Citations Affected:
IC 6-3.5-8
;
IC 6-8.1-1-1.
Synopsis: Local option income tax for education. Allows a school
income tax district to adopt a local option income tax for education.
Provides that each school income tax district is comprised of the school
corporations that have their budgets reviewed in the same county.
Provides that the tax applies to individuals and to corporations that
have net income for the taxable year. Provides that the tax may be
imposed at a rate of not more than 0.25%. Provides that a school
corporation may use the tax revenue only for the purpose of making
employer contributions to the Indiana state teachers' retirement fund on
behalf of the school corporation's employees who are members of that
fund. Specifies that the county auditor shall each year reduce the
general fund property tax levy of a school corporation receiving a
certified distribution of local option income tax for education by an
amount equal to the amount of the certified distribution.
Effective: Upon passage.
January 11, 2001, read first time and referred to Committee on Ways and Means.
A BILL FOR AN ACT to amend the Indiana Code concerning
education finance.
the member has for that year.
Sec. 12. (a) A member of an education income tax council may
exercise the member's votes by passing a resolution and
transmitting the resolution to the county auditor. However, in the
case of an ordinance to impose, rescind, increase, or decrease the
rate of the local option income tax for education, the member must
transmit the resolution to the county auditor by the appropriate
time described in section 17, 18, or 19 of this chapter. The form of
a resolution is as follows:
"The __________ (name of the school corporation) casts its
_____ votes _____ (for or against) the proposed ordinance of
the __________ Education Income Tax Council, which reads
as follows:".
(b) A resolution passed by a member of an education income tax
council exercises all votes of the member on the proposed
ordinance. Those votes may not be changed during the year.
Sec. 13. Any member of an education income tax council may
present an ordinance for consideration. The member must pass a
resolution to propose the ordinance to the education income tax
council and distribute a copy of the proposed ordinance to the
county auditor. The county auditor shall treat a proposed
ordinance presented to the county auditor under this section as a
casting of all the member's votes in favor of that proposed
ordinance. Subject to the limitations of section 14 of this chapter,
the county auditor shall deliver copies of a proposed ordinance that
the county auditor receives to all members of the education income
tax council not later than ten (10) days after receipt of the
proposed ordinance. Not later than thirty (30) days after each
member has received a copy of the proposed ordinance, the county
auditor shall convene a meeting of the education income tax
council for the purpose of considering and voting on the proposed
ordinance. The auditor of a county shall record all votes taken on
the ordinance presented for a vote under the authority of this
chapter and shall immediately send a certified copy of the results
to the department by certified mail.
Sec. 14. (a) An education income tax council may pass only one
(1) ordinance described in section 10(b)(1), 10(b)(2), 10(b)(3), or
10(b)(4) of this chapter in one (1) year. Whenever an ordinance
described in section 10(b)(1), 10(b)(2), 10(b)(3), or 10(b)(4) of this
chapter is passed, the county auditor shall do the following:
(1) Cease distributing proposed ordinances of those types for
the rest of the year.
not more than twenty-five hundredths percent (0.25%). The rate
applies to the adjusted gross income of the school income tax
district's individual taxpayers and to the apportioned net income
of the district's corporate taxpayers. The rate must be the same for
individual taxpayers and for corporate taxpayers.
Sec. 17. (a) To impose the local option income tax for education,
an education income tax council must, after January 1 but before
May 1 of a year, adopt an ordinance. The ordinance must
substantially state the following:
"The ________ Education Income Tax Council imposes the
local option income tax for education on the individual
taxpayers and corporate taxpayers of the ________ (insert
name of county) school income tax district. The local option
income tax for education consists of an individual income tax
and a corporate surtax. The income tax is imposed at a rate of
_____ percent (_____%) on the individual taxpayers and
corporate taxpayers of the school income tax district. The
income tax takes effect July 1 of this year.".
(b) An ordinance adopted under this section takes effect July 1
of the year the ordinance is adopted.
Sec. 18. (a) An education income tax council may increase or
decrease the local option income tax for education rate imposed on
individual taxpayers and corporate taxpayers. To increase or
decrease the rate, the education income tax council must, after
January 1 but before May 1 of a year, adopt an ordinance. The
ordinance must substantially state the following:
"The ________ Education Income Tax Council increases (or
decreases) the local option income tax for education rate. The
tax rate imposed upon the individual taxpayers and on
corporate taxpayers of the school income tax district is
increased (or decreased) from (insert current rate) to (insert
proposed rate). This tax rate increase (or decrease) takes
effect July 1 of this year for individual taxpayers. The
increased (or decreased) rate takes effect January 1 of next
year for corporate taxpayers.".
(b) An ordinance adopted under this section takes effect July 1
of the year the ordinance is adopted.
Sec. 19. (a) The local option income tax for education imposed
by an education income tax council under this chapter remains in
effect until rescinded.
(b) An education income tax council may rescind the local
option income tax for education by adopting an ordinance to
rescind the tax after January 1 but before June 1 of a year.
(c) An ordinance adopted under this section takes effect July 1
of the year the ordinance is adopted.
Sec. 20. If the local option income tax for education is not in
effect during an individual taxpayer's or a corporate taxpayer's
entire taxable year, the amount of local option income tax for
education that the taxpayer owes for that taxable year equals the
product of:
(1) the amount of the local option income tax for education the
taxpayer would owe if the tax had been imposed during the
taxpayer's entire taxable year; multiplied by
(2) a fraction. The numerator equals the number of days
during the taxpayer's taxable year that the local option
income tax for education was in effect. The denominator
equals the total number of days in the taxpayer's taxable year.
Sec. 21. (a) If, for a particular taxable year, an individual
taxpayer is allowed, or an individual taxpayer and the individual
taxpayer's spouse who file a joint return are allowed, a credit for
the elderly or the totally disabled under Section 22 of the Internal
Revenue Code (as defined in
IC 6-3-1-11
), the individual taxpayer
is entitled, or the individual taxpayer and the individual taxpayer's
spouse are entitled, to a credit against their local option income tax
for education liability for that same taxable year. The amount of
the credit equals the lesser of the following:
(1) The product of:
(A) the credit for the elderly or the totally disabled for the
same taxable year; multiplied by
(B) a fraction. The numerator is the local option income
tax for education rate imposed against the individual
taxpayer or the individual taxpayer and the individual
taxpayer's spouse. The denominator is fifteen-hundredths
(0.15).
(2) The amount of local option income tax for education
imposed on the individual taxpayer or the individual taxpayer
and the individual taxpayer's spouse.
(b) If an individual taxpayer and the individual taxpayer's
spouse file a joint return and are subject to different local option
income tax for education tax rates for the same taxable year, they
shall compute the credit under this section by using the formula
provided in subsection (a), except that they shall use the average of
the two (2) tax rates imposed against them as the numerator
referred to in subsection (a)(1)(B).
estimated twelve (12) month revenue collection if the department,
after reviewing the recommendation of the budget agency,
determines that a part of the revenue collection needs to be
distributed during the current calendar year so that the school
income tax district will receive the school income tax district's full
certified distribution for the current calendar year.
Sec. 24. (a) One-half (1/2) of each adopting school income tax
district's certified distribution for a calendar year shall be
distributed from the school income tax district's account
established by section 22 of this chapter to the appropriate county
treasurer before May 1 and the other one-half (1/2) shall be
distributed before November 1 of the calendar year.
(b) All distributions from an account established by section 22
of this chapter shall be made by warrants issued by the auditor of
state to the treasurer of state ordering the appropriate payments.
Sec. 25. The county auditor shall distribute among the school
corporations of the school income tax district the school income tax
district's certified distribution for the calendar year. The amount
that the county auditor shall allocate to a school corporation is
equal to the amount determined under STEP THREE of the
following formula:
STEP ONE: Determine the amount of the certified
distribution available for distribution in the calendar year.
STEP TWO: Determine the percentage of votes that the
school corporation is allocated for the calendar year under
section 11 of this chapter.
STEP THREE: Multiply the STEP ONE amount by the STEP
TWO percentage.
Sec. 26. (a) The county auditor shall each year reduce the
general fund property tax levy of a school corporation receiving a
certified distribution under this chapter in that year. The school
corporation's general fund property tax levy shall be reduced by
the amount of the certified distribution received or to be received
by the school corporation. The state board of tax commissioners
shall certify to the auditor of each county in which a school
corporation receiving a certified distribution is located the
property tax rate applicable to the school corporation's general
fund after the property tax reduction under this section.
(b) A school corporation shall treat a certified distribution that
the school corporation receives or is to receive during a particular
calendar year as a part of the school corporation's property tax
levy for the general fund for that same calendar year for purposes
of fixing the school corporation's budget and for purposes of the
property tax levy limits imposed by
IC 6-1.1-19
and the calculation
of state tuition support under
IC 21-3-1.7.
However, the certified
distributions shall not reduce the total county tax levy that is used
to compute the state property tax replacement credit under
IC 6-1.1-21.
In addition, for the purposes of computing and
distributing any excise taxes or income taxes in which the
distribution is based on property taxes, the certified distributions
shall be treated as though they were property taxes that were due
and payable during that same calendar year.
(c) A school corporation may use certified distributions received
under this chapter only for the purpose of making employer
contributions to the Indiana state teachers' retirement fund on
behalf of the school corporation's employees who are members of
that fund.
Sec. 27. (a) For purposes of this chapter, an individual shall be
treated as an individual taxpayer of the school income tax district
in which the individual:
(1) maintains a residence, if the individual maintains only one
(1) residence in Indiana;
(2) if subdivision (1) does not apply, registers 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) Whether an individual is an individual taxpayer is
determined on January 1 of the calendar year in which the
individual's taxable year commences. If an individual changes the
location of the individual's residence to another school income tax
district in Indiana during a calendar year, the individual's liability
for local option income tax for education is not affected.
Sec. 28. (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;
(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.