Introduced Version






SENATE BILL No. 71

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-3.1-20.

Synopsis: Inventory tax phase out. Provides a credit against a taxpayer's state tax liability for property taxes paid on inventory. Provides that the credit is initially equal to 10% of property taxes paid on inventory, and increases the credit percentage over ten years until the credit may be claimed for 100% of property taxes paid on inventory.

Effective: January 1, 2000.





Weatherwax




    November 18, 1999, read first time and referred to Committee on Finance.







Introduced

Second Regular Session 111th General Assembly (2000)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 1999 General Assembly.

SENATE BILL No. 71



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Be it enacted by the General Assembly of the State of Indiana:

    SECTION 1. IC 6-3.1-20 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2000]:
     Chapter 20. Credit for Property Taxes Paid on Inventory
    Sec. 1. As used in this chapter, "assessed value" means the assessed value of inventory determined under IC 6-1.1-3.
    Sec. 2. As used in this chapter, "inventory" has the meaning set forth in IC 6-1.1-3-11.
    Sec. 3. As used in this chapter, "pass through entity" means:
        (1) a corporation that is exempt from the adjusted gross income tax under IC 6-3-2-2.8 (2); or
        (2) a partnership.
    Sec. 4. As used in this chapter, "state tax liability" means a taxpayer's total tax liability that is incurred under:
        (1) IC 6-2.1 (gross income tax);
        (2) IC 6-3-1 through IC 6-3-7 (adjusted gross income tax);
        (3) IC 6-3-8 (supplemental net income tax);


        (4) IC 6-5.5 (financial institutions tax); and
        (5) IC 27-1-18-2 (insurance premiums tax);
as computed after the application of the credits that under IC 6-3.1-1-2 are to be applied before the credit provided by this chapter.
    Sec. 5. As used in this chapter, "taxpayer" means an individual or entity that has state tax liability.
    Sec. 6. (a) A taxpayer is entitled to a credit against the taxpayer's state tax liability for a taxable year for the ad valorem property taxes paid by the taxpayer in the taxable year on inventory.
    (b) The amount of the credit is equal to the product of:
        (1) the appropriate percentage specified in subsection (c); multiplied by
        (2) the amount of property taxes paid on inventory by the taxpayer during the taxable year.
    (c) The percentage described in subsection (b)(1) is determined by the calendar year in which the property taxes on inventory are paid and is set forth in the following table:
CALENDAR YEAR IN    PERCENTAGE OF
WHICH INVENTORY    INVENTORY TAXES
TAXES ARE PAID    ALLOWED AS A CREDIT
    2000    10%
    2001    20%
    2002    30%
    2003    40%
    2004    50%
    2005    60%
    2006    70%
    2007    80%
    2008    90%
    2009 and thereafter    100%
    (d) If a taxpayer pays property taxes in two (2) different calendar years during the taxpayer's same taxable year, the taxpayer shall apply the appropriate percentage specified for each calendar year to the property taxes paid in each calendar year to compute the credit for the taxable year.
    Sec. 7. (a) If the amount determined under section 6(b) of this chapter for a taxpayer in a taxable year exceeds the taxpayer's state tax liability for that taxable year, the taxpayer may carry the excess over to the following taxable years. The amount of the credit carryover from a taxable year shall be reduced to the extent that the carryover is used by the taxpayer to obtain a credit under this

chapter for any subsequent taxable year. A taxpayer is not entitled to a carryback.
    (b) A taxpayer is not entitled to a refund of any unused credit.
    Sec. 8. If a pass through entity does not have state income tax liability against which the tax credit may be applied, a shareholder or partner of the pass through entity is entitled to a tax credit equal to:
        (1) the tax credit determined for the pass through entity for the taxable year; multiplied by
        (2) the percentage of the pass through entity's distributive income to which the shareholder or partner is entitled.
    Sec. 9. To receive the credit provided by this chapter, a taxpayer must claim the credit on the taxpayer's state tax return or returns in the manner prescribed by the department. The taxpayer shall submit to the department proof of payment of an ad valorem property tax and all information that the department determines is necessary for the calculation of the credit provided by this chapter.

    SECTION 2. [EFFECTIVE JANUARY 1, 2000] IC 6-3.1-20 , as added by this act, applies only to taxable years that begin after December 31, 1999.
    SECTION 3. An emergency is declared for this act.