Introduced Version
SENATE BILL No. 272
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1.
Synopsis: Property tax benefits for trusts. Specifies that a qualified
personal residence trust is entitled to certain property tax deductions
and the homestead credit during the period in which the grantor of the
trust is entitled to occupy the residence rent free under the terms of the
trust and is otherwise eligible for the deduction or credit. (The
introduced version of this bill was prepared by the probate code study
commission.)
Effective: Upon passage.
Zakas
January 10, 2008, read first time and referred to Committee on Judiciary.
Introduced
Second Regular Session 115th General Assembly (2008)
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SENATE BILL No. 272
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 6-1.1-1-9; (08)IN0272.1.1. -->
SECTION 1. IC 6-1.1-1-9 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 9. (a) For purposes
of this article, the "owner" of tangible property shall be determined by
using the rules contained in this section.
(b) Except as otherwise provided in this section, the holder of the
legal title to personal property, or the legal title in fee to real property,
is the owner of that property.
(c) When title to tangible property passes on the assessment date of
any year, only the person obtaining title is the owner of that property on
the assessment date.
(d) When the mortgagee of real property is in possession of the
mortgaged premises, the mortgagee is the owner of that property.
(e) When personal property is security for a debt and the debtor is
in possession of the property, the debtor is the owner of that property.
(f) When a life tenant of real property is in possession of the real
property, the life tenant is the owner of that property.
(g) When the grantor of a qualified personal residence trust
created under United States Treasury Regulation 25.2702-5(c)(2)
is:
(1) in possession of the real property transferred to the trust;
and
(2) entitled to occupy the real property rent free under the
terms of the trust;
the grantor is the owner of that real property.
SOURCE: IC 6-1.1-12-17.9; (08)IN0272.1.2. -->
SECTION 2. IC 6-1.1-12-17.9, AS ADDED BY P.L.95-2007,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 17.9. A trust is entitled to a deduction under
section 9, 11, 13, 14, 16, or 17.4 of this chapter for real property owned
by the trust and occupied by an individual if the county auditor
determines that the individual:
(1) upon verification in the body of the deed or otherwise, has
either:
(A) a beneficial interest in the trust; or
(B) the right to occupy the real property rent free under
the terms of a qualified personal residence trust created by
the individual under United States Treasury Regulation
25.2702-5(c)(2);
(2) otherwise qualifies for the deduction; and
(3) would be considered the owner of the real property under
IC 6-1.1-1-9(f) or IC 6-1.1-1-9(g).
SOURCE: IC 6-1.1-20.9-2; (08)IN0272.1.3. -->
SECTION 3. IC 6-1.1-20.9-2, AS AMENDED BY P.L.224-2007,
SECTION 39, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 2. (a) Except as otherwise provided in section
5 of this chapter, an individual who on March 1 of a particular year
either owns or is buying a homestead under a contract that provides the
individual is to pay the property taxes on the homestead is entitled each
calendar year to a credit against the property taxes which the individual
pays on the individual's homestead. However, only one (1) individual
may receive a credit under this chapter for a particular homestead in a
particular year.
(b) The amount of the credit to which the individual is entitled
equals the product of:
(1) the percentage prescribed in subsection (d); multiplied by
(2) the amount of the individual's property tax liability, as that
term is defined in IC 6-1.1-21-5, which is:
(A) attributable to the homestead during the particular
calendar year; and
(B) determined after the application of the property tax
replacement credit under IC 6-1.1-21.
(c) For purposes of determining that part of an individual's property
tax liability that is attributable to the individual's homestead, all
deductions from assessed valuation which the individual claims under
IC 6-1.1-12 or IC 6-1.1-12.1 for property on which the individual's
homestead is located must be applied first against the assessed value
of the individual's homestead before those deductions are applied
against any other property.
(d) The percentage of the credit referred to in subsection (b)(1) is as
follows:
YEAR PERCENTAGE
OF THE CREDIT
1996 8%
1997 6%
1998 through 2002 10%
2003 through 2005 20%
2006 28%
2007 and thereafter 20%
However, the percentage credit allowed in a particular county for a
particular year shall be increased if on January 1 of a year an ordinance
adopted by a county income tax council was in effect in the county
which increased the homestead credit. The amount of the increase
equals the amount designated in the ordinance.
(e) Before October 1 of each year, the assessor shall furnish to the
county auditor the amount of the assessed valuation of each homestead
for which a homestead credit has been properly filed under this chapter.
(f) The county auditor shall apply the credit equally to each
installment of taxes that the individual pays for the property.
(g) Notwithstanding the provisions of this chapter, a taxpayer other
than an individual is entitled to the credit provided by this chapter if:
(1) an individual uses the residence as the individual's principal
place of residence;
(2) the residence is located in Indiana;
(3) the individual:
(A) has a beneficial interest in the taxpayer; or
(B) has the right to occupy the residence rent free under
the terms of a qualified personal residence trust created by
the individual under United States Treasury Regulation
25.2702-5(c)(2);
(4) the taxpayer either owns the residence or is buying it under a
contract, recorded in the county recorder's office, that provides
that the individual is to pay the property taxes on the residence;
and
(5) the residence consists of a single-family dwelling and the real
estate, not exceeding one (1) acre, that immediately surrounds
that dwelling.
SOURCE: ; (08)IN0272.1.4. -->
SECTION 4. [EFFECTIVE UPON PASSAGE] IC 6-1.1-1-9,
IC 6-1.1-12-17.9, and IC 6-1.1-20.9-2, all as amended by this act,
apply to property taxes first due and payable after December 31,
2008.
SOURCE: ; (08)IN0272.1.5. -->
SECTION 5.
An emergency is declared for this act.