Introduced Version






SENATE BILL No. 270

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-1.1-12-41; IC 6-3.5-7-25.

Synopsis: Inventory tax deduction ordinances. Extends until June 1, 2005, the time in which an ordinance may be adopted in a county to provide: (1) a property tax deduction for inventory assessed in 2005; and (2) a homestead credit funded from county economic development income tax revenues to eliminate the effects of the inventory deduction on homesteads.

Effective: Upon passage; March 30, 2004 (retroactive); March 31, 2005 (retroactive).





Weatherwax




    January 6, 2005, read first time and referred to Committee on Tax and Fiscal Policy.







Introduced

First Regular Session 114th General Assembly (2005)


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 2004 Regular Session of the General Assembly.

SENATE BILL No. 270



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

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

SOURCE: IC 6-1.1-12-41; (05)IN0270.1.1. -->     SECTION 1. IC 6-1.1-12-41 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE MARCH 30, 2004 (RETROACTIVE)]: Sec. 41. (a) This section does not apply to assessment years beginning after December 31, 2005.
    (b) As used in this section, "assessed value of inventory" means the assessed value determined after the application of any deductions or adjustments that apply by statute or rule to the assessment of inventory, other than the deduction allowed under subsection (f).
    (c) As used in this section, "county income tax council" means a council established by IC 6-3.5-6-2.
    (d) As used in this section, "fiscal body" has the meaning set forth in IC 36-1-2-6.
    (e) As used in this section, "inventory" has the meaning set forth in IC 6-1.1-3-11.
    (f) An ordinance may be adopted in a county to provide that a deduction applies to the assessed value of inventory located in the county. The deduction is equal to one hundred percent (100%) of the

assessed value of inventory located in the county for the appropriate year of assessment. An ordinance adopted under this subsection must be adopted before January 1 of a calendar year beginning after December 31, 2002. An ordinance adopted under this section in a particular year applies:
         (1) if adopted before March 31, 2004, to each subsequent assessment year ending before January 1, 2006; and
        (2) if adopted after March 30, 2004, and before June 1, 2005, to the March 1, 2005, assessment date.

An ordinance adopted under this section may be consolidated with an ordinance adopted under IC 6-3.5-7-25 or IC 6-3.5-7-26. The consolidation of an ordinance adopted under this section with an ordinance adopted under IC 6-3.5-7-26 does not cause the ordinance adopted under IC 6-3.5-7-26 to expire after December 31, 2005.
    (g) An ordinance may not be adopted under subsection (f) after March May 30, 2004. 2005. However, an ordinance adopted under this section:
         (1) before March 31, 2004, may be amended after March 30, 2004; and
        (2) before June 1, 2005, may be amended after May 30, 2005;

to consolidate an ordinance adopted under IC 6-3.5-7-26.
    (h) The entity that may adopt the ordinance permitted under subsection (f) is:
        (1) the county income tax council if the county option income tax is in effect on January 1 of the year in which an ordinance under this section is adopted;
        (2) the county fiscal body if the county adjusted gross income tax is in effect on January 1 of the year in which an ordinance under this section is adopted; or
        (3) the county income tax council or the county fiscal body, whichever acts first, for a county not covered by subdivision (1) or (2).
To adopt an ordinance under subsection (f), a county income tax council shall use the procedures set forth in IC 6-3.5-6 concerning the imposition of the county option income tax. The entity that adopts the ordinance shall provide a certified copy of the ordinance to the department of local government finance before February 1.
    (i) A taxpayer is not required to file an application to qualify for the deduction permitted under subsection (f).
    (j) The department of local government finance shall incorporate the deduction established in this section in the personal property return form to be used each year for filing under IC 6-1.1-3-7 or

IC 6-1.1-3-7.5 to permit the taxpayer to enter the deduction on the form. If a taxpayer fails to enter the deduction on the form, the township assessor shall:
        (1) determine the amount of the deduction; and
        (2) within the period established in IC 6-1.1-16-1, issue a notice of assessment to the taxpayer that reflects the application of the deduction to the inventory assessment.
    (k) The deduction established in this section must be applied to any inventory assessment made by:
        (1) an assessing official;
        (2) a county property tax board of appeals; or
        (3) the department of local government finance.

SOURCE: IC 6-3.5-7-25; (05)IN0270.1.2. -->     SECTION 2. IC 6-3.5-7-25 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE MARCH 31, 2005 (RETROACTIVE)]: Sec. 25. (a) This section applies only to a county that has adopted an ordinance under IC 6-1.1-12-41(f).
    (b) For purposes of this section, "imposing entity" means the entity that adopted the ordinance under IC 6-1.1-12-41(f).
    (c) The imposing entity may adopt an ordinance to provide for the use of the certified distribution described in section 16(c) of this chapter for the purpose provided in subsection (e). A county income tax council that adopts an ordinance under this subsection shall use the procedures set forth in IC 6-3.5-6 concerning the adoption of an ordinance for the imposition of the county option income tax. Except as provided in subsection (j), an ordinance must be adopted under this subsection after January 1 but before April June 1 of a calendar year. The ordinance may provide for an additional rate under section 5(p) of this chapter. An ordinance adopted under this subsection:
        (1) first applies to the certified distribution described in section 16(c) of this chapter made in the calendar year that immediately succeeds the calendar year in which the ordinance is adopted;
        (2) must specify the calendar years to which the ordinance applies; and
        (3) must specify that the certified distribution must be used to provide for:
            (A) uniformly applied increased homestead credits as provided in subsection (f); or
            (B) allocated increased homestead credits as provided in subsection (h).
An ordinance adopted under this subsection may be combined with an ordinance adopted under section 26 of this chapter.
    (d) If an ordinance is adopted under subsection (c), the percentage

of the certified distribution specified in the ordinance for use for the purpose provided in subsection (e) shall be:
        (1) retained by the county auditor under subsection (g); (i); and
        (2) used for the purpose provided in subsection (e) instead of the purposes specified in the capital improvement plans adopted under section 15 of this chapter.
    (e) If an ordinance is adopted under subsection (c), the imposing entity shall use the certified distribution described in section 16(c) of this chapter to increase the homestead credit allowed in the county under IC 6-1.1-20.9 for a year to offset the effect on homesteads in the county resulting from a county deduction for inventory under IC 6-1.1-12-41.
    (f) If the imposing entity specifies the application of uniform increased homestead credits under subsection (c)(3)(A), the county auditor shall, for each calendar year in which an increased homestead credit percentage is authorized under this section, determine:
        (1) the amount of the certified distribution that is available to provide an increased homestead credit percentage for the year;
        (2) the amount of uniformly applied homestead credits for the year in the county that equals the amount determined under subdivision (1); and
        (3) the increased percentage of homestead credit that equates to the amount of homestead credits determined under subdivision (2).
    (g) The increased percentage of homestead credit determined by the county auditor under subsection (f) applies uniformly in the county in the calendar year for which the increased percentage is determined.
    (h) If the imposing entity specifies the application of allocated increased homestead credits under subsection (c)(3)(B), the county auditor shall, for each calendar year in which an increased homestead credit is authorized under this section, determine:
        (1) the amount of the certified distribution that is available to provide an increased homestead credit for the year; and
        (2) an increased percentage of homestead credit for each taxing district in the county that allocates to the taxing district an amount of increased homestead credits that bears the same proportion to the amount determined under subdivision (1) that the amount of inventory assessed value deducted under IC 6-1.1-12-41 in the taxing district for the immediately preceding year's assessment date bears to the total inventory assessed value deducted under IC 6-1.1-12-41 in the county for the immediately preceding year's assessment date.


    (i) The county auditor shall retain from the payments of the county's certified distribution an amount equal to the revenue lost, if any, due to the increase of the homestead credit within the county. The money shall be distributed to the civil taxing units and school corporations of the county:
        (1) as if the money were from property tax collections; and
        (2) in such a manner that no civil taxing unit or school corporation will suffer a net revenue loss because of the allowance of an increased homestead credit.
    (j) An entity authorized to adopt:
        (1) an ordinance under subsection (c); and
        (2) an ordinance under IC 6-1.1-12-41(f);
may consolidate the two (2) ordinances. The limitation under subsection (c) that an ordinance must be adopted after January 1 of a calendar year does not apply if a consolidated ordinance is adopted under this subsection. However, notwithstanding subsection (c)(1), the ordinance must state that it first applies to certified distributions in the calendar year in which property taxes are initially affected by the deduction under IC 6-1.1-12-41.
SOURCE: ; (05)IN0270.1.3. -->     SECTION 3. [EFFECTIVE UPON PASSAGE] (a) An ordinance that:
        (1) is adopted under IC 6-1.1-12-41 or IC 6-3.5-7-25 after March 30, 2004, and before the passage of this act; and
        (2) would have been valid if this act had been enacted before the time the ordinance was adopted;
shall be treated as valid to the same extent as if this act had been enacted before the ordinance was adopted.
    (b) The department of local government finance may adopt interim rules in the manner provided for the adoption of emergency rules under IC 4-22-2-37.1 to govern the determination of deductions, the processing of personal property tax returns, and the calculation of the assessed valuation of each taxpayer in cases in which:
        (1) the personal property of the taxpayer is eligible for a deduction under IC 6-1.1-12-41, as amended by this act, as the result of the adoption of an ordinance under IC 6-1.1-12-41, as amended by this act,
after March 30, 2004; and
        (2) the taxpayer did not take the deduction on the taxpayer's personal property tax return.
The rules may include special procedures and filing dates for filing an amended return.
    (c) An interim rule adopted under subsection (b) expires on the

earliest of the following:
        (1) The date that the department of local government finance adopts an interim rule under subsection (b) to supersede a rule previously adopted under subsection (b).
        (2) The date that the department of local government finance adopts a permanent rule under IC 4-22-2 to supersede a rule previously adopted under subsection (b).
        (3) The date that the department of local government finance adopts under subsection (b) or IC 4-22-2 a repeal of a rule previously adopted under subsection (b).
        (4) December 31, 2006.

SOURCE: ; (05)IN0270.1.4. -->     SECTION 4. An emergency is declared for this act.