indiana legislative update

2014 Edition  |  Table of Contents
 

Property Tax
By Chad Miller and Heather Judy, CPA

Affected Code Section: Ind. Code § 6-1.1-1-2 (amendment) & 6-1.1-2-1.5 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Moves the assessment date for tangible property from March 1 to Jan. 1 beginning in 2016. Moves the assessment date for mobile homes from Jan. 15 to Jan. 1 beginning in 2017.
Application Note: The assessment date for tangible property in 2014 and 2015 will remain March 1. Jan. 1, 2016, will be the first assessment date under the new date. This should assist many taxpayers in filing personal property forms who formerly began with year-end fixed assets and had to consider additions and disposals during the first two months of the year.
 

Affected Code Section: Ind. Code § 6-1.1-1-7 (amendment) & 6-1.1-3-1.5 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Restates the filing date for personal property tax returns as May 15.
 

Affected Code Section: Ind. Code § 6-1.1-2-2 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Provides that a change in use, value, character or ownership of tangible personal property after an assessment date cannot be considered in determining the true tax value of the tangible property for that assessment date.
 

Affected Code Section: Ind. Code § 6-1.1-3-7.2 (addition)
Effective Date: July 1, 2015
Enacted By: Senate Bill 1
Explanation: Allows a county income tax council to pass an ordinance by majority vote exempting business personal property beginning with the 2016-pay-2017 tax year if the acquisition cost of a property in the county is less than $20,000. Directs that, for purposes of the exemption, business personal property does not include mobile homes, property held as an investment, and property owned by a public utility. In lieu of a personal property tax return, a qualifying taxpayer must file an annual certification stating that the taxpayer qualifies for the exemption by May 15.
Application Note: This exemption went through multiple iterations, ultimately being a county option to exempt small businesses having property with a cost of less than $20,000. Taxpayers in counties adopting the exemption will need to be mindful of the cost each year and will still have a compliance requirement to file the annual certification.
 

Affected Code Section: Ind. Code § 6-1.1-3-7.5 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Moves the date after which changes on an amended property tax roll over as a credit to a subsequent year from July 15 to April 1 beginning in 2016.
 

Affected Code Section: Ind. Code § 6-1.1-3-17 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Moves the date on which the county assessor shall certify the assessment value of personal property by taxing district to the county auditor from July 1 to June 15 beginning in 2017.
 

Affected Code Section: Ind. Code § 6-1.1-4-4.3 (repeal)
Effective Date: Upon passage
Enacted By: Senate Bill 266
Explanation: Repeals language placing the burden of proof on the assessor if the gross assessed value of the real property was reduced by the Property Tax Assessment
Board of Appeals (PTABOA) in the preceding year.
Application Note: This rule was not truly repealed, but rather was moved to Ind. Code § 6-1.1-15-17.2(d) (see summary below).
 

Affected Code Section: Ind. Code § 6-1.1-4-4.2 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Moves the beginning date of a reassessment of a group of parcels from July 1 to May 1 and the ending date from March 1 to Jan. 1.
 

Affected Code Section: Ind. Code § 6-1.1-4-4.6, 6-1.1-4-5, 6-1.1-4-9, 6-1.1-4-21.4, 6-1.1-4-25, 6-1.1-5-14, 6-1.1-5.5-3, 6-1.1-11-5, & 6-1.1-11-8 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Moves forward certain dates for reassessment plans, petitions for reassessment, and other related dates filings and determinations made by assessor, auditors, and the Department of Local Government Finance.
 

Affected Code Section: Ind. Code § 6-1.1-4-22 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Moves the latest date on which the assessor shall provide taxpayers with a notice of assessment or reassessment from April 10 to February 10 beginning in 2016.
 

Affected Code Section: Ind. Code § 6-1.1-10-16 (amendment)
Effective Date: Jan. 1, 2015
Enacted By: Senate Bill 158
Explanation: Provides an exemption from real property taxation for property used by a for-profit provider to deliver early childhood education to 4- and 5-year-old children. Directs that the exemption is not available to early childhood education service providers if the property is used only for children younger than 4.
Application Note: Previously for-profit daycares were considered 100% taxable by some counties. This will allow for an exemption to daycares that are owned and operated by the provider.
 

Affected Code Section: Ind. Code § 6-1.1-10-36.3 (amendment)
Effective Date: Jan. 1, 2015
Enacted By: Senate Bill 158
Explanation: Excludes for-profit early childhood education service providers from the rule granting a pro rata exemption based on the amount of time used for an exempt purpose.
 

Affected Code Section: Ind. Code § 6-1.1-10-46 (addition)
Effective Date: Jan. 1, 2015
Enacted By: Senate Bill 158
Explanation: Provides an exemption from personal property taxation for property owned, occupied, or used by a for-profit provider to deliver early childhood education to 4- and 5-year-old children. In order to obtain the exemption, the provider’s primary purpose must be educational, the provider must own the property and use the personal property for delivering early childhood education to 4- and 5-year-old children, and the provider must participate in an early education evaluation program and meet quality standards. Grants a pro rata exemption based on enrollment to the extent that the provider has 4- and 5-year-old children and younger children. Provides procedures for determining the enrollment count.
 

Affected Code Section: Ind. Code § 6-1.1-10.3-1 to 6-1.1-10.3-8 (addition)
Effective Date: July 1, 2015
Enacted By: Senate Bill 1
Explanation: Allows a county income tax council to pass an ordinance by majority vote exempting newly acquired business personal property. In order to qualify as newly acquired equipment, the property must be placed into service after the date directed by the ordinance and have not been previously used in Indiana. Directs that, for purposes of the exemption, business personal property does not include mobile homes, property held as an investment, and property owned by a public utility. Requires an exemption ordinance to exempt all new property. Provides that, in the event of a repeal or amendment of an exemption ordinance, any new personal property that was exempt under the original ordinance will remain exempt regardless if the ownership changes. Specifies that there is no filing requirement to take advantage of this exemption.
Application Note: This is a scaled down version of Governor Pence’s call to repeal the tax on business personal property. While an exemption ordinance would not impact existing equipment, counties will have the option to exempt property on a going-forward basis.
 

Affected Code Section: Ind. Code § 6-1.1-11-1.5 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Provides that a change in use, value, character or ownership of tangible personal property or a change in the age, disability, or income of any owner, buyer, or possessor after an assessment date does not impact the eligibility of the tangible property for an exemption for that assessment date. This update applies to assessment dates beginning in 2017 for mobile homes and 2016 for all other personal property.
 

Affected Code Section: Ind. Code § 6-1.1-11-3 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Moves the exemption filing date for personal property from May 15 to April 1 beginning in 2016. Requires a county assessor to notify an applicant for an exemption of a failure to file the assessor’s reassessment data along with the exemption application no later than April 25.
Application Note: Companies receiving the benefit of a property tax exemption need to be mindful of the accelerated due date beginning with the 2016 filing due April 1, 2016.
 

Affected Code Section: Ind. Code § 6-1.1-11-3.5 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Moves the date on which a not-for-profit corporation must notify the county assessor that it has become ineligible for an exemption from May 15 to April 1 beginning in 2016.
 

Affected Code Section: Ind. Code § 6-1.1-11-11 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Directs that, in the event of a conflict between provisions pertaining to procedures related to an exemption from property taxation, changes or additions in the 2014 legislative session shall be controlling.
 

Affected Code Section: Ind. Code § 6-1.1-12-26.2 (addition)
Effective Date: July 1, 2014
Enacted By: House Bill 1046
Explanation: Provides an exemption for structures and foundations of a heritage barn, defined as barns constructed before 1950 that are no longer used for agricultural or other business purposes. Sets forth procedures for filing for the deduction. Permits a county to establish an annual public safety fee of up to $50 for heritage barns.
 

Affected Code Section: Ind. Code § 6-1.1-12-37 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 367
Explanation: Permits active duty members of the armed forces who have been ordered to transfer to a location outside of Indiana who are otherwise eligible for the homestead deduction to qualify for the deduction for assessment dates after 2013. In order to qualify, the taxpayer must submit a copy of the individual’s transfer orders to the county auditor. Removes the homestead deduction if the property is leased while the taxpayer is serving outside of Indiana.
 

Affected Code Section: Ind. Code § 6-1.1-12.1-4.5 & 6-1.1-12.1-17 (amendment)
Effective Date: July 1, 2015
Enacted By: Senate Bill 1
Explanation: Adds a reference to the newly created 20-year super abatement provisions for personal property.
 

Affected Code Section: Ind. Code § 6-1.1-12.1-12.5 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 1
Explanation: Provides that a payment from a taxpayer on account of the taxpayer’s failure to comply with a statement of benefits shall be distributed on a pro rata basis to taxing units using the preceding year’s tax rate.
 

Affected Code Section: Ind. Code § 6-1.1-12.1-18 (addition)
Effective Date: July 1, 2015
Enacted By: Senate Bill 1
Explanation: Permits a designating body to establish an enhanced abatement schedule for business personal property for a statement of benefits approved after June 30, 2015. The abatement can last for up to 20 years as opposed to the prior cap of 10 years. Directs that, for purposes of the exemption, business personal property does not include mobile homes, property held as an investment, and property owned by a public utility. In order to qualify for the enhanced abatement, the property must be placed into service after the statement of benefits is approved and have not been previously used in Indiana. Requires the designating body to conduct a public hearing to review compliance with the statement of benefits after the 10th year of the abatement.

Application Note: This offers a substantial tool that localities can offer to incentivize a business’s investment in personal property, doubling the maximum term of the abatement from 10 to 20 years.
 

Affected Code Section: Ind. Code § 6-1.1-16-1 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 420
Explanation: Requires a township assessor to make a change in assessed value and give notice of the change on or before the later of September 15 of the year for which the assessment is made or four months after the filing date of the personal property tax return, rather than four months after May 15. Requires a county assessor or PTABOA to make a change in assessed value and give notice of the change on or before the later of October 30 of the year for which the assessment is made or five months after the filing date of the personal property tax return, rather than five months after May 15. Requires the Department of Local Government Finance to make a preliminary change in assessed value and give notice of the change on or before the later of October 1 of the year following the year in which the assessment is made or 16 months after the filing date of the personal property tax return, rather than 16 months after May 15.

 

Affected Code Section: Ind. Code § 6-1.1-15-17.2 (amendment)
Effective Date: Upon passage
Enacted By: Senate Bill 266
Explanation: Clarifies that, in determining the prior year’s assessment for purposes of the burden of proof shift for 5% assessed value increases, the assessment to be used is the original assessment or the assessment as last corrected by an assessing official, as stipulated or settled by the taxpayer and the assessing official, or as determined by a reviewing authority. Provides that taxpayers may introduce evidence to prove the correct assessment if the assessor fails to meet the burden of proof. If neither party introduces evidence, then the assessment reverts to the prior tax year’s assessment. Adds that this section does not apply to an assessment subject to review or appeal is based on structural improvements, zoning, or uses not considered in the prior year. Except for properties using the income approach, the burden of proof will be on the assessor for properties which received an assessed value decrease as a result of a prior year appeal if the gross assessed value is increased in the next year. Clarifies that this section applies to all appeals pending on the effective date of the statute and all future appeals.
 

Affected Code Section: Ind. Code § 6-1.1-18.5-3 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 176
Explanation: Adds the requirement that a local option income tax must have been imposed or increased to provide property tax relief in a county in order for the caps to the permissible ad valorem property tax levy to apply to the underlying civil taxing unit.
 

Affected Code Section: Ind. Code § 6-1.1-18.5-13.7 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 367
Explanation: Makes permanent the ability for Fairfield Township in Tippecanoe County to request an adjustment in its maximum permissible property tax levy.
 

Affected Code Section: Ind. Code § 6-1.1-20.6-4 (amendment)
Effective Date: Jan. 1, 2014 (retroactive)
Enacted By: Senate Bill 367
Explanation: Enlarges the definition of “residential property” for purposes of the credit for excessive property taxes to include a single family dwelling under construction and up to one acre of land on which the dwelling is located. Clarifies that the term does not include a commercial hotel, motel, inn, tourist camp or tourist cabin.
 

Affected Code Section: Ind. Code § 6-1.1-21.4-2 & 6-1.1-21.4-3 (amendment)
Effective Date: Upon passage
Enacted By: Senate Bill 367
Explanation: Enlarges the definition of “eligible school corporation” for purposes of qualifying for rainy day fund loans to include a school corporation that had a loan from the counter-cyclical revenue and economic stabilization fund denied in October 2013, provided that a referendum tax levy is not passed. Sets terms and conditions for making the loan to the school corporation.
 

Affected Code Section: Ind. Code § 6-1.1-22-8.1 (amendment)
Effective Date: July 1, 2014
Enacted By: House Bill 1234
Explanation: Modifies the time in which county treasurers must mail property tax statements from 15 days before the first payment is due to 15 business days before the first payment is due.
 

Affected Code Section: Ind. Code § 6-1.1-22.6-26.7 (addition)
Effective Date: Upon passage
Enacted By: House Bill 1234
Explanation: Provides that a school corporation in LaPorte County may transfer up to 20% of the school’s 2014 certified debt service fund budget from the debt service fund to the rainy day fund.
 

Affected Code Section: Ind. Code § 6-1.1-24-1 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 367
Explanation: Adds properties with delinquent penalties, fees, or interest to the list of properties to be certified by the county treasurer to the county auditor for tax sales.
 

Affected Code Section: Ind. Code § 6-1.1-24-1.2 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 367
Explanation: Provides that a subsequent arrangement can be entered into between a county treasurer and taxpayer if a taxpayer fails to abide by the agreement made between the taxpayer and the county treasurer to remove a tract from a tax sale.
 

Affected Code Section: Ind. Code § 6-1.1-25-2 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 249
Explanation: Changes interest rates associated with redemption of a property as part of a property tax sale. Raises the rate imposed on the amount by which the purchase price exceeds the minimum bid on the property from 5% to 10% for sales occurring before July 1, 2014. Reduces the rate imposed on the amount of taxes and special assessment paid by the purchaser after the sale from 10% to 5% for sales occurring before July 1, 2014.
 

Affected Code Section: Ind. Code § 6-1.1-28-1 (amendment)
Effective Date: July 1, 2014
Enacted By: House Bill 1234 & Senate Bill 421
Explanation: Allows a county council to waive the requirement that a PTABOA member be a Level II or Level III assessor-appraiser. Prohibits assessor employees and contracted appraisers from serving as PTABOA members in the county in which they are employed.
 

Affected Code Section: Ind. Code § 6-1.1-35.7-1 to 6-1.1-35.7-7 (addition)
Effective Date: July 1, 2014
Enacted By: House Bill 1234 & Senate Bill 421
Explanation: Provides that assessors, assessor employees, and contracted appraisers must adhere to the Uniform Standards of Professional Appraisal Practice and other standards of conduct in performing their duties. Provides procedures for revoking the certification of an assessor, assessor employee, or contracted appraiser for up to three years if there is gross incompetence in performing an assessment. Codifies the definition of tax representative and sets forth standards of conduct. Provides procedures for revoking the certification of a tax representative for violating rules of practice, gross incompetence in practice, violations of the standards of ethics, and dishonesty, fraud, material deception, or breach of fiduciary duty.

 

Affected Code Section: Ind. Code § 6-1.1-36-17 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 249
Explanation: Directs that, in addition to notifying the county treasurer of the determination, a county auditor finding that a property is not eligible for a standard deduction is to make a notation on the tax duplicate of his/her finding and record a notice of an ineligible homestead lien. Provides that additional tax and penalties from removing the standard deduction are imposed for property taxes from an assessment date occurring before the earlier of the date of the notation on the tax duplicate or the date a notice of an ineligible homestead lien is recorded with the county recorder. Provides a mechanism to release the lien.
 

Affected Code Section: Ind. Code § 6-1.1-37-7 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 1
Explanation: Adds a penalty of $25 for taxpayers who fail to timely file an annual certification of qualification for exemption in counties that pass an ordinance exempting business personal property with an acquisition cost of less than $20,000.
 

Affected Code Section: Ind. Code § 36-7-14.2-1 to 36-7-14.2-2 (addition)
Effective Date: July 1, 2015
Enacted By: Senate Bill 1
Explanation: Directs that, for counties that pass an ordinance exempting business personal property with an acquisition cost of less than $20,000, property tax rates must be calculated by including the assessed value of the exempted property in the base assessed value.
 

Affected Code Section: Public Law 288-2013, Section 75 (amendment)
Effective Date: Upon Passage
Enacted By: House Bill 1027
Explanation: Provides retroactive exempt treatment to certain parcels meeting specific definitions.
 

Affected Code Section: Public Law 1380-2014, Section 33 (amendment)
Effective Date: July 1, 2014
Enacted By: House Bill 1380
Explanation: Directs the Department of Local Government Finance to increase the 2015 maximum permissible ad valorem property tax levy for Washington Township in Hamilton County by up to $85,000.

 

Connect with Chad 
Chad Miller is the property tax practice leader in KSM’s State and Local Tax Practice. Chad has 13 years of Indiana property tax experience, having previously worked in the Hamilton County, Indiana Assessor’s office as a real property appraisal manager. 

Connect with Heather 
Heather Judy is a manager in Katz, Sapper & Miller's State and Local Tax Practice. She has been with the firm since 2006. Heather provides a variety of tax compliance and consulting services in the areas of property tax, multistate sales and income taxes, business incentives, and other state taxes.