Bill Text: IN SB0031 | 2011 | Regular Session | Introduced
Bill Title: Local option taxes for counties, cities, and towns.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2011-08-21 - Bill Withdrawn [SB0031 Detail]
Download: Indiana-2011-SB0031-Introduced.html
Citations Affected: IC 6-1.1-20.6-10; IC 6-2.5-11; IC 6-3-4-17;
IC 6-3.1-19-1; IC 6-3.5; IC 6-8.1; IC 36-1-8-5.1; IC 36-7.
Synopsis: Local option taxes for counties, cities, and towns. Allows
cities and towns, except Indianapolis, to adopt a municipal income tax
on individuals who reside within the municipality, regardless of their
place of employment. Provides that the maximum rate is 1%. Requires
the revenue to be deposited in the municipality's general fund, and
allows the municipality to use the revenue for any general fund
purpose. Requires the tax to be re-adopted every four years using a
ratification ordinance. Allows counties, cities, and towns to adopt a
local sales tax applicable to tangible personal property delivered (not
by common carrier) within the geographic boundaries of the political
subdivision. Requires the tax to be re-adopted every four years using
a ratification ordinance. Provides that the local option sales tax revenue
may be used for any lawful purpose. Provides that the department of
state revenue shall maintain several data bases of local sales tax data
associated with the local option sales tax, in accordance with the
requirements of the Streamlined Sales and Use Tax Agreement. Adds
the municipal option income tax and local option sales tax to the list of
local taxes that may be captured by the state in the case of a local unit
failing to make timely debt payments and sources of revenue that may
be used by the local unit to make debt service payments. Requires,
beginning with the individual income tax return for 2011, the
department of state revenue to include on the adjusted gross income tax
return a requirement that the taxpayer identify the city or town, if any,
where the taxpayer's principal place of residence is located.
Effective: July 1, 2011.
January 5, 2011, read first time and referred to Committee on Tax and Fiscal Policy.
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A BILL FOR AN ACT to amend the Indiana Code concerning
taxation and to make an appropriation.
(1) the principal and interest payable during a calendar year on bonds; and
(2) lease rental payments payable during a calendar year on leases;
of a political subdivision payable from ad valorem property taxes.
(b) Political subdivisions are required by law to fully fund the payment of their debt obligations in an amount sufficient to pay any debt service or lease rentals on outstanding obligations, regardless of any reduction in property tax collections due to the application of tax credits granted under this chapter. Any reduction in collections must be applied to the other funds of the political subdivision after debt service or lease rentals have been fully funded.
(c) Upon the failure of a political subdivision to pay any of the
political subdivision's debt service obligations during a calendar year
when due, the treasurer of state, upon being notified of the failure by
a claimant, shall pay the unpaid debt service obligations that are due
from money in the possession of the state that would otherwise be
available for distribution to the political subdivision under any other
law, deducting the payment from the amount distributed. A deduction
under this subsection must be made:
(1) first from distributions of:
(A) county adjusted gross income tax distributions under
IC 6-3.5-1.1, county option income tax distributions under
IC 6-3.5-6, or county economic development income tax
distributions under IC 6-3.5-7 that would otherwise be
distributed to the county under the schedule in IC 6-3.5-1.1-10,
IC 6-3.5-1.1-21.1, IC 6-3.5-6-16, IC 6-3.5-6-17.3,
IC 6-3.5-7-17, and IC 6-3.5-7-17.3;
(B) municipal option income tax distributions under
IC 6-3.5-9; and
(C) local option gross retail tax distributions under
IC 6-3.5-10; and
(2) second from any other undistributed funds of the political
subdivision in the possession of the state.
(d) This section shall be interpreted liberally so that the state shall
to the extent legally valid ensure that the debt service obligations of
each political subdivision are paid when due. However, this section
does not create a debt of the state.
(1) "Agreement" means the Streamlined Sales and Use Tax Agreement.
(2) "Certified automated system" means software certified jointly by the states that are signatories to the agreement to calculate the tax imposed by each jurisdiction on a transaction, to determine the amount of tax to remit to the appropriate state, and to maintain a record of the transaction.
(3) "Certified service provider" means an agent certified jointly by the states that are signatories to the agreement to perform all of the seller's sales tax functions.
(4) "Person" means an individual, a trust, an estate, a fiduciary, a partnership, a limited liability company, a limited liability partnership, a corporation, or any other legal entity.
(5) "Sales tax" means:
(A) the state gross retail tax levied under IC 6-2.5; and
(B) the local option gross retail tax imposed under IC 6-3.5-10.
(6) "Seller" means any person making sales, leases, or rentals of personal property or services.
(7) "State" means any state of the United States and the District of Columbia.
(8) "Use tax" means the use tax levied under IC 6-2.5.
(b) As used in this section, "taxing jurisdiction" means the geographical territory of the state or a political subdivision in which a sales or use tax is in effect.
(c) The department shall maintain a data base that describes boundary changes for all local taxing jurisdictions. The data base must include a description of each change and the effective date of the change.
(d) The department shall maintain a data base of all sales and use tax rates for each jurisdiction in Indiana that levies a sales or use tax. The state and each political subdivision in the data base must be identified by codes that conform with Federal Information Processing Standards, as developed by the National Institute of Standards and Technology.
(e) The department shall maintain a data base that assigns to each five (5) digit and nine (9) digit ZIP code in Indiana the taxing jurisdictions within the ZIP code that levy a sales or use tax in the taxing jurisdiction.
(f) The department shall maintain the data bases described in subsections (c) through (e) in accordance with the requirements of the agreement.
(g) The department shall allow sellers and certified service providers access to the data bases described in subsections (c) through (e).
(h) The department may contract with a vendor to maintain the data bases that the department is required to maintain under this section.
or certified service provider is not liable for the tax, penalties, and
interest associated with charging and collecting the incorrect
amount of sales or use tax for a retail transaction if:
(1) the seller or certified service provider has relied on
erroneous data provided by the department in the data base
described in section 13(e) of this chapter; and
(2) the erroneous data provided by the department in the data
base described in section 13(e) of this chapter is the reason
that the seller or certified service provider charged and
collected the incorrect amount of sales or use tax on the retail
transaction.
(b) If the department:
(1) corrects the errors in the data base described in section
13(e) of this chapter; and
(2) provides the seller or certified service provider with notice
of the corrected data;
the relief provided by subsection (a) ceases ten (10) days after the
seller or certified service provider receives the department's notice
of corrected data.
(1) develop a quarterly report that summarizes the amount reported to and processed by the department under section 4.1(h) of this chapter, section 15.7(a)(3) of this chapter, IC 6-3.5-1.1-18(c), IC 6-3.5-6-22(c), and IC 6-3.5-7-18(c)
(2) make the quarterly report available to county auditors and city and town fiscal officers within forty-five (45) days after the end of the calendar quarter.
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
(2) IC 6-3.5-1.1 (county adjusted gross income tax);
(3) IC 6-3.5-6 (county option income tax);
(4) IC 6-3.5-7 (county economic development income tax);
(5) IC 6-3.5-9 (municipal option income tax);
as computed after the application of all credits that under IC 6-3.1-1-2 are to be applied before the credit provided by this chapter.
Chapter 9. Municipal Option Income Tax
Sec. 1. This chapter applies to all cities and towns, except Indianapolis.
Sec. 2. As used in this chapter, "adjusted gross income" has the meaning set forth in IC 6-3-1-3.5.
Sec. 3. As used in this chapter, "department" refers to the department of state revenue.
Sec. 4. As used in this chapter, "fiscal body" means:
(1) the common council, for a city; and
(2) the town council, for a town.
Sec. 5. As used in this chapter, "municipal option income tax" refers to the tax authorized by this chapter.
Sec. 6. As used in this chapter, "municipal taxpayer", as the term relates to a particular municipality, means any individual who resides in that municipality on the date specified in section 18 of this chapter.
Sec. 7. As used in this chapter, "municipality" means a city or town.
Sec. 8. (a) The fiscal body of a municipality may adopt an ordinance to impose a municipal option income tax on the adjusted gross income of municipal taxpayers as provided in section 10 of this chapter.
(b) A fiscal body shall hold at least one (1) public hearing on the proposed ordinance before the public hearing at which an ordinance is adopted under subsection (a). The fiscal body shall give public notice of the public hearing under IC 5-3-1.
Sec. 9. The municipal option income tax may be imposed in increments of one-tenth percent (0.1%) but not to exceed a rate of one percent (1%) on the adjusted gross income of municipal taxpayers.
Sec. 10. (a) To impose a municipal option income tax to take effect on October 1 of a year, the fiscal body of a municipality must adopt an ordinance after March 31 but before August 1 of that year. The ordinance must state substantially the following:
"The ________ (insert name of municipality) ________ (insert City or Town) Council imposes the municipal option income
tax on the residents of ________ (insert name of municipality).
The income tax is imposed at a rate of _____ percent
(_____%). The income tax takes effect October 1 ______
(insert year). The tax will continue for four (4) years unless an
ordinance changing the rate or a ratification ordinance
continuing the tax is adopted during that four (4) year
period.".
(b) An ordinance adopted under subsection (a) takes effect
October 1 of the year in which the ordinance is adopted. However,
a fiscal body may not impose a municipal option income tax that
takes effect before October 1, 2012.
Sec. 11. (a) The fiscal body of a municipality may increase or
decrease the rate of a municipal option income tax. To increase or
decrease the rate, the fiscal body must, after March 31 but before
August 1 of a year, adopt an ordinance. The ordinance must state
substantially the following:
"The ________ (insert name of municipality) ________ (insert
City or Town) Council increases (or decreases) the rate of the
municipal option income tax. The tax rate is increased (or
decreased) from (insert current rate) to (insert proposed
rate). This tax rate increase (or decrease) takes effect October
1 of this year. The tax will continue for four (4) years unless
an ordinance changing the rate or a ratification ordinance
continuing the tax is adopted during that four (4) year
period.".
(b) A fiscal body shall hold at least one (1) public hearing on the
proposed ordinance before the public hearing at which an
ordinance is adopted under subsection (a). The fiscal body shall
give public notice of the public hearing under IC 5-3-1.
(c) An ordinance adopted under this section takes effect October
1 of the year in which the ordinance is adopted.
(d) An ordinance adopted under this section serves as a
ratification ordinance under section 13 of this chapter.
Sec. 12. (a) The fiscal body of a municipality may rescind the
municipal option income tax by adopting an ordinance to rescind
the tax after March 31 but before August 1 of a year.
(b) A fiscal body shall hold at least one (1) public hearing on the
proposed ordinance before the public hearing at which an
ordinance is adopted under subsection (a). The fiscal body shall
give public notice of the public hearing under IC 5-3-1.
(c) An ordinance adopted under this section takes effect October
1 of the year in which the ordinance is adopted.
Sec. 13. (a) A municipal option income tax remains in effect until the earlier of:
(1) the date the tax is rescinded; or
(2) September 30 of the fourth year after the year in which:
(A) the tax was imposed;
(B) the rate was last changed; or
(C) a ratification ordinance was previously adopted;
whichever is latest.
(b) The fiscal body of a municipality must adopt a ratification ordinance to continue the tax in effect after September 30 of the fourth year after the year in which the tax was imposed, the rate was last changed, or a previous ratification ordinance was adopted, whichever is latest. A ratification ordinance must be adopted not later than August 1 of this fourth year. The ordinance must state substantially the following:
"The ________ (insert name of municipality) ________ (insert City or Town) Council ratifies the imposition of the income tax on the residents of (insert name of municipality). The income tax remains in effect at a rate of _____ percent (_____%). The tax will continue for four (4) years unless an ordinance changing the rate or a ratification ordinance continuing the tax is adopted during that four (4) year period.".
Sec. 14. Immediately upon adoption of any ordinance under this chapter, the fiscal officer of the municipality shall send a certified copy of the ordinance to the department by certified mail.
Sec. 15. (a) Revenue derived from the imposition of the municipal option income tax shall, in the manner prescribed by this section, be distributed to the municipality that imposed it.
(b) Before August 2 of each calendar year, the budget agency shall certify to the fiscal officer of each adopting municipality the amount of municipal option income tax revenue that the budget agency determines has been:
(1) received from municipal taxpayers of that municipality for a taxable year ending before the calendar year in which the determination is made; and
(2) reported on an annual return or amended return processed by the department in the state fiscal year ending before July 1 of the calendar year in which the determination is made;
as adjusted for refunds of municipal option income tax made in the state fiscal year plus the amount of interest in the municipality's
account that has been accrued and has not been included in a
certification made in a preceding year. The amount certified is the
municipality's certified distribution for the following calendar
year.
(c) The amount certified under subsection (b) shall be adjusted
under subsections (d), (e), and (f). The budget agency shall provide
each municipality's fiscal body with an informative summary of the
calculations used to determine the certified distribution. The
summary of calculations must include:
(1) the amount reported on individual income tax returns
processed by the department during the previous fiscal year;
(2) adjustments for over distributions in prior years;
(3) adjustments for clerical or mathematical errors in prior
years;
(4) adjustments for tax rate changes; and
(5) the amount of excess account balances to be distributed
under section 16 of this chapter.
(d) The budget agency shall certify an amount less than the
amount determined under subsection (b) if the budget agency
determines that the reduced distribution is necessary to offset
overpayments made in a calendar year before the calendar year of
the distribution. The budget agency may reduce the amount of the
certified distribution over several calendar years so that any
overpayments are offset over several years rather than in one (1)
lump sum.
(e) The budget agency shall adjust the certified distribution of
a municipality to correct for any clerical or mathematical errors
made in any previous certification under this section. The budget
agency may reduce the amount of the certified distribution over
several calendar years so that any adjustment under this
subsection is offset over several years rather than in one (1) lump
sum.
(f) This subsection applies to a municipality that:
(1) initially imposed the municipal option income tax; or
(2) increases the municipal option income rate;
under this chapter in the same calendar year in which the budget
agency makes a certification under this section. The budget agency
shall adjust the certified distribution of a municipality to provide
for a distribution in the immediately following calendar year and
in each calendar year thereafter. The budget agency shall provide
for a full transition to certification of distributions as provided in
subsection (b)(1) through (b)(2).
(g) On the first business day in May of each year, one-half (1/2) of each municipality's certified distribution for a calendar year shall be distributed from its account to the municipality's fiscal officer. The other one-half (1/2) shall be distributed on the first business day in November of that calendar year.
Sec. 16. (a) A special account within the state general fund shall be established for each municipality adopting a municipal option income tax. Revenue derived from the imposition of the municipal option income tax shall be deposited in that municipality's special account in the state general fund. Money in the special account is appropriated to make the distributions required by this chapter.
(b) Income earned on money held in a municipality's special account under subsection (a) becomes a part of that account.
(c) Revenue remaining in a municipality's special account at the end of a state fiscal year does not revert to any other account in the state general fund.
(d) Before October 2 of each year, the department shall submit a report to each municipality's fiscal officer indicating the balance in the municipality's special account as of the cutoff date set by the budget agency.
(e) If the budget agency determines that a sufficient balance exists in a municipality's account that exceeds the amount necessary, when added to other money that will be deposited in the account after the date of the determination, to make certified distributions to the municipality in the ensuing year, the budget agency shall make a supplemental distribution to a municipality from the municipality's special account. A determination under this subsection must be made before October 2.
(f) A supplemental distribution described in subsection (e) must be:
(1) made in January of the ensuing calendar year; and
(2) allocated in the same manner as certified distributions for deposit in a municipality's rainy day fund established under IC 36-1-8-5.1.
Sec. 17. (a) The department of local government finance may not reduce the general fund property tax levy of a municipality receiving a distribution under this chapter in that year to offset the amount of the municipality's certified distribution for that year. However, this subsection does not prevent the department of local government finance from reducing the general fund property tax levy of a municipality as a result of a budget reduction under IC 6-1.1-17-16.
(b) A municipality shall treat its certified distribution for a particular calendar year as a part of the municipality's general fund for that same calendar year for purposes of fixing the municipality's budget.
(c) A municipality may use distributions received under this chapter for any purpose for which the municipality may use its general fund.
Sec. 18. (a) For purposes of this chapter, an individual shall be treated as a municipal taxpayer of the municipality in which the individual:
(1) maintains a residence, if the individual maintains only one (1) residence in Indiana;
(2) if subdivision (1) does not apply, registers to vote;
(3) if subdivision (1) or (2) does not apply, registers the individual's personal automobile; or
(4) if subdivision (1), (2), or (3) does not apply, spends the majority of the individual's time in Indiana during the taxable year in question.
(b) Whether an individual is a municipal taxpayer is determined on January 1 of the calendar year in which the individual's taxable year commences. If an individual changes the location of the individual's residence to another location in Indiana during a calendar year, the individual's liability for municipal option income tax is not affected.
Sec. 19. If a municipal option income tax is not in effect during an individual taxpayer's entire taxable year, the amount of municipal option income tax that the taxpayer owes for that taxable year equals the product of:
(1) the amount of the municipal option income 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 equals the number of days during the taxpayer's taxable year that the municipal option income tax was in effect. The denominator equals the total number of days in the taxpayer's taxable year.
Sec. 20. (a) If, for a particular taxable year, a municipal taxpayer is allowed, or a municipal taxpayer and the municipal taxpayer's spouse who file a joint return are allowed, a credit for the elderly or the totally disabled under Section 22 of the Internal Revenue Code, the municipal taxpayer is entitled or the municipal taxpayer and the municipal taxpayer's spouse are entitled to a credit against their municipal option income tax liability for that
same taxable year. The amount of the credit equals the lesser of the
following:
(1) The product of:
(A) the credit for the elderly or the totally disabled for the
same taxable year; multiplied by
(B) a fraction. The numerator is the municipal option
income tax rate imposed against the municipal taxpayer or
the municipal taxpayer and the municipal taxpayer's
spouse. The denominator is fifteen-hundredths (0.15).
(2) The amount of municipal option income tax imposed on
the municipal taxpayer or the municipal taxpayer and the
municipal taxpayer's spouse.
(b) If a municipal taxpayer and the municipal taxpayer's spouse
file a joint return and are subject to different municipal option
income tax rates for the same taxable year, they shall compute the
credit under this section by using the formula provided in
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).
Sec. 21. If for any taxable year a municipal taxpayer is subject
to different tax rates for the municipal option income tax imposed
by a municipality, the taxpayer's municipal option income tax rate
for that municipality and that taxable year is the rate determined
in the last STEP of the following STEPS:
STEP ONE: Multiply the number of months in the taxpayer's
taxable year that precede October 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 September 30 by the rate in effect
after the rate change.
STEP THREE: Divide the sum of the amounts determined
under STEPS ONE and TWO by twelve (12).
Sec. 22. (a) 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) remittances;
(5) incorporation of the provisions of the Internal Revenue
Code;
(6) penalties and interest;
(7) exclusion of military pay credits for withholding; and
(8) exemptions and deductions;
apply to the imposition, collection, and administration of the municipal option income tax. The municipal option income tax is a listed tax and an income tax for purposes of IC 6-8.1.
(b) IC 6-3-1-3.5(a)(5), IC 6-3-3-3, IC 6-3-3-5, and IC 6-3-5-1 do not apply to the municipal option income tax.
(c) Each employer shall report to the department the amount of withholdings attributable to the municipal taxpayers for each municipality in which the municipal option income tax is in effect. This report shall be submitted annually with the employer's withholding report.
Chapter 10. Local Option Gross Retail Tax
Sec. 1. Except as otherwise provided in this chapter, the definitions set forth in:
(1) IC 6-2.5-1; and
(2) IC 36-1-2;
apply throughout this chapter.
Sec. 2. As used in this chapter, "adopting county or municipality" means an eligible county or municipality that has adopted the local option gross retail tax.
Sec. 3. As used in this chapter, "gross retail income" has the meaning set forth in IC 6-2.5-1-5, except that the term does not include taxes imposed under IC 6-2.5 or IC 6-9.
Sec. 4. As used in this chapter, "local option gross retail tax district" of an adopting county or municipality means the geographic territory in which the local option gross retail tax adopted by the adopting county or municipality is imposed.
Sec. 5. As used in this chapter, "municipality" means a city or town.
Sec. 6. (a) Using procedures described in this chapter, the fiscal body of a county or municipality may adopt an ordinance to impose or rescind the local option gross retail tax in the local option gross retail tax district of the eligible county or municipality.
(b) Before the fiscal body of a county or municipality may adopt an ordinance to impose or rescind a tax under this chapter, the fiscal body of the eligible county or municipality must hold a public hearing on the proposed ordinance. The fiscal body of the eligible
county or municipality must provide notice to the public in
accordance with IC 5-3-1 of the date, time, and place of the public
hearing.
Sec. 7. (a) An ordinance imposing the local option gross retail
tax under this chapter must specify the date the local option gross
retail tax takes effect. A tax imposed under this chapter must take
effect on the first day of a calendar quarter. A tax imposed under
this chapter may not take effect until at least sixty (60) days after
the date the ordinance imposing the tax is adopted.
(b) An ordinance to rescind the local option gross retail tax must
specify the date the rescission of the tax takes effect.
Sec. 8. (a) An ordinance imposing the local option gross retail
tax under this chapter must specify the boundaries of the eligible
county or municipality on the effective date of the local option
gross retail tax. The boundaries of the eligible county or
municipality on the effective date of the local option gross retail tax
are the initial boundaries of the local option gross retail tax district
of the eligible county or municipality.
(b) If at any time the boundaries of an adopting county or
municipality do not coincide with the boundaries of the local option
gross retail tax district of the adopting county or municipality, the
fiscal body of an adopting county or municipality may adopt an
ordinance to alter the boundaries of the local option gross retail tax
district to coincide with the boundaries of the adopting county or
municipality.
(c) An ordinance adopted under subsection (b) must specify the
date on which the altered boundaries of the local option gross retail
tax district take effect. The altered boundaries of the local option
gross retail tax district must take effect on the first day of a
calendar quarter. The altered boundaries of the local option gross
retail tax district may not take effect until at least sixty (60) days
after the date on which the ordinance is adopted.
(d) An ordinance adopted under subsection (b) must specify the
changes to the boundaries of the local option gross retail tax
district of the adopting county.
Sec. 9. (a) If the fiscal body of a county or municipality adopts
an ordinance under this chapter, the fiscal body of the eligible
county or municipality shall immediately send a certified copy of
the ordinance to the department.
(b) If:
(1) the fiscal body of a county or municipality adopts an
ordinance to impose the local option gross retail tax under
section 6 of this chapter; or
(2) the fiscal body of an adopting county or municipality
adopts an ordinance to change the boundaries of the adopting
municipality's local option gross retail tax district under
section 8 of this chapter;
the fiscal body shall immediately transmit information concerning
the boundaries of the local option gross retail tax district to the
department in an electronic format prescribed by the department.
Sec. 10. (a) A tax imposed under this chapter by the fiscal body
of an adopting county or municipality applies only to a retail
transaction that:
(1) is subject to the state gross retail tax; and
(2) is sourced to the local option gross retail tax district of the
adopting county or municipality under the sourcing rules of
IC 6-2.5.
(b) Subsection (a) applies to a local option gross retail tax
throughout the period an ordinance imposing the local option gross
retail tax is in effect. An amendment of the state gross retail tax
applies also to the local option gross retail tax in effect in an
adopting county or municipality on the date the amendment to the
state gross retail tax becomes effective.
Sec. 11. (a) This section applies to a retail transaction that is
subject to the local option gross retail tax.
(b) The local option gross retail tax is measured by the gross
retail income received by a retail merchant in a retail unitary
transaction and is imposed at the rate set forth in the ordinance
imposing the tax. The rate must be stated as a whole percentage
point.
(c) A retail merchant may apply the rounding rule of
IC 6-2.5-2-2(b) to the unrounded total of:
(1) the state gross retail tax; plus
(2) the local option gross retail tax;
that is imposed on a retail transaction.
Sec. 12. (a) A person who receives goods or services in a retail
transaction that is taxed under this chapter is liable for the tax.
The person shall pay the tax to the retail merchant as a separate
amount added to the consideration for the goods or services. The
retail merchant shall collect the tax as an agent for the state and
the county. The tax imposed under this chapter shall be imposed,
paid, and collected in the same manner in which the state gross
retail tax is imposed, paid, and collected under IC 6-2.5.
(b) An eligible county or municipality that imposes the local
option gross retail tax under this chapter is prohibited from
conducting an audit of any retail merchant or purchaser for the
purpose of determining whether the proper amount of local option
gross retail tax has been collected or paid.
Sec. 13. (a) A special account within the state general fund shall
be established for each adopting county or municipality that
imposes the local option gross retail tax. Revenue collected under
this chapter within an adopting county or municipality shall be
deposited in that adopting county's or municipality's account in the
state general fund.
(b) Income earned on money held in an account under
subsection (a) becomes a part of that account.
(c) Revenue remaining in an account established under
subsection (a) at the end of a fiscal year does not revert to the state
general fund.
Sec. 14. (a) Revenue derived from the imposition of the local
option gross retail tax shall, in the manner prescribed by this
section, be distributed to the adopting county or municipality that
imposed it. Revenue in a county's or municipality's special account
is appropriated to make the distributions required by this chapter.
(b) Before the fifteenth business day of each month, the auditor
of state shall distribute the amount specified in subsection (c) to the
fiscal officer of each adopting county or municipality.
(c) The amount to be distributed each month to an adopting
county or municipality under this section is the amount
accumulated at the end of the previous month in the adopting
county's or municipality's special account established under section
13 of this chapter.
(d) The auditor of state may adjust the amount specified in
subsection (c) to account for mathematical or clerical errors
involving a previous distribution under this section. At the
discretion of the auditor of state, an adjustment under this section
may be prorated over two (2) or more future distributions under
this section.
Sec. 15. An adopting county or municipality may use local
option gross retail tax revenue received in a distribution under
section 14 of this chapter for any lawful purpose.
(IC 4-33-13); the slot machine wagering tax (IC 4-35-8); the type II
gambling game excise tax (IC 4-36-9); the gross income tax (IC 6-2.1)
(repealed); the utility receipts and utility services use taxes (IC 6-2.3);
the state gross retail and use taxes (IC 6-2.5); the adjusted gross income
tax (IC 6-3); the supplemental net income tax (IC 6-3-8) (repealed); the
county adjusted gross income tax (IC 6-3.5-1.1); the county option
income tax (IC 6-3.5-6); the county economic development income tax
(IC 6-3.5-7); the municipal option income tax (IC 6-3.5-9); the local
option gross retail tax (IC 6-3.5-10); the auto rental excise tax
(IC 6-6-9); the financial institutions tax (IC 6-5.5); the gasoline tax
(IC 6-6-1.1); the alternative fuel permit fee (IC 6-6-2.1); the special
fuel tax (IC 6-6-2.5); the motor carrier fuel tax (IC 6-6-4.1); a motor
fuel tax collected under a reciprocal agreement under IC 6-8.1-3; the
motor vehicle excise tax (IC 6-6-5); the commercial vehicle excise tax
(IC 6-6-5.5); the excise tax imposed on recreational vehicles and truck
campers (IC 6-6-5.1); the hazardous waste disposal tax (IC 6-6-6.6);
the cigarette tax (IC 6-7-1); the beer excise tax (IC 7.1-4-2); the liquor
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.
(b) The department shall enter into an agreement with the fiscal officer of an entity that has adopted a local option gross retail tax under IC 6-3.5-10, an innkeeper's tax, a food and beverage tax, or an admissions tax under IC 6-9 to furnish the fiscal officer annually with:
(1) the name of each business collecting the taxes listed in this subsection; and
(2) the amount of money collected from each business.
(c) The agreement must provide that the department must provide the information in an electronic format that the fiscal officer can use, as well as a paper copy.
(d) The agreement must include a provision that, unless in accordance with a judicial order, the fiscal officer, employees of the fiscal officer, former employees of the fiscal officer, counsel of the fiscal officer, agents of the fiscal officer, or any other person may not divulge the names of the businesses, the amount of taxes paid by the businesses, or any other information disclosed to the fiscal officer by the department.
(1) The due date of the return.
(2) In the case of a return filed for the state gross retail or use tax, the gasoline tax, the special fuel tax, the motor carrier fuel tax, the oil inspection fee, or the petroleum severance tax, the end of the calendar year which contains the taxable period for which the return is filed.
(b) If a person files a utility receipts tax return (IC 6-2.3), an adjusted gross income tax (IC 6-3), supplemental net income tax (IC 6-3-8) (repealed), county adjusted gross income tax (IC 6-3.5-1.1), county option income tax (IC 6-3.5-6), municipal option income tax (IC 6-3.5-9), or financial institutions tax (IC 6-5.5) return that understates the person's income, as that term is defined in the particular income tax law, by at least twenty-five percent (25%), the proposed assessment limitation is six (6) years instead of the three (3) years provided in subsection (a).
(c) In the case of the motor vehicle excise tax (IC 6-6-5), the tax shall be assessed as provided in IC 6-6-5-5 and IC 6-6-5-6 and shall include the penalties and interest due on all listed taxes not paid by the due date. A person that fails to properly register a vehicle as required by IC 9-18 and pay the tax due under IC 6-6-5 is considered to have failed to file a return for purposes of this article.
(d) In the case of the commercial vehicle excise tax imposed under IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5 and shall include the penalties and interest due on all listed taxes not paid by the due date. A person that fails to properly register a commercial vehicle as required by IC 9-18 and pay the tax due under IC 6-6-5.5 is considered to have failed to file a return for purposes of this article.
(e) In the case of the excise tax imposed on recreational vehicles and truck campers under IC 6-6-5.1, the tax shall be assessed as
provided in IC 6-6-5.1 and must include the penalties and interest due
on all listed taxes not paid by the due date. A person who fails to
properly register a recreational vehicle as required by IC 9-18 and pay
the tax due under IC 6-6-5.1 is considered to have failed to file a return
for purposes of this article. A person who fails to pay the tax due under
IC 6-6-5.1 on a truck camper is considered to have failed to file a return
for purposes of this article.
(f) If a person files a fraudulent, unsigned, or substantially blank
return, or if a person does not file a return, there is no time limit within
which the department must issue its proposed assessment.
(g) If any part of a listed tax has been erroneously refunded by the
department, the erroneous refund may be recovered through the
assessment procedures established in this chapter. An assessment
issued for an erroneous refund must be issued:
(1) within two (2) years after making the refund; or
(2) within five (5) years after making the refund if the refund was
induced by fraud or misrepresentation.
(h) If, before the end of the time within which the department may
make an assessment, the department and the person agree to extend
that assessment time period, the period may be extended according to
the terms of a written agreement signed by both the department and the
person. The agreement must contain:
(1) the date to which the extension is made; and
(2) a statement that the person agrees to preserve the person's
records until the extension terminates.
The department and a person may agree to more than one (1) extension
under this subsection.
(i) If a taxpayer's federal income tax liability for a taxable year is
modified due to the assessment of a federal deficiency or the filing of
an amended federal income tax return, then the date by which the
department must issue a proposed assessment under section 1 of this
chapter for tax imposed under IC 6-3 is extended to six (6) months after
the date on which the notice of modification is filed with the
department by the taxpayer.
(1) identifies the total number of individual taxpayers that live within a particular incorporated city or town;
(2) identifies the total individual adjusted gross income of those taxpayers; and
(3) includes any other information that:
(A) can be abstracted from the taxpayers' individual income tax returns; and
(B) is necessary to obtain information concerning individual income taxation under IC 6-3.5-1.1, IC 6-3.5-6,
as agreed to by the department and the legislative services agency.
(b) As used in this subsection, "authorized agency" refers to the legislative services agency or the budget agency. As used in this subsection, "director" refers to the executive director of the legislative services agency or the director of the budget agency. The department shall provide access to the information described in subsection (a) in electronic format to an authorized agency:
(1) upon receipt of a written request from the director of the authorized agency; and
(2) upon the director's agreement that any information accessed (other than aggregate data) will be kept confidential and used solely for official purposes.
(1) members and employees of the department;
(2) the governor;
(3) the attorney general or any other legal representative of the state in any action in respect to the amount of tax due under the provisions of the law relating to any of the listed taxes; or
(4) any authorized officers of the United States;
when it is agreed that the information is to be confidential and to be used solely for official purposes.
(b) The information described in subsection (a) may be revealed upon the receipt of a certified request of any designated officer of the state tax department of any other state, district, territory, or possession of the United States when:
(1) the state, district, territory, or possession permits the exchange of like information with the taxing officials of the state; and
(2) it is agreed that the information is to be confidential and to be used solely for tax collection purposes.
(c) The information described in subsection (a) relating to a person on public welfare or a person who has made application for public welfare may be revealed to the director of the division of family resources, and to any director of a county office of the division of family resources located in Indiana, upon receipt of a written request from either director for the information. The information shall be treated as confidential by the directors. In addition, the information described in subsection (a) relating to a person who has been designated as an absent parent by the state Title IV-D agency shall be made available to the state Title IV-D agency upon request. The information shall be subject to the information safeguarding provisions of the state and federal Title IV-D programs.
(d) The name, address, Social Security number, and place of employment relating to any individual who is delinquent in paying educational loans owed to a postsecondary educational institution may be revealed to that institution if it provides proof to the department that the individual is delinquent in paying for educational loans. This information shall be provided free of charge to approved postsecondary educational institutions (as defined by IC 21-7-13-6(a)). The department shall establish fees that all other institutions must pay to the department to obtain information under this subsection. However, these fees may not exceed the department's administrative costs in providing the information to the institution.
(e) The information described in subsection (a) relating to reports submitted under IC 6-6-1.1-502 concerning the number of gallons of gasoline sold by a distributor and IC 6-6-2.5 concerning the number of gallons of special fuel sold by a supplier and the number of gallons of
special fuel exported by a licensed exporter or imported by a licensed
transporter may be released by the commissioner upon receipt of a
written request for the information.
(f) The information described in subsection (a) may be revealed
upon the receipt of a written request from the administrative head of a
state agency of Indiana when:
(1) the state agency shows an official need for the information;
and
(2) the administrative head of the state agency agrees that any
information released will be kept confidential and will be used
solely for official purposes.
(g) The information described in subsection (a) may be revealed
upon the receipt of a written request from the chief law enforcement
officer of a state or local law enforcement agency in Indiana when it is
agreed that the information is to be confidential and to be used solely
for official purposes.
(h) The name and address of retail merchants, including township,
as specified in IC 6-2.5-8-1(j) may be released solely for tax collection
purposes to township assessors and county assessors.
(i) The department shall notify the appropriate innkeepers' tax
board, bureau, or commission that a taxpayer is delinquent in remitting
innkeepers' taxes under IC 6-9.
(j) All information relating to the delinquency or evasion of the
motor vehicle excise tax may be disclosed to the bureau of motor
vehicles in Indiana and may be disclosed to another state, if the
information is disclosed for the purpose of the enforcement and
collection of the taxes imposed by IC 6-6-5.
(k) All information relating to the delinquency or evasion of
commercial vehicle excise taxes payable to the bureau of motor
vehicles in Indiana may be disclosed to the bureau and may be
disclosed to another state, if the information is disclosed for the
purpose of the enforcement and collection of the taxes imposed by
IC 6-6-5.5.
(l) All information relating to the delinquency or evasion of
commercial vehicle excise taxes payable under the International
Registration Plan may be disclosed to another state, if the information
is disclosed for the purpose of the enforcement and collection of the
taxes imposed by IC 6-6-5.5.
(m) All information relating to the delinquency or evasion of the
excise taxes imposed on recreational vehicles and truck campers that
are payable to the bureau of motor vehicles in Indiana may be disclosed
to the bureau and may be disclosed to another state if the information
is disclosed for the purpose of the enforcement and collection of the
taxes imposed by IC 6-6-5.1.
(n) This section does not apply to:
(1) the beer excise tax, including brand and packaged type
(IC 7.1-4-2);
(2) the liquor excise tax (IC 7.1-4-3);
(3) the wine excise tax (IC 7.1-4-4);
(4) the hard cider excise tax (IC 7.1-4-4.5);
(5) the malt excise tax (IC 7.1-4-5);
(6) the motor vehicle excise tax (IC 6-6-5);
(7) the commercial vehicle excise tax (IC 6-6-5.5); and
(8) the fees under IC 13-23.
(o) The name and business address of retail merchants within each
county that sell tobacco products may be released to the division of
mental health and addiction and the alcohol and tobacco commission
solely for the purpose of the list prepared under IC 6-2.5-6-14.2.
(p) The department shall notify the appropriate county
treasurer that a taxpayer is delinquent in remitting local option
gross retail taxes collected under IC 6-3.5-10.
(1) an ordinance, in the case of a county, city, or town; or
(2) a resolution, in the case of any other political subdivision.
(b) An ordinance or a resolution adopted under this section must specify the following:
(1) The purposes of the rainy day fund.
(2) The sources of funding for the rainy day fund, which may include the following:
(A) Unused and unencumbered funds under:
(i) section 5 of this chapter;
(ii) IC 6-3.5-1.1-21.1;
(iii) IC 6-3.5-6-17.3;
(iv) IC 6-3.5-7-17.3;
(v) IC 6-3.5-9-17; or
(vi) IC 6-3.5-10-15.
(B) Any other funding source:
(i) specified in the ordinance or resolution adopted under this section; and
(ii) not otherwise prohibited by law.
(c) The rainy day fund is subject to the same appropriation process as other funds that receive tax money.
(d) In any fiscal year, a political subdivision may transfer under section 5 of this chapter not more than ten percent (10%) of the political subdivision's total annual budget for that fiscal year, adopted under IC 6-1.1-17, to the rainy day fund.
(e) A political subdivision may use only the funding sources specified in subsection (b)(2)(A) or in the ordinance or resolution establishing the rainy day fund. The political subdivision may adopt a subsequent ordinance or resolution authorizing the use of another funding source.
(f) The department of local government finance may not reduce the actual or maximum permissible levy of a political subdivision as a result of a balance in the rainy day fund of the political subdivision.
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax).
(2) IC 6-3.5-1.1 (county adjusted gross income tax).
(3) IC 6-3.5-6 (county option income tax).
(4) IC 6-3.5-7 (county economic development income tax).
(5) IC 6-3.5-9 (municipal option income tax).
(6) IC 6-3.5-10 (local option gross retail tax).
(1) the unit's distributive share of the county option income tax under IC 6-3.5-6;
(2) the unit's distributive share of the county economic development income tax under IC 6-3.5-7;
(3) the unit's distributive share of the municipal option income tax under IC 6-3.5-9;
(4) the unit's local option gross retail tax distribution under IC 6-3.5-10;
in any amount to pay amounts payable under section 18 or 19 of this chapter.
(b) The legislative body may covenant to adopt an ordinance to increase its tax rate under the county option income tax, county
economic development income tax, municipal option income tax,
local option gross retail tax, or any other revenues at the time it is
necessary to raise funds to pay any amounts payable under section 18
or 19 of this chapter.
(c) The reuse authority may pledge revenues received or to be
received from any source legally available to the reuse authority for the
purposes of this chapter in any amount to pay amounts payable under
section 18 or 19 of this chapter.
(d) The pledge or covenant under this section may be for the term
of the bonds issued under section 18 of this chapter, the term of a lease
entered into under section 19 of this chapter, or for a shorter period as
determined by the legislative body. Money pledged by the legislative
body under this section shall be considered revenues or other money
available to the reuse authority under sections 18 through 19 of this
chapter.
(e) The general assembly covenants not to impair this pledge or
covenant as long as any bonds issued under section 18 of this chapter
are outstanding or as long as any lease entered into under section 19 of
this chapter is still in effect. The pledge or covenant shall be enforced
as provided in IC 5-1-14-4.
(1) the unit's distributive share of the county adjusted gross income tax under IC 6-3.5-1.1;
(2) the unit's distributive share of the county option income tax under IC 6-3.5-6;
(3) the unit's distributive share of the county economic development income tax under IC 6-3.5-7;
(4) the unit's distributive share of the municipal option income tax under IC 6-3.5-9;
(5) the unit's local option gross retail tax distribution under IC 6-3.5-10;
in any amount to pay amounts payable under section 23 or 24 of this chapter.
(b) The legislative body may covenant to adopt an ordinance to
increase its tax rate under the county adjusted gross income tax, county
option income tax, county economic development income tax,
municipal option income tax, local option gross retail tax, or any
other revenues at the time it is necessary to raise funds to pay any
amounts payable under section 23 or 24 of this chapter.
(c) The development authority may pledge revenues received or to
be received from any source legally available to the development
authority for the purposes of this chapter in any amount to pay amounts
payable under section 23 or 24 of this chapter.
(d) The pledge or covenant under this section may be for:
(1) the term of the bonds issued under section 23 of this chapter;
(2) the term of a lease entered into under section 24 of this
chapter; or
(3) for a shorter period as determined by the legislative body.
Money pledged by the legislative body under this section shall be
considered revenues or other money available to the development
authority under sections 23 through 24 of this chapter.
(e) The general assembly covenants not to impair this pledge or
covenant as long as any bonds issued under section 23 of this chapter
are outstanding or as long as any lease entered into under section 24 of
this chapter is still in effect. The pledge or covenant shall be enforced
as provided in IC 5-1-14-4.