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Bill Watch March 13, 2017: Tax Legislation of Note - Taxation News

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Tax News


Posted on: Mar 13, 2017

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

Click here to view the full Bill Watch reports.

HB1450    PROPERTY TAX MATTERS. (LEONARD D) Provides that a political subdivision must upload a copy of a contract to the department of local government finance's (DLGF) computer gateway if the total cost of the contract exceeds $50,000. Allows the DLGF to use estimated data to compute six year rolling averages for the purpose of determining the annual adjustments of assessed values between reassessments. Provides that a public utility that fails to timely file a statement concerning the property owned or used by the public utility on an assessment date shall remit the penalty to the department of state revenue. Defines the terms "installment loan" and "mortgage" for purposes of the mortgage deduction. Provides that, for purposes of claiming the mortgage deduction, the associated mortgage instrument that is recorded must include the terms of payment or other performance. Restates the conditions for when a taxpayer must reapply for various property tax deductions. Restates the requirement that a taxpayer file a certified statement with the county auditor when the taxpayer ceases to be eligible for the standard deduction for a property. Restates the provisions concerning the prohibition against dividing a controlled project in order to avoid the petition and remonstrance and referendum processes. Provides that both the executive of a political subdivision and a majority of the members of the fiscal body of a political subdivision may independently request technical assistance from the distressed unit appeal board in helping prevent the political subdivision from becoming a distressed political subdivision. Provides that a multiple county property tax assessment board of appeals shall submit to the DLGF, the Indiana board of tax review, and the legislative services agency separate reports for each county participating in the multiple county property tax assessment board of appeals. Authorizes, but does not require, the DLGF to adopt rules to limit the basis of payment for services provided by professionals who work on capital projects to a fee for service agreement. Provides that the DLGF may adopt a rule after June 30, 2016, and before April 1, 2017, that concerns or includes market segmentation and affects assessments for the January 1, 2018, assessment date. Provides that interest on a refund or credit owed to a taxpayer is computed until the date the county auditor determines the amount of the refund or credit. Allows a county auditor, with the approval of the county treasurer, to waive, negotiate, or settle penalties that have accrued on delinquent property taxes. Eliminates the requirement in current law that the DLGF review a loan contract entered into by an airport authority. Provides that a conservancy district is not required to go through the budget review process unless the conservancy district imposes a property tax. Provides that a redevelopment commission's annual report to the unit that created the redevelopment commission must include both a list of parcels of real property and the personal property records for the property in the redevelopment area. Provides that a resolution by a provider unit to withdraw from a fire protection territory is effective on January 1 of the year following the year in which the resolution is adopted. Provides that if the provider unit of a fire protection territory withdraws, the remaining units must unanimously agree on which unit is to become the successor provider unit. Permits a school corporation located in Vanderburgh County to impose a property tax at a rate of up to $0.005 to provide money to a historical society for restoration and maintenance of Bosse Field. Repeals the requirements that the budget agency publish by May 1 each year an estimate of the total amount of statewide distributions of local income tax revenue for: (1) the following two years, in an odd-numbered year; and (2) the following year, in an even-numbered year.

HB1536    TAX SALES. (ENGLEMAN K) Specifies deadlines related to acquiring a tax deed for real property if a county assigns a certificate of sale for the real property to a political subdivision. Eliminates a conflict with an administrative order of the Indiana supreme court concerning cause numbers. Provides that a person who wishes to challenge the validity of a tax sale or a tax deed ordered by a court must show by clear and convincing evidence that an error or other irregularity affected the substantial justice of the tax sale or violated the due process of law.

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.

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.

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.

SB501    PROPERTY TAX APPEALS. (FREEMAN A) Makes procedural changes and technical corrections to various property tax provisions in the Indiana Code that relate to property tax assessments, reviews, appeals, and refunds.

SB515    TAX ADMINISTRATION. (HERSHMAN B) Provides a sales tax exemption for certain transactions involving agricultural or industrial processing machinery, tools, and equipment. Provides a sales tax exemption for prosthetic devices, including artificial limbs, orthopedic devices, dental prosthetic devices, eyeglasses, and contact lenses. Provides an income tax deduction for certain amounts a taxpayer included as an item of income in a prior tax year, paying tax on the amount, but later returned the item in a subsequent tax year because it was established that the taxpayer did not have an unrestricted right to the item of income. Specifies that the modifications that are required to be made in determining a taxpayer's Indiana adjusted gross income include those exemptions, deductions, and add backs that are provided for in other provisions of the Indiana Code. Specifies that, in determining an Indiana net operating loss deduction, certain modifications to adjusted gross income shall not be applied. Amends the due date for a corporation to file its state tax return to coincide with the due date for the corporation's federal tax return. Provides that fees collected under the International Registration Plan for the registration or renewal of certain vehicles shall be distributed as follows: (1) The first $125,000 to the state police building account. (2) Any remaining amounts to the motor vehicle highway account. Makes technical corrections.

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