Bill Text: IN SB0399 | 2013 | Regular Session | Introduced
Bill Title: Local option income tax (LOIT) for early childhood education.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-01-14 - First reading: referred to Committee on Tax and Fiscal Policy [SB0399 Detail]
Download: Indiana-2013-SB0399-Introduced.html
Citations Affected: IC 6-3.5-10; IC 6-8.1-1-1.
Synopsis: LOIT for early childhood education. Provides that a
referendum may be held in a county on whether to authorize the county
council to impose an early childhood education income tax. Specifies
that such a referendum may be initiated by the county council or by a
petition filed by voters. Provides that if such a referendum is approved,
the county council may impose an early childhood education income
tax of not more than 1% on the adjusted gross income of resident
county taxpayers. Requires a county's certified distribution of early
childhood education income tax revenue (as determined by the budget
agency) to be distributed monthly to the county treasurer for deposit in
a dedicated fund. Specifies that, subject to appropriation by the county
council, the tax revenue may be used only for one or more of the
following purposes: (1) To pay for the acquisition or construction of a
facility that is or will be used for early childhood education. (2) To pay
for the operation or maintenance expenses of a facility that is used for
early childhood education. (3) To pay the salaries of teachers that
provide instruction for early childhood education. (4) To pay for
instructional materials and educational technology that are used for
early childhood education. (5) To make grants to any school, school
corporation, or other entity for any of these purposes.
Effective: July 1, 2013.
January 14, 2013, 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.
Chapter 10. Local Option Income Tax for Early Childhood Education
Sec. 1. This chapter applies to all counties.
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, "early childhood education" means any educational program or activity that:
(1) is provided to children less than five (5) years of age; and
(2) consists of activities and experiences that are intended to:
(A) contribute to the readiness of the children to begin formal schooling; and
(B) improve the school performance of the children in later
years.
Sec. 5. As used in this chapter, "early childhood education
income tax" refers to the local option income tax for early
childhood education imposed under this chapter.
Sec. 6. As used in this chapter, "fiscal body" has the meaning set
forth in IC 36-1-2-6.
Sec. 7. As used in this chapter, "resident county taxpayer", as
the phrase relates to a county for a year, means any individual who
resides in that county on the date specified in section 19 of this
chapter.
Sec. 8. A public question to authorize an early childhood
education income tax may be initiated by:
(1) a resolution adopted by a county fiscal body under section
9(a) of this chapter; or
(2) a petition filed under section 9(b) of this chapter by voters
of a county.
Sec. 9. (a) A county fiscal body may adopt a resolution to have
a public question placed on the ballot under section 10 of this
chapter to allow voters to determine whether the county fiscal body
may impose an early childhood education income tax. If a county
fiscal body adopts a resolution under this subsection, the county
auditor shall certify the resolution to the county election board.
(b) The voters of a county may file a petition to have a public
question placed on the ballot under section 10 of this chapter to
allow voters to determine whether the county fiscal body may
impose an early childhood education income tax. A petition under
this subsection must be signed by at least two percent (2%) of the
total vote cast at the last election for secretary of state in the
county. If the voters of a county file a sufficient petition under this
subsection, the county auditor shall certify the petition to the
county election board.
(c) If a county election board receives a resolution certified
under subsection (a) or a petition certified under subsection (b), the
county election board shall place a public question concerning the
authority of the county fiscal body on the ballot in accordance with
IC 3-10-9 on the first regularly scheduled general election that will
occur in all of the precincts of the county at least sixty (60) days
after the county election board receives the resolution or the
petition.
Sec. 10. (a) If authorized by section 9 of this chapter, a public
question shall be placed on the ballot in all of the precincts that are
located in the county in substantially the following form:
"Shall the county fiscal body of _________ County (insert
name of county) be given the authority to impose a local
option income tax for early childhood education of not more
than 1%?".
(b) Except as otherwise provided in this chapter, IC 3 applies to
the election at which a public question under this chapter is
considered.
Sec. 11. (a) If the majority of the voters in a county voting on a
public question under this chapter vote to approve the public
question, the fiscal body of the county may adopt an ordinance to
impose the early childhood education income tax on the adjusted
gross income of resident county taxpayers as provided in this
chapter. The early childhood education 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 resident
county taxpayers.
(b) If the majority of the voters in a county voting on a public
question under this chapter vote to disapprove the public question:
(1) the fiscal body of the county may not adopt an ordinance
to impose the early childhood education income tax under this
chapter; and
(2) another public question may not be placed on the ballot in
the county under this chapter earlier than two (2) years after
the date of the election at which the initial public question was
disapproved.
Sec. 12. (a) A county fiscal body may do any of the following:
(1) Subject to approval of a public question under section 11
of this chapter, adopt an ordinance to impose the early
childhood education income tax.
(2) Adopt an ordinance to increase the rate of the early
childhood education income tax, but not to exceed a rate of
one percent (1%).
(3) Adopt an ordinance to decrease the rate of the early
childhood education income tax.
(4) Adopt an ordinance to rescind the early childhood
education income tax.
(b) A power granted by this chapter to adopt an ordinance to
impose or rescind the early childhood education income tax or to
increase or decrease an early childhood education income tax rate
may be exercised at any time in a year before November 1 of that
year.
(c) An ordinance authorized by this chapter that imposes or
rescinds the early childhood education income tax or that increases
or decreases an early childhood education income tax rate takes
effect as follows:
(1) An ordinance adopted after December 31 of the
immediately preceding year and before October 1 of the
current year takes effect October 1 of the current year.
(2) An ordinance adopted after September 30 and before
October 16 of the current year takes effect November 1 of the
current year.
(3) An ordinance adopted after October 15 and before
November 1 of the current year takes effect December 1 of the
current year.
Sec. 13. (a) If the early childhood education income tax is not in
effect during a resident county taxpayer's entire taxable year, the
amount of early childhood education income tax that the resident
county taxpayer owes for that taxable year equals the product of:
(1) the amount of early childhood education income tax the
resident county taxpayer would owe if the tax had been
imposed during the resident county taxpayer's entire taxable
year; multiplied by
(2) a fraction. The numerator of the fraction equals the
number of days in the resident county taxpayer's taxable year
during which the early childhood education income tax was in
effect. The denominator of the fraction equals the total
number of days in the resident county taxpayer's taxable year.
(b) If for any taxable year a resident county taxpayer is subject
to different tax rates for the early childhood education income tax,
the taxpayer's early childhood education income tax rate for that
county and that taxable year is the rate determined in the last
STEP of the following STEPS:
STEP ONE: For each tax rate in effect in a year, multiply the
number of months in the taxpayer's taxable year in which the
rate is in effect.
STEP TWO: Divide the sum of the amounts determined under
STEP ONE by twelve (12).
Sec. 14. (a) A special account within the state general fund shall
be established for each county adopting the early childhood
education income tax. Any revenue derived from the imposition of
the early childhood education income tax by a county shall be
credited to that county's account in the state general fund.
(b) Any income earned on money credited to an account
becomes a part of that account.
(c) Any revenue credited to an account at the end of a fiscal year
may not be credited to any other account in the state general fund.
(d) Before October 2 of each year, the department shall submit
a report to each county auditor indicating the balance in the
county's account as of the cutoff date set by the budget agency.
Sec. 15. (a) Revenue derived from the imposition of the early
childhood education income tax shall, in the manner prescribed by
this section, be distributed to the county that imposed the tax.
(b) Before August 2 of each calendar year, the budget agency
shall certify to the county auditor of each adopting county the sum
of the amount of early childhood education income tax revenue
that the budget agency determines has been:
(1) received from that county 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 early childhood education income tax
made in the state fiscal year plus the amount of interest in the
county's account that has been accrued and has not been included
in a certification made in a preceding year. The amount certified
is the county's certified distribution, which shall be distributed as
provided in section 16 of this chapter.
(c) The amount certified under subsection (b) shall be adjusted
under subsections (d), (e), and (f). The budget agency shall provide
the county 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 17 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 county 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 county that imposes, increases,
decreases, or rescinds a tax or tax rate under this chapter before
November 1 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 county 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) in the manner provided in subsection (d). If
the county imposes, increases, decreases, or rescinds a tax or tax
rate under this chapter after the date for which a certification
under subsection (b) is based, the budget agency shall adjust the
certified distribution of the county after August 1 of the calendar
year. The adjustment shall reflect any other adjustment authorized
under subsections (c), (d), and (e). The adjusted certification shall
be treated as the county's certified distribution for the immediately
succeeding calendar year. The budget agency shall certify the
adjusted certified distribution to the county auditor for the county
and provide the county council with an informative summary of
the calculations that revises the informative summary provided in
subsection (c) and reflects the changes made in the adjustment.
(g) The budget agency shall, before May 1 of every
odd-numbered year, publish an estimate of the statewide total
amount of certified distributions to be made under this chapter
during the following two (2) calendar years.
(h) The budget agency shall, before May 1 of every
even-numbered year, publish an estimate of the statewide total
amount of certified distributions to be made under this chapter
during the following calendar year.
Sec. 16. (a) One-twelfth (1/12) of each county's certified
distribution for a calendar year shall be distributed from the
account established for the county under section 14 of this chapter
to the appropriate county treasurer on the first regular business
day of each month of that calendar year.
(b) All distributions from an account established under section
14 of this chapter shall be made by warrants issued by the auditor
of state to the treasurer of state ordering the appropriate
payments.
Sec. 17. (a) If the budget agency determines that the balance in
a county's account established under section 14 of this chapter
exceeds one hundred fifty percent (150%) of the certified
distributions to be made to the county in the ensuing year, the
budget agency shall make a supplemental distribution to the county
from the county's account.
(b) A supplemental distribution described in subsection (a) must
be:
(1) made in January of the ensuing calendar year; and
(2) distributed to the county treasurer and used in the same
manner as certified distributions.
(c) The amount of the supplemental distribution is equal to the
amount by which the balance in the county's account exceeds one
hundred fifty percent (150%) of the certified distributions to be
made to the county in the ensuing year.
(d) A determination under this section must be made before
November 2.
Sec. 18. (a) The county treasurer of each county in which the
early childhood education income tax is imposed shall establish an
early childhood education fund. The tax revenue received by a
county under this chapter shall be deposited in the county's early
childhood education fund.
(b) Subject to appropriation by the county fiscal body, tax
revenue received by a county under this chapter and deposited in
the county's early childhood education fund may be used only for
one (1) or more of the following purposes:
(1) To pay for the acquisition or construction of a facility that
is or will be used for early childhood education.
(2) To pay for the operation or maintenance expenses of a
facility that is used for early childhood education.
(3) To pay the salaries of teachers that provide instruction for
early childhood education.
(4) To pay for:
(A) instructional materials; and
(B) educational technology (including computers, tablet
computers, electronic book readers, and similar devices);
that are used for early childhood education.
(5) To make grants to any school, school corporation, or other
entity for any purpose listed in subdivisions (1) through (4).
Sec. 19. (a) For purposes of this chapter, an individual shall be
treated as a resident of the county in which the individual:
(1) maintains a home if the individual maintains only one (1)
home in Indiana;
(2) if subdivision (1) does not apply, is registered 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) The residence of an individual is to be determined on
January 1 of the calendar year in which the individual's taxable
year commences. If an individual changes location of residence to
another county in Indiana during a calendar year, the individual's
liability for early childhood education income tax is not affected.
Sec. 20. (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 early
childhood education income tax. The early childhood education
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 early childhood education income tax.
(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 local option income tax for early childhood education (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.
