CHAPTER 6. COUNTY OPTION INCOME TAX
IC 6-3.5-6
Chapter 6. County Option Income Tax
IC 6-3.5-6-1
Definitions
Sec. 1. As used in this chapter:
"Adjusted gross income" has the same definition that the term isgiven in IC 6-3-1-3.5. However, in the case of a county taxpayer whois not treated as a resident county taxpayer of a county, the termincludes only adjusted gross income derived from the taxpayer'sprincipal place of business or employment.
"Apartment complex" means real property consisting of at leastfive (5) units that are regularly used to rent or otherwise furnishresidential accommodations for periods of at least thirty (30) days.
"Civil taxing unit" means any entity, except a school corporation,that has the power to impose ad valorem property taxes. The termdoes not include a solid waste management district that is not entitledto a distribution under section 1.3 of this chapter. However, in thecase of a county in which a consolidated city is located, theconsolidated city, the county, all special taxing districts, specialservice districts, included towns (as defined in IC 36-3-1-7), and allother political subdivisions except townships, excluded cities (asdefined in IC 36-3-1-7), and school corporations shall be deemed tocomprise one (1) civil taxing unit whose fiscal body is the fiscalbody of the consolidated city.
"County income tax council" means a council established bysection 2 of this chapter.
"County taxpayer", as it relates to a particular county, means anyindividual:
(1) who resides in that county on the date specified in section20 of this chapter; or
(2) who maintains the taxpayer's principal place of business oremployment in that county on the date specified in section 20of this chapter and who does not reside on that same date inanother county in which the county option income tax, thecounty adjusted income tax, or the county economicdevelopment income tax is in effect.
"Department" refers to the Indiana department of state revenue.
"Fiscal body" has the same definition that the term is given inIC 36-1-2-6.
"Homestead" has the meaning set forth in IC 6-1.1-12-37.
"Qualified residential property" refers to any of the following:
(1) An apartment complex.
(2) A homestead.
(3) Residential rental property.
"Resident county taxpayer", as it relates to a particular county,means any county taxpayer who resides in that county on the datespecified in section 20 of this chapter.
"Residential rental property" means real property consisting of notmore than four (4) units that are regularly used to rent or otherwise
furnish residential accommodations for periods of at least thirty (30)days.
"School corporation" has the same definition that the term is givenin IC 6-1.1-1-16.
As added by P.L.44-1984, SEC.14. Amended by P.L.23-1986, SEC.9;P.L.22-1988, SEC.4; P.L.96-1995, SEC.3; P.L.146-2008, SEC.335.
IC 6-3.5-6-1.1
Determination of allocation amount
Sec. 1.1. (a) For purposes of allocating the certified distributionmade to a county under this chapter among the civil taxing units inthe county, the allocation amount for a civil taxing unit is the amountdetermined using the following formula:
STEP ONE: Determine the total property taxes that are first dueand payable to the civil taxing unit during the calendar year ofthe distribution plus, for a county, an amount equal to thewelfare allocation amount.
STEP TWO: Determine the sum of the following:
(A) Amounts appropriated from property taxes to pay theprincipal of or interest on any debenture or other debtobligation issued after June 30, 2005, other than anobligation described in subsection (b).
(B) Amounts appropriated from property taxes to makepayments on any lease entered into after June 30, 2005, otherthan a lease described in subsection (c).
(C) The proceeds of any property that are:
(i) received as the result of the issuance of a debtobligation described in clause (A) or a lease described inclause (B); and
(ii) appropriated from property taxes for any purpose otherthan to refund or otherwise refinance a debt obligation orlease described in subsection (b) or (c).
STEP THREE: Subtract the STEP TWO amount from the STEPONE amount.
STEP FOUR: Determine the sum of:
(A) the STEP THREE amount; plus
(B) the civil taxing unit or school corporation's certifieddistribution for the previous calendar year.
The allocation amount is subject to adjustment as provided inIC 36-8-19-7.5. The welfare allocation amount is an amount equal tothe sum of the property taxes imposed by the county in 1999 for thecounty's welfare fund and welfare administration fund and, if thecounty received a certified distribution under IC 6-3.5-1.1 or thischapter in 2008, the property taxes imposed by the county in 2008for the county's county medical assistance to wards fund, family andchildren's fund, children's psychiatric residential treatment servicesfund, county hospital care for the indigent fund, and children withspecial health care needs county fund.
(b) Except as provided in this subsection, an appropriation fromproperty taxes to repay interest and principal of a debt obligation is
not deducted from the allocation amount for a civil taxing unit if:
(1) the debt obligation was issued; and
(2) the proceeds appropriated from property taxes;
to refund or otherwise refinance a debt obligation or a lease issuedbefore July 1, 2005. However, an appropriation from property taxesrelated to a debt obligation issued after June 30, 2005, is deducted ifthe debt extends payments on a debt or lease beyond the time inwhich the debt or lease would have been payable if the debt or leasehad not been refinanced or increases the total amount that must bepaid on a debt or lease in excess of the amount that would have beenpaid if the debt or lease had not been refinanced. The amount of thededuction is the annual amount for each year of the extension periodor the annual amount of the increase over the amount that wouldhave been paid.
(c) Except as provided in this subsection, an appropriation fromproperty taxes to make payments on a lease is not deducted from theallocation amount for a civil taxing unit if:
(1) the lease was issued; and
(2) the proceeds were appropriated from property taxes;
to refinance a debt obligation or lease issued before July 1, 2005.However, an appropriation from property taxes related to a leaseentered into after June 30, 2005, is deducted if the lease extendspayments on a debt or lease beyond the time in which the debt orlease would have been payable if it had not been refinanced orincreases the total amount that must be paid on a debt or lease inexcess of the amount that would have been paid if the debt or leasehad not been refinanced. The amount of the deduction is the annualamount for each year of the extension period or the annual amountof the increase over the amount that would have been paid.
As added by P.L.207-2005, SEC.6. Amended by P.L.146-2008,SEC.336; P.L.182-2009(ss), SEC.217.
IC 6-3.5-6-1.3
Districts not entitled to distribution
Sec. 1.3. (a) This section applies to a county solid wastemanagement district (as defined in IC 13-11-2-47) or a joint solidwaste management district (as defined in IC 13-11-2-113).
(b) A district may not receive a distribution under this chapterunless a majority of the members of each of the county fiscal bodiesof the counties within the district passes a resolution approving thedistribution.
(c) A resolution passed by a county fiscal body under subsection(b) may:
(1) expire on a date specified in the resolution; or
(2) remain in effect until the county fiscal body revokes orrescinds the resolution.
As added by P.L.96-1995, SEC.4. Amended by P.L.1-1996, SEC.48;P.L.70-2001, SEC.2.
IC 6-3.5-6-1.5 Time within which to adopt ordinance; effective date of ordinances
Sec. 1.5. (a) Notwithstanding any other provision of this chapter,a power granted by this chapter to adopt an ordinance to:
(1) impose, increase, decrease, or rescind a tax or tax rate; or
(2) grant, increase, decrease, rescind, or change a homesteadcredit or property tax replacement credit authorized under thischapter;
may be exercised at any time in a year before November 1 of thatyear.
(b) Notwithstanding any other provision of this chapter, anordinance authorized by this chapter that imposes or increases a taxor a tax rate takes effect as follows:
(1) An ordinance adopted after December 31 of the immediatelypreceding year and before October 1 of the current year takeseffect October 1 of the current year.
(2) An ordinance adopted after September 30 and beforeOctober 16 of the current year takes effect November 1 of thecurrent year.
(3) An ordinance adopted after October 15 and beforeNovember 1 of the current year takes effect December 1 of thecurrent year.
(c) Notwithstanding any other provision of this chapter, anordinance authorized by this chapter that decreases or rescinds a taxor a tax rate takes effect as follows:
(1) An ordinance adopted after December 31 of the immediatelypreceding year and before October 1 of the current year takeseffect on the later of October 1 of the current year or the firstday of the month in the current year as the month in which thelast increase in the tax or tax rate occurred.
(2) An ordinance adopted after September 30 and beforeOctober 16 of the current year takes effect on the later ofNovember 1 of the current year or the first day of the month inthe current year as the month in which the last increase in thetax or tax rate occurred.
(3) An ordinance adopted after October 15 and beforeNovember 1 of the current year takes effect December 1 of thecurrent year.
(d) Notwithstanding any other provision of this chapter, anordinance authorized by this chapter that grants, increases, decreases,rescinds, or changes a homestead credit or property tax replacementcredit authorized under this chapter takes effect for and applies toproperty taxes first due and payable in the year immediatelyfollowing the year in which the ordinance is adopted.
As added by P.L.113-2010, SEC.63.
IC 6-3.5-6-2
County income tax council; established; powers
Sec. 2. (a) A county income tax council is established for eachcounty in Indiana. The membership of each county's county incometax council consists of the fiscal body of the county and the fiscal
body of each city or town that lies either partially or entirely withinthat county.
(b) Using procedures described in this chapter, a county incometax council may adopt ordinances to:
(1) impose the county option income tax in its county;
(2) subject to section 12 of this chapter, rescind the countyoption income tax in its county;
(3) increase the county option income tax rate for the county;
(4) freeze the county option income tax rate for its county;
(5) increase the homestead credit in its county; or
(6) subject to section 12.5 of this chapter, decrease the countyoption income tax rate for the county.
(c) An ordinance adopted in a particular year under this chapterto impose or rescind the county option income tax or to increase itstax rate is effective July 1 of that year.
As added by P.L.44-1984, SEC.14. Amended by P.L.2-1989, SEC.14;P.L.42-1994, SEC.4; P.L.267-2003, SEC.7.
IC 6-3.5-6-3
County income tax council; allocation of votes
Sec. 3. (a) In the case of a city or town that lies within more thanone (1) county, the county auditor of each county shall base theallocations required by subsection (b) on the population of that partof the city or town that lies within the county for which theallocations are being made.
(b) Every county income tax council has a total of one hundred(100) votes. Every member of the county income tax council isallocated a percentage of the total one hundred (100) votes that maybe cast. The percentage that a city or town is allocated for a yearequals the same percentage that the population of the city or townbears to the population of the county. The percentage that the countyis allocated for a year equals the same percentage that the populationof all areas in the county not located in a city or town bears to thepopulation of the county. On or before January 1 of each year, thecounty auditor shall certify to each member of the county income taxcouncil the number of votes, rounded to the nearest one hundredth(0.01), it has for that year.
As added by P.L.44-1984, SEC.14.
IC 6-3.5-6-4
Resolutions; transmittal to county auditor
Sec. 4. (a) A member of the county income tax council mayexercise its votes by passing a resolution and transmitting theresolution to the auditor of the county. However, in the case of anordinance to impose, rescind, increase, decrease, or freeze the countyrate of the county option income tax, the member must transmit theresolution to the county auditor by the appropriate time described insection 8, 9, 10, or 11 of this chapter. The form of a resolution is asfollows:
"The ______________ (name of civil taxing unit's fiscal body)
casts its _____ votes _____ (for or against) the proposedordinance of the ______________ County Income Tax Council,which reads as follows:".
(b) A resolution passed by a member of the county income taxcouncil exercises all votes of the member on the proposed ordinance,and those votes may not be changed during the year.
As added by P.L.44-1984, SEC.14. Amended by P.L.42-1994, SEC.5.
IC 6-3.5-6-5
Ordinances; procedure for proposal; voting
Sec. 5. Any member of a county income tax council may presentan ordinance for passage. To do so, the member must pass aresolution to propose the ordinance to the county income tax counciland distribute a copy of the proposed ordinance to the auditor of thecounty. The auditor of the county shall treat any proposed ordinancepresented to the auditor under this section as a casting of all thatmember's votes in favor of that proposed ordinance. Subject to thelimitations of section 6 of this chapter, the auditor of the county shalldeliver copies of a proposed ordinance the auditor receives to allmembers of the county income tax council within ten (10) days afterreceipt. Once a member receives a proposed ordinance from theauditor of the county, the member shall vote on it within thirty (30)days after receipt.
As added by P.L.44-1984, SEC.14. Amended by P.L.28-1997,SEC.17.
IC 6-3.5-6-6
Ordinances; limitation of number; effect of passage on proposedordinances; proposed ordinances with same effect
Sec. 6. (a) A county income tax council may pass only one (1)ordinance described in section 2(b)(1), 2(b)(2), 2(b)(3), 2(b)(4), or2(b)(6) of this chapter in one (1) year. Once an ordinance describedin section 2(b)(1), 2(b)(2), 2(b)(3), 2(b)(4), or 2(b)(6) of this chapterhas been passed, the auditor of the county shall:
(1) cease distributing proposed ordinances of those types for therest of the year; and
(2) withdraw from the membership any other of those types ofproposed ordinances.
Any votes subsequently received by the auditor of the county onproposed ordinances of those types during that same year are void.
(b) The county income tax council may not vote on, nor may theauditor of the county distribute to the members of the county incometax council, any proposed ordinance during a year, if previouslyduring that same year the auditor of the county received anddistributed to the members of the county income tax council aproposed ordinance whose passage would have substantially thesame effect.
As added by P.L.44-1984, SEC.14. Amended by P.L.42-1994, SEC.6.
IC 6-3.5-6-7 Ordinances; hearing; notice
Sec. 7. (a) Before a member of the county income tax council maypropose an ordinance or vote on a proposed ordinance, the membermust hold a public hearing on the proposed ordinance and providethe public with notice of the time and place where the public hearingwill be held.
(b) The notice required by subsection (a) must be given inaccordance with IC 5-3-1.
(c) The form of the notice required by this section must be insubstantially the following form:
"NOTICE OF COUNTY OPTION
INCOME TAX ORDINANCE VOTE.
The fiscal body of the _____________ (insert name of civil taxingunit) hereby declares that on __________ (insert date) at______________ (insert the time of day) a public hearing will beheld at _______________ (insert location) concerning the followingresolution to propose an ordinance (or proposed ordinance) that isbefore the members of the county income tax council. Members ofthe public are cordially invited to attend the hearing for the purposeof expressing their views.
(Insert a copy of the proposed ordinance or resolution to proposean ordinance.)".
As added by P.L.44-1984, SEC.14.
IC 6-3.5-6-8
Imposition of tax; time; rate of tax; necessity and form ofordinance; recording of votes
Sec. 8. (a) The county income tax council of any county in whichthe county adjusted gross income tax will not be in effect on October1 of a year under an ordinance adopted during a previous calendaryear may impose the county option income tax on the adjusted grossincome of county taxpayers of its county effective October 1 of thatsame year.
(b) Except as provided in sections 30, 31, and 32 of this chapter,the county option income tax may initially be imposed at a rate oftwo-tenths of one percent (0.2%) on the resident county taxpayers ofthe county and at a rate of five hundredths of one percent (0.05%) forall other county taxpayers.
(c) To impose the county option income tax, a county income taxcouncil must, after March 31 but before August 1 of the year, pass anordinance. The ordinance must substantially state the following:
"The _____________ County Income Tax Council imposes thecounty option income tax on the county taxpayers of_____________ County. The county option income tax isimposed at a rate of two-tenths of one percent (0.2%) on theresident county taxpayers of the county and at a rate of fivehundredths of one percent (0.05%) on all other countytaxpayers. This tax takes effect October 1 of this year.".
(d) Except as provided in sections 30, 31, and 32 of this chapter,if the county option income tax is imposed on the county taxpayers
of a county, then the county option income tax rate that is in effectfor resident county taxpayers of that county increases by one-tenthof one percent (0.1%) on each succeeding October 1 until the rateequals six-tenths of one percent (0.6%).
(e) The county option income tax rate in effect for the countytaxpayers of a county who are not resident county taxpayers of thatcounty is at all times one-fourth (1/4) of the tax rate imposed uponresident county taxpayers.
(f) The auditor of a county shall record all votes taken onordinances presented for a vote under this section and immediatelysend a certified copy of the results to the department by certifiedmail.
As added by P.L.44-1984, SEC.14. Amended by P.L.35-1990,SEC.16; P.L.224-2007, SEC.70.
IC 6-3.5-6-9
Increase of tax rate
Sec. 9. (a) If on March 31 of a calendar year the county optionincome tax rate in effect for resident county taxpayers equals sixtenths of one percent (0.6%), excluding a tax rate imposed undersection 30, 31, or 32 of this chapter, the county income tax councilof that county may after March 31 and before August 1 of that yearpass an ordinance to increase its tax rate for resident countytaxpayers. If a county income tax council passes an ordinance underthis section, its county option income tax rate for resident countytaxpayers increases by one tenth of one percent (0.1%) eachsucceeding October 1 until its rate reaches a maximum of onepercent (1%), excluding a tax rate imposed under section 30, 31, or32 of this chapter.
(b) The auditor of the county shall record any vote taken on anordinance proposed under the authority of this section andimmediately send a certified copy of the results to the department bycertified mail.
As added by P.L.44-1984, SEC.14. Amended by P.L.35-1990,SEC.17; P.L.224-2007, SEC.71.
IC 6-3.5-6-9.5
Repealed
(Repealed by P.L.2-1989, SEC.56.)
IC 6-3.5-6-10
Effect of adoption of county option income tax and county adjustedgross income tax in same county
Sec. 10. If during a particular calendar year the county council ofa county adopts an ordinance to impose the county adjusted grossincome tax in its county on October 1 of that year and the countyoption income tax council of the county adopts an ordinance toimpose the county option income tax in the county on October 1 ofthat year, the county option income tax takes effect in that countyand the county adjusted gross income tax shall not take effect in that
county.
As added by P.L.44-1984, SEC.14. Amended by P.L.224-2007,SEC.72.
IC 6-3.5-6-11
Freeze of tax rate; adoption, duration, and rescission of ordinance
Sec. 11. (a) This section does not apply to a tax rate imposedunder section 30 of this chapter.
(b) The county income tax council of any county may adopt anordinance to permanently freeze the county option income tax ratesat the rate in effect for its county on March 31 of a year.
(c) To freeze the county option income tax rates, a county incometax council must, after March 31 but before August 1 of a year, adoptan ordinance. The ordinance must substantially state the following:
"The __________ County Income Tax Council permanentlyfreezes the county option income tax rates at the rate in effecton March 31 of the current year.".
(d) An ordinance adopted under the authority of this sectionremains in effect until rescinded. The county income tax council mayrescind such an ordinance after March 31 but before August 1 of anycalendar year. Such an ordinance shall take effect October 1 of thatsame calendar year.
(e) If a county income tax council rescinds an ordinance asadopted under this section, the county option income tax rate shallautomatically increase by one-tenth of one percent (0.01%) until:
(1) the tax rate is again frozen under another ordinance adoptedunder this section; or
(2) the tax rate equals six tenths of one percent (0.6%) (if thefrozen tax rate equaled an amount less than six tenths of onepercent (0.6%)) or one percent (1%) (if the frozen tax rateequaled an amount in excess of six tenths of one percent(0.6%)).
(f) The county auditor shall record any vote taken on an ordinanceproposed under the authority of this section and immediately send acertified copy of the results to the department by certified mail.
As added by P.L.44-1984, SEC.14. Amended by P.L.35-1990,SEC.18; P.L.224-2007, SEC.73.
IC 6-3.5-6-12
Duration of tax; rescission of tax; record of votes
Sec. 12. (a) The county option income tax imposed by a countyincome tax council under this chapter remains in effect untilrescinded.
(b) Subject to subsection (c), the county income tax council of acounty may rescind the county option income tax by passing anordinance to rescind the tax after March 31 but before August 1 ofa year.
(c) A county income tax council may not rescind the countyoption income tax or take any action that would result in a civiltaxing unit in the county having a smaller distributive share than the
distributive share to which it was entitled when it pledged countyoption income tax, if the civil taxing unit or any commission, board,department, or authority that is authorized by statute to pledge countyoption income tax, has pledged county option income tax for anypurpose permitted by IC 5-1-14 or any other statute.
(d) The auditor of a county shall record all votes taken on aproposed ordinance presented for a vote under the authority of thissection and immediately send a certified copy of the results to thedepartment by certified mail.
As added by P.L.44-1984, SEC.14. Amended by P.L.2-1989, SEC.15;P.L.35-1990, SEC.19; P.L.28-1997, SEC.18; P.L.224-2007, SEC.74.
IC 6-3.5-6-12.5
Decrease in county option income tax rate; adoption of ordinance;procedures
Sec. 12.5. (a) The county income tax council may adopt anordinance to decrease the county option income tax rate in effect.
(b) To decrease the county option income tax rate, the countyincome tax council must adopt an ordinance after March 31 butbefore August 1 of a year. The ordinance must substantially state thefollowing:
"The ______________ County Income Tax Council decreasesthe county option income tax rate from __________ percent(___ %) to __________ percent (___ %). This ordinance takeseffect October 1 of this year.".
(c) A county income tax council may not decrease the countyoption income tax if the county or any commission, board,department, or authority that is authorized by statute to pledge thecounty option income tax has pledged the county option income taxfor any purpose permitted by IC 5-1-14 or any other statute.
(d) An ordinance adopted under this subsection takes effectOctober 1 of the year in which the ordinance is adopted.
(e) The county auditor shall record the votes taken on anordinance under this subsection and shall send a certified copy of theordinance to the department by certified mail not more than thirty(30) days after the ordinance is adopted.
(f) Notwithstanding IC 6-3.5-7, a county income tax council thatdecreases the county option income tax in a year may not in the sameyear adopt or increase the county economic development income taxunder IC 6-3.5-7.
As added by P.L.42-1994, SEC.7. Amended by P.L.224-2007,SEC.75.
IC 6-3.5-6-13
Homestead credit percentage; determination
Sec. 13. (a) A county income tax council of a county in which thecounty option income tax is in effect may adopt an ordinance toprovide a homestead credit for homesteads in its county.
(b) A county income tax council may not provide a homesteadcredit percentage that exceeds the amount determined in the last
STEP of the following formula:
STEP ONE: Determine the amount of the sum of all propertytax levies for all taxing units in a county which are to be paid inthe county in 2003 as reflected by the auditor's abstract for the2002 assessment year, adjusted, however, for any postabstractadjustments which change the amount of the levies.
STEP TWO: Determine the amount of the county's estimatedproperty tax replacement under IC 6-1.1-21-3(a) (before itsrepeal) for property taxes first due and payable in 2003.
STEP THREE: Subtract the STEP TWO amount from the STEPONE amount.
STEP FOUR: Determine the amount of the county's total countylevy (as defined in IC 6-1.1-21-2(g) before its repeal) forproperty taxes first due and payable in 2003.
STEP FIVE: Subtract the STEP FOUR amount from the STEPONE amount.
STEP SIX: Subtract the STEP FIVE result from the STEPTHREE result.
STEP SEVEN: Divide the STEP THREE result by the STEPSIX result.
STEP EIGHT: Multiply the STEP SEVEN result byeight-hundredths (0.08).
STEP NINE: Round the STEP EIGHT product to the nearestone-thousandth (0.001) and express the result as a percentage.
(c) The homestead credit percentage must be uniform for allhomesteads in a county.
(d) In the ordinance that establishes the homestead creditpercentage, a county income tax council may provide for a series ofincreases or decreases to take place for each of a group of succeedingcalendar years.
(e) An ordinance may be adopted under this section after March31 but before August 1 of a calendar year.
(f) An ordinance adopted under this section takes effect onJanuary 1 of the next succeeding calendar year.
(g) Any ordinance adopted under this section for a county isrepealed for a year if on January 1 of that year the county optionincome tax is not in effect.
As added by P.L.44-1984, SEC.14. Amended by P.L.3-1989, SEC.41;P.L.224-2003, SEC.247; P.L.97-2004, SEC.30; P.L.224-2007,SEC.76; P.L.146-2008, SEC.337.
IC 6-3.5-6-13.5
County income tax council meetings to consider rate adjustment
Sec. 13.5. A county income tax council must before August 1 ofeach odd-numbered year hold at least one (1) public meeting atwhich the county income tax council discusses whether the countyoption income tax rate under this chapter should be adjusted.
As added by P.L.182-2009(ss), SEC.218.
IC 6-3.5-6-14 Taxpayer subject to different tax rates; rate of tax
Sec. 14. If for any taxable year a county taxpayer is subject todifferent tax rates for the county option income tax imposed by aparticular county, the taxpayer's county option income tax rate forthat county and that taxable year is the rate determined in the lastSTEP of the following STEPS:
STEP ONE: Multiply the number of months in the taxpayer'staxable year that precede October 1 by the rate in effect beforethe rate change.
STEP TWO: Multiply the number of months in the taxpayer'staxable year that follow September 30 by the rate in effect afterthe rate change.
STEP THREE: Divide the sum of the amounts determinedunder STEPS ONE and TWO by twelve (12).
As added by P.L.44-1984, SEC.14. Amended by P.L.224-2007,SEC.77.
IC 6-3.5-6-15
Tax not in effect entire taxable year
Sec. 15. If the county option income tax is not in effect during acounty taxpayer's entire taxable year, the amount of county optionincome tax that the county taxpayer owes for that taxable year equalsthe product of:
(1) the amount of county option income tax the county taxpayerwould owe if the tax had been imposed during the countytaxpayer's entire taxable year; multiplied by
(2) a fraction. The numerator of the fraction equals the numberof days in the county taxpayer's taxable year during which thecounty option income tax was in effect. The denominator of thefraction equals the total number of days in the county taxpayer'staxable year.
However, if the taxpayer files state income tax returns on a calendaryear basis, the fraction to be applied under this section is one-half(1/2).
As added by P.L.44-1984, SEC.14.
IC 6-3.5-6-16
Deposit of revenue in special account
Sec. 16. (a) A special account within the state general fund shallbe established for each county that adopts the county option incometax. Any revenue derived from the imposition of the county optionincome tax by a county shall be deposited in that county's account inthe state general fund.
(b) Any income earned on money held in an account undersubsection (a) becomes a part of that account.
(c) Any revenue remaining in an account established undersubsection (a) at the end of a fiscal year does not revert to the stategeneral fund.
As added by P.L.44-1984, SEC.14.
IC 6-3.5-6-17
Calculation of certified distribution; summary of calculation;notice to county auditor
Sec. 17. (a) Revenue derived from the imposition of the countyoption income tax shall, in the manner prescribed by this section, bedistributed to the county that imposed it. The amount that is to bedistributed to a county during an ensuing calendar year equals theamount of county option income tax revenue that the budget agencydetermines has been:
(1) received from that county for a taxable year ending in acalendar year preceding the calendar year in which thedetermination is made; and
(2) reported on an annual return or amended return processedby the department in the state fiscal year ending before July 1of the calendar year in which the determination is made;
as adjusted (as determined after review of the recommendation of thebudget agency) for refunds of county option income tax made in thestate fiscal year.
(b) Before August 2 of each calendar year, the budget agencyshall certify to the county auditor of each adopting county theamount determined under subsection (a) plus the amount of interestin the county's account that has accrued and has not been included ina certification made in a preceding year. The amount certified is thecounty's "certified distribution" for the immediately succeedingcalendar year. The amount certified shall be adjusted, as necessary,under subsections (c), (d), (e), and (f). The budget agency shallprovide the county council with an informative summary of thecalculations used to determine the certified distribution. Thesummary of calculations must include:
(1) the amount reported on individual income tax returnsprocessed by the department during the previous fiscal year;
(2) adjustments for over distributions in prior years;
(3) adjustments for clerical or mathematical errors in prioryears;
(4) adjustments for tax rate changes; and
(5) the amount of excess account balances to be distributedunder IC 6-3.5-6-17.3.
The budget agency shall also certify information concerning the partof the certified distribution that is attributable to a tax rate undersection 30, 31, or 32 of this chapter. This information must becertified to the county auditor and to the department of localgovernment finance not later than September 1 of each calendar year.The part of the certified distribution that is attributable to a tax rateunder section 30, 31, or 32 of this chapter may be used only asspecified in those provisions.
(c) The budget agency shall certify an amount less than theamount determined under subsection (b) if the budget agencydetermines that the reduced distribution is necessary to offsetoverpayments made in a calendar year before the calendar year of thedistribution. The budget agency may reduce the amount of the
certified distribution over several calendar years so that anyoverpayments are offset over several years rather than in one (1)lump sum.
(d) The budget agency shall adjust the certified distribution of acounty to correct for any clerical or mathematical errors made in anyprevious certification under this section. The budget agency mayreduce the amount of the certified distribution over several calendaryears so that any adjustment under this subsection is offset overseveral years rather than in one (1) lump sum.
(e) This subsection applies to a county that imposes, increases,decreases, or rescinds a tax or tax rate under this chapter beforeNovember 1 in the same calendar year in which the budget agencymakes a certification under this section. The budget agency shalladjust the certified distribution of a county to provide for adistribution in the immediately following calendar year and in eachcalendar year thereafter. The budget agency shall provide for a fulltransition to certification of distributions as provided in subsection(a)(1) through (a)(2) in the manner provided in subsection (c). If thecounty imposes, increases, decreases, or rescinds a tax or tax rateunder this chapter after the date for which a certification undersubsection (b) is based, the budget agency shall adjust the certifieddistribution of the county after August 1 of the calendar year. Theadjustment shall reflect any other adjustment required undersubsections (c), (d), and (f). The adjusted certification shall betreated as the county's "certified distribution" for the immediatelysucceeding calendar year. The budget agency shall certify theadjusted certified distribution to the county auditor for the countyand provide the county council with an informative summary of thecalculations that revises the informative summary provided insubsection (b) and reflects the changes made in the adjustment.
(f) This subsection applies in the year a county initially imposesa tax rate under section 30 of this chapter. Notwithstanding any otherprovision, the budget agency shall adjust the part of the county'scertified distribution that is attributable to the tax rate under section30 of this chapter to provide for a distribution in the immediatelyfollowing calendar year equal to the result of:
(1) the sum of the amounts determined under STEP ONEthrough STEP FOUR of IC 6-3.5-1.5-1(a) in the year in whichthe county initially imposes a tax rate under section 30 of thischapter; multiplied by
(2) the following:
(A) In a county containing a consolidated city, one andfive-tenths (1.5).
(B) In a county other than a county containing a consolidatedcity, two (2).
(g) One-twelfth (1/12) of each adopting county's certifieddistribution for a calendar year shall be distributed from its accountestablished under section 16 of this chapter to the appropriate countytreasurer on the first day of each month of that calendar year.
(h) Upon receipt, each monthly payment of a county's certified
distribution shall be allocated among, distributed to, and used by thecivil taxing units of the county as provided in sections 18 and 19 ofthis chapter.
(i) All distributions from an account established under section 16of this chapter shall be made by warrants issued by the auditor ofstate to the treasurer of state ordering the appropriate payments.
As added by P.L.44-1984, SEC.14. Amended by P.L.23-1986,SEC.10; P.L.178-2002, SEC.61; P.L.1-2003, SEC.42; P.L.267-2003,SEC.8; P.L.207-2005, SEC.7; P.L.224-2007, SEC.78; P.L.146-2008,SEC.338; P.L.182-2009(ss), SEC.219; P.L.113-2010, SEC.64.
IC 6-3.5-6-17.2
Annual report to county auditor
Sec. 17.2. Before October 2 of each year, the budget agency shallsubmit a report to each county auditor indicating the balance in thecounty's special account as of the cutoff date set by the budgetagency.
As added by P.L.178-2002, SEC.62. Amended by P.L.267-2003,SEC.9; P.L.182-2009(ss), SEC.220.
IC 6-3.5-6-17.3
Distribution of excess balance; use
Sec. 17.3. (a) If the budget agency determines that a sufficientbalance exists in a county account in excess of the amount necessary,when added to other money that will be deposited in the accountafter the date of the determination, to make certified distributions tothe county in the ensuing year, the budget agency shall make asupplemental distribution to a county from the county's specialaccount.
(b) A supplemental distribution described in subsection (a) mustbe:
(1) made in January of the ensuing calendar year; and
(2) allocated in the same manner as certified distributions fordeposit in a civil unit's rainy day fund established underIC 36-1-8-5.1.
(c) A determination under this section must be made beforeOctober 2.
As added by P.L.178-2002, SEC.63. Amended by P.L.267-2003,SEC.10; P.L.182-2009(ss), SEC.221.
IC 6-3.5-6-17.4
(Repealed by P.L.267-2003, SEC.16.)
IC 6-3.5-6-17.5
Repealed
(Repealed by P.L.267-2003, SEC.16.)
IC 6-3.5-6-17.6
Repealed
(Repealed by P.L.267-2003, SEC.16.)
IC 6-3.5-6-18
Use of revenue by county auditors; distribution of revenue to civiltaxing units and school corporations; qualified economicdevelopment tax projects
Sec. 18. (a) The revenue a county auditor receives under thischapter shall be used to:
(1) replace the amount, if any, of property tax revenue lost dueto the allowance of an increased homestead credit within thecounty;
(2) fund the operation of a public communications system andcomputer facilities district as provided in an election, if any,made by the county fiscal body under IC 36-8-15-19(b);
(3) fund the operation of a public transportation corporation asprovided in an election, if any, made by the county fiscal bodyunder IC 36-9-4-42;
(4) make payments permitted under IC 36-7-14-25.5 orIC 36-7-15.1-17.5;
(5) make payments permitted under subsection (i);
(6) make distributions of distributive shares to the civil taxingunits of a county; and
(7) make the distributions permitted under sections 27, 28, 29,30, 31, 32, and 33 of this chapter.
(b) The county auditor shall retain from the payments of thecounty's certified distribution, an amount equal to the revenue lost,if any, due to the increase of the homestead credit within the county.This money shall be distributed to the civil taxing units and schoolcorporations of the county as though they were property taxcollections and in such a manner that no civil taxing unit or schoolcorporation shall suffer a net revenue loss due to the allowance of anincreased homestead credit.
(c) The county auditor shall retain:
(1) the amount, if any, specified by the county fiscal body fora particular calendar year under subsection (i), IC 36-7-14-25.5,IC 36-7-15.1-17.5, IC 36-8-15-19(b), and IC 36-9-4-42 from thecounty's certified distribution for that same calendar year; and
(2) the amount of an additional tax rate imposed under section27, 28, 29, 30, 31, 32, or 33 of this chapter.
The county auditor shall distribute amounts retained under thissubsection to the county.
(d) All certified distribution revenues that are not retained anddistributed under subsections (b) and (c) shall be distributed to thecivil taxing units of the county as distributive shares.
(e) The amount of distributive shares that each civil taxing unit ina county is entitled to receive during a month equals the product ofthe following:
(1) The amount of revenue that is to be distributed asdistributive shares during that month; multiplied by
(2) A fraction. The numerator of the fraction equals theallocation amount for the civil taxing unit for the calendar yearin which the month falls. The denominator of the fraction
equals the sum of the allocation amounts of all the civil taxingunits of the county for the calendar year in which the monthfalls.
(f) The department of local government finance shall provide eachcounty auditor with the fractional amount of distributive shares thateach civil taxing unit in the auditor's county is entitled to receivemonthly under this section.
(g) Notwithstanding subsection (e), if a civil taxing unit of anadopting county does not impose a property tax levy that is first dueand payable in a calendar year in which distributive shares are beingdistributed under this section, that civil taxing unit is entitled toreceive a part of the revenue to be distributed as distributive sharesunder this section within the county. The fractional amount such acivil taxing unit is entitled to receive each month during that calendaryear equals the product of the following:
(1) The amount to be distributed as distributive shares duringthat month; multiplied by
(2) A fraction. The numerator of the fraction equals the budgetof that civil taxing unit for that calendar year. The denominatorof the fraction equals the aggregate budgets of all civil taxingunits of that county for that calendar year.
(h) If for a calendar year a civil taxing unit is allocated a part ofa county's distributive shares by subsection (g), then the formula usedin subsection (e) to determine all other civil taxing units' distributiveshares shall be changed each month for that same year by reducingthe amount to be distributed as distributive shares under subsection(e) by the amount of distributive shares allocated under subsection(g) for that same month. The department of local government financeshall make any adjustments required by this subsection and providethem to the appropriate county auditors.
(i) Notwithstanding any other law, a county fiscal body maypledge revenues received under this chapter (other than revenuesattributable to a tax rate imposed under section 30, 31, or 32 of thischapter) to the payment of bonds or lease rentals to finance aqualified economic development tax project under IC 36-7-27 in thatcounty or in any other county if the county fiscal body determinesthat the project will promote significant opportunities for the gainfulemployment or retention of employment of the county's residents.
As added by P.L.44-1984, SEC.14. Amended by P.L.225-1986,SEC.10; P.L.32-1986, SEC.2; P.L.84-1987, SEC.3; P.L.2-1989,SEC.16; P.L.28-1993, SEC.7; P.L.273-1999, SEC.71; P.L.283-2001,SEC.4; P.L.90-2002, SEC.296; P.L.120-2002, SEC.4; P.L.1-2003,SEC.44; P.L.255-2003, SEC.4; P.L.207-2005, SEC.8; P.L.162-2006,SEC.31; P.L.184-2006, SEC.6; P.L.1-2007, SEC.63; P.L.224-2007,SEC.79; P.L.182-2009(ss), SEC.222.
IC 6-3.5-6-18.5
Distributive shares to civil taxing units in counties containing aconsolidated city
Sec. 18.5. (a) This section applies to a county containing a
consolidated city.
(b) Notwithstanding section 18(e) of this chapter, the distributiveshares that each civil taxing unit in a county containing aconsolidated city is entitled to receive during a month equals thefollowing:
(1) For the calendar year beginning January 1, 1995, calculatethe total amount of revenues that are to be distributed asdistributive shares during that month multiplied by thefollowing factor:
Center Township .0251
Decatur Township .00217
Franklin Township .0023
Lawrence Township .01177
Perry Township .01130
Pike Township .01865
Warren Township .01359
Washington Township .01346
Wayne Township .01307
Lawrence-City .00858
Beech Grove .00845
Southport .00025
Speedway .00722
Indianapolis/Marion County .86409
(2) Notwithstanding subdivision (1), for the calendar yearbeginning January 1, 1995, the distributive shares for each civiltaxing unit in a county containing a consolidated city shall benot less than the following:
Center Township $1,898,145
Decatur Township $164,103
Franklin Township $173,934
Lawrence Township $890,086
Perry Township $854,544
Pike Township $1,410,375
Warren Township $1,027,721
Washington Township $1,017,890
Wayne Township $988,397
Lawrence-City $648,848
Beech Grove $639,017
Southport $18,906
Speedway $546,000
(3) For each year after 1995, calculate the total amount ofrevenues that are to be distributed as distributive shares duringthat month as follows:
STEP ONE: Determine the total amount of revenues thatwere distributed as distributive shares during that month incalendar year 1995.
STEP TWO: Determine the total amount of revenue that thedepartment has certified as distributive shares for that monthunder section 17 of this chapter for the calendar year.
STEP THREE: Subtract the STEP ONE result from the
STEP TWO result.
STEP FOUR: If the STEP THREE result is less than orequal to zero (0), multiply the STEP TWO result by the ratioestablished under subdivision (1).
STEP FIVE: Determine the ratio of:
(A) the maximum permissible property tax levy underIC 6-1.1-18.5 for each civil taxing unit for the calendaryear in which the month falls, plus, for a county, thewelfare allocation amount; divided by
(B) the sum of the maximum permissible property taxlevies under IC 6-1.1-18.5 for all civil taxing units of thecounty during the calendar year in which the month falls,and an amount equal to the welfare allocation amount.
STEP SIX: If the STEP THREE result is greater than zero(0), the STEP ONE amount shall be distributed bymultiplying the STEP ONE amount by the ratio establishedunder subdivision (1).
STEP SEVEN: For each taxing unit determine the STEPFIVE ratio multiplied by the STEP TWO amount.
STEP EIGHT: For each civil taxing unit determine thedifference between the STEP SEVEN amount minus theproduct of the STEP ONE amount multiplied by the ratioestablished under subdivision (1). The STEP THREE excessshall be distributed as provided in STEP NINE only to thecivil taxing units that have a STEP EIGHT difference greaterthan or equal to zero (0).
STEP NINE: For the civil taxing units qualifying for adistribution under STEP EIGHT, each civil taxing unit'sshare equals the STEP THREE excess multiplied by the ratioof:
(A) the maximum permissible property tax levy underIC 6-1.1-18.5 for the qualifying civil taxing unit during thecalendar year in which the month falls, plus, for a county,an amount equal to the welfare allocation amount; dividedby
(B) the sum of the maximum permissible property taxlevies under IC 6-1.1-18.5 for all qualifying civil taxingunits of the county during the calendar year in which themonth falls, and an amount equal to the welfare allocationamount.
(c) The welfare allocation amount is an amount equal to the sumof the property taxes imposed by the county in 1999 for the county'swelfare fund and welfare administration fund and the property taxesimposed by the county in 2008 for the county's county medicalassistance to wards fund, family and children's fund, children'spsychiatric residential treatment services fund, county hospital carefor the indigent fund, children with special health care needs countyfund, plus, in the case of Marion County, thirty-five million dollars($35,000,000).
As added by P.L.42-1994, SEC.10. Amended by P.L.98-1995, SEC.1;
P.L.273-1999, SEC.72; P.L.283-2001, SEC.5; P.L.120-2002, SEC.5;P.L.255-2003, SEC.5; P.L.234-2005, SEC.5; P.L.146-2008,SEC.339.
IC 6-3.5-6-18.6
Timing of income tax distributions within the county
Sec. 18.6. (a) The county auditor shall timely distribute thecertified distribution received under section 17 of this chapter to eachcivil taxing unit that is a recipient of distributive shares as providedby sections 18 and 18.5 of this chapter.
(b) A distribution is considered to be timely made if thedistribution is made not later than ten (10) working days after thedate the county treasurer receives the county's certified distributionunder section 17 of this chapter.
As added by P.L.26-2009, SEC.2.
IC 6-3.5-6-19
Calculation of distributive shares; allowable uses of revenue
Sec. 19. (a) Except as provided in sections 18(e) and 18.5(b)(3)of this chapter, in determining the fractional share of distributiveshares the civil taxing units of a county are entitled to receive undersection 18 of this chapter during a calendar year, the department oflocal government finance shall consider only property taxes imposedon tangible property subject to assessment in that county.
(b) In determining the amount of distributive shares a civil taxingunit is entitled to receive under section 18(g) of this chapter, thedepartment of local government finance shall consider only thepercentage of the civil taxing unit's budget that equals the ratio thatthe total assessed valuation that lies within the civil taxing unit andthe county that has adopted the county option tax bears to the totalassessed valuation that lies within the civil taxing unit.
(c) The distributive shares to be allocated and distributed underthis chapter:
(1) shall be treated by each civil taxing unit as additionalrevenue for the purpose of fixing the civil taxing unit's budgetfor the budget year during which the distributive shares are tobe distributed to the civil taxing unit; and
(2) may be used for any lawful purpose of the civil taxing unit.
(d) In the case of a civil taxing unit that includes a consolidatedcity, its fiscal body may distribute any revenue it receives under thischapter to any governmental entity located in its county except anexcluded city, a township, or a school corporation.
As added by P.L.44-1984, SEC.14. Amended by P.L.225-1986,SEC.11; P.L.273-1999, SEC.73; P.L.90-2002, SEC.297;P.L.267-2003, SEC.11; P.L.118-2005, SEC.1.
IC 6-3.5-6-20
County residents; determination
Sec. 20. (a) For purposes of this chapter, an individual shall betreated as a resident of the county in which he: (1) maintains a home, if the individual maintains only one (1)in Indiana;
(2) if subdivision (1) does not apply, is registered to vote;
(3) if subdivision (1) or (2) does not apply, registers hispersonal automobile; or
(4) if subdivision (1), (2), or (3) does not apply, spends themajority of his time spent in Indiana during the taxable year inquestion.
(b) The residence or principal place of business or employment ofan individual is to be determined on January 1 of the calendar yearin which the individual's taxable year commences. If an individualchanges the location of his residence or principal place ofemployment or business to another county in Indiana during acalendar year, his liability for county option income tax is notaffected.
(c) Notwithstanding subsection (b), if an individual becomes acounty taxpayer for purposes of IC 36-7-27 during a calendar yearbecause the individual:
(1) changes the location of the individual's residence to a countyin which the individual begins employment or business at aqualified economic development tax project (as defined inIC 36-7-27-9); or
(2) changes the location of the individual's principal place ofemployment or business to a qualified economic developmenttax project and does not reside in another county in which thecounty option income tax is in effect;
the individual's adjusted gross income attributable to employment orbusiness at the qualified economic development tax project is taxableonly by the county containing the qualified economic developmenttax project.
As added by P.L.44-1984, SEC.14. Amended by P.L.42-1994,SEC.11.
IC 6-3.5-6-21
Reciprocity