2016 Indiana Legislative Update

indiana legislative update

2018 Edition  |  Table of Contents
 

Local Taxation
By Donna L. Niesen, CPA, Amy Zimmer, and Stephen Royster, CPA

Affected Code Section: Ind. Code § 4-33-12-9 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1027 § 3
Explanation: Revises statute governing money paid to a unit of local government under section 6 or section 8 of this chapter to permit the Dearborn County council to vote to direct the county auditor of Dearborn County to make specific distributions of money received under section 6 of this chapter. Provides that upon approval by a majority vote, the Dearborn County auditor shall distribute twenty-five percent (25%) of money received under section 6 of this chapter to cities and towns in Dearborn County that have not received money under section 6 of this chapter, as of January 1, 2017, and where a riverboat is not located pursuant to a specific formula. Provides that such distribution will be made to the fiscal officer of the city or town. Provides that a city or town that receives such money: (1) may not use the money to reduce the city's or town's maximum levy under Ind. Code Chapter 6-1.1-18.5; (2) may use the money to reduce the property tax levy of the city or town for a specific year; and (3) may use the money for any legal or corporate purpose of the city or town, including the pledge of money to bonds, leases, or other obligations under Ind. Code § 5-1-14-4. Provides that the money distributed is considered miscellaneous revenue.

Affected Code Section: Ind. Code Article 6-3.5 (amendments)
Effective Date: July 1, 2017 (retroactive)
Enacted By: Senate Bill 6 §§ 74, 75
Explanation: Makes technical corrections.

Affected Code Section: Ind. Code Article 6-3.5 (amendments); Ind. Code Article 6-3.6 (amendments)
Effective Date: Upon Passage
Enacted By: Senate Bill 6 §§ 76, 77
Explanation: Makes technical corrections.

Affected Code Section: Ind. Code § 6-3.5-4-7.3 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1311 § 1
Explanation: Changes the schedule used to determine the amount of surtax imposed based on the age of a vehicle as opposed to the year of manufacture.

Affected Code Section: Ind. Code § 6-3.6-1-1 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1003 § 28
Explanation: Removes the reporting requirements imposed on the office of management and budget to compile a comprehensive report detailing for each taxing unit throughout the state and for each property class type, the categorization of revenue and its uses compared to former taxes.

Affected Code Section: Ind. Code § 6-3.6-1-1.1 (deletion)
Effective Date: July 1, 2018
Enacted By: House Bill 1003 § 29
Explanation: Repeals the section which provided the legislative intent behind Ind. Code Article 6-3.6.

Affected Code Section: Ind. Code § 6-3.6-3-1 (amendment)
Effective Date: Upon Passage
Enacted By: House Bill 1263 § 1
Explanation: Provides that the adopting body for a county includes the county fiscal body for purposes of adopting a rate dedicated to paying for correctional facilities and rehabilitation facilities in the county as permitted by Ind. Code § 6-3.6-6-2.7.

Affected Code Section: Ind. Code § 6-3.6-6-2.7 (addition)
Effective Date: Upon Passage
Enacted By: House Bill 1263 § 2
Explanation: Provides that a county fiscal body may adopt an ordinance to impose (within the local income tax expenditure rate) a tax rate for correctional facilities and rehabilitation facilities in the county. Specifies that the tax rate must be in increments of one-hundredth of one percent (0.01%) and may not exceed two-tenths of one percent (0.2%). Provides that the tax rate may not be in effect for more than twenty (20) years. Specifies that the revenue generated by such a tax rate: (1) must be distributed directly to the county before the remainder of the expenditure rate revenue is distributed; and (2) shall be maintained in a separate dedicated county fund and used by the county only for paying for correctional facilities and rehabilitation facilities in the county.

Affected Code Section: Ind. Code § 6-3.6-6-3 (amendment)
Effective Date: Upon Passage
Enacted By: House Bill 1263 § 3
Explanation: Makes conforming changes to provide that any revenue raised from a tax imposed under Ind. Code § 6-3.6-6-2.7 shall be distributed to the county equal to the amount of revenue generated by the rate of tax imposed.

Affected Code Section: Ind. Code § 6-3.6-7-8.7 (addition)
Effective Date: July 1, 2018
Enacted By: House Bill 1263 § 4
Explanation: Authorizes the county council of Fulton County to impose an additional local income tax rate of not more than twenty-five hundredths percent (0.25%). Provides that revenue from the additional tax rate may be used only to: (1) pay the costs of financing, constructing, acquiring, improving, renovating, equipping, operating, and maintaining a county jail and related buildings and parking facilities; and (2) pay bonds issued or leases entered into for the constructing, acquiring, improving, renovating, or equipping of the county jail and related buildings and parking facilities. Provides that the additional local income tax rate may be imposed only until the latest of the following dates: (1) the date on which the financing, construction, acquisition, improvement, renovation, and equipping of the facilities are completed; (2) the date on which the last of any bonds issued or leases entered into to finance the construction, acquisition, improvement, renovation, and equipping of the facilities are fully paid; and (3) the date on which the ordinance imposing the tax is rescinded. The county treasurer shall establish a county jail revenue fund to be used into which the local income tax revenues derived from the tax rate imposed under this section shall be deposited.

Affected Code Section: Ind. Code § 6-3.6-7-12.5 (addition)
Effective Date: July 1, 2018
Enacted By: House Bill 1263 § 5
Explanation: Authorizes the county council of Jennings County to impose a local income tax special purpose rate for the following purposes: (1) To finance, construct, acquire, improve, renovate, and equip the county jail and related buildings and parking facilities, including costs related to the demolition of existing buildings, the acquisition of land, and any other reasonably related costs. (2) To repay bonds issued or leases entered into for those purposes. Provides that the tax rate may not exceed sixty-five hundredths percent (0.65%), but the tax rate may not be greater than the rate necessary to pay for the purposes of the tax. Provides that before adopting the ordinance to impose the tax rate, the county council must first study the feasibility of, the need for, and the desire of contiguous counties to establish a regional single gender jail. Provides that the additional local income tax rate may be imposed only until the latest of the following dates: (1) the date on which the financing, construction, acquisition, improvement, renovation, and equipping of the facilities are completed; (2) the date on which the last of any bonds issued or leases entered into to finance the construction, acquisition, improvement, renovation, and equipping of the facilities are fully paid; and (3) the date on which the ordinance imposing the tax is rescinded. The county treasurer shall establish a county jail revenue fund to be used into which the local income tax revenues derived from the tax rate imposed under this section shall be deposited.

Affected Code Section: Ind. Code § 6-3.6-7-19 (amendment)
Effective Date: Upon Passage
Enacted By: House Bill 1263 § 6
Explanation: Provides that the local income tax special rate imposed in Randolph County may also be used for the following purposes: (1) Operating the county courthouse. (2) Financing, constructing, acquiring, renovating, equipping, and operating the county jail, public safety improvements, and other county facilities, including the repayment of bonds issued, or leases entered into, for constructing, acquiring, renovating, and equipping the county jail, public safety improvements, and other county facilities. Specifies that before the tax revenue may be used for these purposes, the county fiscal body must adopt an ordinance that: (1) specifically authorizes the revenue to be used for those purposes; and (2) recognizes that if the revenues are used for those purposes, the tax rate will continue after the existing purposes of the tax are completed.

Affected Code Section: Ind. Code § 6-3.6-7-21.5 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1263 § 7
Explanation: Provides that the Tipton County local income tax special purpose rate may also be used to operate and maintain the county jail and related buildings and parking facilities and the county courthouse. Specifies that before the tax revenue may be used for these purposes, the county council must adopt an ordinance that: (1) specifically authorizes the revenue to be used for those purposes; and (2) recognizes that if the revenues are used for those purposes, the tax rate will continue after the existing purposes of the tax are completed.

Affected Code Section: Ind. Code § 6-3.6-7-22 (amendment)
Effective Date: Upon Passage
Enacted By: House Bill 1263 § 8
Explanation: Provides that the local income tax special purpose rate imposed in Union County may also be used for the following purposes: (1) To operate the county courthouse. (2) To finance, construct, acquire, improve, renovate, equip, or operate the county jail or other county criminal justice facilities. (3) To repay bonds issued, or leases entered into, for constructing, acquiring, improving, renovating, and equipping the county jail or other county criminal justice facilities. Specifies that before the tax revenue may be used for these purposes, the county fiscal body must adopt an ordinance that: (1) specifically authorizes the revenue to be used for those purposes; and (2) recognizes that if the revenues are used for those purposes, the tax rate will continue after the existing purposes of the tax are completed.

Affected Code Section: Ind. Code § 6-3.6-9-10 (amendment)
Effective Date: Upon Passage
Enacted By: House Bill 1263 § 9
Explanation: Provides that the budget agency shall certify information concerning the part of the certified distribution that is attributable to the part of the distribution attributable to a tax rate imposed under Ind. Code § 6-3.6-6-2.7.

Affected Code Section: Ind. Code § 6-9-1-5 (amendment); Ind. Code § 6-9-2-1 (amendment); Ind. Code § 6-9-2.5-6 (amendment); Ind. Code § 6-9-3-4 (amendment); Ind. Code § 6-9-4-6 (amendment); Ind. Code § 6-9-6-6 (amendment); Ind. Code § 6-9-7-6 (amendment); Ind. Code § 6-9-8-2 (amendment); Ind. Code § 6-9-9-2 (amendment); Ind. Code § 6-9-10-6 (amendment); Ind. Code § 6-9-10.5-6 (amendment); Ind. Code § 6-9-11-6 (amendment); Ind. Code § 6-9-14-6 (amendment); Ind. Code § 6-9-15-6 (amendment); Ind. Code § 6-9-16-6 (amendment); Ind. Code § 6-9-17-3 (amendment); Ind. Code § 6-9-18-3 (amendment); Ind. Code § 6-9-19-3 (amendment); Ind. Code § 6-9-32-3 (amendment); Ind. Code § 6-9-37-3 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1056 §§ 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 19, 23, 24
Explanation: Removes the requirement that the Innkeeper’s tax be reported on forms approved by the county treasurer.

Affected Code Section: Ind. Code § 6-9-18-5 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1056 § 18
Explanation: Provides that a member appointed to a convention and tourism commission under the uniform innkeeper's tax statute who is required to be: (1) engaged in a convention, visitor, or tourism business; or (2) involved in or promoting conventions, visitors, or tourism; need not be a resident of the county if the member is an owner or an executive level employee of a convention, visitor, or tourism business that is located within the county. Provides that such a member must be a resident of Indiana. Repeals the requirement in the uniform innkeeper's tax statute that not more than a simple majority of the members of a convention and tourism commission may be affiliated with the same political party. Makes conforming changes.

Affected Code Section: Ind. Code § 6-9-29-3 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1056 § 20
Explanation: Provides that the department of state revenue shall prescribe a standard return form to be used by a taxpayer with remittance of the innkeeper’s tax to: (1) the department of state revenue, if the taxpayer files a separate return for the innkeeper’s tax; or (2) to the county treasurer, if an ordinance has been adopted requiring the payment of the innkeeper’s tax to the county treasurer instead of the department of state revenue.

Affected Code Section: Ind. Code § 6-9-29-5 (addition)
Effective Date: July 1, 2018
Enacted By: House Bill 1056 § 21
Explanation: Requires the department of state revenue to provide each commission with summary data of the amount of the innkeeper's tax collections to the county. Provides that, in the case of a county that has adopted an ordinance requiring the payment of the innkeeper's tax to the county treasurer instead of the department: (1) the county treasurer is required to annually report to the department of state revenue the amount of innkeeper's tax collected in the county in the preceding calendar year; and (2) the department is required to provide summary data of the total amount of the county's innkeeper's tax collected in the preceding calendar year to the commission established for that county. Defines “commission” for each county with a county innkeeper’s tax.

Affected Code Section: Ind. Code § 6-9-31-2 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1056 § 22
Explanation: Removes the requirement that the innkeeper’s tax be reported on forms approved by the county treasurer. Provides that the admission tax and the supplemental auto rental excise tax shall be reported on forms approved by the county treasurer.

Affected Code Section: Ind. Code § 11-12-4-5 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1263 § 10
Explanation: Provides that before construction of a county jail may begin, the county executive must prepare a feasibility study and hold a public hearing as required by Ind. Code § 36-1-8-19.

Affected Code Section: Ind. Code Chapter 11-12-5.5 (addition)
Effective Date: July 1, 2018
Enacted By: House Bill 1263 § 11
Explanation: Specifies that the executive of a county may enter into an interlocal agreement with one or more other local or state entities for the construction, maintenance, or operation of a regional jail. Provides that in the case of a county, the county executive may not enter into a regional jail agreement unless the regional jail agreement is first approved by both the county fiscal body and the county sheriff. Specifies certain terms that must be included in the regional agreement (in addition to those terms required under all interlocal agreements). Provides that if the participating entities determine that the regional jail agreement shall be administered by a separate legal entity or by a joint board, the county sheriff of each county participating in the agreement (or the county sheriff’s designee) must be included as a member on the governing board of the separate legal entity or as a member of the joint board. Provides that this chapter only supplements and does not limit the authority of any entity to enter into an agreement concerning regional or multicounty jails.

Affected Code Section: Ind. Code § 36-1-8-19 (addition)
Effective Date: July 1, 2018
Enacted By: House Bill 1263 § 13
Explanation: Provides that after June 30, 2018, a county may not begin the construction or reconstruction of a county jail or submit final plans and specifications for the construction or reconstruction of a county jail to the department of correction under Ind. Code § 11-12-4-5, unless the county executive first: (1) prepares a feasibility study of possible alternatives to the construction or reconstruction of the county jail; and (2) holds a public hearing on the feasibility study. Specifies what information the feasibility study must include. Provides that notice must be given of the date, time, and place of the public hearing to discuss the feasibility study. Provides that the county executive shall allow the public to testify at the public hearing on the feasibility study. Provides that the feasibility study and public hearing are not required for the construction or reconstruction of a county jail in the case of a county in which the county executive before July 1, 2018, has voted on or otherwise approved a proposal or contract concerning the construction or reconstruction of the county jail.

Affected Code Section: Non-Code Section
Effective Date: Upon Passage
Enacted By: House Bill 1263 § 14
Explanation: Urges the legislative council to assign to a study committee the task of studying whether enhanced funding for Level 6 felons in county jails would assist in regional jail financing.

 

Connect with Donna 
Donna L. Niesen is a partner in Katz, Sapper & Miller’s State and Local Tax Group. Donna helps keep clients up-to-date on the multitude of tax rules and requirements in all 50 states. She guides them in the right direction as they address complex issues that emerge on the state and local levels.

Connect with Amy 
Amy Zimmer is a state and local tax manager in Katz, Sapper & Miller’s State and Local Tax Group. She provides a variety of tax compliance and consulting services in the areas of property tax, multistate sales and income taxes and other state taxes.

Connect with Stephen 
Stephen Royster is a director in Katz, Sapper & Miller’s State and Local Tax Group. Stephen provides services in tax consulting and preparation in the areas of multistate income and sales taxes, business incentives, controversy services and other state taxes.