Introduced Version






HOUSE BILL No. 1542

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-4.1.

Synopsis: Inheritance tax. Provides that the inheritance tax does not apply to property interests transferred by decedents whose deaths occur after December 31, 2017. Specifies that certain definitions apply after the elimination of the inheritance tax for purposes of the Indiana estate tax and the Indiana generation-skipping transfer tax. Provides that the inheritance tax replacement amount is calculated in the same manner that it was calculated between 1997 and 2012. (Current law provides that a county is not eligible for a replacement amount unless it receives a replacement amount for inheritance tax collections in state fiscal year 2011-2012.) Phases out inheritance tax replacement amount distributions from 2013 to 2017.

Effective: July 1, 2013.





Turner, Thompson




    January 22, 2013, read first time and referred to Committee on Ways and Means.







Introduced

First Regular Session 118th General Assembly (2013)


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HOUSE BILL No. 1542



    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 6-4.1-1-0.5; (13)IN1542.1.1. -->     SECTION 1. IC 6-4.1-1-0.5, AS ADDED BY P.L.157-2012, SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. (a) Except as provided in subsection (b), this chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
    (b) For purposes of IC 6-4.1-11 and IC 6-4.1-11.5, the following statutes apply with respect to a property interest transferred by a decedent whose death occurs after December 31, 2017:
        (1) Section 4 of this chapter.
        (2) Section 5 of this chapter.
        (3) Section 8 of this chapter.
        (4) Section 11 of this chapter.
        (5) Section 13 of this chapter.

SOURCE: IC 6-4.1-1-4; (13)IN1542.1.2. -->     SECTION 2. IC 6-4.1-1-4 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 4. "Federal state death tax credit" means the maximum federal estate tax credit provided, with respect to estate, inheritance, legacy, or succession taxes, under Section

2011 or Section 2102 of the Internal Revenue Code.

SOURCE: IC 6-4.1-2-0.5; (13)IN1542.1.3. -->     SECTION 3. IC 6-4.1-2-0.5, AS ADDED BY P.L.157-2012, SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. This chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
SOURCE: IC 6-4.1-3-0.5; (13)IN1542.1.4. -->     SECTION 4. IC 6-4.1-3-0.5, AS ADDED BY P.L.157-2012, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. This chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
SOURCE: IC 6-4.1-4-0.2; (13)IN1542.1.5. -->     SECTION 5. IC 6-4.1-4-0.2, AS ADDED BY P.L.157-2012, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.2. This chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
SOURCE: IC 6-4.1-5-0.5; (13)IN1542.1.6. -->     SECTION 6. IC 6-4.1-5-0.5, AS ADDED BY P.L.157-2012, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. This chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
SOURCE: IC 6-4.1-5-1.1; (13)IN1542.1.7. -->     SECTION 7. IC 6-4.1-5-1.1, AS ADDED BY P.L.157-2012, SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 1.1. (a) This section applies to a property interest transferred by a decedent whose death occurs after December 31, 2012, and before January 1, 2018.
    (b) For purposes of determining the amount of inheritance tax imposed under this article, a credit is allowed against the tax imposed under section 1 of this chapter on a decedent's transfer of property interests. The amount of the credit equals the inheritance tax imposed under section 1 of this chapter multiplied by the percentage prescribed in the following table:
    YEAR OF     PERCENTAGE
    INDIVIDUAL'S DEATH     OF CREDIT
    2013     10%
    2014     20% 30%
    2015     30% 50%
    2016     40% 70%
    2017     50% 90%
    2018     60%
    2019     70%
    2020     80%
    2021     90%
    (c) A person who is liable for inheritance tax imposed under this article may claim the credit allowed under this section at the time the person pays the tax. When the payment is made, the person collecting the tax shall reduce the inheritance tax due by the amount of the credit specified in subsection (b).
SOURCE: IC 6-4.1-6-0.5; (13)IN1542.1.8. -->     SECTION 8. IC 6-4.1-6-0.5, AS ADDED BY P.L.157-2012, SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. This chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
SOURCE: IC 6-4.1-7-0.5; (13)IN1542.1.9. -->     SECTION 9. IC 6-4.1-7-0.5, AS ADDED BY P.L.157-2012, SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. This chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
SOURCE: IC 6-4.1-8-0.5; (13)IN1542.1.10. -->     SECTION 10. IC 6-4.1-8-0.5, AS ADDED BY P.L.157-2012, SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. This chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
SOURCE: IC 6-4.1-9-0.5; (13)IN1542.1.11. -->     SECTION 11. IC 6-4.1-9-0.5, AS ADDED BY P.L.157-2012, SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. This chapter does not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.
SOURCE: IC 6-4.1-11-6; (13)IN1542.1.12. -->     SECTION 12. IC 6-4.1-11-6, AS AMENDED BY P.L.157-2012, SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 6. (a) The department of state revenue shall collect the Indiana estate tax and the interest charges imposed under this chapter. The department shall remit the money which it collects under this chapter to the state treasurer, and the state treasurer shall deposit the money in the state general fund.
    (b) Except as provided in subsection (e), (d), the treasurer of state shall annually distribute to each county the amount determined under subsection (c) or (d) for the county. The distribution for with respect to inheritance tax collections in a particular state fiscal year must be made before August 15 of the following state fiscal year. There is appropriated from the state general fund the amount necessary to make the distributions under this subsection.
    (c) For a state fiscal year ending before July 1, 2012, The department of state revenue shall determine the inheritance tax

replacement amount for each county using the following formula:
        STEP ONE: Determine the amount of inheritance tax revenue retained by each county in each state fiscal year beginning with the state fiscal year that began July 1, 1990, and ending with the state fiscal year that ends June 30, 1997.
        STEP TWO: Determine the average annual amount of inheritance tax revenue retained by each county using five (5) of the seven (7) state fiscal years described in STEP ONE after excluding the two (2) years in which each county retained its highest and lowest totals of inheritance tax revenue.
        STEP THREE: Determine the remainder of the STEP TWO amount minus the amount of inheritance taxes retained by the county during the immediately preceding state fiscal year.
    (d) For a state fiscal year beginning after June 30, 2012, and ending before July 1, 2022, the department of state revenue shall determine the inheritance tax replacement amount for each county using the following formula:
        STEP ONE: Determine the inheritance tax replacement amount distributed to the county for the state fiscal year that began on July 1, 2011.
        STEP TWO: FOUR: Multiply the amount determined under STEP ONE THREE by the appropriate percentage as follows:
            (A) Ninety-one percent (91%) for the state fiscal year beginning July 1, 2012. Ninety percent (90%) for distributions made in 2013.
            (B) Eighty-two percent (82%) for the state fiscal year beginning July 1, 2013. Seventy percent (70%) for distributions made in 2014.
            (C) Seventy-three percent (73%) for the state fiscal year beginning July 1, 2014. Fifty percent (50%) for distributions made in 2015.
            (D) Sixty-four percent (64%) for the state fiscal year beginning July 1, 2015. Thirty percent (30%) for distributions made in 2016.
            (E) Fifty-five percent (55%) for the state fiscal year beginning July 1, 2016. Ten percent (10%) for distributions made in 2017.
            (F) Forty-five percent (45%) for the state fiscal year beginning July 1, 2017.
            (G) Thirty-six percent (36%) for the state fiscal year beginning July 1, 2018.
            (H) Twenty-seven percent (27%) for the state fiscal year

beginning July 1, 2019.
            (I) Eighteen percent (18%) for the state fiscal year beginning July 1, 2020.
            (J) Nine percent (9%) for the state fiscal year beginning July 1, 2021.
    (e) (d) A county is not entitled to a distribution under subsection (b) for a state fiscal year beginning after June 30, 2022. after December 31, 2017.

SOURCE: IC 6-4.1-12-0.5; (13)IN1542.1.13. -->     SECTION 13. IC 6-4.1-12-0.5, AS ADDED BY P.L.157-2012, SECTION 15, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 0.5. (a) For an individual who dies after December 31, 2021, 2017, there is no inheritance tax imposed on the decedent's transfer of property interests.
    (b) Sections 1 through 12 of this chapter do not apply to a property interest transferred by a decedent whose death occurs after December 31, 2021. 2017.