Introduced Version






HOUSE BILL No. 1031

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-2.5-11; IC 6-3.5-9; IC 6-8.1.

Synopsis: Local option sales tax. Provides that a municipality may levy a local option gross retail tax of 1% of retail sales occurring in the municipality if the office of tourism development certifies the municipality as an outstanding Indiana tourist destination. Provides that a municipality that levies the local option gross retail tax may use the local option gross retail tax revenue for any lawful purpose. Provides that the department of state revenue shall maintain several data bases of local sales tax data associated with the local option gross retail tax, in accordance with the requirements of the Streamlined Sales and Use Tax Agreement.

Effective: July 1, 2009.





Wolkins




    January 7, 2009, read first time and referred to Committee on Ways and Means.







Introduced

First Regular Session 116th General Assembly (2009)


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 2008 Regular Session of the General Assembly.

HOUSE BILL No. 1031



    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 6-2.5-11-2; (09)IN1031.1.1. -->     SECTION 1. IC 6-2.5-11-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 2. As used in this chapter:
        (1) "Agreement" means the Streamlined Sales and Use Tax Agreement.
        (2) "Certified automated system" means software certified jointly by the states that are signatories to the agreement to calculate the tax imposed by each jurisdiction on a transaction, to determine the amount of tax to remit to the appropriate state, and to maintain a record of the transaction.
        (3) "Certified service provider" means an agent certified jointly by the states that are signatories to the agreement to perform all of the seller's sales tax functions.
        (4) "Person" means an individual, a trust, an estate, a fiduciary, a partnership, a limited liability company, a limited liability partnership, a corporation, or any other legal entity.
        (5) "Sales tax" means:
             (A) the state gross retail tax levied under IC 6-2.5; and
            (B) the local option gross retail tax levied under IC 6-3.5-9.

        (6) "Seller" means any person making sales, leases, or rentals of personal property or services.
        (7) "State" means any state of the United States and the District of Columbia.
        (8) "Use tax" means the use tax levied under IC 6-2.5.
SOURCE: IC 6-2.5-11-13; (09)IN1031.1.2. -->     SECTION 2. IC 6-2.5-11-13 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 13. (a) As used in this section, "local taxing jurisdiction" means the taxing jurisdiction of a political subdivision.
    (b) As used in this section, "taxing jurisdiction" means the geographical territory of the state or a political subdivision in which a sales or use tax is in effect.
    (c) The department shall maintain a data base that describes boundary changes for all local taxing jurisdictions. The data base must include a description of each change and the effective date of the change.

     (d) The department shall maintain a data base of all sales and use tax rates for each jurisdiction in Indiana that levies a sales or use tax. The state and each political subdivision in the data base must be identified by codes that conform with Federal Information Processing Standards, as developed by the National Institute of Standards and Technology.
    (e) The department shall maintain a data base that assigns to each five (5) digit and nine (9) digit ZIP code in Indiana the taxing jurisdictions within the ZIP code that levy a sales or use tax in the taxing jurisdiction.

     (f) The department shall maintain the data bases described in subsections (c) through (e) in accordance with the requirements of the agreement.
    (g) The department shall allow sellers and certified service providers access to the data bases described in subsections (c) through (e).
    (h) The department may contract with a vendor to maintain the data bases that the department is required to maintain under this section.

SOURCE: IC 6-2.5-11-14; (09)IN1031.1.3. -->     SECTION 3. IC 6-2.5-11-14 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 14. (a) Except as provided in subsection (b), a seller or certified service provider is not liable for the tax, penalties, and

interest associated with charging and collecting the incorrect amount of sales or use tax for a retail transaction if:
        (1) the seller or certified service provider has relied on erroneous data provided by the department in the data base described in section 13(e) of this chapter; and
        (2) the erroneous data provided by the department in the data base described in section 13(e) of this chapter is the reason that the seller or certified service provider charged and collected the incorrect amount of sales or use tax on the retail transaction.

     (b) If the department:
        (1) corrects the errors in the data base described in section 13(e) of this chapter; and
        (2) provides the seller or certified service provider with notice of the corrected data;
the relief provided by subsection (a) ceases ten (10) days after the seller or certified service provider receives the department's notice of corrected data.

SOURCE: IC 6-3.5-9; (09)IN1031.1.4. -->     SECTION 4. IC 6-3.5-9 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]:
     Chapter 9. Local Option Gross Retail Tax
    Sec. 1. Except as otherwise provided in this chapter, the definitions contained in:
        (1) IC 6-2.5-1; and
        (2) IC 36-1-2;
apply throughout this chapter.
    Sec. 2. As used in this chapter, "adopting municipality" means an eligible municipality that has adopted the local option gross retail tax.
    Sec. 3. As used in this chapter, "eligible municipality" means a municipality certified by the office of tourism development as an outstanding Indiana tourist destination under section 17 of this chapter.
    Sec. 4. As used in this chapter, "gross retail income" has the meaning set forth in IC 6-2.5-1-5, except that the term does not include taxes imposed under IC 6-2.5 or IC 6-9.
    Sec. 5. As used in this chapter, "local option gross retail tax district" of an adopting municipality means the geographic territory in which the local option gross retail tax adopted by the adopting municipality is imposed.
    Sec. 6. (a) Using procedures described in this chapter, the fiscal

body of an eligible municipality may adopt an ordinance to impose or rescind the local option gross retail tax in the local option gross retail tax district of the eligible municipality.
    (b) Before the fiscal body of an eligible municipality may adopt an ordinance to impose or rescind a tax under this chapter, the fiscal body of the eligible municipality must hold a public hearing on the proposed ordinance. The fiscal body of the eligible municipality must provide notice to the public in accordance with IC 5-3-1 of the date, time, and place of the public hearing.
    (c) An ordinance imposing the local option gross retail tax under this chapter must specify the date the local option gross retail tax takes effect. A tax imposed under this chapter must take effect on the first day of a calendar quarter. A tax imposed under this chapter may not take effect until at least sixty (60) days after the date the ordinance imposing the tax is adopted.
    (d) An ordinance imposing the local option gross retail tax under this chapter must specify the boundaries of the eligible municipality on the effective date of the local option gross retail tax. The boundaries of the eligible municipality on the effective date of the local option gross retail tax are the initial boundaries of the local option gross retail tax district of the eligible municipality.
    Sec. 7. (a) If at any time the boundaries of an adopting municipality do not coincide with the boundaries of the local option gross retail tax district of the adopting municipality, the fiscal body of an adopting municipality may adopt an ordinance to alter the boundaries of the local option gross retail tax district to coincide with the boundaries of the adopting municipality.
    (b) An ordinance adopted under subsection (a) must specify the date on which the altered boundaries of the local option gross retail tax district take effect. The altered boundaries of the local option gross retail tax district must take effect on the first day of a calendar quarter. The altered boundaries of the local option gross retail tax district may not take effect until at least sixty (60) days after the date on which the ordinance is adopted.
    (c) An ordinance adopted under subsection (a) must specify the changes to the boundaries of the local option gross retail tax district of the adopting county.
    Sec. 8. The fiscal body of an adopting municipality may adopt an ordinance to rescind the tax. The fiscal body of the adopting municipality must specify in the ordinance the date the rescission of the tax takes effect.
    Sec. 9. (a) If the fiscal body of an eligible municipality adopts an

ordinance under this chapter, the fiscal body of the eligible municipality shall immediately send a certified copy of the ordinance to the department.
    (b) If:
        (1) the fiscal body of an eligible municipality adopts an ordinance to impose the local option gross retail tax under section 6 of this chapter; or
        (2) the fiscal body of an adopting municipality adopts an ordinance to change the boundaries of the adopting municipality's local option gross retail tax district under section 7 of this chapter;
the fiscal body shall immediately transmit information concerning the boundaries of the local option gross retail tax district to the department in an electronic format prescribed by the department.
    Sec. 10. (a) A tax imposed under this chapter by the fiscal body of an adopting municipality applies only to a retail transaction that:
        (1) is subject to the state gross retail tax; and
        (2) is sourced to the local option gross retail tax district of the adopting municipality under the sourcing rules of IC 6-2.5.
    (b) Subsection (a) applies to a local option gross retail tax throughout the period of time an ordinance imposing the local option gross retail tax is in effect. An amendment of the state gross retail tax applies also to the local option gross retail tax in effect in an adopting municipality on the date the amendment to the state gross retail tax becomes effective.
    Sec. 11. (a) This section applies to a retail transaction that is subject to the local option gross retail tax.
    (b) The local option gross retail tax is measured by the gross retail income received by a retail merchant in a retail unitary transaction and is imposed at the following rates:
    LOCAL     GROSS RETAIL INCOME
    OPTION     FROM THE
    GROSS     RETAIL UNITARY
    RETAIL TAX     TRANSACTION
    $    0         less than    $0.50
    $    0.01     at least $0.50 but less than    $1.50
On a retail unitary transaction in which the gross retail income received by the retail merchant is one dollar and fifty cents ($1.50) or more, the local option gross retail tax is one percent (1%) of that gross retail income.
    (c) A retail merchant may apply the rounding rule of

IC 6-2.5-2-2(b) to the unrounded total of:
        (1) the state gross retail tax; plus
        (2) the local option gross retail tax;
that is imposed on a retail transaction.
    Sec. 12. (a) A person who receives goods or services in a retail transaction that is taxed under this chapter is liable for the tax. The person shall pay the tax to the retail merchant as a separate amount added to the consideration for the goods or services. The retail merchant shall collect the tax as an agent for the state and the county. The tax imposed under this chapter shall be imposed, paid, and collected in the same manner in which the state gross retail tax is imposed, paid, and collected under IC 6-2.5.
    (b) An eligible municipality that imposes the local option gross retail tax under this chapter is prohibited from conducting an audit of any retail merchant or purchaser for the purpose of determining whether the proper amount of local option gross retail tax has been collected or paid.
    Sec. 13. (a) A special account within the state general fund shall be established for each adopting municipality that imposes the local option gross retail tax. Revenue collected under this chapter within an adopting municipality shall be deposited in that adopting municipality's account in the state general fund.
    (b) Income earned on money held in an account under subsection (a) becomes a part of that account.
    (c) Revenue remaining in an account established under subsection (a) at the end of a fiscal year does not revert to the state general fund.
    Sec. 14. (a) Revenue derived from the imposition of the local option gross retail tax shall, in the manner prescribed by this section, be distributed to the adopting municipality that imposed it.
    (b) After the last day of each month, the auditor of state shall distribute the amount specified in subsection (c) to the fiscal officer of each adopting municipality.
    (c) The amount to be distributed each month to an adopting municipality under this section is the amount accumulated at the end of the month in the adopting municipality's special account established under section 13 of this chapter.
    (d) The auditor of state may adjust the amount specified in subsection (c) to account for mathematical or clerical errors involving a previous distribution under this section. At the discretion of the auditor of state, an adjustment under this section

may be prorated over two (2) or more future distributions under this section.
     Sec. 15. An adopting municipality may use local option gross retail tax revenue received in a distribution under section 14 of this chapter for any lawful purpose.
    Sec. 16. A municipality may submit an application to the office of tourism development for certification as an outstanding Indiana tourist destination. The application must be made on forms and in the manner prescribed by the office of tourism development.
     Sec. 17. (a) The office of tourism development shall establish a program for certifying municipalities as outstanding Indiana tourist destinations.
     (b) In determining whether to certify a municipality as an outstanding Indiana tourist destination, the office of tourism development shall consider the following factors:
        (1) The estimated amount of annual revenue generated by tourism in the applicant municipality.
        (2) Natural features of the applicant municipality or its environs.
        (3) Cultural attractions of the applicant municipality.
        (4) Any other distinctive attraction associated with the applicant municipality.

SOURCE: IC 6-8.1-1-1; (09)IN1031.1.5. -->     SECTION 5. IC 6-8.1-1-1, AS AMENDED BY P.L.131-2008, SECTION 27, AS AMENDED BY P.L.146-2008, SECTION 358, AND AS AMENDED BY P.L.95-2008, SECTION 15, IS CORRECTED AND AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 1. "Listed taxes" or "taxes" includes only the pari-mutuel taxes (IC 4-31-9-3 through IC 4-31-9-5); the riverboat admissions tax (IC 4-33-12); the riverboat wagering tax (IC 4-33-13); the slot machine wagering tax (IC 4-35-8); the type II gambling game excise tax (IC 4-36-9); 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); a local option gross retail tax (IC 6-3.5-9); 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 excise tax imposed on recreational vehicles and truck campers (IC 6-6-5.1); the hazardous waste disposal tax (IC 6-6-6.6); the cigarette tax (IC 6-7-1); the 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: IC 6-8.1-3-7.1; (09)IN1031.1.6. -->     SECTION 6. IC 6-8.1-3-7.1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 7.1. (a) "Fiscal officer" has the meaning set forth in IC 36-1-2-7.
    (b) The department shall enter into an agreement with the fiscal officer of an entity that has adopted a local option gross retail tax under IC 6-3.5-9, an innkeeper's tax, a food and beverage tax, or an admissions tax under IC 6-9 to furnish the fiscal officer annually with:
        (1) the name of each business collecting the taxes listed in this subsection; and
        (2) the amount of money collected from each business.
    (c) The agreement must provide that the department must provide the information in an electronic format that the fiscal officer can use, as well as a paper copy.
    (d) The agreement must include a provision that, unless in accordance with a judicial order, the fiscal officer, employees of the fiscal officer, former employees of the fiscal officer, counsel of the fiscal officer, agents of the fiscal officer, or any other person may not divulge the names of the businesses, the amount of taxes paid by the businesses, or any other information disclosed to the fiscal officer by the department.
SOURCE: IC 6-8.1-7-1; (09)IN1031.1.7. -->     SECTION 7. IC 6-8.1-7-1, AS AMENDED BY P.L.131-2008, SECTION 29, AND AS AMENDED BY P.L.146-2008, SECTION 359, IS CORRECTED AND AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 1. (a) This subsection does not apply to the disclosure of information concerning a conviction on a tax evasion charge. Unless in accordance with a judicial order or as otherwise provided in this chapter, the department, its employees,

former employees, counsel, agents, or any other person may not divulge the amount of tax paid by any taxpayer, terms of a settlement agreement executed between a taxpayer and the department, investigation records, investigation reports, or any other information disclosed by the reports filed under the provisions of the law relating to any of the listed taxes, including required information derived from a federal return, except to:
        (1) members and employees of the department;
        (2) the governor;
        (3) the attorney general or any other legal representative of the state in any action in respect to the amount of tax due under the provisions of the law relating to any of the listed taxes; or
        (4) any authorized officers of the United States;
when it is agreed that the information is to be confidential and to be used solely for official purposes.
    (b) The information described in subsection (a) may be revealed upon the receipt of a certified request of any designated officer of the state tax department of any other state, district, territory, or possession of the United States when:
        (1) the state, district, territory, or possession permits the exchange of like information with the taxing officials of the state; and
        (2) it is agreed that the information is to be confidential and to be used solely for tax collection purposes.
    (c) The information described in subsection (a) relating to a person on public welfare or a person who has made application for public welfare may be revealed to the director of the division of family resources, and to any director of a county local office of family and children the division of family resources located in Indiana, upon receipt of a written request from either director for the information. The information shall be treated as confidential by the directors. In addition, the information described in subsection (a) relating to a person who has been designated as an absent parent by the state Title IV-D agency shall be made available to the state Title IV-D agency upon request. The information shall be subject to the information safeguarding provisions of the state and federal Title IV-D programs.
    (d) The name, address, Social Security number, and place of employment relating to any individual who is delinquent in paying educational loans owed to a postsecondary educational institution may be revealed to that institution if it provides proof to the department that the individual is delinquent in paying for educational loans. This information shall be provided free of charge to approved postsecondary educational institutions (as defined by IC 21-7-13-6(a)). The

department shall establish fees that all other institutions must pay to the department to obtain information under this subsection. However, these fees may not exceed the department's administrative costs in providing the information to the institution.
    (e) The information described in subsection (a) relating to reports submitted under IC 6-6-1.1-502 concerning the number of gallons of gasoline sold by a distributor and IC 6-6-2.5 concerning the number of gallons of special fuel sold by a supplier and the number of gallons of special fuel exported by a licensed exporter or imported by a licensed transporter may be released by the commissioner upon receipt of a written request for the information.
    (f) The information described in subsection (a) may be revealed upon the receipt of a written request from the administrative head of a state agency of Indiana when:
        (1) the state agency shows an official need for the information; and
        (2) the administrative head of the state agency agrees that any information released will be kept confidential and will be used solely for official purposes.
    (g) The information described in subsection (a) may be revealed upon the receipt of a written request from the chief law enforcement officer of a state or local law enforcement agency in Indiana, when it is agreed that the information is to be confidential and to be used solely for official purposes.
    (g) (h)
The name and address of retail merchants, including township, as specified in IC 6-2.5-8-1(j) may be released solely for tax collection purposes to township assessors and county assessors.
    (h) (i) The department shall notify the appropriate innkeepers' tax board, bureau, or commission that a taxpayer is delinquent in remitting innkeepers' taxes under IC 6-9.
    (i) (j) All information relating to the delinquency or evasion of the motor vehicle excise tax may be disclosed to the bureau of motor vehicles in Indiana and may be disclosed to another state, if the information is disclosed for the purpose of the enforcement and collection of the taxes imposed by IC 6-6-5.
    (j) (k) All information relating to the delinquency or evasion of commercial vehicle excise taxes payable to the bureau of motor vehicles in Indiana may be disclosed to the bureau and may be disclosed to another state, if the information is disclosed for the purpose of the enforcement and collection of the taxes imposed by IC 6-6-5.5.
    (k) (l) All information relating to the delinquency or evasion of

commercial vehicle excise taxes payable under the International Registration Plan may be disclosed to another state, if the information is disclosed for the purpose of the enforcement and collection of the taxes imposed by IC 6-6-5.5.
    (m) All information relating to the delinquency or evasion of the excise taxes imposed on recreational vehicles and truck campers that are payable to the bureau of motor vehicles in Indiana may be disclosed to the bureau and may be disclosed to another state if the information is disclosed for the purpose of the enforcement and collection of the taxes imposed by IC 6-6-5.1.
    (l) (n)
This section does not apply to:
        (1) the beer excise tax (IC 7.1-4-2);
        (2) the liquor excise tax (IC 7.1-4-3);
        (3) the wine excise tax (IC 7.1-4-4);
        (4) the hard cider excise tax (IC 7.1-4-4.5);
        (5) the malt excise tax (IC 7.1-4-5);
        (6) the motor vehicle excise tax (IC 6-6-5);
        (7) the commercial vehicle excise tax (IC 6-6-5.5); and
        (8) the fees under IC 13-23.
    (m) (o) The name and business address of retail merchants within each county that sell tobacco products may be released to the division of mental health and addiction and the alcohol and tobacco commission solely for the purpose of the list prepared under IC 6-2.5-6-14.2.
     (p) The department shall notify the appropriate county treasurer that a taxpayer is delinquent in remitting local option gross retail taxes collected under IC 6-3.5-9.