Introduced Version
HOUSE BILL No. 1294
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-12-44.
Synopsis: Rental dwelling property tax deduction. Establishes a
property tax deduction for residential rental property. Specifies the
deduction percentage for taxes payable in 2007 and 2008. Provides that
the deduction for taxes payable after 2008 is based on deduction
percentages set by the department of local government finance based
on certain guidelines.
Effective: Upon passage.
Hoffman
January 10, 2006, read first time and referred to Committee on Ways and Means.
Introduced
Second Regular Session 114th General Assembly (2006)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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NEW will appear in that style type in the introductory clause of each SECTION that adds
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HOUSE BILL No. 1294
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 6-1.1-12-44; (06)IN1294.1.1. -->
SECTION 1. IC 6-1.1-12-44 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
Sec. 44. (a) As used in this section:
(1) "2002 proportion" means for property taxes first due and
payable in 2002 the proportion that the recalculated gross tax
liability per dollar of gross assessed value attributable to
principal rental dwellings bears to the recalculated gross tax
liability per dollar of gross assessed value attributable to all
dwellings;
(2) "2009 proportion" means for property taxes first due and
payable in 2009 the proportion that the recalculated gross tax
liability per dollar of gross assessed value attributable to
principal rental dwellings bears to the recalculated gross tax
liability per dollar of gross assessed value attributable to all
dwellings;
(3) "condominium" has the meaning set forth in IC 32-25-2-7;
(4) "condominium building" means a building in which one
(1) or more condominium units are located;
(5) "condominium unit" has the meaning set forth in
IC 32-25-2-9;
(6) "department" refers to the department of local
government finance;
(7) "dwelling" has the meaning set forth in IC 6-1.1-20.9-1(1);
(8) "gross assessed value" means assessed value without the
application of deductions under this chapter;
(9) "majority interest condominium owner" means a person,
an entity, or affiliated or related entities that own one (1) or
more condominium units that comprise more than fifty
percent (50%) of the area (excluding common areas) of a
condominium building;
(10) "principal rental dwelling" means:
(A) for the assessment date in 2001, a dwelling:
(i) for which the credit under IC 6-1.1-20.9 did not apply
for property taxes first due and payable in 2002; and
(ii) that had an assessed value of at least twelve thousand
dollars ($12,000); and
(B) for the assessment date in 2008, a dwelling:
(i) that an individual with a leasehold interest in the
property uses as the individual's principal place of
residence, regardless of whether the individual is absent
from the property while in a facility described in
subsection (b); and
(ii) that has an assessed value of at least seventy
thousand dollars ($70,000);
(11) "recalculated gross tax liability" means liability for
property taxes calculated without the application of:
(A) deductions under this chapter, except the deduction
under section 37 of this chapter; or
(B) any credit under this article; and
(12) "standard deduction amount" means the maximum
amount of the standard deduction under section 37(b)(2) of
this chapter.
(b) The term "principal rental dwelling" does not include any
of the following:
(1) A hospital licensed under IC 16-21.
(2) A facility licensed under IC 16-28.
(3) A Christian Science home or sanatorium.
(4) A group home licensed under IC 12-17.4.
(5) An establishment that serves as an emergency shelter for:
(A) victims of domestic violence;
(B) homeless persons; or
(C) other similar purposes.
(6) A fraternity, sorority, or student cooperative housing
organization described in IC 6-2.5-5-21.
(c) For property taxes first due and payable in 2007 and 2008,
subject to subsections (j), (k), and (l), the owner of a building that
contains one (1) or more dwellings that one (1) or more individuals
with a leasehold interest in the property use as the individuals'
principal place of residence (regardless of whether the individuals
are absent from the property while in a facility described in
subsection (b)) is entitled to a deduction from the assessed value of
the building and the land on which the building is located in the
amount determined under subsection (d).
(d) Subject to subsection (e), if the number of dwellings
described in subsection (c) in the building is:
(1) less than five (5), the amount of the deduction under
subsection (c) is the product of:
(A) sixty-six percent (66%); and
(B) the standard deduction amount; or
(2) greater than four (4), the amount of the deduction under
subsection (c) is the product of:
(A) the number of dwellings in the building;
(B) the amount determined under subdivision (1); and
(C) the percentage from the following table that
corresponds to the number of dwellings in the building:
NUMBER OF UNITS PERCENTAGE
5 to 8 25%
9 to 20 15%
more than 20 10%
(e) The deduction amount under this section may not exceed
fifty percent (50%) of the combined assessed value of the building
and the land.
(f) For property taxes first due and payable in 2009 and later
years, deductions that are calculated in the same manner provided
in subsection (d) apply, except that the deduction percentage
determined by the department under subsection (g) is substituted
for the percentage indicated in subsection (d)(1)(A).
(g) Before January 1, 2008, the department shall, based on the
department's best estimates:
(1) for property taxes first due and payable in 2009, determine
a deduction percentage calculated to result, when the
deduction percentage is substituted under subsection (f), in a
2009 proportion that equals the 2002 proportion; and
(2) report the deduction percentage determined under
subdivision (1) to:
(A) the legislative council in an electronic format under
IC 5-14-6; and
(B) county auditors.
(h) A certificate of occupancy that complies with this subsection
is prima facie evidence that a building and the land on which the
building is located contain the number of dwellings specified in the
certificate. To comply with this subsection, the certificate of
occupancy must:
(1) be prepared on a form prescribed by the department;
(2) be signed under penalties of perjury by:
(A) the owner of the building containing one (1) or more
dwellings; or
(B) the principal officer of the entity owning the building;
and
(3) indicate that:
(A) with respect to a building that contains only one (1)
dwelling, the unit was used as a principal place of
residence; and
(B) with respect to a building that contains more than one
(1) dwelling, substantially all the dwellings in the building
were used as principal places of residence;
on the assessment date for which the deduction under this
section applies.
(i) To obtain the deduction under this section, the:
(1) owner of the building containing a dwelling; or
(2) principal officer for the cooperative, common interest
community, owner's association, or other entity owning the
building;
must file a certified application in duplicate, on forms prescribed
by the department, with the auditor of the county in which the
property is subject to assessment. The certified application must be
filed before May 11 of the year containing the assessment date to
which the application applies.
(j) If the owner of a building containing a dwelling is eligible to
receive:
(1) a homestead credit for the building under IC 6-1.1-20.9; or
(2) the standard deduction for the building under section 37
of this chapter;
the owner may not claim the deduction provided under this section.
(k) If a parcel of land contains more than one (1) building for
which a deduction is claimed under this section, the township
assessor shall allocate the assessed value of the land among the
buildings on the parcel in proportion to the assessed value of each
building. The county auditor shall use the allocated assessed value
of land under this section in determining the amount of the
deduction that is to be granted under this section.
(l) The owner of a condominium unit that uses the condominium
unit as a dwelling is eligible for a deduction under this section.
Each condominium unit that is owned by a co-owner (as defined in
IC 32-25-2-11) that is not a majority interest condominium owner
is treated as a separate building for the purpose of applying this
section. The amount of the deduction under this section for one (1)
or more condominium units owned by a majority interest
condominium owner is:
(1) determined as if:
(A) the majority interest condominium owner were the
owner of the condominium building; and
(B) each condominium unit owned by the majority interest
condominium owner in the condominium building and
used as a dwelling were a separate dwelling contained in
the building; and
(2) apportioned equally among the condominium units in the
condominium building.
SOURCE: ; (06)IN1294.1.2. -->
SECTION 2. [EFFECTIVE UPON PASSAGE] (a)
Notwithstanding IC 6-1.1-12-44(i), as added by this act, a certified
application must be filed before July 1, 2006, under that subsection
to claim a deduction under IC 6-1.1-12-44, as added by this act, for
property taxes first due and payable in 2007.
(b) This SECTION expires January 1, 2008.
SOURCE: ; (06)IN1294.1.3. -->
SECTION 3.
An emergency is declared for this act.