taxing unit's tax area for
taxable years beginning after December 31, 2010. The tax rate set
by the taxing unit for a particular budget year may not exceed,
after applying all other revenues from taxes that must be budgeted
under IC 6-1.2, the lesser of the following:
(1) The revenue necessary for the taxing unit to fund its
budget for the budget year.
(2) The amount that is permitted to be raised for the
particular budget year under the tax limits that apply to the
taxing unit.
Sec. 2. The tax is imposed on the adjusted gross income of:
(1) each individual who is a resident of the tax area on the
residency determination date for the individual's taxable
year; and
(2) each individual:
(A) who is not a resident of any tax area in Indiana on the
residency determination date for the individual's taxable
year; but
(B) whose principal place of business or employment is
located in the tax area on the residency determination date
for the individual's taxable year.
Sec. 3. For purposes of this chapter, an individual shall be
treated as a resident of:
(1) the tax area in which the individual maintains a home, if
the individual maintains only one (1) home in Indiana;
(2) if subdivision (1) does not apply, the tax area in which the
individual is registered to vote;
(3) if subdivisions (1) and (2) do not apply, the tax area in
which the individual registers the individual's personal
automobile; or
(4) if subdivisions (1), (2), and (3) do not apply, the tax area in
which the individual spends the majority of the individual's
time in Indiana during the taxable year in question.
Sec. 4. The residence of an individual is determined on January
1 of the year in which the individual's taxable year begins. If an
individual changes the location of the individual's residence to
another tax area in Indiana during a year, the individual's liability
for the tax is not affected.
Sec. 5. If for any taxable year a taxpayer is subject to different
tax rates for the tax imposed in a tax area, the taxpayer's tax rate
for the tax area and that taxable year is the rate determined in
STEP FOUR of the following STEPS:
STEP ONE: Multiply the number of months in the taxpayer's
taxable year that precede July 1 by the rate in effect before
the rate change.
STEP TWO: Multiply the number of months in the taxpayer's
taxable year that follow June 30 by the rate in effect after the
rate change.
STEP THREE: Add the results determined under STEP ONE
and STEP TWO.
STEP FOUR: Divide the STEP THREE result by twelve (12).
Sec. 6. If the tax is not in effect during a taxpayer's entire
taxable year, the amount of tax that the taxpayer owes for that
taxable year equals the product of:
(1) the amount of tax the taxpayer would owe if the tax had
been imposed during the taxpayer's entire taxable year;
multiplied by
(2) a fraction. The numerator of the fraction equals the
number of days in the taxpayer's taxable year during which
the tax was in effect. The denominator of the fraction equals
the total number of days in the taxpayer's taxable year.
Sec. 7. (a) Except as provided in subsection (b), if for a
particular taxable year a resident is liable for an income tax
imposed by a county, city, town, or other local governmental entity
located outside Indiana, that resident is entitled to a credit against
the taxpayer's total tax liability imposed under this article for that
same taxable year. The amount of the credit equals the amount of
tax imposed by the other governmental entity on income derived
from sources outside Indiana and subject to the tax under this
chapter. However, the credit provided by this section may not
reduce a resident's tax liability under this article to an amount less
than would have been owed if the income subject to taxation by the
other governmental entity had been ignored.
(b) The credit provided by this section does not apply to a
resident to the extent that the other governmental entity provides
for a credit to the resident for the amount of taxes owed under this
article.
(c) To claim the credit provided by this section, a resident must
provide the department of state revenue with satisfactory evidence
that the taxpayer is entitled to the credit.
Sec. 8. (a) If for a particular taxable year a taxpayer is, or a
taxpayer and the taxpayer's spouse who file a joint return are,
allowed a credit for the elderly or totally disabled under Section 22
of the Internal Revenue Code, the taxpayer is, or the taxpayer and
the taxpayer's spouse are, entitled to a credit against the tax
liability under this article for that same taxable year. The amount
of the credit equals the lesser of:
(1) the product of:
(A) the credit for the elderly or totally disabled for that
same taxable year; multiplied by
(B) a fraction, the:
(i) numerator of which is the tax rate imposed under this
article against the taxpayer or the taxpayer and the
taxpayer's spouse; and
(ii) denominator of which is fifteen-hundredths (0.15); or
(2) the amount of tax imposed on the taxpayer or the taxpayer
and the taxpayer's spouse.
(b) If a taxpayer and the taxpayer's spouse file a joint return
and are subject to different taxing unit tax rates for the same
taxable year, the taxpayer and the taxpayer's spouse shall compute
the credit under this section by using the formula provided under
subsection (a), except that they shall use the average of the two (2)
tax rates imposed against them as the numerator referred to in
subsection (a)(1)(B)(i).
Sec. 9. Except as otherwise provided in this chapter, all
provisions of the adjusted gross income tax law (IC 6-3)
concerning:
(1) definitions;
(2) declarations of estimated tax;
(3) filing of returns;
(4) deductions or exemptions from adjusted gross income;
(5) remittances;
(6) incorporation of the provisions of the Internal Revenue
Code;
(7) penalties and interest; and
(8) exclusion of military pay credits for withholding;
apply to the imposition, collection, and administration of the tax
imposed by this article.
Sec. 10. IC 6-3-1-3.5(a)(6), IC 6-3-3-3, IC 6-3-3-5,
IC 6-3-4-4.1(g), IC 6-3-4-8.1(f), and IC 6-3-5-1 do not apply to the
tax imposed by this article.
Sec. 11. Each employer, including an employer making
payments by electronic funds transfer, shall report to the
department of state revenue for each reporting period the amount
of tax withholdings attributable to each taxing area. The report
must be made before the later of:
(1) the time that an employer that is not making an electronic
funds transfer is required to pay to the department of state
revenue amounts withheld during the reporting period; or
(2) the date specified by the department of state revenue.
Sec. 12. A taxpayer required to file estimated or annual state
adjusted gross income tax returns under IC 6-3-4-4.1, including
taxpayers making payments by electronic funds transfer, shall file
estimated tax returns and make payments of the tax imposed by
this article to the department of state revenue at the time or times
and in the installments specified under IC 6-3-4-4.1 for making
estimated state adjusted gross income tax returns by taxpayers not
making an electronic funds transfer.
Chapter 4. Distribution of Tax Revenue
Sec. 1. The department of state revenue shall separately account
within the state general fund for the taxes imposed in each taxing
area in a manner sufficient to provide each taxing unit in a taxing
area, the taxpayers of the taxing unit, and a county board (as
defined in IC 6-1.2-2-4) with jurisdiction over the taxing unit with
an accounting of the amounts collected under this article in each of
the taxing unit's taxing areas.
Sec. 2. The auditor of state shall distribute each month to a
taxing unit the net amount collected in the immediately preceding
month from the tax imposed by the taxing unit, after making
refunds and other adjustments for the overpayment of taxes.
Sec. 3. The auditor of state shall distribute, as required by law,
for deposit in the appropriate special fund, any tax revenue that is
to be distributed to an allocation area.
Sec. 4. Distributions under this chapter must be made from the
state general fund.
Sec. 5. (a) This section applies if:
(1) a taxing unit's legislative body adopts an ordinance (if the
taxing unit is a county, city, or town) or a resolution (if the
taxing unit is not a county, city, or town) authorizing the
distribution of part of the taxing unit's taxes to an assignee of
the taxing unit; and
(2) the assignment is permitted by law.
(b) The auditor of state shall reduce the amount of a distribution
made to a taxing unit by the amount that the taxing unit directs the
auditor of state to distribute to an assignee of the taxing unit.
(c) A distribution under this section must be made to the
assignee designated in the ordinance or resolution at the assignee's
last known address, as submitted to the auditor of state by the
executive of the taxing unit before the cutoff date specified by the
auditor of state or as otherwise determined by law.
(d) A distribution under this section may be made not more than
one (1) time each month. The distribution may be made only in the
months specified in the ordinance or resolution. The distribution
for a month may not exceed the amount that the taxing unit would
otherwise be entitled to receive as a distribution in the month after
deducting all other distribution assignments.
Sec. 6. The amount necessary to make the distributions required
by this chapter is annually appropriated from the state general
fund.
ARTICLE 1.7. FIRE AND SAFETY BENEFIT TAX
Chapter 1. Definitions
Sec. 1. The definitions in this chapter apply throughout this article.
Sec. 2. "Eligible entity" means a:
(1) county, city, town, or township; or
(2) fire protection district;
that provides public safety services.
Sec. 3. "Property" refers to property described in IC 6-1.7-2-1(2) that is subject to the tax imposed by this article and is not exempt from the tax under IC 6-1.1-10 or any other law.
Sec. 4. "Public safety services" refers to services described in IC 6-1.7-2-3.
Sec. 5. "Tax" refers to the fire and safety benefit tax imposed under this article.
Chapter 2. Application
Sec. 1. This article applies to:
(1) all eligible entities; and
(2) the owner of each:
(A) lot;
(B) parcel of property; or
(C) building or other real property improvement;
located in an eligible entity.
Sec. 2. This article applies to an expenditure to establish, maintain, operate, provide facilities or equipment for, contract for, finance, or repay a judgment or other obligation related to any of the following:
(1) A police and law enforcement system to preserve public peace and order.
(2) A firefighting and fire prevention system.
(3) Emergency ambulance services (as defined in IC 16-18-2-107), except as part of a levy for a county hospital under IC 16-22 or a municipal hospital under IC 16-23.
(4) Emergency medical services (as defined in IC 16-18-2-110), except as part of a levy for a county hospital under IC 16-22 or a municipal hospital under IC 16-23.
(5) Emergency action (as defined in IC 13-11-2-65).
Sec. 3. The activities and systems to which this article applies include the following:
(1) A communications system (as defined in IC 36-8-15-3) or an enhanced emergency telephone system (as defined in IC 36-8-16-2).
(2) Pension payments for any of the following:
(A) A member of a fire department (as defined in IC 36-8-1-8) or any other employee of a fire department.
(B) A member of a police department (as defined in IC 36-8-1-9), a police chief hired under a waiver under IC 36-8-4-6.5, or any other employee hired by a police department.
(C) A county sheriff or any other member of the office of the county sheriff.
(D) Other personnel employed to provide a service described in section 2 of this chapter.
(3) Operation of the following:
(A) A county jail.
(B) A juvenile detention center.
Sec. 4. This article does not apply to expenditures related to:
(1) a court;
(2) a probation department of a court; or
(3) confinement, supervision, community correction services, or other correctional services for a person who has been:
(A) diverted before a final hearing or trial under an agreement that:
(i) is between the prosecuting attorney and the person or the person's custodian, guardian, or parent; and
(ii) provides for confinement, supervision, community correction services, or other correctional services instead of a final action described in clause (B) or (C);
(B) convicted of a crime; or
(C) adjudicated as a delinquent child or a child in need of services in a facility;
except for expenditures related to the operation of a county jail or juvenile detention center.
Chapter 3. Elimination of Property Tax Levies; Repayment of Prior Debt
Sec. 1. An eligible entity may not impose an ad valorem property tax levy to pay an expenditure under IC 6-1.7-2-2 or to fund the activities and systems referred to in IC 6-1.7-2-3.
Sec. 2. (a) This article does not prohibit:
(1) the consolidation of services payable from taxes; or
(2) the funding of emergency ambulance services or emergency medical services with a user fee imposed under another statute.
(b) The legislative body of an eligible entity delivering the consolidated services referred to in subsection (a)(1) shall allocate
the cost payable from taxes based on the relative benefit of the
consolidated services to:
(1) public safety services; and
(2) other purposes.
Sec. 3. Section 1 of this chapter does not release or extinguish a
debt of an eligible entity that was incurred before January 1, 2011.
However, to the extent permitted under the Constitution of the
United States and the Constitution of the State of Indiana, a law
entitling a holder of an obligation to enforce a right to repayment
from property tax levies does not apply after December 31, 2010,
to a holder of an obligation that was created before January 1,
2011, but was incurred to finance an activity to which this article
applies.
Sec. 4. If an agreement with an eligible entity entered into
before January 1, 2011, or a judgment entered against an eligible
entity before January 1, 2011, requires the eligible entity to make
payments after December 31, 2010, from property tax levies that
are prohibited by section 1 of this chapter, the holders of the
obligations are entitled to payment from all other sources of
receipts that are available to the eligible entity after December 31,
2010, except receipts that by law or the terms of a grant are
restricted to another use.
Chapter 4. Treatment of Distributions Based on Property Tax
Levies
Sec. 1. Taxes imposed under this article shall be treated as ad
valorem property taxes for the purpose of distributions under the
following:
(1) IC 6-3.5.
(2) IC 6-5.5.
(3) IC 6-6-5.
(4) Any other law that computes a distribution on the assessed
value of the tangible property in an eligible entity or on the
property tax levy imposed by the eligible entity.
Sec. 2. The department of state revenue shall provide the
information for county auditors to make the distributions
described in section 1 of this chapter for public safety services.
Chapter 5. Imposition of Tax
Sec. 1. An eligible entity may impose a tax on:
(1) the owner of property in the eligible entity; and
(2) if the eligible entity has entered into a contract to provide
public safety services outside the eligible entity, the owner of
property outside the eligible entity served under the contract;
for any period beginning after December 31, 2010.
Sec. 2. The tax for public safety services shall be determined based on any combination of the following:
(1) The acreage or frontage of land.
(2) The relative crime or fire risk of property, as determined by insurance ratings and other information available to the eligible entity.
(3) The relative costs of purchasing or leasing special facilities or equipment to deliver public safety services to property.
Sec. 3. The tax for public safety services does not have to be uniform throughout the eligible entity or for all users. The legislative body of an eligible entity may exercise reasonable discretion in:
(1) adopting different tax schedules; or
(2) making classifications in tax schedules:
(A) based on variations in the costs, including capital expenditures required, of furnishing the services to various classes of users or to various locations in the eligible entity; or
(B) where there are variations in the number of users in various locations in the eligible entity.
Sec. 4. If public safety services will not be provided until after a capital improvement is completed, an eligible entity may bill and collect taxes for the services to be provided after the contract for construction of the capital improvement has been let and actual work commenced in an amount sufficient to meet the interest on the revenue bonds and other expenses payable before the completion of the capital improvement.
Sec. 5. Unless the eligible entity finds and directs otherwise, public safety services are considered to benefit every:
(1) lot;
(2) parcel of land; and
(3) building or other real property improvement;
in the eligible entity. The tax shall be billed and collected accordingly.
Sec. 6. (a) The legislative body of an eligible entity shall, by ordinance, or, in the case of a township or fire protection district, by resolution, establish just and equitable tax schedules for public safety services provided by the eligible entity. The tax is payable by the owner of each lot, parcel of land, or building or other real property improvement that:
(1) is in the eligible entity; or
(2) in any way uses or is served by the eligible entity.
(b) The legislative body of an eligible entity may periodically change and readjust the tax schedules as provided in this article.
Sec. 7. (a) For purposes of this chapter, just and equitable taxes are those that produce sufficient revenue to provide revenue for not more than fifty percent (50%) of the following:
(1) All expenses incident to the delivery of public safety services.
(2) A sinking fund for the liquidation of bonds or other evidence of indebtedness and reserves against default in the payment of interest and principal of bonds.
(3) Adequate money to be used as working capital and money for making improvements, additions, extensions, and replacements.
(b) Taxes too low to meet the financial requirements described in subsection (a) are unlawful. The initial taxes established after notice and hearing under this article are prima facie just and equitable.
Sec. 8. The initial taxes may be established under this article only after a public hearing at which all the:
(1) property owners to be served by the eligible entity; and
(2) others interested;
have an opportunity to be heard concerning the proposed taxes.
Sec. 9. After introduction of the ordinance or resolution initially establishing taxes but before the ordinance or resolution is finally adopted, notice of the hearing setting forth the proposed schedule of the taxes must be given by publication one (1) time each week for two (2) weeks in a newspaper of general circulation in the eligible entity. The last publication must be at least seven (7) days before the date fixed in the notice for the hearing. The hearing may be adjourned as necessary.
Sec. 10. (a) The ordinance or resolution establishing the initial taxes, either as:
(1) originally introduced; or
(2) modified and amended;
must be passed and put into effect after the hearing.
(b) A copy of the schedule of the taxes established must be:
(1) kept on file in the principal office of the eligible entity; and
(2) open to public inspection.
Sec. 11. (a) The taxes established for a class of users of property served shall be extended to cover any additional property served after the taxes are established that are in the same class without the
necessity of hearing or notice.
(b) A change or readjustment of the taxes may be made in the
same manner as the taxes were originally established.
Sec. 12. Taxes imposed under this article that result in revenue
exceeding the amount of just and equitable taxes permitted under
section 7 of this chapter are not void. The excess shall be deposited
in the political subdivision's rainy day fund and used as required
under IC 6-1.2-7-3.
Chapter 6. Liens for Taxes
Sec. 1. The taxes made, assessed, or established under this
article against:
(1) a lot;
(2) a parcel of land; or
(3) a building or other real property improvement;
in an eligible entity or served by an eligible entity are a lien against
the lot, parcel of land, or building or other real property
improvement.
Sec. 2. Except as provided in sections 5 and 6 of this chapter, a
lien under section 1 of this chapter attaches at the time of the
recording of the list in the county recorder's office as provided in
IC 6-1.7-7. The lien:
(1) is superior to and takes precedence over all other liens
except a lien for taxes; and
(2) shall be enforced under this article.
Sec. 3. If taxes are not paid within the time fixed by the eligible
entity, the taxes become delinquent, and a penalty of ten percent
(10%) of the amount of the taxes attaches to the taxes. The eligible
entity may recover:
(1) the amount due;
(2) the penalty; and
(3) reasonable attorney's fees;
in a civil action in the name of the eligible entity.
Sec. 4. The taxes, together with the penalty, are collectible in the
manner provided by this article.
Sec. 5. (a) A tax is not enforceable as a lien against a subsequent
owner of property unless the lien for the tax was recorded with the
county recorder before the conveyance to the subsequent owner.
(b) If the property is conveyed before the lien can be filed, the
officer of the eligible entity who is charged with the collection of
the tax shall notify the person who owned the property at the time
the tax became payable. The notice must inform the person that
payment, including penalty fees for delinquencies, is due not less
than fifteen (15) days after the date of the notice. If payment is not
received before one hundred eighty (180) days after the date of the
notice have elapsed, the amount due may be expensed as a bad debt
loss.
Sec. 6. (a) This section applies whenever a property owner has
notified the eligible entity by certified mail with return receipt
requested of the address to which the owner's notice is to be sent.
(b) A lien does not attach against a lot, parcel of land, or
building or other real property improvement occupied by someone
other than the owner unless the officer of the eligible entity who is
charged with the collection of taxes notifies the owner of the
property after the taxes have become sixty (60) days delinquent.
Sec. 7. (a) The eligible entity shall release:
(1) liens filed with the county recorder after the recorded date
of conveyance of the property; and
(2) delinquent taxes incurred by the seller;
on receipt of a verified demand in writing from the purchaser.
(b) The demand must state the following:
(1) That the delinquent taxes were not incurred by the
purchaser as a user, lessee, or previous owner.
(2) That the purchaser has not been paid by the seller for the
delinquent taxes.
Chapter 7. Enforcement of Delinquencies
Sec. 1. This chapter applies only to taxes or penalties that have
been due and unpaid for at least ninety (90) days.
Sec. 2. The officer of the eligible entity who is charged with the
collection of the taxes shall enforce payment of the taxes. The
officer shall, not more than two (2) times in a year, prepare a list
of the delinquent taxes, including the amount of the penalty, that
are enforceable under this chapter. The list must include the
following:
(1) The name of each owner of each lot or parcel of real
property on which the taxes have become delinquent.
(2) The description of the property as shown by the records of
the office of the county auditor.
(3) The amount of the taxes, together with the amount of the
penalty.
Sec. 3. (a) The officer of the eligible entity shall record a copy of
the list in the office of the county recorder.
(b) The county recorder shall charge a fee for recording the list
in accordance with the fee schedule established in IC 36-2-7-10.
(c) After recording the list, the officer shall mail to each
property owner on the list a notice stating that a lien against the
owner's property has been recorded.
(d) This subsection applies only to a county that does not contain
a consolidated city. A service charge of five dollars ($5), which is
in addition to the recording fee charged under this section and
section 6 of this chapter, shall be added to each delinquent tax that
is recorded.
Sec. 4. (a) This section applies only to a county containing a
consolidated city.
(b) Using the lists prepared and recorded under sections 2 and
3 of this chapter, the eligible entity shall certify to the county
auditor a list of the liens that remain unpaid according to the
following schedule:
(1) Liens recorded on or after August 1 of the preceding year
and before February 1 of the current year shall be certified
before March 1 of each year for collection in May of the same
year.
(2) Liens recorded on or after February 1 of the current year
and before August 1 of the current year shall be certified
before September 1 of each year for collection in November
of the same year.
(c) The county and the officers and employees of the county are
not liable for any material error in the information on the list
prepared under subsection (b).
Sec. 5. (a) This section applies only to a county that does not
contain a consolidated city.
(b) Using the lists prepared and recorded under sections 2 and
3 of this chapter:
(1) after April 1 of the preceding year; and
(2) before April 1 of the current year;
the eligible entity shall, before June 1 of each year, certify to the
county auditor a list of the liens that remain unpaid for collection
in the next November.
(c) The county and the officers and employees of the county are
not liable for any material error in the information on the list.
Sec. 6. (a) The eligible entity shall release a recorded lien when
the:
(1) delinquent taxes;
(2) penalties;
(3) service charges; and
(4) recording fees;
have been fully paid.
(b) The county recorder shall charge a fee for releasing the lien in accordance with IC 36-2-7-10.
Sec. 7. (a) This subsection applies to a county that does not contain a consolidated city. On receipt of the list under section 5 of this chapter, the county auditor shall add a fifteen dollar ($15) certification fee for each lot or parcel of real property on which taxes are delinquent. The certification fee is in addition to all other fees and taxes. The county auditor shall immediately enter on the tax duplicate for the municipality the:
(1) delinquent taxes;
(2) penalties;
(3) service charges;
(4) recording fees; and
(5) certification fees;
that are due not later than the due date of the next November installment of property taxes.
(b) This subsection applies to a county having a consolidated city. On receipt of the list under section 4 of this chapter, the county auditor shall enter on the tax duplicate the:
(1) delinquent taxes;
(2) penalties;
(3) service charges; and
(4) recording fees;
that are due not later than the due date of the next installment of property taxes.
(c) The county treasurer shall include any unpaid charges for the:
(1) delinquent tax;
(2) penalty;
(3) service charge;
(4) recording fee; and
(5) certification fee;
for each owner of each lot or parcel of property at the time the next cycle's property tax installment is billed.
Sec. 8. (a) This section does not apply to a county containing a consolidated city.
(b) After June 1 of each year, the officer of the eligible entity may not collect or accept:
(1) delinquent taxes;
(2) penalties;
(3) service charges;
(4) recording fees; or
(5) certification fees;
from property owners whose property has been certified to the county auditor.
Sec. 9. If a:
(1) delinquent tax;
(2) penalty;
(3) service charge;
(4) recording fee; or
(5) certification fee;
is not paid, the county treasurer shall collect the unpaid money in the same way that delinquent property taxes are collected.
Sec. 10. (a) At the time of each semiannual tax settlement, the county treasurer shall certify to the county auditor all:
(1) taxes;
(2) fees and charges; and
(3) penalties;
that have been collected.
(b) The county auditor shall:
(1) deduct the service charges and certification fees collected by the county treasurer; and
(2) pay to the officer of the eligible entity the remaining taxes and penalties due the eligible entity.
(c) The county treasurer shall:
(1) retain the service charges and certification fees that have been collected; and
(2) deposit the charges and taxes in the county general fund.
Sec. 11. (a) This section applies to a:
(1) tax;
(2) penalty; or
(3) service charge;
that was not recorded before a recorded conveyance.
(b) The:
(1) tax;
(2) penalty; or
(3) service charge;
shall be removed from the tax roll for a purchaser who, in the manner prescribed by IC 6-1.7-6-7, files a verified demand with the county auditor.
Chapter 8. Foreclosure of Liens
Sec. 1. An eligible entity may, as an additional or alternative remedy, foreclose a lien established by this article as a means of collection of taxes, including the penalty on the taxes.
Sec. 2. (a) In all actions brought to foreclose the liens, the eligible entity is entitled to recover the following:
(1) The amount of the taxes.
(2) The penalty on the taxes.
(3) Reasonable attorney's fees.
(b) The court shall order that the foreclosure be made without relief from valuation or appraisement statutes.
Sec. 3. Except as otherwise provided by this article, the following apply in all actions to foreclose the liens:
(1) The laws concerning municipal public improvement assessments.
(2) The rights, remedies, procedure, and relief granted the parties to the action.
ARTICLE 1.8. COMMERCIAL ACTIVITY TAX
Chapter 1. Definitions
Sec. 1. Except as provided in section 9 of this chapter, the definitions in this chapter apply throughout this article.
Sec. 2. (a) "Person" means, but is not limited to, individuals, combinations of individuals of any form, receivers, assignees, trustees in bankruptcy, firms, companies, joint stock companies, business trusts, estates, partnerships, limited liability partnerships, limited liability companies, associations, joint ventures, clubs, societies, for-profit corporations, S corporations, qualified subarticle S subsidiaries, qualified subarticle S trusts, trusts, entities that are disregarded for federal income tax purposes, and any other entities.
(b) The term does not include nonprofit organizations or the state, its agencies, its instrumentalities, and its political subdivisions.
Sec. 3. "Consolidated elected taxpayer" means a group of two (2) or more persons treated as a single taxpayer for purposes of this article as the result of an election made under this article.
Sec. 4. "Combined taxpayer" means a group of two (2) or more persons treated as a single taxpayer for purposes of this article.
Sec. 5. "Fund" refers to the local government distribution fund established by IC 6-1.8-8-1.
Sec. 6. (a) "Taxpayer" means any person, or any group of persons in the case of a consolidated elected taxpayer or combined taxpayer treated as one (1) taxpayer, required to register or pay
tax under this article.
(b) The term does not include a person excluded from a group
filing a combined return under IC 6-1.8-2-1.
Sec. 7. (a) Except as otherwise provided in this article, "gross
receipts" means the total amount realized by a person, without
deduction for the cost of goods sold or other expenses incurred,
that contributes to the production of gross income of the person,
including the fair market value of any property and any services
received, and any debt transferred or forgiven as consideration.
(b) The following are examples of gross receipts:
(1) Amounts realized from the sale, exchange, or other
disposition of a taxpayer's property to or with another.
(2) Amounts realized from a taxpayer's performance of
services for another.
(3) Amounts realized from another's use or possession of a
taxpayer's property or capital.
(4) Any combination of the foregoing amounts.
Sec. 8. "Gross receipts" excludes the following amounts:
(1) Interest income except interest on credit sales.
(2) Dividends and distributions from corporations, and
distributive or proportionate shares of receipts and income
from a pass through entity.
(3) Receipts from the sale, exchange, or other disposition of an
asset described in Section 1221 or 1231 of the Internal
Revenue Code, without regard to the length of time the person
held the asset. Notwithstanding Section 1221 of the Internal
Revenue Code, receipts from hedging transactions also are
excluded to the extent the transactions are entered into
primarily to protect a financial position, such as managing the
risk of exposure to:
(A) foreign currency fluctuations that affect assets,
liabilities, profits, losses, equity, or investments in foreign
operations;
(B) interest rate fluctuations; or
(C) commodity price fluctuations.
As used in this subdivision, "hedging transaction" has the
same meaning as used in Section 1221 of the Internal Revenue
Code and also includes transactions accorded hedge
accounting treatment under statement of Financial
Accounting Standards number 133 of the Financial
Accounting Standards Board. The actual transfer of title of
real or tangible personal property to another entity is not a
hedging transaction.
(4) Proceeds received attributable to the repayment, maturity,
or redemption of the principal of a loan, bond, mutual fund,
certificate of deposit, or marketable instrument.
(5) The principal amount received under a repurchase
agreement or on account of any transaction properly
characterized as a loan to the person.
(6) Contributions received by a trust, plan, or other
arrangement, any of which is described in Section 501(a) of
the Internal Revenue Code, or to which Title 26, Subtitle A,
Article 1, Subarticle (D) of the Internal Revenue Code applies.
(7) Compensation, whether current or deferred, and whether
in cash or in kind, received or to be received by an employee,
former employee, or the employee's legal successor for
services rendered to or for an employer, including
reimbursements received by or for an individual for medical
or educational expenses, health insurance premiums, or
employee expenses, or on account of a dependent care
spending account, legal services plan, any cafeteria plan
described in Section 125 of the Internal Revenue Code, or any
similar employee reimbursement.
(8) Proceeds received from the issuance of the taxpayer's own
stock, options, warrants, puts, or calls, or from the sale of the
taxpayer's treasury stock.
(9) Proceeds received on the account of payments from life
insurance policies.
(10) The following:
(A) Gifts or charitable contributions received, membership
dues received, and payments received for educational
courses, meetings, meals, or similar payments to a trade,
professional, or other similar association.
(B) Fundraising receipts received by any person when any
excess receipts are donated or used exclusively for
charitable purposes.
(C) Proceeds received by a religious or other nonprofit
organization, including proceeds realized with regard to
the organization's unrelated business taxable income.
(11) Damages received as the result of litigation that exceed
amounts that, if received without litigation, would be gross
receipts.
(12) Property, money, and other amounts received or
acquired by an agent on behalf of another that exceed the
agent's commission, fee, or other remuneration.
(13) Tax refunds, other tax benefit recoveries, and
reimbursements for the tax imposed under this article made
by entities that are part of the same combined taxpayer or
consolidated elected taxpayer group, and reimbursements
made by entities that are not members of a combined
taxpayer or consolidated elected taxpayer group that are
required to be made for economic parity among multiple
owners of an entity whose tax obligation under this article is
required to be reported and paid entirely by one (1) owner,
under the requirements of this article.
(14) Pension reversions.
(15) Contributions to capital.
(16) Sales or use taxes collected as a vendor or an out-of-state
seller on behalf of the taxing jurisdiction from a consumer or
other taxes the taxpayer is required by law to collect directly
from a purchaser and remit to a local, state, or federal tax
authority.
(17) In the case of receipts from the sale of cigarettes or
tobacco products by a wholesale dealer, retail dealer,
distributor, manufacturer, or seller, subject to IC 6-7, an
amount equal to the federal and state excise taxes paid by any
person on or for such cigarettes or tobacco products under
subtitle E of the Internal Revenue Code or IC 6-7.
(18) In the case of receipts from the sale of motor fuel,
gasoline, or special fuels by a person subject to IC 6-6-1.1,
IC 6-6-2.1, or IC 6-6-4.1, an amount equal to federal and state
excise taxes paid by any person on such motor fuel, gasoline,
or special fuel under Section 4081 of the Internal Revenue
Code, IC 6-6-1.1, IC 6-6-2.1, or IC 6-6-4.1.
(19) In the case of receipts from the sale of beer or
intoxicating liquor subject to IC 7.1 by a person holding a
permit issued under IC 7.1, an amount equal to federal and
state excise taxes paid by any person on or for such beer or
intoxicating liquor under subtitle E of the Internal Revenue
Code or IC 7.1.
(20) Receipts realized by a new motor vehicle dealer or used
motor vehicle dealer, from the sale or other transfer of a
motor vehicle, to another motor vehicle dealer for the purpose
of resale by the transferee motor vehicle dealer, but only if the
sale or other transfer was based upon the transferee's need to
meet a specific customer's preference for a motor vehicle.
(21) Receipts from a financial institution subject to the financial institutions tax under IC 6-5.5 for services provided to the financial institution in connection with the issuance, processing, servicing, and management of loans or credit accounts, if the financial institution and the recipient of the receipts have at least fifty percent (50%) of their ownership interests owned or controlled, directly or constructively through related interests, by common owners.
(22) Receipts realized from administering antineoplastic drugs and other cancer chemotherapy, biologicals, therapeutic agents, and supportive drugs in a physician's office to patients with cancer.
(23) Funds received or used by a mortgage broker that is not a dealer in intangibles, other than fees or other consideration, under a table funding mortgage loan or warehouse lending mortgage loan. As used in this subdivision, "mortgage broker" means a person assisting a buyer in obtaining a mortgage loan for a fee or other consideration paid by the buyer or a lender, or a person engaged in table funding or warehouse lending mortgage loans that are first lien mortgage loans.
(24) Property, money, and other amounts received by a professional employer organization from a client employer that exceed the administrative fee charged by the professional employer organization to the client employer.
(25) In the case of amounts retained as commissions by a permit holder under IC 4-31, an amount equal to the amounts specified under that article that must be paid to or collected as a tax and the amounts specified under that article to be used as purse money.
(26) Qualifying distribution center receipts.
(27) Any receipts for which the tax imposed by this article is prohibited by the Constitution or laws of the United States or the Constitution of the State of Indiana.
(28) Receipts subject to a financial institutions tax under IC 6-5.5 based on one (1) or more measurement periods that include the entire tax period under this article.
(29) Receipts subject to a utility receipts tax under IC 6-2.3.
(30) Receipts subject to an insurance premiums tax under IC 27-1-18-2 based on one (1) or more measurement periods that include the entire tax period under this article.
(31) Receipts of a person that solely facilitates or services one
(1) or more securitizations or similar transactions for a
taxpayer (as defined in IC 6-5.5-1-17). For purposes of this
subdivision, "securitization" means transferring one (1) or
more assets to one (1) or more persons and then issuing
securities backed by the right to receive payment from the
asset or assets so transferred.
Sec. 9. (a) For purposes of this section and section 8(26) of this
chapter, the following definitions apply:
(1) "Qualifying distribution center receipts" means receipts
of a supplier from qualified property that is delivered to a
qualified distribution center, multiplied by a quantity that
equals one (1) minus the Indiana delivery percentage.
(2) "Qualified property" means tangible personal property
delivered to a qualified distribution center that is shipped to
that qualified distribution center solely for further shipping
by the qualified distribution center to another location in
Indiana or elsewhere.
(3) "Further shipping" includes storing and repackaging
qualified property into smaller or larger bundles, so long as
the property is not subject to further manufacturing or
processing.
(4) "Qualified distribution center" means a warehouse or
other similar facility in Indiana that, for the qualifying year,
is operated by a person that is not part of a combined
taxpayer group and that has a qualifying certificate. However,
all warehouses or other similar facilities that are operated by
persons in the same taxpayer group and that are located
within one (1) mile of each other shall be treated as one (1)
qualified distribution center.
(5) "Qualifying year" means the calendar year to which the
qualifying certificate applies.
(6) "Qualifying period" means the period of July 1 of the
second year preceding the qualifying year through June 30 of
the year preceding the qualifying year.
(7) "Qualifying certificate" means an annual application
approved by the department from an operator of a
distribution center that has filed an application as prescribed
by the department.
(8) "Indiana delivery percentage" means the proportion of
the total property delivered to a destination inside Indiana
from the qualified distribution center during the qualifying
period compared with total deliveries from the qualified
distribution center everywhere during the qualifying period.
(b) An application for a qualifying certificate and annual fee
shall be filed and paid for each qualified distribution center. The
application and annual fee shall be filed on or before September 1
before the qualifying year or forty-five (45) days after the opening
of the distribution center, whichever is later. The applicant must
substantiate to the department's satisfaction that, for the
qualifying period, all persons operating the distribution center
have more than fifty percent (50%) of the cost of the qualified
property shipped to a location such that it would have a situs
outside Indiana under this article. The applicant must also
substantiate that the distribution center cumulatively had costs
from its suppliers equal to or exceeding five hundred million
dollars ($500,000,000) during the qualifying period. For purposes
of this subsection, "supplier" excludes any person that is part of
the consolidated elected taxpayer group, if applicable, of the
operator of the qualified distribution center. The department may
require the applicant to have an independent certified public
accountant certify that the calculation of the minimum thresholds
required for a qualified distribution center by the operator of a
distribution center has been made in accordance with generally
accepted accounting principles. The department shall issue or deny
the issuance of a certificate not later than sixty (60) days after the
receipt of the application. A denial is subject to appeal under
IC 6-8.1. If the operator files a timely appeal, the operator shall be
granted a qualifying certificate; however, the operator is liable for
any tax, interest, or penalty upon amounts claimed as qualifying
distribution center receipts, other than those receipts exempt under
this article, that would have otherwise not been owed by its
suppliers if the qualifying certificate were valid.
(c) If the distribution center is new and was not open for the
entire qualifying period, the operator of the distribution center
may request that the department grant a qualifying certificate. If
the certificate is granted and it is later determined that more than
fifty percent (50%) of the qualified property during that year was
not shipped to a location such that it would have a situs outside
Indiana under this article or if it is later determined that the
person that operates the distribution center had average monthly
costs from its suppliers of less than forty million dollars
($40,000,000) during that year, the operator of the distribution
center is liable for any tax, interest, or penalty upon amounts
claimed as qualifying distribution center receipts, other than those
receipts exempt under this article that would have not otherwise
been owed by its suppliers during the qualifying year if the
qualifying certificate were valid. For purposes of this subsection,
"supplier" excludes any person that is part of the consolidated
elected taxpayer group, if applicable, of the operator of the
qualified distribution center.
(d) When filing an application for a qualifying certificate under
this section, the operator of a qualified distribution center also
shall provide documentation, as the department requires, for the
department to ascertain the Indiana delivery percentage. The
department, upon issuing the qualifying certificate, also shall
certify the Indiana delivery percentage. The operator of the
qualified distribution center may appeal the department's
certification of the Indiana delivery percentage in the same manner
as an appeal is taken from the denial of a qualifying certificate
under this section.
(e) Not later than thirty (30) days after all appeals have been
exhausted, the operator of the qualified distribution center shall
notify the affected suppliers of qualified property that the suppliers
are required to file, not later than sixty (60) days after receiving
notice from the operator of the qualified distribution center,
amended reports for the affected calendar quarter or quarters or
calendar year, whichever applies. Any additional tax liability or tax
overpayment is subject to interest but is not subject to the
imposition of any penalty so long as the amended returns are
timely filed. The supplier of tangible personal property delivered
to the qualified distribution center shall include in its report of
taxable gross receipts the receipts from the total sales of property
delivered to the qualified distribution center for the calendar
quarter or calendar year, whichever applies, multiplied by the
Indiana delivery percentage for the qualifying year. This section
shall not be construed as imposing liability on the operator of a
qualified distribution center for the tax imposed by this article
arising from any change to the Indiana delivery percentage.
(f) If a distribution center is new and not open for the entire
qualifying period, the operator shall make a good faith estimate of
an Indiana delivery percentage for use by suppliers in their reports
of taxable gross receipts for the remainder of the qualifying period.
The operator of the facility shall disclose to the suppliers that the
Indiana delivery percentage is an estimate and is subject to
recalculation. By the due date of the next application for a
qualifying certificate, the operator shall determine the actual
Indiana delivery percentage for the estimated qualifying period
and proceed as provided in this section with respect to the
calculation and recalculation of the Indiana delivery percentage.
The supplier shall file, not later than sixty (60) days after receiving
notice from the operator of the qualified distribution center,
amended reports for the affected calendar quarter or quarters or
calendar year, whichever applies. Any additional tax liability or tax
overpayment is subject to interest but is not subject to the
imposition of any penalty so long as the amended returns are
timely filed.
(g) Qualifying certificates and Indiana delivery percentages
issued by the department must be open to public inspection and
shall be timely published by the department. A supplier relying in
good faith on a certificate issued under this section is not subject to
tax on the qualifying distribution center receipts under this section.
If it is determined that a qualifying certificate should not have been
issued because the statutory requirements were in fact not met, a
person receiving the qualifying certificate is responsible for paying
the tax, interest, and penalty upon amounts claimed as qualifying
distribution center receipts that would not otherwise have been
owed by the supplier if the qualifying certificate were available.
(h) The annual fee for a qualifying certificate is one hundred
thousand dollars ($100,000) for each qualified distribution center.
If a qualifying certificate is not issued, the annual fee is subject to
refund after the exhaustion of all appeals provided for by law. The
fee imposed under this subsection may be assessed in the same
manner as the tax imposed under this article.
(i) The department may require that adequate security be
posted by the operator of the distribution center on appeal when
the department disagrees that the applicant has met the minimum
thresholds for a qualified distribution center.
Sec. 10. In the case of a taxpayer when acting as a real estate
broker, "gross receipts" includes only the part of any fee for the
service of a real estate broker, or service of a real estate
salesperson associated with that broker, that is retained by the
broker and not paid to an associated real estate salesperson or
another real estate broker.
Sec. 11. (a) A taxpayer's method of accounting for gross receipts
for a tax period must be the same as the taxpayer's method of
accounting for federal income tax purposes for the taxpayer's
federal taxable year that includes the tax period. If a taxpayer's
method of accounting for federal income tax purposes changes, the
taxpayer's method of accounting for gross receipts under this
article must be changed accordingly.
(b) In calculating gross receipts, the following shall be deducted
to the extent included as a gross receipt in the current tax period
or reported as taxable gross receipts in a prior tax period:
(1) Cash discounts allowed and taken.
(2) Returns and allowances.
(3) Bad debts. For purposes of this subdivision, "bad debts"
means any debts that have become worthless or uncollectible
between the preceding and current quarterly tax payment
periods, have been uncollected for at least six (6) months, and
may be claimed as a deduction under Section 166 of the
Internal Revenue Code and the regulations adopted under
this section, or that could be claimed as such if the taxpayer
kept its accounts on the accrual basis. "Bad debts" does not
include:
(A) uncollectible amounts on property that remains in the
possession of the taxpayer until the full purchase price is
paid;
(B) expenses incurred in attempting to collect any account
receivable or incurred for any part of a debt recovered; or
(C) the fair market value of repossessed property.
(4) Any amount realized from the sale of an account
receivable but only to the extent the receipts from the
underlying transaction giving rise to the account receivable
were included in the gross receipts of the taxpayer.
Sec. 12. "Taxable gross receipts" means gross receipts that have
a situs in Indiana under this article.
Sec. 13. A person has "substantial nexus with Indiana" if the
person qualifies under any of the following:
(1) Owns or uses a part or all of its capital in Indiana.
(2) Holds a certificate of compliance with the laws of Indiana
authorizing the person to do business in Indiana.
(3) Has bright line presence in Indiana.
(4) Otherwise has nexus with Indiana to an extent that the
person can be required to remit the tax imposed under this
article under the Constitution of the United States.
Sec. 14. A person has "bright line presence" in Indiana for a
reporting period and for the remaining part of the calendar year
if the person meets any of the following:
(1) Has at any time during the calendar year property in
Indiana with a total value of at least fifty thousand dollars
($50,000). For the purpose of this subdivision, owned property
is valued at original cost, and rented property is valued at
eight (8) times the net annual rental charge.
(2) Has during the calendar year payroll in Indiana of at least
fifty thousand dollars ($50,000). Payroll in Indiana includes
all of the following:
(A) Any amount subject to withholding by the person
under IC 6-3.
(B) Any other amount the person pays as compensation to
an individual under the supervision or control of the
person for work done in Indiana.
(C) Any amount the person pays for services performed in
Indiana on its behalf by another.
(3) Has during the calendar year taxable gross receipts of at
least five hundred thousand dollars ($500,000).
(4) Has at any time during the calendar year within Indiana
at least twenty-five percent (25%) of the person's total
property, total payroll, or total gross receipts.
(5) Is domiciled in Indiana as an individual or for corporate,
commercial, or other business purposes.
Sec. 15. "Calendar quarter" means a three (3) month period
ending on March 31, June 30, September 30, or December 31.
Sec. 16. "Tax period" means the period over which a taxpayer
is required to pay the tax imposed under this article.
Sec. 17. "Agent" means a person authorized by another person
to act on its behalf to undertake a transaction for the other,
including any of the following:
(1) A person receiving a fee to sell financial instruments.
(2) A person retaining only a commission from a transaction
with the other proceeds from the transaction being remitted
to another person.
(3) A lottery sales agent holding a valid Indiana license.
Sec. 18. "Received" includes amounts accrued under the accrual
method of accounting.
Sec. 19. "Pass through entity" means:
(1) a corporation that is exempt from the adjusted gross
income tax under IC 6-3-2-2.8(2); or
(2) a:
(A) partnership;
(B) trust;
(C) limited liability company; or
(D) limited liability partnership;
that is not treated as a corporation under IC 6-3.
Sec. 20. "Department" refers to the department of state revenue.
Sec. 21. "Taxing unit" means a political subdivision described in IC 6-1.2-1-1.
Chapter 2. Combined Returns
Sec. 1. A group of two (2) or more persons may elect to be a consolidated elected taxpayer for purposes of this article if the group satisfies all of the following requirements:
(1) The group elects to include all persons having at least fifty percent (50%) of the value of their ownership interests owned or controlled, directly or constructively through related interests, by common owners during all or any part of the tax period, together with the common owners. At the election of the group, all entities that are not incorporated or formed under the laws of a state or of the United States and that meet the elected ownership test must be included in the group or all must be excluded from the group. The group shall notify the department of the foregoing elections before the due date of the return in which the election is to become effective. If fifty percent (50%) of the value of a person's ownership interests is owned or controlled by each of two (2) consolidated elected taxpayer groups formed under the fifty percent (50%) ownership or control test, that person is a member of each group for purposes of this chapter, and each group shall include in the group's taxable gross receipts fifty percent (50%) of that person's taxable gross receipts. Otherwise, all of that person's taxable gross receipts must be included in the taxable gross receipts of the consolidated elected taxpayer group of which the person is a member. The ownership or control of fifty percent (50%) of the value of a person's ownership interests by two (2) otherwise unrelated groups never forms the basis for consolidating the groups into a single consolidated elected taxpayer group and never permits any exclusion under section 3 of this chapter of taxable gross receipts between members of the two (2) groups. Subdivision (3) applies with respect to the elections described in this subdivision.
(2) The group makes the election to be treated as a consolidated elected taxpayer in the manner prescribed under section 5 of this chapter.
(3) Subject to review and audit by the department, the group
agrees that all of the following apply:
(A) The group shall file reports as a single taxpayer for at
least the next eight (8) calendar quarters following the
election so long as at least two (2) of the members of the
group meet the requirements of this subdivision.
(B) Before the expiration of the eighth calendar quarter
described in clause (A), the group shall notify the
department if it elects to cancel its designation as a
consolidated elected taxpayer. If the group does not so
notify the department, the election remains in effect for
another eight (8) calendar quarters.
(C) If, at any time during any of the eight (8) calendar
quarters following the election, a former member of the
group no longer meets the requirements under subdivision
(1), that member shall report and pay the tax imposed
under this article separately, as a member of a combined
taxpayer, or, if the former member satisfies the
requirements with respect to another consolidated elected
group, as a member of that consolidated elected group.
(D) The group agrees to the application of section 2 of this
chapter.
Sec. 2. A group of persons making the election under this
chapter shall report and pay tax on all of the group's taxable gross
receipts even if substantial nexus with Indiana does not exist for
one (1) or more persons in the group.
Sec. 3. (a) Members of a consolidated elected taxpayer group
shall exclude gross receipts among persons included in the
consolidated elected taxpayer group.
(b) As used in this section, "dealer transfer" means a transfer
of property that satisfies both of the following:
(1) The property is directly transferred by any means from
one (1) member of the group to another member of the group
that is a dealer in intangibles.
(2) The property is subsequently delivered by the dealer in
intangibles to a person that is not a member of the group.
(c) For a dealer transfer, a consolidated elected taxpayer group
shall not exclude, under this section, gross receipts from the
transfer described in subsection (b)(1).
Sec. 4. Gross receipts related to the sale or transmission of
electricity through the use of an intermediary regional
transmission organization approved by the Federal Energy
Regulatory Commission shall be excluded from taxable gross
receipts under section 3 of this chapter if all other requirements of
that section are met, even if the receipts are from and to the same
member of the group.
Sec. 5. (a) To make the election to be a consolidated elected
taxpayer, a group of persons shall notify the department of the
election in the manner prescribed by the department. The election
shall be made before the beginning of the first calendar quarter to
which the election applies.
(b) The election must be made on a form prescribed by the
department for that purpose and shall be signed by one (1) or more
individuals with authority, separately or together, to make a
binding election on behalf of all persons in the group.
(c) Any person acquired or formed after the filing of the
registration must be included in the group if the person meets the
requirements of this chapter, and the group shall notify the
department of any additions to the group with the next tax return
it files with the department.
Sec. 6. Each member of a consolidated elected taxpayer is jointly
and severally liable for the tax imposed by this article and any
penalties or interest on the tax. The department may require one
(1) person in the group to be the taxpayer for purposes of
registration and remittance of the tax, but all members of the
group are subject to assessment under IC 6-8.1.
Sec. 7. All persons, other than exempt persons, having more
than fifty percent (50%) of the value of their ownership interest
owned or controlled, directly or constructively through related
interests, by common owners during all or any part of the tax
period, together with the common owners, are members of a
combined taxpayer if those persons are not members of a
consolidated elected taxpayer under an election under this chapter.
Sec. 8. A combined taxpayer shall register, file returns, and pay
taxes under this article as a single taxpayer.
Sec. 9. A combined taxpayer shall not exclude taxable gross
receipts for transactions between its members or for transactions
with others that are not members.
Sec. 10. (a) A combined taxpayer shall pay to the department a
registration fee equal to the lesser of two hundred dollars ($200) or
twenty dollars ($20) for each person in the group. An additional fee
may not be imposed for the addition of new members to the group
once the group has remitted a fee of two hundred dollars ($200).
The fee shall be timely paid before the beginning of the first
calendar quarter.
(b) Any person acquired or formed after the filing of the registration must be included in the group if the person meets the requirements of section 1 of this chapter, and the group shall notify the department of any additions with the next quarterly tax return it files with the department.
Sec. 11. Each member of a combined taxpayer is jointly and severally liable for the tax imposed by this article and any penalties or interest on the tax. The department may require one (1) person in the group to be the taxpayer for purposes of registration and remittance of the tax, but all members of the group are subject to assessment under IC 6-8.1.
Chapter 3. Property Transferred Into Indiana
Sec. 1. Except as provided in this chapter, the following apply:
(1) A person shall include as taxable gross receipts the value of property the person transfers into Indiana for the person's own use within one (1) year after the person receives the property outside Indiana.
(2) In the case of an elected consolidated taxpayer or a combined taxpayer, the taxpayer shall include as taxable gross receipts the value of property that any of the taxpayer's members transferred into Indiana for the use of any of the taxpayer's members within one (1) year after the taxpayer receives the property outside Indiana.
Sec. 2. Property brought into Indiana not later than one (1) year after it is received outside Indiana by a person or group described in this chapter shall not be included as taxable gross receipts as required under section 1 of this chapter if the department ascertains that the property's receipt outside Indiana by the person or group followed by its transfer into Indiana not later than one (1) year was not intended in whole or in part to avoid in whole or in part the tax imposed under this article.
Sec. 3. The department may adopt rules under IC 4-22-2 necessary to administer this chapter.
Chapter 4. Imposition of Tax
Sec. 1. Beginning with the tax period that begins July 1, 2010, and continuing for every tax period thereafter, there is levied a commercial activity tax on each person with taxable gross receipts for the privilege of doing business in Indiana. For purposes of this article, "doing business" means engaging in any activity, whether legal or illegal, that is conducted for, or results in, gain, profit, or income, at any time during the calendar year. Persons on which the commercial activity tax is levied include, but are not limited to,
persons with substantial nexus with Indiana. The tax imposed
under this section is not a transactional tax and is not subject to
P.L.86-272, 73 Stat. 555. The tax imposed under this section is in
addition to any other taxes or fees imposed by law. The tax levied
under this section is imposed on the person receiving the gross
receipts and is not a tax imposed directly on a purchaser. The tax
imposed by this section is an annual privilege tax for the calendar
year that, in the case of calendar year taxpayers, is the annual tax
period and, in the case of calendar quarter taxpayers, contains all
quarterly tax periods in the calendar year. A taxpayer is subject to
the annual privilege tax for doing business during any part of the
calendar year.
Sec. 2. The tax imposed by this chapter is a tax on the taxpayer
and shall not be billed or invoiced to another person. Even if the
tax or any part of the tax is billed or invoiced and separately
stated, the amounts remain part of the price for purposes of the
sales and use taxes levied under IC 6-2.5. This chapter does not
prohibit a person from including in the price charged for a good or
service an amount sufficient to recover the tax imposed by this
chapter.
Sec. 3. Except as provided in this article, the tax levied under
this chapter for each tax period is the product of twenty-five
hundredths of one percent (0.25%) multiplied by the gross receipts
of the taxpayer.
Sec. 4. A taxpayer is entitled to a deduction against the gross
receipts that are subject to taxation in a calendar year under this
article. The amount of the deduction is equal to one thousand
dollars ($1,000).
Chapter 5. Situs of Gross Receipts to Indiana
Sec. 1. For purposes of this article, the determination that gross
receipts have a situs in Indiana is made in the same manner that
adjusted gross income is sourced to Indiana under IC 6-3-2.
Sec. 2. If the situs provisions of this chapter do not fairly
represent the extent of a person's activity in Indiana, the person
may request, or the department may require or permit, an
alternative method. The request must be made within the
applicable statute of limitations set forth in this article.
Sec. 3. The department may adopt rules under IC 4-22-2 to
provide additional guidance to the application of this section, and
provide alternative methods of determining the situs of gross
receipts that apply to all persons, or subset of persons, that are
engaged in similar business or trade activities.
Chapter 6. Registration With Department; Fee
Sec. 1. Not later than the later of October 1, 2010, or thirty (30) days before the end of the first calendar quarter in which the taxpayer has taxable gross receipts in a calendar year, each person subject to this article shall register with the department on the form prescribed by the department. However, the department shall prescribe procedures that exempt a person that is reasonably likely to have gross receipts of less than one thousand dollars ($1,000) in any calendar year from registering under this chapter.
Sec. 2. The form must include the following:
(1) The person's name.
(2) If applicable, the name of the state or country under the laws of which the person is incorporated.
(3) If applicable, the location of a person's principal office and the name and address of the officer or agent of the corporation in charge of the business.
(4) If applicable, the names of the person's president, secretary, treasurer, and statutory agent designated under IC 23, with the post office address of each.
(5) The kind of business in which the person is engaged, including applicable business or industry codes.
(6) If required by the department, the date of the beginning of the person's annual accounting period that includes January 1 of the taxable calendar year.
(7) If the person is not a corporation or a sole proprietor, the names of the person's owners and officers, if required by the department.
(8) The person's federal employer identification number or numbers or, if those are not applicable, the person's Social Security number or equivalent.
(9) All other information that the department requires to administer and enforce this article.
Sec. 3. Except as otherwise provided in this chapter, a person registering with the department under this chapter may not be required to pay a fee.
Sec. 4. If a person that has registered under this chapter is no longer a taxpayer subject to this article, the person shall notify the department that the person's registration should be canceled.
Chapter 7. Filing
Sec. 1. (a) Not later than forty (40) days after the end of each calendar quarter, every taxpayer shall file with the department a tax return in a form the department prescribes. The return must
include the amount of the taxpayer's taxable gross receipts for the
calendar quarter and must indicate the amount of tax due for the
calendar quarter.
(b) A taxpayer shall pay the tax imposed by this article on
taxable gross receipts for a calendar quarter with the return filed
under subsection (a).
(c) A tax return is not considered to be an incorrect reporting of
taxable gross receipts for purposes of this chapter if the return
reflects at least ninety-five percent (95%) and not more than one
hundred five percent (105%) of the actual taxable gross receipts
for the calendar quarter.
(d) The tax return filed for the fourth calendar quarter of a
calendar year is the annual return for the privilege tax imposed by
this article. The return must report any additional taxable gross
receipts not previously reported in the calendar year and must
adjust for any overreported taxable gross receipts in the calendar
year. If the taxpayer ceases to be a taxpayer before the end of the
calendar year, the last return the taxpayer is required to file is the
annual return for the taxpayer, and the taxpayer shall report any
additional taxable gross receipts not previously reported in the
calendar year and shall adjust for any overreported taxable gross
receipts in the calendar year.
Sec. 2. IC 6-8.1 applies to taxpayers under this article.
Sec. 3. (a) Any person remitting taxes exceeding ten thousand
dollars ($10,000) in any calendar quarter shall remit each tax
payment and, if required by the department, file the tax return or
the annual report electronically. The department may prescribe
the means for taxpayers to file and remit the tax electronically.
(b) A person required by this section to remit taxes or file
returns electronically may apply to the department, on the form
prescribed by the department, to be excused from that
requirement. The department may excuse a person from the
requirements of this subsection for good cause.
(c) If a person required to remit taxes or file a return
electronically under this section fails to do so, the department may
impose a penalty not to exceed the following:
(1) For either of the first two (2) calendar quarters the person
so fails, five percent (5%) of the amount of the payment that
was required to be remitted.
(2) For the third and any subsequent calendar quarters the
person so fails, ten percent (10%) of the amount of the
payment that was required to be remitted.
(d) The penalty imposed under this section is in addition to any other penalty imposed under this article or IC 6-8.1 and is considered as revenue arising from the tax imposed under this article.
Sec. 4. (a) If any person liable for the tax imposed under this article sells the trade or business, disposes of in any manner other than in the regular course of business at least seventy-five percent (75%) of the assets of the trade or business, or quits the trade or business, any tax owed by the person becomes due and payable immediately, and the person shall pay the tax under this section, including any applicable penalties and interest, not later than forty-five (45) days after the date of selling or quitting the trade or business. The person's successor shall withhold a sufficient amount of the purchase money to cover the amount due and unpaid until the former owner produces a receipt from the department showing that the amounts are paid or a certificate indicating that no taxes are due. If a purchaser fails to withhold purchase money, that person is personally liable up to the purchase money amount, for the amounts that are unpaid during the operation of the business by the former owner.
(b) The department may adopt rules under IC 4-22-2 regarding the issuance of certificates under this section, including the waiver of the need for a certificate if certain criteria are met.
Sec. 5. (a) The department may prescribe requirements for the keeping of records and other pertinent documents, the filing of copies of federal income tax returns and determinations, and computations reconciling federal income tax returns with the returns and reports required by IC 6-8.1. The department may require any person, by rule or notice served on that person, to keep those records that the department considers necessary to show whether, and the extent to which, a person is subject to this article. Those records and other documents must be open during business hours to the inspection of the department and shall be preserved for four (4) years unless the department, in writing, consents to their destruction within that period or by order requires that they be kept longer. If the records are normally kept by the person electronically, the person shall provide the records to the department electronically at the department's request.
(b) Any information required by the department under this article is confidential. However, the department shall make public an electronic list of all actively registered persons required to remit the tax under this article, including legal names, trade names,
addresses, and account numbers. In addition, the list must include
all persons that canceled their registration at any time during the
preceding four (4) calendar years, including the date the
registration was canceled.
Chapter 8. Deposits
Sec. 1. The local government distribution fund is established.
The department shall administer the fund.
Sec. 2. The treasurer of state may invest the money in the fund
not currently needed to meet the obligations of the fund in the same
manner as other public trust funds are invested. Interest that
accrues from the investments shall be allocated to and deposited in
the fund.
Sec. 3. Money in the fund at the end of a state fiscal year does
not revert to the state general fund.
Sec. 4. The net amount collected from the tax imposed under
this article, after making refunds and other adjustments for the
overpayment of taxes under this article, shall be deposited in the
local government distribution fund.
Sec. 5. After December 31, 2010, the department shall distribute
the balance in the fund at least monthly to taxing units.
Sec. 6. The amount to be distributed from the fund to a taxing
unit under this chapter is in proportion to the average value of
property used or held for a business purpose in the political
subdivision relative to the average value of property used or held
for a business purpose in all taxing units in Indiana. For purposes
of this section, the following apply:
(1) The value of property is the value determined in the
manner prescribed in IC 6-3-2-2 for the determination of the
property factor applicable to determining a taxpayer's
adjusted gross income derived from sources within Indiana
and reported to the department under this article.
(2) If property is located in more than one (1) taxing unit, the
value of the property shall be assigned to each taxing unit.
(3) The value of indefinite situs property shall be allocated
among political subdivisions in the manner provided in
IC 6-1.1-8.
Sec. 7. There is annually appropriated to the department from
the fund an amount sufficient to make the distributions required
by this chapter.
ARTICLE 1.9. EMPLOYER PAYROLL EXPENSE TAX
Chapter 1. Definitions
Sec. 1. The definitions in this chapter apply throughout this article.
Sec. 2. (a) "Compensation" means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services rendered in Indiana, including self-employment income, as defined in Section 1402 of the Internal Revenue Code.
(b) The term does not include remuneration:
(1) excluded from the federal definition of wages set forth in Section 3401 of the Internal Revenue Code; or
(2) paid to a team member (as defined in IC 6-3-2-2.7) who would not be subject to adjusted gross income tax if IC 6-3-2-2.7 were not in effect.
Sec. 3. "Department" refers to the department of state revenue.
Sec. 4. "Employee" means the following:
(1) An individual who is an employee (as defined in section 3401 of the Internal Revenue Code).
(2) An individual who earns self-employment income (as defined in Section 1402 of the Internal Revenue Code).
Sec. 5. (a) "Employer" means the following:
(1) An employer (as defined in Section 3401 of the Internal Revenue Code).
(2) An individual who earns self-employment income (as defined in Section 1402 of the Internal Revenue Code).
(b) The term does not include the following:
(1) The United States government.
(2) An agency or instrumentality of the United States government.
(3) The state.
(4) A state agency (as defined in IC 34-6-2-141).
(5) A body corporate and politic created by statute.
(6) A political subdivision (as defined in IC 34-6-2-110).
(7) A state educational institution (as defined in IC 21-7-13-32).
(8) A nonprofit college or university (as defined in IC 21-17-1-10).
(9) An organization described in Section 501(c)(3) of the Internal Revenue Code.
(10) Any other entity that is organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes if no part of the entity's income is used
for the private benefit or gain of any member, trustee,
shareholder, employee, or associate of the entity. For
purposes of this subdivision, the term "private benefit or
gain" does not include reasonable compensation paid to an
employee for work or services actually performed.
Sec. 6. "Fund" refers to the local government payroll
distribution fund established by IC 6-1.9-4-1.
Sec. 7. "Tax" refers to the employer payroll expense tax
imposed under this article.
Sec. 8. "Tax district" means a geographic area within which
resident taxpayers are taxed under IC 6-1.6 by the same taxing
units and at the same total rate.
Sec. 9. "Taxing unit" means a political subdivision described in
IC 6-1.2-1-1.
Chapter 2. Imposition of Tax
Sec. 1. An employer payroll expense tax is imposed on each
employer that pays compensation to one (1) or more employees
who:
(1) are Indiana residents; or
(2) perform work or render services in whole or in part in
Indiana;
after December 31, 2010. The incidence of the tax is solely upon the
employer subject to the tax and may not be transferred directly or
indirectly to the employee.
Sec. 2. The amount of the employer payroll expense tax imposed
on an employer for a calendar year is determined under STEP
TWO of the following formula:
STEP ONE: Determine the total amount of compensation
paid by the employer to employees during the calendar year.
STEP TWO: Multiply the STEP ONE amount by twenty-five
hundredths of one percent (0.25%).
Chapter 3. Returns and Remittances
Sec. 1. An employer who is subject to the tax imposed by this
article shall file an annual return with the department on or before
the thirtieth day following the close of the calendar year. An
employer may take a credit on an annual return filed under this
section for any taxes previously paid by the employer for that
calendar year under section 2 or 3 of this chapter.
Sec. 2. (a) Except as provided by subsection (b) or section 3 of
this chapter, an employer who is subject to the tax imposed by this
article shall file returns with the department and make payments
of the tax imposed by this article at the same time the employer
files withholding returns under IC 6-3-4. The amount of tax to be
paid by the employer with each withholding return is determined
under STEP TWO of the following formula:
STEP ONE: Determine the total amount of compensation
paid by the employer to employees during the period covered
by the withholding return.
STEP TWO: Multiply the STEP ONE amount by twenty-five
hundredths of one percent (0.25%).
(b) An employer who is required by IC 6-3-4-8.1 to remit
monthly withholding taxes due by electronic funds transfer or by
delivering a payment by cashier's check, certified check, or money
order shall remit the monthly tax payments required by subsection
(a) in the same manner and at the same time. If an employer's
remittance of employer payroll expense taxes is made by electronic
funds transfer, the employer is not required to file a monthly
return for those taxes. However, the employer shall file a quarterly
return before the twentieth day following the end of each calendar
quarter.
Sec. 3. (a) Except as provided by subsection (b), an employer
who is subject to the tax imposed by this article but is not required
to file withholding returns under IC 6-3-4 shall file monthly
returns with the department and make monthly payments of the
tax imposed by this article. The amount of tax to be paid by the
employer for each month is determined under STEP TWO of the
following formula:
STEP ONE: Determine the total amount of compensation
paid by the employer to employees during the month.
STEP TWO: Multiply the STEP ONE amount by twenty-five
hundredths of one percent (0.25%).
The employer shall pay taxes due under this section for a
particular month to the department not later than thirty (30) days
after the end of that month.
(b) If the department determines that:
(1) the employer's estimated monthly tax liability under this
article for the current calendar year; or
(2) the employer's average monthly tax liability under this
article for the preceding calendar year;
exceeds ten thousand dollars ($10,000), the employer shall remit
the monthly tax payments required by this section by electronic
funds transfer (as defined in IC 4-8.1-2-7) or by delivering in
person or by overnight courier a payment by cashier's check,
certified check, or money order to the department. If an
employer's remittance is made by electronic funds transfer, the
employer is not required to file a monthly return for those taxes.
However, the employer shall file a quarterly return before the
twentieth day following the end of each calendar quarter.
Sec. 4. The department shall require an employer to report the
amount of each remittance of tax payments under this chapter that
is attributable to each taxing district in which an employee of the
employer has a principal place of business or employment, as
determined at the beginning of the month in which the
compensation was earned.
Sec. 5. The department shall prescribe the procedures and
forms for making returns and payments under this chapter,
including a procedure for combining the returns required by this
section with the withholding returns required by IC 6-3-4.
Chapter 4. Administration and Deposit of Revenue
Sec. 1. The local government payroll distribution fund is
established. The department shall administer the fund.
Sec. 2. The treasurer of state may invest the money in the fund
not currently needed to meet the obligations of the fund in the same
manner as other public trust funds are invested. Interest that
accrues from the investments shall be allocated to and deposited in
the fund.
Sec. 3. Money in the fund at the end of a state fiscal year does
not revert to the state general fund.
Sec. 4. The net amount collected from the tax imposed under
this article, after making refunds and other adjustments for the
overpayment of taxes under this article, shall be deposited in the
fund.
Sec. 5. After December 31, 2010, the department shall distribute
the balance in the fund at least monthly to taxing units.
Sec. 6. The amount to be distributed from the fund to a taxing
unit is the amount determined under STEP TWO of the following
formula:
STEP ONE: For each taxing district in which a taxing unit
imposes a tax under IC 6-1.2, determine the total amount
being distributed that is attributable to employees who have
a principal place of business or employment in the taxing
district.
STEP TWO: Multiply the STEP ONE amount by a fraction.
The:
(A) numerator of the fraction is the amount of the budget
for the taxing unit approved by the county board (as
defined in IC 6-1.2-2-4) under IC 6-1.2 for the budget year
in which the tax being distributed was imposed; and
(B) denominator of the fraction is the sum of the budgets
approved by the county board (as defined in IC 6-1.2-2-4)
under IC 6-1.2 for all of the taxing units permitted to
impose a tax under IC 6-1.2 for the budget year in which
the tax being distributed was imposed.
Sec. 7. There is annually appropriated to the department from
the fund an amount sufficient to make the distributions required
by this chapter.
STATE GROSS RETAIL INCOME
GROSS FROM THE
RETAIL RETAIL UNITARY
TAX TRANSACTION
$ 0 less than $ 0 .07
$ 0.01 at least $ 0.07 but less than $ 0 .20
$ 0.02 at least $ 0.20 but less than $ 0 .34
$ 0.03 at least $ 0.34 but less than $ 0 .48
$ 0.04 at least $ 0.48 but less than $ 0 .60
$ 0.05 at least $ 0.60 but less than $ 0 .74
$ 0.06 at least $ 0.74 but less than $ 0 .87
$ 0.07 at least $ 0.87 but less than $1.00
On a retail unitary transaction in which the gross retail income received by the retail merchant is one dollar
(b) If the tax computed under subsection (a) results in a fraction of one-half cent ($0.005) or more, the amount of the tax shall be rounded to the next additional cent.
(1) seven and five-tenths percent
(2) the retail merchant's total gross retail income from taxable transactions made during the reporting period.
The amount determined under this section is the retail merchant's state gross retail and use tax liability regardless of the amount of tax the retail merchant actually collects.
(b) The allowance equals a percentage of the retail merchant's state gross retail and use tax liability accrued during a calendar year, specified as follows:
(1)
(2)
(A) was greater than sixty thousand dollars ($60,000); and
(B) did not exceed six hundred thousand dollars ($600,000).
(3)
(c) A retail merchant described in IC 6-2.5-4-5 or IC 6-2.5-4-6 is not entitled to the allowance provided by this section.
(1) the price per unit before the addition of state and federal taxes; multiplied by
(2) seven and five-tenths percent
The retail merchant shall collect the state gross retail tax prescribed in this section even if the transaction is exempt from taxation under IC 6-2.5-5.
(b) With respect to the sale of special fuel or kerosene which is dispensed from a metered pump, unless the purchaser provides an exemption certificate in accordance with IC 6-2.5-8-8, a retail merchant shall collect, for each unit of special fuel or kerosene sold, state gross retail tax in an amount equal to the product, rounded to the nearest one-tenth of one cent ($0.001), of:
(1) the price per unit before the addition of state and federal taxes; multiplied by
(2) seven and five-tenths percent
Unless the exemption certificate is provided, the retail merchant shall collect the state gross retail tax prescribed in this section even if the transaction is exempt from taxation under IC 6-2.5-5.
(1) The total number of gallons of gasoline sold from a metered pump during the period covered by the report.
(2) The total amount of money received from the sale of gasoline described in subdivision (1) during the period covered by the report.
(3) That portion of the amount described in subdivision (2) which represents state and federal taxes imposed under this article, IC 6-6-1.1, or Section 4081 of the Internal Revenue Code.
(4) The total number of gallons of special fuel sold from a metered pump during the period covered by the report.
(5) The total amount of money received from the sale of special
fuel during the period covered by the report.
(6) That portion of the amount described in subdivision (5) that
represents state and federal taxes imposed under this article,
IC 6-6-2.5, or Section 4041 of the Internal Revenue Code.
(7) The total number of gallons of E85 sold from a metered pump
during the period covered by the report.
(b) Concurrently with filing the report, the retail merchant shall
remit the state gross retail tax in an amount which equals six and
fifty-four ninety-eight hundredths percent (6.54%) (6.98%) of the
gross receipts, including state gross retail taxes but excluding Indiana
and federal gasoline and special fuel taxes, received by the retail
merchant from the sale of the gasoline and special fuel that is covered
by the report and on which the retail merchant was required to collect
state gross retail tax. The retail merchant shall remit that amount
regardless of the amount of state gross retail tax which the merchant
has actually collected under this chapter. However, the retail merchant
is entitled to deduct and retain the amounts prescribed in subsection
(c), IC 6-2.5-6-10, and IC 6-2.5-6-11.
(c) A retail merchant is entitled to deduct from the amount of state
gross retail tax required to be remitted under subsection (b) the amount
determined under STEP THREE of the following formula:
STEP ONE: Determine:
(A) the sum of the prepayment amounts made during the
period covered by the retail merchant's report; minus
(B) the sum of prepayment amounts collected by the retail
merchant, in the merchant's capacity as a qualified distributor,
during the period covered by the retail merchant's report.
STEP TWO: Subject to subsections (d) and (f), for qualified
reporting periods beginning after June 30, 2009, and ending
before July 1, 2020, determine the product of:
(A) eighteen cents ($0.18); multiplied by
(B) the number of gallons of E85 sold at retail by the retail
merchant during the period covered by the retail merchant's
report.
STEP THREE: Add the amounts determined under STEPS ONE
and TWO.
For purposes of this section, a prepayment of the gross retail tax is
presumed to occur on the date on which it is invoiced.
(d) The total amount of deductions allowed under subsection (c)
STEP TWO may not exceed the amount of money that the budget
agency determines is available in the retail merchant E85 deduction
reimbursement fund established under IC 15-15-12-30.5 for the
deductions for all retail merchants in a particular qualified reporting
period. A retail merchant is not required to apply for an allocation of
deductions under subsection (c) STEP TWO. Before August 1 of each
year, the budget agency shall estimate whether the amount of
deductions from the immediately preceding qualified reporting period
that are subject to reimbursement under IC 15-15-12-30.5(f) and the
deductions expected to be reported under subsection (c) STEP TWO
for the qualified reporting periods beginning after December 31 and
ending before April 1 of the following year will exceed the amount of
money available in the retail merchant E85 deduction reimbursement
fund for the deductions. If the budget agency determines that the
amount of money in the retail merchant E85 deduction reimbursement
fund is insufficient to cover the amount of the deductions expected to
be reported, the budget agency shall publish in the Indiana Register a
notice that the deduction program under subsection (c) STEP TWO is
suspended with respect to the qualified reporting periods occurring in
the following calendar year and that no deductions will be granted for
retail transactions occurring in the qualified reporting periods occurring
in the following calendar year.
(e) As used in this section, "qualified reporting period" refers to a
reporting period beginning after December 31 and ending before April
1 of each year.
(f) The budget agency may suspend the deduction program under
subsection (c) STEP TWO for a particular year at any time during a
qualified reporting period if the budget agency determines that the
amount of money in the retail merchant E85 deduction reimbursement
fund and the amount of money that will be transferred to the fund on
July 1 will not be sufficient to reimburse the deductions expected to
occur before the deduction program for the year ends on March 31. The
budget agency shall immediately provide notice to the participating
retail merchants of the decision to suspend the deduction program for
that year.
(b) The department shall deposit those collections in the following manner:
(1) Ninety-nine and
(2)
thousandths of one percent (0.67%) (0.627%) of the collections
shall be paid into the public mass transportation fund established
by IC 8-23-3-8.
(3) Twenty-nine Twenty-seven thousandths of one percent
(0.029%) (0.027%) of the collections shall be deposited into the
industrial rail service fund established under IC 8-3-1.7-2.
(4) One hundred twenty-three fifteen thousandths of one percent
(0.123%) (0.115%) of the collections shall be deposited into the
commuter rail service fund established under IC 8-3-1.5-20.5.
(b) Except as provided in section 1.5 of this chapter, each taxable year, a tax at the rate of eight and five-tenths percent (8.5%) of adjusted gross income is imposed on that part of the adjusted gross income derived from sources within Indiana of every corporation.
excise tax (IC 7.1-4-3); the wine excise tax (IC 7.1-4-4); the hard cider
excise tax (IC 7.1-4-4.5); the malt excise tax (IC 7.1-4-5); the
petroleum severance tax (IC 6-8-1); the various innkeeper's taxes
(IC 6-9); the various food and beverage taxes (IC 6-9); the county
admissions tax (IC 6-9-13 and IC 6-9-28); the regional transportation
improvement income tax (IC 8-24-17); the oil inspection fee
(IC 16-44-2); the emergency and hazardous chemical inventory form
fee (IC 6-6-10); the penalties assessed for oversize vehicles (IC 9-20-3
and IC 9-30); the fees and penalties assessed for overweight vehicles
(IC 9-20-4 and IC 9-30); the underground storage tank fee (IC 13-23);
the solid waste management fee (IC 13-20-22); and any other tax or fee
that the department is required to collect or administer.
(1) IC 6-2.5-2-2, as amended by this act;
(2) IC 6-2.5-6-7, as amended by this act;
(3) IC 6-2.5-6-10, as amended by this act;
(4) IC 6-2.5-7-3, as amended by this act; and
(5) IC 6-2.5-7-5, as amended by this act;
all transactions, except the furnishing of public utility, telephone, or cable television services and commodities by retail merchants described in IC 6-2.5-4-5, IC 6-2.5-4-6, and IC 6-2.5-4-11 shall be considered as having occurred after December 31, 2010, to the extent that delivery of the property or services constituting selling at retail is made after that date to the purchaser or to the place of delivery designated by the purchaser. However, a transaction shall be considered as having occurred before January 1, 2011, to the extent that the agreement of the parties to the transaction was entered into before January 1, 2011, and payment for the property or services furnished in the transaction is made before January 1, 2011, notwithstanding the delivery of the property or services after December 31, 2010.
(b) With respect to a transaction constituting the furnishing of public utility, telephone, or cable television services and commodities, only transactions for which the charges are collected upon original statements and billings dated after October 31, 2010, shall be considered as having occurred after December 31, 2010.
(c) The legislative council shall provide for the preparation of legislation for introduction in the 2011 regular session of the general assembly to correct and revise statutes affected by this act.
(d) Notwithstanding IC 6-1.1-20, IC 6-1.1-20 applies to bonds and leases for capital projects payable from any combination of a local resident income tax imposed under IC 6-1.6, a fire and safety
benefit tax imposed under IC 6-1.7, a commercial activity tax
imposed under IC 6-1.8, or an employer payroll expense tax
imposed under IC 6-1.9.
(e) This subsection does not apply to an exemption granted
under IC 6-1.1-10 or another law. A deduction from the assessed
value of property subject to property taxation granted by
IC 6-1.1-12, IC 6-1.1-12.1, or another law shall not be treated as a
deduction or an exemption from a fire and safety benefit tax
imposed under IC 6-1.7.
(f) A taxpayer who is subject in a taxable year to different state
adjusted gross income tax rates shall pay taxes at each rate equal
to the product of:
(1) the amount of taxes the taxpayer would owe if the tax rate
had been imposed during the taxpayer's entire taxable year;
multiplied by
(2) a fraction:
(A) the numerator of which equals the number of days
during the taxpayer's taxable year during which the tax
rate was in effect; and
(B) the denominator of which equals the total number of
days in the taxpayer's taxable year.
The department of state revenue shall provide instructions to
employers and taxpayers to implement this subsection.
(g) The department of local government finance shall assist
political subdivisions and county boards of tax adjustment with the
implementation of this act.
(h) This SECTION expires January 1, 2012.
