Introduced Version
HOUSE BILL No. 1374
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-8.1-1-1; IC 6-9-43.
Synopsis: Municipal food and beverage tax. Authorizes a municipal
legislative body to impose by ordinance a municipal food and beverage
tax. Provides that the tax may not exceed 1% of the gross retail income
received from retail food and beverage transactions. Provides that the
tax does not apply to a transaction that is exempt from the sales tax.
Provides that the tax does not apply to a consolidated city, a
municipality that has imposed a food and beverage tax under current
law, or a municipality entitled to receive county food and beverage tax
revenue.
Effective: July 1, 2012.
McClain
January 12, 2012, read first time and referred to Committee on Ways and Means.
Introduced
Second Regular Session 117th General Assembly (2012)
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 2011 Regular Session of the General Assembly.
HOUSE BILL No. 1374
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 6-8.1-1-1; (12)IN1374.1.1. -->
SECTION 1. IC 6-8.1-1-1, AS AMENDED BY P.L.182-2009(ss),
SECTION 247, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2012]: 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(repealed); the utility receipts and utility services use taxes (IC 6-2.3);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tax (IC 6-3); the supplemental net income tax (IC 6-3-8) (repealed); the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 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); a municipal food and beverage tax
(IC 6-9-43); the regional transportation improvement income tax
(IC 8-24-17); 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 6-9-43; (12)IN1374.1.2. -->
SECTION 2. IC 6-9-43 IS ADDED TO THE INDIANA CODE AS
A
NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2012]:
Chapter 43. Uniform Municipal Food and Beverage Tax
Sec. 1. This chapter does not apply to any of the following:
(1) A consolidated city.
(2) A municipality imposing a food and beverage tax under
any other provision of this article.
(3) A municipality entitled to receive county food and
beverage tax revenue under this article.
Sec. 2. The definitions in IC 6-2.5, IC 6-9-12-1, and IC 36-1-2
apply throughout this chapter.
Sec. 3. As used in this chapter, "municipal food and beverage
tax" refers to a tax imposed under section 4 of this chapter.
Sec. 4. (a) The legislative body of a municipality may adopt an
ordinance to impose an excise tax, known as the _____________
(insert name of municipality) food and beverage tax, on those
transactions described in section 5 of this chapter.
(b) If the legislative body adopts an ordinance under subsection
(a), the legislative body shall immediately send a certified copy of
the ordinance to the commissioner of the department of state
revenue.
(c) If the legislative body adopts an ordinance under subsection
(a), the municipal food and beverage tax applies to transactions
that occur after the later of the following:
(1) The day specified in the ordinance.
(2) The last day of the month that succeeds the month in
which the ordinance is adopted.
Sec. 5. (a) Except as provided in subsection (c), a municipal food
and beverage tax applies to any transaction in which food or
beverage is furnished, prepared, or served:
(1) for consumption at a location or on equipment provided by
a retail merchant;
(2) in the municipality in which the tax is imposed; and
(3) by a retail merchant for consideration.
(b) Transactions described in subsection (a)(1) include
transactions in which food or beverage is:
(1) served by a retail merchant off the merchant's premises;
(2) food sold in a heated state or heated by a retail merchant;
(3) two (2) or more food ingredients mixed or combined by a
retail merchant for sale as a single item (other than food that
is only cut, repackaged, or pasteurized by the seller, and eggs,
fish, meat, poultry, and foods containing these raw animal
foods requiring cooking by the consumer as recommended by
the federal Food and Drug Administration in chapter 3,
subpart 3-401.11 of its Food Code so as to prevent food borne
illnesses); or
(4) food sold with eating utensils provided by a retail
merchant, including plates, knives, forks, spoons, glasses,
cups, napkins, or straws (for purposes of this subdivision, a
plate does not include a container or packaging used to
transport the food).
(c) The municipal food and beverage tax does not apply to the
furnishing, preparing, or serving of any food or beverage in a
transaction that is exempt, or to the extent exempt, from the state
gross retail tax imposed by IC 6-2.5.
Sec. 6. A municipal food and beverage tax is in addition to any
other food and beverage tax imposed under this article in the
municipality.
Sec. 7. A municipal food and beverage tax is imposed on the
gross retail income received by a retail merchant from a
transaction described in section 5 of this chapter at a rate specified
in the ordinance adopted under section 4 of this chapter. The tax
rate:
(1) must be imposed in an increment of twenty-five
hundredths percent (0.25%); and
(2) may not exceed one percent (1%).
Sec. 8. For purposes of this chapter, the gross retail income
received by the retail merchant from a transaction that is subject
to the municipal food and beverage tax does not include the
following:
(1) The amount of tax imposed on the transaction under
IC 6-2.5.
(2) The amount of tax imposed on the transaction by a county
under this article, if any.
Sec. 9. A municipal food and beverage tax shall be imposed,
paid, and collected in the same manner that the state gross retail
tax is imposed, paid, and collected under IC 6-2.5. However, the
return to be filed for the payment of the tax under this chapter
may be made separately or may be combined with the return filed
for the payment of the state gross retail tax, as prescribed by the
department of state revenue.
Sec. 10. (a) The department shall notify the fiscal officer of the
municipality of the amount of tax paid in the municipality during
the immediately preceding three (3) month period.
(b) Amounts received from a municipal food and beverage tax
each month must be paid before the twentieth day of the following
month by the treasurer of state to the fiscal officer of the imposing
municipality upon warrants issued by the auditor of state.
Sec. 11. (a) If a municipality has outstanding obligations that are
payable from a municipal food and beverage tax, the legislative
body of the municipality may not reduce the municipal food and
beverage tax rate below a rate that would produce one and
twenty-five hundredths (1.25) times the total of the highest annual
payment requirements from the municipal food and beverage tax
to their final maturity.
(b) For purposes of subsection (a), the determination of a tax
rate sufficient to produce one and twenty-five hundredths (1.25)
times the total of the highest annual payment requirements is based
on an average of the immediately preceding three (3) years
collections for the municipal food and beverage tax, if the tax has
been imposed for the last preceding three (3) years. If the tax has
not been imposed for the last preceding three (3) years, the
legislative body of the municipality may not reduce the rate below
a rate that would produce one and twenty-five hundredths (1.25)
times the total of the highest annual payment requirements, based
upon a study by a qualified accountant or financial advisor.
(c) If a municipality has no outstanding obligations that are
payable from a municipal food and beverage tax imposed, the
legislative body of the municipality may adopt an ordinance to
reduce the tax rate imposed under section 4 of this chapter or to
repeal the tax.
Sec. 12. A municipal food and beverage tax is a listed tax.
Sec.
13
. The
department of local government finance
may not
reduce a
municipality's
property tax levy by the amount of revenue
received by the municipality from a municipal food and beverage
tax.
Sec. 14. (a) The fiscal officer of a municipality shall establish a
food and beverage tax revenue fund for the deposit of all amounts
received under this chapter.
(b) Money in a municipality's food and beverage tax revenue
fund may be
treated by
the municipality
as additional revenue for
the purpose of fixing its budget for the budget year during which
the revenues are to be distributed to the municipality.
Sec. 15. A municipality may pledge any revenues received from
a municipal food and beverage tax in accordance with IC 5-1-14-4.
Sec.
16
.
(a)
A
municipality
may use municipal food and
beverage tax revenue for one (1) or more of the following purposes:
(1) Reducing the
municipality
's property tax levy for the
ensuing budget year.
(2) Providing property tax relief to taxpayers or classes of
taxpayers, to the extent permitted by the Constitution of the
State of Indiana.
(3) Replacing revenues of the municipality lost as a result of
the credit provided by IC 6-1.1-20.6.
(
4
) Paying debt service or lease rentals on:
(A) bonds;
(B) leases;
(C) obligations; or
(D) any other evidence of indebtedness of the
municipality
.
(
5
) Paying the costs of any capital project.
(
6
) As operating revenue.
(
7
) Paying pension liabilities of the
municipality
.
(
8
) For any other purpose that
the legislative
body determines
necessary, wise, and will be in the best interests of the
residents of the
municipality
.
(
b
) Bonds or other obligations issued under this section:
(1) are payable from money provided in this chapter, any
other revenues available to the municipality, or any
combination of these sources, in accordance with a pledge
made under IC 5-1-14-4;
(2) must be issued in the manner prescribed by:
(A) IC 36-4-6-19 through IC 36-4-6-20; or
(B) IC 36-5-2-11 through IC 36-5-2-12;
(3) may, in the discretion of the municipality, be sold at a
negotiated sale at a price to be determined by the county or in
accordance with IC 5-1-11 and IC 5-3-1; and
(4) may be issued for a term not to exceed twenty-five (25)
years, and the term must include any refunding bonds issued
to refund bonds originally issued under this section.
(c) Leases entered into under this section:
(1) may be for a term not to exceed twenty-five (25) years;
(2) may provide for payments from revenues under this
chapter, any other revenues available to the municipality, or
any combination of these sources;
(3) may provide that payments by the municipality to the
lessor are required only to the extent and only for the time
that the lessor is able to provide the leased facilities in
accordance with the lease;
(4) must be based upon the value of the facilities leased; and
(5) may not create a debt of the municipality for purposes of
the Constitution of the State of Indiana.
(d) A lease may be entered into by the executive of the
municipality only after a public hearing with notice given in
accordance with IC 5-3-1 at which all interested parties are
provided the opportunity to be heard. After the public hearing, the
executive may approve the execution of the lease on behalf of the
municipality only if the executive finds that the service to be
provided throughout the life of the lease will serve the public
purpose of the municipality and is in the best interests of its
residents. A lease approved by the executive must also be approved
by an ordinance of the municipal legislative body.
(e) Upon execution of a lease under this section, and after
approval of the lease by the municipal legislative body, the
executive of the municipality shall publish notice of the execution
of the lease and the approval of the lease in accordance with
IC 5-3-1.
(f) An action to contest the validity of bonds issued or leases
entered into under this section must be brought within thirty (30)
days after the adoption of a bond ordinance or notice of the
execution and approval of the lease, as applicable.
Sec. 17. The general assembly covenants with:
(1) each municipality imposing a municipal food and beverage
tax; and
(2) the purchasers and owners of obligations of a municipality
payable from a municipal food and beverage tax;
that this chapter will not be repealed or amended in any manner
that will adversely affect the imposition or collection of a municipal
food and beverage tax so long as the principal, interest, or lease
rentals due under those obligations of a municipality that are
payable from a municipal food and beverage tax remain unpaid.