HOUSE BILL No. 1539
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-1-0.5; IC 6-7.1; IC 6-8-12; IC 6-8.1-1-1.
Synopsis: Replacement of property tax with transfer tax. Provides that
property may not be assessed for taxation after 2010. Establishes the
real estate transfer tax on all transfers of a real property interest for
valuable consideration. Imposes the real estate transfer tax at the rate
of 10% of the consideration paid for the conveyance. Specifies
exemptions from the real estate transfer tax. Establishes the county real
estate transfer tax fund. Requires distributions from the fund to the civil
taxing units and school corporations located in the county proportional
to their 2010 property tax levies.
Effective: July 1, 2007.
January 23, 2007, read first time and referred to Committee on Ways and Means.
First Regular Session 115th General Assembly (2007)
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HOUSE BILL No. 1539
A BILL FOR AN ACT to amend the Indiana Code concerning
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 6-1.1-1-0.5; (07)IN1539.1.1. -->
SECTION 1. IC 6-1.1-1-0.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2007]: Sec. 0.5. This article does not apply after December 31,
SOURCE: IC 6-7.1; (07)IN1539.1.2. -->
SECTION 2. IC 6-7.1 IS ADDED TO THE INDIANA CODE AS A
ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1,
ARTICLE 7.1. REAL ESTATE TRANSFER TAX
Chapter 1. Applicability
Sec. 1. Except as provided in section 2 of this chapter, this
article applies to the transfer of a real property interest for
valuable consideration that occurs after December 31, 2010.
Sec. 2. (a) This article does not apply to the following:
(1) A transfer of a real property interest for a consideration
of less than one hundred dollars ($100).
(2) A contract or transfer that is performed in Indiana but
includes land outside Indiana.
(3) A lease, including an oil and gas lease, or a transfer of a
(4) A transfer of rights and interests for underground gas
(5) The partition of land between tenants in common, joint
tenants, or tenants by the entirety.
(6) The following conveyances:
(A) A conveyance between spouses.
(B) A conveyance from a parent to the parent's natural
child, stepchild, or adopted child.
(C) A conveyance from a grandparent to the grandparent's
natural grandchild, stepgrandchild, or adopted grandchild.
(7) A transfer of mineral rights and interests.
(b) An action with respect to a property interest is not a transfer
for valuable consideration if the action is evidenced by one (1) of
(1) A judgment or an order of a court of record making or
ordering a transfer, except when a specific monetary
consideration is specified or ordered by the court.
(2) An instrument used to clarify boundary lines when
monetary consideration is not given.
(3) A quitclaim deed that does not serve as a source of title.
(4) A land contract in which the legal title does not pass to the
grantee until the total consideration specified in the contract
has been paid.
(5) An instrument creating a joint tenancy between two (2) or
more persons when at least one (1) of the persons already
owns the property.
(6) An instrument that conveys property or an interest in
property to a receiver, an administrator, or a trustee in a
bankruptcy or an insolvency proceeding.
(7) A written instrument transferring an interest in property
under a foreclosure of a mortgage, including a written
instrument given instead of foreclosure of a mortgage. This
exemption does not apply to a subsequent transfer of the
foreclosed property by the entity that foreclosed on the
(8) An instrument evidencing an interest in personal property.
(9) An instrument or writing given as security, including a
mortgage or trust deed or any assignment or discharge of
(10) An instrument in which the grantor is the United States,
the state, any political subdivision or municipality, or a public
officer acting in the officer's official capacity.
(11) An instrument given in foreclosure or instead of
foreclosure of a loan made, guaranteed, or insured by the
United States, the state, a political subdivision, or a public
officer acting in the officer's official capacity.
(12) An instrument given to the United States, the state, or a
public officer as grantee, under the terms, guarantee, or
insurance of a loan guaranteed or insured by the grantee.
Chapter 2. Definitions
Sec. 1. The definitions in this chapter apply throughout this
Sec. 2. "Civil taxing unit" means any entity, except a school
corporation, of the type authorized before January 1, 2011, to
impose ad valorem property taxes.
Sec. 3. "Conveyance" means any transfer of a real property
interest for valuable consideration.
Sec. 4. "Conveyance document" means any document, deed,
contract of sale, agreement, judgment, lease that includes the fee
simple estate, or other document presented for recording that
purports to transfer a real property interest for valuable
Sec. 5. "Department" refers to the department of state revenue.
Sec. 6. "School corporation" means a public school corporation
established under Indiana law.
Sec. 7. "Tax" means the real estate transfer tax established by
Chapter 3. General Provisions
Sec. 1. (a) A real estate transfer tax is established on any
transfer for valuable consideration of real property in a county.
(b) The tax is imposed at the rate of ten percent (10%) of the
total consideration actually paid or required to be paid in exchange
for the conveyance of the real property as stated in the real estate
transfer form filed under section 4 of this chapter.
Sec. 2. The seller or grantor of a real property interest is liable
for the tax.
Sec. 3. The real estate transfer tax is a listed tax for purposes of
Sec. 4. When a conveyance document is filed with the county
auditor under section 9 of this chapter, the seller or grantor shall
file a real estate transfer form and pay the tax due to the county
Sec. 5. The department shall prescribe a real estate transfer
form for use under this chapter. The form prescribed by the
department must include at least the following information:
(1) The key number (as defined in IC 6-1.1-1-8.5) of the
(2) Whether the entire parcel is being conveyed.
(3) The address of the property.
(4) The date of the execution of the form.
(5) The date the property was transferred.
(6) An estimate of any personal property included in the
(7) The name and address of each transferor and transferee.
(8) The ownership interest transferred.
(9) The total consideration actually paid or required to be
paid in exchange for the conveyance, whether it is money,
property, a service, an agreement, or other consideration, but
excluding tax payments and payments for legal and other
services that are incidental to the conveyance.
(10) Other information as required by the department to
carry out this article.
Sec. 6. The county recorder may not accept a conveyance
document for recording unless:
(1) the real estate transaction form signed by the parties is
included with the document; and
(2) the tax has been paid to the county auditor.
Sec. 7. (a) A real estate transfer form must be signed by at least
one (1) seller to the transaction and at least one (1) buyer to the
transaction or by an attorney or an agent for a seller or buyer.
(b) A person who signs a real estate transfer form shall attest in
writing and under penalties of perjury that to the best of the
person's knowledge and belief the information contained in the real
estate transfer form is true and correct.
Sec. 8. A tax may not be collected under this article for a
conveyance document if the conveyance was made under a written
executory contract upon which the tax was previously paid.
Sec. 9. (a) The county auditor shall keep a transfer book,
arranged by townships, cities, and towns. In the transfer book the
county auditor shall enter a description, for purposes of this
article, of real property that is conveyed by deed or partition, the
date of the conveyance, the names of the parties, and the post office
address of the grantee.
(b) In addition, the county auditor shall endorse on the deed or
instrument of conveyance the words "entered for taxation subject
to final acceptance for transfer", "not taxable", "has already been
listed for taxation", or "entered for taxation". The deed or
instrument must include on its face the post office address of the
Chapter 4. County Real Estate Transfer Fund
Sec. 1. A county real estate transfer tax fund is established in
each county. The fund is administered by the county auditor.
Sec. 2. The county auditor shall deposit in the county real estate
transfer tax fund the money collected from the real estate transfer
tax under this article.
Sec. 3. (a) The county auditor shall distribute the money in the
fund to the civil taxing units and school corporations in the county
as distributive shares in the amounts determined under this
(b) The amount of distributive shares that each civil taxing unit
and school corporation in a county is entitled to receive during a
month equals the product of the following:
(1) The amount of revenue that is to be distributed as
distributive shares during that month; multiplied by
(2) A fraction. The numerator of the fraction equals the total
property taxes that are first due and payable to the civil
taxing unit or school corporation in 2010. The denominator of
the fraction equals the sum of the total property taxes that are
first due and payable to all civil taxing units of the county in
(c) Notwithstanding subsection (b), if a civil taxing unit or
school corporation did not impose a property tax levy in 2010, that
civil taxing unit or school corporation is entitled to receive a part
of the revenue to be distributed as distributive shares under this
section within the county. The fractional amount that the civil
taxing unit or school corporation is entitled to receive each month
during a calendar year equals the product of the following:
(1) The amount to be distributed as distributive shares during
that month; multiplied by
(2) A fraction. The numerator of the fraction equals the
budget of that civil taxing unit or school corporation for that
calendar year. The denominator of the fraction equals the
total budgets of all civil taxing units and school corporations
of that county for that calendar year.
(d) If for a calendar year a civil taxing unit is allocated a part of
a county's distributive shares by subsection (c), the formula used
in subsection (b) to determine all other civil taxing units'
distributive shares shall be changed each month for that same year
by reducing the amount to be distributed as distributive shares
under subsection (b) by the amount of distributive shares allocated
under subsection (c) for that same month.
(e) For purposes of this section, a school corporation's budget
does not include any part of the budget funded by distributions of
state money under IC 21.
Chapter 5. Penalties
Sec. 1. A person who knowingly or intentionally:
(1) falsifies the value of transferred real property; or
(2) omits or falsifies any information required to be provided
in a real estate transfer form under this article;
commits a Class C misdemeanor.
Sec. 2. A public official who knowingly or intentionally accepts
a real estate transfer document for filing in violation of this article
commits a Class C misdemeanor.
SOURCE: IC 6-8-12; (07)IN1539.1.3. -->
SECTION 3. IC 6-8-12 IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
Chapter 12. State and Local Taxation of Property
Sec. 1. Tangible property (as defined in IC 6-1.1-1-19) may not
be assessed for taxation after December 31, 2010.
SOURCE: IC 6-8.1-1-1; (07)IN1539.1.4. -->
SECTION 4. IC 6-8.1-1-1, AS AMENDED BY P.L.162-2006,
SECTION 35, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2007] : Sec. 1. "Listed taxes" or "taxes" includes only the
pari-mutuel taxes (IC 4-31-9-3 through IC 4-31-9-5); the river boat
admissions tax (IC 4-33-12); the river boat wagering tax (IC 4-33-13);
the gross income tax (IC 6-2.1) (repealed); the utility receipts and
utility services use taxes (IC 6-2.3); the state gross retail and use taxes
(IC 6-2.5); the adjusted gross income tax (IC 6-3); the supplemental net
income tax (IC 6-3-8) (repealed); the county adjusted gross income tax
(IC 6-3.5-1.1); the county option income tax (IC 6-3.5-6); the county
economic development income tax (IC 6-3.5-7); the municipal option
income tax (IC 6-3.5-8); the auto rental excise tax (IC 6-6-9); the
financial institutions tax (IC 6-5.5); the gasoline tax (IC 6-6-1.1); the
alternative fuel permit fee (IC 6-6-2.1); the special fuel tax
(IC 6-6-2.5); the motor carrier fuel tax (IC 6-6-4.1); a motor fuel tax
collected under a reciprocal agreement under IC 6-8.1-3; the motor
vehicle excise tax (IC 6-6-5); the commercial vehicle excise tax
(IC 6-6-5.5); the hazardous waste disposal tax (IC 6-6-6.6); the
cigarette tax (IC 6-7-1); the real estate transfer tax (IC 6-7.1);
beer excise tax (IC 7.1-4-2); the liquor excise tax (IC 7.1-4-3); the wine
excise tax (IC 7.1-4-4); the hard cider excise tax (IC 7.1-4-4.5); the
malt excise tax (IC 7.1-4-5); the petroleum severance tax (IC 6-8-1);
the various innkeeper's taxes (IC 6-9); the various food and beverage
taxes (IC 6-9); the county admissions tax (IC 6-9-13 and IC 6-9-28);
the oil inspection fee (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.
SOURCE: ; (07)IN1539.1.5. -->
SECTION 5. [EFFECTIVE JULY 1, 2007] (a) Before July 1, 2010,
the department of state revenue shall:
(1) prescribe the real estate transfer form required under
IC 6-7.1-3, as added by this act; and
(2) make the form described in subdivision (1) available to
each county auditor.
(b) This SECTION expires January 1, 2011.
SOURCE: ; (07)IN1539.1.6. -->
SECTION 6. [EFFECTIVE JULY 1, 2007] (a) As used in this
SECTION, "committee" refers to the interim study committee on
property tax elimination established by this SECTION.
(b) The interim study committee on property tax elimination is
established. The committee shall prepare legislation for
introduction in the 2010 session of the general assembly to bring all
laws in conflict with this act into conformity with this act.
(c) The committee shall operate under the policies governing
study committees adopted by the legislative council.
(d) The affirmative votes of a majority of the voting members
appointed to the committee are required for the committee to take
action on any measure, including final reports.
(e) This SECTION expires November 1, 2009.