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Bill Watch 2017 Jan. 26, 2017: Current Tax Law of Note - Taxation News

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Tax News


Posted on: Jan 26, 2017

The IndyBar Legislative Committee is currently monitoring the following tax related legislation. IndyBar members can request that the Legislative Committee track specific legislation by contacting committee chair Lawren Mills at lawren.mills@icemiller.com.

 

HB1158 SALES AND USE TAX (MILLER D) Provides that if a purchaser is physically present at a retail merchant's location when a product is purchased and the purchaser requests delivery of the product to a location outside Indiana, the sale is considered to be made at the business location of the sale and subject to the state sales tax, unless the
purchaser presents proof during the consummation of the sale that the purchaser resides outside Indiana.

HB1160 STUDY OF TAX COURT EFFECTIVENESS (CHERRY R) Urges the legislative council to assign to an appropriate interim study committee for study during the 2017 interim the topic of the effectiveness of the Indiana tax court.

HB1175 LOCAL INCOME TAX COLLECTION (CULVER W) Provides that for taxable years beginning after December 31, 2017, the fiscal body of a county imposing a local income tax may adopt an ordinance providing that the county, rather than the department of state revenue, has the authority and responsibility for the administration, collection, and
enforcement of the local income tax. Specifies that in such a county: (1) taxpayers must file local income tax returns
with the county treasurer of the county that imposed the tax and must pay the local income tax to the county
treasurer of the county that imposed the tax; and (2) employers must remit withholdings of local income taxes to the
county treasurer of the county that imposed the tax.

HB1180 BLIND AND DISABLED PROPERTY TAX DEDUCTION (KERSEY C) Increases, from $17,000 to $22,000, the taxable gross income limitation for the residential real property tax deduction for an individual who is blind or is an individual with a disability beginning with the January 1, 2017, assessment date.

HB1311 STATE AND LOCAL TAXATION (LEONARD D) Provides that the minimum valuation applicable to the total amount of a taxpayer's assessable depreciable personal property in a taxing district is reduced incrementally from 30% of the assessed value of the depreciable personal property in the taxing district to 20% over 10 years beginning with the
January 1, 2018, assessment date. Eliminates the addbacks of a taxpayer's federal income tax deduction for income
attributable to domestic production activities in the definitions of "adjusted gross income" under the adjusted gross
income tax law and the financial institutions tax law.

SB260 TAX RATES (TALLIAN K) Eliminates the following: (1) The decreases in the corporate adjusted gross income tax rate that are scheduled under current law to become effective for taxable years beginning after June 30, 2017. (2) The
decreases in the financial institutions tax rate that are scheduled under current law to become effective for taxable
years beginning after December 31, 2018.

SB350 PROPERTY TAX ASSESSMENT (ECKERTY D) Provides, with limited exceptions, that: (1) the only factor permitted to be used in changing the assessed value of most real property from year to year is the annual adjustment factor; and (2) an assessing official may not change the real property's underlying parcel characteristics (including age, grade, or condition of the real property) until the real property has been reassessed under the county's reassessment plan, there is a change in an objective factor or feature relating to a property, or there is a need to correct an error.
Provides a process that must be followed by an assessing official who wishes to apply an exception. Provides that the
department of local government finance (DLGF) may impose a penalty on an assessing official who fails to follow the
process or when the county property tax assessment board of appeals (PTABOA) finds that a request to apply an
exception is not supported by the facts or a legal opinion. Creates the DLGF assessment supervision fund for the
deposit of penalty revenue. Changes the standards for the crime for an assessing official or the DLGF who: (1)
assesses any property at more or less than the proper assessed value to include intentionally or recklessly assessing;
(2) fails to perform any of the duties under the general assessment provisions to include an intentional or reckless
failure; or (3) violates any of the other general assessment provisions to include a knowing or intentional violation.
Permits a taxpayer to file a complaint with the DLGF. Permits the DLGF to revoke a township or county assessor
certification. Permits a property owner of record to appeal a property tax assessment at any time before July 1 of the
year after the assessment date. Permits a taxpayer to name an attorney in fact who may take the place of the
taxpayer under the property tax laws, including appeals. Requires an assessing official to schedule a preliminary
conference within normal business hours and reschedule the conference to a time convenient to the taxpayer upon
request. Requires evidence in a property tax appeal to be submitted at least 10 days before the PTABOA hearing.
Requires an assessing official to show cause to the DLGF before a taxpayer may be required by the assessing official
to post a bond or provide other security regarding a contested assessment. Provides that if a taxing official causes a
lien to be placed against a property without obtaining the department's approval, the taxing official commits a Class C
infraction. Allows a taxpayer alone to stipulate to an assessed value determined by an Indiana registered appraiser.
Provides that the office of the assessing official and taxpayer each pay 50% of the appraisal costs. Specifies deadlines
for the PTABOA to make decisions. Makes conforming changes.

HB1046 PROPERTY TAX LIABILITY (CULVER W) Provides that, if the assessed value of real property is reduced as a result of a property tax appeal, the subsequent assessed value of the real property may not be increased by more than 3% per year for the next three years after the assessment date in which the reduction was applied. Specifies that the 3%
limitation does not apply to any part of a change in an assessment: (1) that is directly applicable to any change in an
objective factor or feature relating to the property, including an improvement or enlargement of the property; or (2)
that results from the correction of an error or omission, including the correction of a mathematical error.

HB1056 PROPERTY TAX RELIEF (PRYOR C) Permits a board of county commissioners (outside Marion County), a county council, a city-county council, a city common council, or a town council to establish a neighborhood enhancement property tax relief program. Provides an assessed value deduction for longtime owner-occupants of homesteads having an assessed value of less than $100,000. Provides that the homesteads must be located in designated distressed areas where real property values have risen markedly as a consequence of the renovation of other residences or the construction of new residences in the area. Specifies that the deduction applies only to the extent the assessed value of a homestead has increased by more than 3% from the previous year. Provides that only
homesteads and owners that qualify for the program on the first assessment date under the program are granted a
deduction unless the local unit allows others to qualify. Specifies that there must be at least five homesteads in a
designated area. Specifies that not more than 5% of the territory of the unit may be included in designated areas.
Allows a local unit to include additional requirements in the ordinance establishing the program. Prohibits income of
the owner of a homestead from being a consideration. Adds the same penalty provision for wrongly receiving the
deduction that applies to the homestead standard deduction.

HB1075 TAX CREDIT FOR IMPROVING RESIDENCE ACCESSIBILITY (MACER K) Provides a credit against the adjusted gross income tax to a taxpayer who: (1) purchases a new residence that has improved accessibility or universal visibility; or (2) retrofits an existing residence to improve accessibility or provide universal visibility.

HB1076 PROPERTY TAX EXEMPTIONS (BARTLETT J) Provides that an Indiana domestic nonprofit corporation that meets certain conditions may submit an exemption application before September 1, 2017, for property tax exemptions for property used as a church with respect to the 2010 through 2016 assessment dates if the property would have
qualified for the exemption if an exemption application had been properly and timely filed for the property. Provides
that an eligible taxpayer is entitled to a refund for any taxes, penalties, and interest paid with respect to the property,
and specifies that a tax deed may not be issued for the property.

HB1115 VETERANS' PROPERTY TAX DEDUCTIONS (KLINKER S) Provides that beginning with the January 1, 2018,
assessment date, the assessed value of an individual's Indiana real property, Indiana mobile home not assessed as
real property, and Indiana manufactured home not assessed as real property may not be considered when
determining whether the individual is eligible for the property tax deduction for: (1) totally disabled veterans; and (2)
veterans who are at least 62 years of age and have a disability of at least 10%.

HB1247 PROPERTY TAX REPLACEMENT FEE (KARICKHOFF M) Permits a county council or a local income tax adopting body to establish an annual property tax replacement fee on any parcel receiving assessed value deductions or property tax credits that reduce the annual property tax liability on the parcel to less than the fee amount set by the county.Provides that the fee must be at least $100 and not more than $400. Specifies that the property taxes paid on the
parcel are a credit against the fee. Changes the county option amount from $25 to $100 for requiring the payment of
property taxes and the property tax replacement fee, if any, in the May installment. Eliminates the $5 minimum
property tax statement processing fee if a county adopts the property tax replacement fee.

HB1257 VETERANS PROPERTY TAX DEDUCTION (VANNATTER H) Eliminates the assessed value cap of $175,000 that applies to the property tax deduction for a veteran who: (1) has a total disability; or (2) is at least 62 years of age
and has at least a 10% disability.

HB1299 PROPERTY TAX ASSESSMENT APPEALS (PRYOR C) Provides that costs that may be reimbursed to a county assessor in defending an assessment appeal include legal fees.

SB122 STATE PAYMENTS IN LIEU OF PROPERTY TAXES (KOCH E) Requires the state to make payments in lieu of property taxes (PILOTs) for qualified parcels in counties in which at least 15% of all land in the county is: (1) in the aggregate, owned or leased by the state of Indiana or the federal government; and (2) subject to an exemption from property taxes. Defines "qualified parcel" as a parcel that is: (1) owned or leased by the state of Indiana; (2) subject to an exemption from property taxes; and (3) located in a county to which this act applies. Provides that a county
containing qualified parcels is entitled to receive PILOTs from the state. Provides that for purposes of calculating a
PILOT, each acre of the qualified parcel is considered to have an assessed value of one-half of the statewide
agricultural land base rate value. Annually appropriates from the state general fund the amount necessary to pay the
required PILOTs.

SB164 ELIMINATION OF ANNUAL ADJUSTMENTS OF ASSESSED VALUES (NIEMEYER R) Eliminates the annual adjustments (or "trending") to assessed values of real property for assessment dates beginning after December 31, 2017. Retains the provisions in current law that require four year cyclical reassessments. Makes conforming changes.

SB331 PROPERTY TAX ASSESSMENT (ZAKAS J) Provides the following if the application of an annual adjustment factor derived by an assessing official would result in an increase of more than 10% in the assessed value of one or more homesteads for property tax purposes: (1) The assessing official shall submit certain information to the division of
data analysis (division) of the department of local government finance. (2) The division shall review the information
submitted and make a determination of whether the annual adjustment factor was correctly calculated or is
otherwise inappropriate. (3) If the division determines that the annual adjustment factor to be applied to the
homestead was incorrectly calculated or otherwise needs to be adjusted, the division shall certify to the assessing
official the information and instructions necessary for the assessing official to correct the annual adjustment factor.

SB386 REVIEW OF ASSESSMENTS AND DEDUCTIONS (NIEMEYER R) Provides that before a hearing to be held by a county property tax assessment board of appeals (PTABOA) to review an action taken by a county or township official with respect to an assessment of a taxpayer's property or a reviewable deduction claimed by a taxpayer, the county or
township official and the taxpayer must exchange the information that each party is relying on to support each party's
respective position on each disputed issue concerning the assessment or deduction.

SB415 PROPERTY TAX DEDUCTIONS (HOLDMAN T) Provides that the property tax mortgage deduction applies only if: (1) the mortgage loan or installment loan is made and recorded before January 1, 2018, or the purchase contract under which the person owes the contract indebtedness is entered into before January 1, 2018, and the purchase contract or a memorandum of the contract is recorded before January 1, 2018; and (2) the statement applying for the
deduction is filed for the first time on or before January 5, 2018. Increases the homestead deduction to the lesser of:
(1) 65% of the assessed value of the homestead; or (2) $48,000; in the case of a homestead for which the mortgage
deduction is not claimed for the same assessment date. (For homesteads for which the mortgage deduction is
claimed for the same assessment date, the amount of the homestead deduction would remain at the lesser of: (1)
60% of the assessed value of the homestead; or (2) $45,000.)

SB440 VARIOUS TAX MATTERS (HOLDMAN T) Provides that the attorney general owes the same obligations to the state or any other party the attorney general represents in a judicial or administrative proceeding that any other attorney
owes to a client under rules prescribed by the supreme court. Requires the party that petitions for equitable allocation
and apportionment of state income tax to bear the burden of proof that the standard allocation and apportionment
provisions do not fairly represent the taxpayer's activity in Indiana and that the proposed alternative to the standard
allocation and apportionment provisions is reasonable. Specifies certain documents and records that the department
of state revenue (department) must maintain for at least three years. Provides that, if a taxpayer has filed a protest
of a tax assessment or a refund claim, the department shall maintain all documents and records relevant to a
determination of the taxpayer's protest for a period ending not less than the last day to file an appeal. Requires the
department to adopt certain procedures for department employees to follow in mailing documents that provide notice
to a taxpayer. Specifies the content of a notice to a taxpayer that establishes a deadline for the taxpayer to act or
respond. Allows the commissioner of the department to settle any refund dispute, in addition to the authority in
current law to settle any tax liability. Repeals the provision in current law that requires that the terms of a settlement
must be available for public inspection.

SB448 TAXPAYER REPRESENTATIVES (NIEMEYER R) Requires the department of local government finance (DLGF) to prepare and make available to taxpayers a power of attorney form that allows the owner of property that is the
subject of an appeal to appoint a spouse, child, sibling, parent, or grandparent of the owner to represent the owner
concerning the appeal before the county property tax assessment board of appeals, the DLGF, or the Indiana board of
tax review. Provides that a spouse, child, sibling, parent, or grandparent who is appointed by the owner of the
property is not required to be certified as a tax representative in order to represent the owner concerning the appeal.

SB449 PROPERTY TAX AUDIT CONTRACTOR COMPENSATION (NIEMEYER R) Extends the prohibition under current law against contracting for property tax audit services on a percentage basis to include any method that bases payments under the contract on increases of assessed value or property tax revenue that are attributable to the discovery of property that has been undervalued or omitted from assessment.

SB481 TAX DEDUCTION FOR HEALTH CARE SHARING EXPENSES (KOCH E) Allows a taxpayer who is an Indiana resident and a member of a health care sharing ministry to deduct from the taxpayer's adjusted gross income the total
amount of qualified health care sharing expenses incurred by the taxpayer in a particular taxable year.

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