Introduced Version
HOUSE BILL No. 1618
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-3-7.2; IC 6-1.1-37-7.
Synopsis: Exemption for new business personal property. Provides
that for business personal property purchased after December 31, 2023,
the total acquisition cost of a taxpayer's total business personal property
in a county for an assessment date is exempt from taxation.
Effective: January 1, 2024.
Payne, Morrison, Sweet, Hostettler
January 19, 2023, read first time and referred to Committee on Ways and Means.
2023 IN 1618—LS 6890/DI 134 Introduced
First Regular Session of the 123rd General Assembly (2023)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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between statutes enacted by the 2022 Regular Session of the General Assembly.
HOUSE BILL No. 1618
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-1.1-3-7.2, AS AMENDED BY P.L.137-2022,
2 SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JANUARY 1, 2024]: Sec. 7.2. (a) This section applies to assessment
4 dates occurring after December 31, 2015.
5 (b) As used in this section, "affiliate" means an entity that
6 effectively controls or is controlled by a taxpayer or is associated with
7 a taxpayer under common ownership or control, whether by
8 shareholdings or other means.
9 (c) As used in this section, "business personal property" means
10 personal property that:
11 (1) is otherwise subject to assessment and taxation under this
12 article;
13 (2) is used in a trade or business or otherwise held, used, or
14 consumed in connection with the production of income; and
15 (3) was:
16 (A) acquired by the taxpayer in an arms length transaction
17 from an entity that is not an affiliate of the taxpayer, if the
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1 personal property has been previously used in Indiana before
2 being placed in service in the county; or
3 (B) acquired in any manner, if the personal property has never
4 been previously used in Indiana before being placed in service
5 in the county.
6 The term does not include mobile homes assessed under IC 6-1.1-7,
7 personal property held as an investment, or personal property that is
8 assessed under IC 6-1.1-8 and is owned by a public utility subject to
9 regulation by the Indiana utility regulatory commission. However, the
10 term does include the personal property of a telephone company or a
11 communications service provider if that personal property meets the
12 requirements of subdivisions (1) through (3), regardless of whether that
13 personal property is assessed under IC 6-1.1-8 and regardless of
14 whether the telephone company or communications service provider is
15 subject to regulation by the Indiana utility regulatory commission.
16 (d) This subsection applies to business personal property
17 purchased before January 1, 2024. Notwithstanding section 7 of this
18 chapter, if the acquisition cost of a taxpayer's total business personal
19 property in a county is less than eighty thousand dollars ($80,000) for
20 that assessment date, the taxpayer's business personal property in the
21 county for that assessment date is exempt from taxation.
22 (e) This subsection applies to business personal property
23 purchased after December 31, 2023. Notwithstanding section 7 of
24 this chapter, the total acquisition cost of a taxpayer's total business
25 personal property in a county for an assessment date is exempt
26 from taxation.
27 (e) (f) Subject to subsection (f), (g), a taxpayer that is eligible for the
28 exemption under this section for an assessment date shall include the
29 following information on the taxpayer's personal property tax return:
30 (1) A declaration that the taxpayer's business personal property in
31 the county is exempt from property taxation.
32 (2) Whether the taxpayer's business personal property within the
33 county is in one (1) location or multiple locations.
34 (3) An address for the location of the property.
35 If the business personal property is in multiple locations within a
36 county, the taxpayer shall provide an address for the location where the
37 sum of acquisition costs for business personal property is greatest. If
38 two (2) or more addresses contain the greatest equivalent sum of
39 acquisition costs for business personal property within a given county,
40 the taxpayer shall choose only one (1) address to list on the return.
41 (f) (g) Beginning after December 31, 2022, a taxpayer that has
42 included the information required under subsection (e) (f) on the
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1 taxpayer's personal property tax return to claim the exemption under
2 this section is not required to file a personal property return for the
3 taxpayer's business personal property for an assessment date that
4 occurs after the assessment date for which the information is first
5 provided under subsection (e), (f), unless or until the taxpayer no
6 longer qualifies for the exemption under subsection (d) for a
7 subsequent assessment date.
8 SECTION 2. IC 6-1.1-37-7, AS AMENDED BY P.L.153-2021,
9 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
10 JANUARY 1, 2024]: Sec. 7. (a) If a person fails to file a required
11 personal property return on or before the due date, the county auditor
12 shall add a penalty of twenty-five dollars ($25) to the person's next
13 property tax installment. The county auditor shall also add an
14 additional penalty to the taxes payable by the person if the person fails
15 to file the personal property return within thirty (30) days after the due
16 date. The amount of the additional penalty is twenty percent (20%) of
17 the taxes finally determined to be due with respect to the personal
18 property which should have been reported on the return.
19 (b) For purposes of this section, a personal property return is not due
20 until the expiration of any extension period granted by the township or
21 county assessor under IC 6-1.1-3-7(b).
22 (c) The penalties prescribed under this section do not apply to an
23 individual or the individual's dependents if the individual:
24 (1) is in the military or naval forces of the United States on the
25 assessment date; and
26 (2) is covered by the federal Servicemembers Civil Relief Act (50
27 U.S.C. App. 501 et seq.) or IC 10-16-20.
28 (d) If a person subject to IC 6-1.1-3-7(c) fails to include on a
29 personal property return the information, if any, that the department of
30 local government finance requires under IC 6-1.1-3-9 or IC 6-1.1-5-13,
31 the county auditor shall add a penalty to the property tax installment
32 next due for the return. The amount of the penalty is twenty-five dollars
33 ($25).
34 (e) If the total assessed value that a person reports on a personal
35 property return is less than the total assessed value that the person is
36 required by law to report and if the amount of the undervaluation
37 exceeds five percent (5%) of the value that should have been reported
38 on the return, then the county auditor shall add a penalty of twenty
39 percent (20%) of the additional taxes finally determined to be due as
40 a result of the undervaluation. The penalty shall be added to the
41 property tax installment next due for the return on which the property
42 was undervalued. If a person has complied with all of the requirements
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1 for claiming a deduction, an exemption, or an adjustment for abnormal
2 obsolescence, then the increase in assessed value that results from a
3 denial of the deduction, exemption, or adjustment for abnormal
4 obsolescence is not considered to result from an undervaluation for
5 purposes of this subsection.
6 (f) If a person required by IC 6-1.1-3-7.2(e) IC 6-1.1-3-7.2(f) to
7 declare on the taxpayer's personal property tax return that the taxpayer's
8 business personal property is exempt fails to timely file the taxpayer's
9 personal property tax return with the declaration, the county auditor
10 shall impose a penalty of twenty-five dollars ($25) that must be paid by
11 the person with the next property tax installment that is collected. A
12 county shall include the penalty on a property tax bill associated with
13 the tax district in which the majority value of the taxpayer's business
14 personal property within the county is located, as determined by the
15 county assessor.
16 (g) A penalty is due with an installment under subsection (a), (d),
17 (e), or (f) whether or not an appeal is filed under IC 6-1.1-15-5 with
18 respect to the tax due on that installment.
19 SECTION 3. [EFFECTIVE JANUARY 1, 2024] (a) IC 6-1.1-3-7.2
20 and IC 6-1.1-37-7, both as amended by this act, apply to taxable
21 years beginning after December 31, 2023.
22 (b) This SECTION expires July 1, 2026.
2023 IN 1618—LS 6890/DI 134