indiana legislative update

2014 Edition  |  Table of Contents
 

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

Affected Code Section: Ind. Code § 6-3.5-1.1-9 (amendment)
Effective Date:  July 1, 2014
Enacted By: Senate Bill 176
Explanation: Adds the requirement that a pledge of County Adjusted Gross Income Tax (CAGIT) revenues must have been for property tax relief or public safety.
 

Affected Code Section: Ind. Code § 6-3.5-1.1-24 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Permits Hancock and Johnson County to increase CAGIT to fund mass transit if approved by voters in a local public question. The increase can range from 0.1% to 0.25%. Provides distribution instructions to ensure that additional taxes are used for public transportation and not as a property tax replacement distribution. Makes certain provisions pertaining to property levy freezes inapplicable to the additional tax rate.
 

Affected Code Section: Ind. Code § 6-3.5-1.1-29 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Provides that the additional tax rate to fund mass transit from Hancock and Johnson County may only apply to the taxpayers who reside in a township in which voters approve the local public question.
 

Affected Code Section: Ind. Code § 6-3.5-1.5-1 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Makes certain provisions pertaining to rate calculations for CAGIT or County Option Income Tax (COIT) not apply to an additional tax rate for mass transit.
 

Affected Code Section: Ind. Code § 6-3.5-6-18 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Adds funding a public transportation project to the list of acceptable uses of COIT revenue. Adds the requirement that a pledge of COIT revenues must have been for property tax relief or public safety.
 

Affected Code Section: Ind. Code § 6-3.5-6-26 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Adds the requirement that a pledge of COIT revenues must have been for property tax relief or public safety.
 

Affected Code Section: Ind. Code § 6-3.5-6-30 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Permits Delaware and Madison County to increase COIT to fund mass transit if approved by voters in a local public question. The increase can range from 0.1% to 0.25%. Provides distribution instructions to ensure that additional taxes are used for public transportation and not as a property tax replacement distribution. Makes certain provisions pertaining to property levy freezes inapplicable to the additional tax rate.
 

Affected Code Section: Ind. Code § 6-3.5-6-34 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Provides that the additional tax rate to fund mass transit from Delaware and Madison County may only apply to the taxpayers who reside in a township in which voters approve the local public question.
 

Affected Code Section: Ind. Code § 6-3.5-7-5 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Limits the application of rules pertaining to County Economic Development Income Tax (CEDIT) imposition to counties approving the use of the certified distribution for property tax relief or for public transportation projects.
 

Affected Code Section: Ind. Code § 6-3.5-7-5.5 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Provides that the additional CEDIT tax rate in Hamilton and Marion County for mass transit is not subject to certain limitations relating to increased property taxes on homesteads or residential property.
 

Affected Code Section: Ind. Code § 6-3.5-7-8.1 (addition)
Effective Date: July 1, 2014
Enacted By: House Bill 1380
Explanation: Provides a credit against the CEDIT for taxes paid to a county, city, town or other local governmental entity located outside Indiana. Provides that the credit is limited to the amount of tax imposed on income earned outside of Indiana and subject to CEDIT. Denies the credit to the extent that the taxpayer is afforded a credit by the other governmental entity for CEDIT. Directs that the taxpayer must provide sufficient evidence of eligibility in order to claim the credit.
Application Note: Although the effective date of the statute is July 1, 2014, it applies to taxable years beginning in 2015.
 

Affected Code Section: Ind. Code § 6-3.5-7-26 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Makes COIT taxes imposed to fund public transportation projects subject to rules pertaining to the additional tax rate to replace lost revenue resulting from granting a homestead credit or residential property tax replacement credit. Makes certain sections inapplicable to counties adopting a mass transit ordinance. Permits Hamilton and Marion County to increase CEDIT to fund mass transit if approved by voters in a local public question. The increase can range from 0.1% to 0.25%. Provides distribution instructions to ensure that additional taxes are used for public transportation and not as a property tax replacement distribution.
 

Affected Code Section: Ind. Code § 6-3.5-7-29 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Provides that the additional tax rate to fund mass transit from Hamilton and Marion County may only apply to the taxpayers who reside in a township in which voters approve the local public question.
 

Affected Code Section: Ind. Code § 6-9-2-4 (amendment)
Effective Date: July 1, 2014
Enacted By: House Bill 1380
Explanation: Directs the Lake County Convention and Visitors Bureau to publish a budget on the Department of Local Government Finance’s website.
 

Affected Code Section: Ind. Code § 6-9-2.5-7.5 (amendment)
Effective Date: July 1, 2014
Enacted By: House Bill 1380
Explanation: Delays the date on which the Vanderburgh County treasurer must increase the contribution to the tourism capital improvement fund from 3.5% to 4.5% from 2015 to 2020.
 

Affected Code Section: Ind. Code § 6-9-2.5-7.7 (amendment)
Effective Date: July 1, 2014
Enacted By: House Bill 1380
Explanation: Delays the date on which the Vanderburgh County treasurer must decrease the contribution to the convention center operating fund from 2% to 1% from 2015 to 2020.

 

Connect with Donna 
Donna L. Niesen is a partner in Katz, Sapper & Miller’s State and Local Tax Practice. She has been with the firm since 2005. Donna provides a wide variety of tax consulting services in the areas of multistate sales and income taxes, business incentives, controversy services, and other state taxes.

Connect with Amy 
Amy Zimmer is a state and local tax consultant in Katz, Sapper & Miller’s State and Local Tax Practice. 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.