Introduced Version
HOUSE BILL No. 1270
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-49.5.
Synopsis: Optional circuit breaker tax credit. Authorizes the city of
Gary to adopt an ordinance to provide a credit against property tax
liability for qualified individuals. Defines a "qualified individual" for
purposes of the credit. Provides that the ordinance may designate: (1)
all of the territory of the city; or (2) one or more specific geographic
territories within the city; as a neighborhood enhancement district in
which qualified individuals may apply for the credit. Provides that the
amount of the credit in a particular year is equal to the amount by
which an individual's property tax liability increases by more than the
percentage of increase specified by the city fiscal body from the prior
year. Provides that the credit does not affect the allocation of taxes to
a referendum fund. Requires a qualified individual who desires to
claim the credit to file a certified statement with the county auditor.
Provides that the county auditor shall apply the credit in succeeding
years after the certified statement is filed unless the auditor determines
that the individual is no longer eligible for the credit or the county
fiscal body rescinds the ordinance. Provides that the penalty for
wrongly receiving the credit is the same as the penalty for wrongly
receiving the homestead standard deduction. Provides that an
individual may not receive both the optional circuit breaker tax credit
and an over 65 property tax credit in the same year. Provides that an
ordinance must specify that the credit does not apply for property taxes
first due and payable after December 31, 2027. Sunsets the optional
circuit breaker tax credit on January 1, 2028.
Effective: July 1, 2024.
Hatcher
January 9, 2024, read first time and referred to Committee on Ways and Means.
2024 IN 1270—LS 6702/DI 134 Introduced
Second Regular Session of the 123rd General Assembly (2024)
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HOUSE BILL No. 1270
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 6-1.1-49.5 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2024]:
4 Chapter 49.5. Optional Circuit Breaker Tax Credit
5 Sec. 1. This chapter applies to the city of Gary.
6 Sec. 2. As used in this chapter, "homestead" refers to a
7 homestead that has been granted a standard deduction under
8 IC 6-1.1-12-37.
9 Sec. 3. As used in this chapter, "neighborhood enhancement
10 district" refers to a geographic territory designated by the city
11 fiscal body and established as a designated area in an ordinance
12 adopting an optional circuit breaker tax credit under section 5 of
13 this chapter.
14 Sec. 4. As used in this chapter, "qualified individual" means an
15 individual who:
16 (1) has received a standard deduction granted under
17 IC 6-1.1-12-37 for the individual's homestead property in the
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1 immediately preceding calendar year (or was married at the
2 time of death to a deceased spouse who qualified for a
3 standard deduction granted under IC 6-1.1-12-37 for the
4 individual's homestead property in the immediately preceding
5 calendar year);
6 (2) is receiving a standard deduction granted under
7 IC 6-1.1-12-37 for the same homestead property in the
8 current calendar year;
9 (3) has lived in the homestead for at least ten (10) years on or
10 before December 31 of the calendar year immediately
11 preceding the current calendar year;
12 (4) is fifty-five (55) years of age or older on or before
13 December 31 of the calendar year preceding the year in which
14 the credit is claimed; and
15 (5) had:
16 (A) in the case of an individual who filed a single return,
17 adjusted gross income (as defined in Section 62 of the
18 Internal Revenue Code) not exceeding the amount
19 specified in the ordinance adopted by the city under section
20 5(c)(2) of this chapter; or
21 (B) in the case of an individual who filed a joint income tax
22 return with the individual's spouse, combined adjusted
23 gross income (as defined in Section 62 of the Internal
24 Revenue Code) not exceeding the amount specified in the
25 ordinance adopted by the city under section 5(c)(2) of this
26 chapter;
27 for the calendar year preceding by two (2) years the calendar
28 year in which property taxes are first due and payable.
29 Sec. 5. (a) Subject to subsection (h), the city fiscal body may
30 adopt an ordinance to provide a credit against a qualified
31 individual's property tax liability as set forth in this chapter.
32 (b) An ordinance adopted under this section may designate a
33 neighborhood enhancement district. A neighborhood enhancement
34 district may include:
35 (1) all of the territory of the city; or
36 (2) one (1) or more specific geographic territories within the
37 city;
38 as an area in which qualified individuals may apply for the credit.
39 (c) Subject to subsection (h), an ordinance adopted under this
40 section must:
41 (1) include a boundary description of the neighborhood
42 enhancement district or districts to which the ordinance
2024 IN 1270—LS 6702/DI 134 3
1 applies;
2 (2) specify the income thresholds for a qualified individual
3 under section 4(5)(A) and 4(5)(B) of this chapter, if any; and
4 (3) specify the percentage of increase on a qualified
5 individual's property tax liability in a particular year
6 compared to the prior year that is to be used in determining
7 the amount of the optional circuit breaker tax credit
8 calculated under section 8(2)(B) of this chapter. The
9 percentage must be at least two percent (2%) but not more
10 than five percent (5%).
11 The boundary description required under subdivision (1) must be
12 sufficient to identify the parcel or parcels to which the credit may
13 be applied, including identification by taxing district, a parcel list,
14 or a legal description.
15 (d) If a proposal is presented to the city fiscal body to adopt an
16 ordinance under this section, the city fiscal body shall hear the
17 proposal at a public meeting of the city fiscal body and may then
18 vote to adopt the ordinance at the next meeting of the city fiscal
19 body.
20 (e) The city fiscal body may rescind an ordinance adopted under
21 this section.
22 (f) An ordinance adopted under this section is effective January
23 1 of the year following the year in which the ordinance is adopted.
24 (g) An ordinance adopted under this section must specify that
25 the credit does not apply for property taxes first due and payable
26 after December 31, 2027.
27 (h) A city fiscal body shall prescribe the same income
28 thresholds, credit amounts, and any other requirements related to
29 eligibility for each neighborhood enhancement district designated
30 in the city.
31 Sec. 6. If a city fiscal body adopts an ordinance to either provide
32 the credit under this chapter or rescind an ordinance previously
33 adopted, the city fiscal body shall, not later than fifteen (15) days
34 after the adoption of the ordinance, give notice of the adoption of
35 the ordinance to:
36 (1) the department of local government finance on the form
37 and in the manner prescribed by the department of local
38 government finance;
39 (2) the county auditor; and
40 (3) the fiscal officer of each taxing unit within the
41 neighborhood enhancement district or districts to which the
42 ordinance applies;
2024 IN 1270—LS 6702/DI 134 4
1 including a certified copy of the adopted ordinance.
2 Sec. 7. (a) A qualified individual who desires to claim the credit
3 under this chapter must apply for the credit by filing a certified
4 statement on forms prescribed by the department of local
5 government finance with the county auditor. However, a qualified
6 individual who remains eligible for the credit in the following year
7 is not required to file a statement to apply for the credit in the
8 following year.
9 (b) An individual who has a credit provided under this chapter
10 applied to the individual's property tax liability in a particular
11 calendar year may not also have a credit under IC 6-1.1-20.6-8.5
12 applied to the individual's property tax liability in the same
13 calendar year.
14 (c) Not more than one (1) credit may be claimed under this
15 chapter with respect to a particular homestead by any qualified
16 individual.
17 Sec. 8. The amount of the credit under this chapter is equal to
18 the greater of zero (0) or the result of:
19 (1) the property tax liability first due and payable on the
20 qualified individual's homestead property for the calendar
21 year (excluding any property tax liability imposed in a voter
22 approved referendum levy); minus
23 (2) the result of:
24 (A) the property tax liability first due and payable on the
25 qualified individual's homestead property for the
26 immediately preceding year after the application of the
27 credit granted under this section for that year (excluding
28 any property tax liability imposed in a voter approved
29 referendum levy); multiplied by
30 (B) the sum of:
31 (i) the percentage adopted in an ordinance under section
32 5(c)(3) of this chapter, expressed as a decimal; plus
33 (ii) one (1).
34 However, the credit provided by this chapter shall not apply to any
35 portion of property tax liability imposed on a qualified individual's
36 homestead property that is used for trade or business purposes in
37 connection with the production of income. In addition, the credit
38 does not affect the allocation of taxes to a referendum fund.
39 Sec. 9. If the ownership of a homestead for which a qualified
40 individual received a credit under this chapter changes, and the
41 qualified individual no longer owns or principally resides in the
42 homestead, the county auditor shall remove the designation of the
2024 IN 1270—LS 6702/DI 134 5
1 individual as a qualified individual with respect to that homestead.
2 Sec. 10. The county auditor shall, in a particular year, apply a
3 credit provided under this chapter to each qualified individual who
4 received the credit in the preceding year unless the county auditor
5 determines that the individual is no longer eligible for the credit or
6 the city fiscal body rescinds the ordinance that provided the credit.
7 Sec. 11. (a) If an individual who is receiving the credit provided
8 by this chapter:
9 (1) knows or should have known that the individual does not
10 qualify for the credit under this chapter; or
11 (2) changes the use of the individual's property so that part or
12 all of the property no longer qualifies for the credit under this
13 chapter;
14 the individual must file a certified statement with the county
15 auditor, notifying the county auditor that subdivision (1) or (2)
16 applies, not more than sixty (60) days after the date subdivision (1)
17 or (2) first applies.
18 (b) An individual who fails to file the statement required by this
19 section is liable for any additional taxes that would have been due
20 on the property if the individual had filed the statement as
21 required by this section, plus a civil penalty equal to ten percent
22 (10%) of the additional taxes due. The additional taxes owed plus
23 the civil penalty become part of the property tax liability for
24 purposes of this article.
25 (c) The civil penalty imposed under this section is in addition to
26 any interest and penalties for a delinquent payment that might
27 otherwise be due. One percent (1%) of the total civil penalty
28 collected under this section shall be transferred by the county to
29 the department of local government finance for use by the
30 department of local government finance in establishing and
31 maintaining the homestead property data base under
32 IC 6-1.1-12-37(i) and, to the extent there is money remaining, for
33 any other purposes of the department of local government finance.
34 Sec. 12. This chapter expires January 1, 2028.
2024 IN 1270—LS 6702/DI 134