CHAPTER 2. EMPLOYMENT TAX
IC 6-3.5-2
Chapter 2. Employment Tax
IC 6-3.5-2-1
Definitions
Sec. 1. As used in this chapter:
(1) "Agency" means a board, commission, division, bureau,committee, authority, military body, college, university, or otherinstrumentality.
(2) "Compensation" means gross income from services renderedas that term is defined by section 61(a) of the Internal Revenue Code.
(3) "Employee" means any individual permitted to work forremuneration by any employer, but excluding any individualperforming:
(i) agricultural labor as that term is defined in IC 22-2-2-3(m);
(ii) domestic service solely on a daily basis in a private home;
(iii) newspaper carrier delivery or distribution service if theindividual is under the age of eighteen (18) years; or
(iv) services in the employ of one's father, mother, son,daughter, or spouse.
(4) "Full time employee" means an employee who receivedcompensation from employment of at least nine hundred dollars($900) in any calendar quarter of a year from an employer who issubject to the tax imposed by this chapter; "full time employee" shallinclude a self-employed person who receives compensation fromemployment of at least nine hundred dollars ($900) in any calendarquarter of a year.
(5) "Employer" means any natural person, receiver, administrator,executor, trustee, trustee in bankruptcy, trust, estate, firm,partnership (general or limited), joint venture, company, limitedliability company, or any form of unincorporated business,corporation (foreign or domestic, for profit or not-for-profit) who orwhich is doing business within the county.
(6) "Doing business within the county" means employingindividuals to work in whole or in part, within the county and one (1)of the following:
(i) maintaining a fixed place of business in the county;
(ii) owning or leasing property within the county;
(iii) maintaining a stock of tangible personal property within thecounty;
(iv) employing or loaning capital or property within the county;or
(v) employing persons as employees or independent contractors,to solicit business within the county.
(7) "Person" includes a sole proprietorship, partnership,association, corporation, limited liability company, fiduciary, orindividual.
(8) "Principally employed in the county" means an employee whodevotes more than fifty percent (50%) of the time which he works forhis employer to services which he performs in the taxing county. (9) "Political subdivision" means a county, township, town, city,separate municipal corporation, special taxing district, or publicschool corporation.
(10) "County council" includes a city-county council of aconsolidated city.
(Formerly: Acts 1975, P.L.62, SEC.1.) As amended by Acts 1981,P.L.11, SEC.32; P.L.2-1987, SEC.22; P.L.8-1993, SEC.91.
IC 6-3.5-2-2
Counties over 400,000 but less than 700,000; ordinance imposingtax; maximum rate
Sec. 2. Before July 1 of any year, the county council of a countyhaving a population of more than four hundred thousand (400,000)but less than seven hundred thousand (700,000) may adopt anordinance to impose an employment tax on each employer andemployee described in section 3 of this chapter. The county councilmay impose the employment tax at a rate not to exceed fifty cents($0.50) per employee per month. Any tax so imposed shall be paidby the employer for each full-time employee and by each suchemployee at the same rate. A self-employed person shall be subjectto tax only as an employee. No other county may adopt an ordinanceto impose an employment tax under this chapter.
(Formerly: Acts 1975, P.L.62, SEC.1.) As amended by Acts 1979,P.L.74, SEC.1; P.L.12-1992, SEC.28.
IC 6-3.5-2-3
Employers and employees subject to tax
Sec. 3. If the county council adopts an ordinance to impose theemployment tax, employers and employees are subject to the tax if:
(1) in the case of an employer, he employs at least one (1) fulltime employee who is principally employed in the county during anyportion of a month after the date such ordinance is adopted; and
(2) in the case of an employee, he is principally employed in thecounty by an employer described in clause (1) of this section duringany portion of a month after the date the ordinance is adopted.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-4
Persons exempt from tax
Sec. 4. The following persons are exempt from the employmenttax:
(1) the United States;
(2) an agency of the United States;
(3) this state;
(4) an agency of this state;
(5) a political subdivision of this state; and
(6) a taxpayer described in IC 6-2.5-5-21(b)(1).
However, employees of such persons are not exempt from theemployment tax.
(Formerly: Acts 1975, P.L.62, SEC.1.) As amended by Acts 1981,
P.L.77, SEC.16; P.L.192-2002(ss), SEC.120.
IC 6-3.5-2-5
Rescission of tax
Sec. 5. Before July 1 of any year, the county council may adopt anordinance to rescind the employment tax. If the county counciladopts such an ordinance, the tax does not apply after December 31of the year the ordinance is adopted.
However, if the adoption of the employment tax is conditionedupon any other county adopting the tax, the county council mayrescind the tax before it becomes effective if the other county doesnot adopt the tax.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-6
Increasing or decreasing tax
Sec. 6. Before July 1 of any year, the county council may adopt anordinance to increase or decrease the employment tax rate. The newtax rate shall become effective on January 1 of the year immediatelyfollowing the year in which the ordinance is adopted.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-7
Copies of ordinances
Sec. 7. If a county council adopts an ordinance to impose, rescind,or change the rate of the employment tax, the county council shallsend a copy of the ordinance to the county auditor and to the countytreasurer.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-8
Quarterly payments
Sec. 8. An employer described in section 3 of this chapter shallpay employment tax for each calendar quarter equal to the sum of thefollowing:
(1) for each month during which the employer employed at leastone (1) full time employee who was principally employed in thecounty during that month, the tax for such month equals the totalnumber of full time employees principally employed within thecounty during that month multiplied by the current tax rate; and
(2) for each employee described in clause (1) of this section theemployer is required to withhold the tax imposed on the employeefor that month under this chapter. The employer shall withhold thetax from the employee, as an agent for the county. Notwithstandingthe amount of employment tax collected from its employees, eachemployer is liable to the county for the tax imposed on its employeesunder this chapter. Every employer and every officer, employee ormember of the employer who is responsible for withholding the taxesfrom employees is personally liable for the taxes. The taxes to bewithheld by the employer constitute a trust fund in the hands of the
employer and are owned by the county.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-9
Filing returns; record keeping requirement
Sec. 9. Each employer described in section 3 of this chapter shallpay the total employment tax due for each calendar quarter to thecounty treasurer within thirty (30) days after the end of the quarter.Concurrently with the payment of the tax, the employer shall file anemployment tax return with the county treasurer on a form prescribedby the state board of accounts. Each employer within the county shallmaintain for a period of five (5) years adequate records to determineits tax liability for a calendar quarter. Upon request of the countytreasurer, the Indiana department of revenue shall conduct an auditof an employer's employment tax records.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-10
County mass transportation fund; deposit of revenue
Sec. 10. The county treasurer shall deposit all employment taxrevenues in a fund to be known as the "_________ county masstransportation fund". Money which is credited to a county's masstransportation fund may be used only to purchase, establish, operate,repair, or maintain a public mass transportation system. The countycouncil may, in the manner provided by law, appropriate money fromthe fund to a public corporation which is authorized to purchase,establish, operate, repair, or maintain such a system if the system islocated, either entirely or partially, within the county.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-11
Tokens for public passenger transportation
Sec. 11. The county council may establish a method of provide toeach taxpayer at the time the employment tax is paid, tokens,coupons or indicia, equal to the tax paid, which are acceptable forpassenger transportation on any transportation facility operated by orunder contract with the county or public transportation authority.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-12
Estimated tax revenues
Sec. 12. On or before August 1st of each year, the auditor of acounty which has adopted the employment tax shall provide thecounty council with an estimate of the employment tax revenues tobe credited to the county mass transportation fund during the nextcalendar year. The county shall show the estimated employment taxrevenues in its budget estimate for that calendar year.
(Formerly: Acts 1975, P.L.62, SEC.1.)
IC 6-3.5-2-13 Interest penalties
Sec. 13. If an employer fails to pay all or any part of theemployment tax due for a calendar quarter within the time prescribedby section 9 of this chapter, he shall pay interest on the unpaidamount at the rate of twelve percent (12%) per year.
(Formerly: Acts 1975, P.L.62, SEC.1.)