LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 7047 NOTE PREPARED: Jan 8, 2024
BILL NUMBER: SB 263 BILL AMENDED:
SUBJECT: Local Income Tax Distributions.
FIRST AUTHOR: Sen. Baldwin BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill provides for local income tax certified shares in Hamilton County and
Johnson County to be allocated to civil taxing units according to the location and tax liability of each
taxpayer.
Effective Date: June 1, 2024; July 1, 2024; January 1, 2025.
Explanation of State Expenditures: Department of State Revenue (DOR): This bill’s requirement will result
in an increase in the DOR’s administrative workload. The DOR will need to make updates to the individual
income tax return forms in order to account for items such as the township of the taxpayer’s residence and
a current mailing address of the taxpayer. In addition to the updates to the form, the DOR will also likely
need to update their processing systems and database so that these additional data points are collected and
maintained accordingly. Furthermore, the DOR may potentially need to share additional individual income
tax return data with the SBA and the DLGF so that all three agencies can work in conjunction to calculate
certified shares at the taxing district level in Hamilton County and in Johnson County.
Department of Local Government Finance (DLGF): This bill’s requirement will result in an increase in the
DLGF’s administrative workload. The DLGF will have to compute the revised allocation factors and
allocations of local income tax for Hamilton County and Johnson County using the formula in the bill.
Additionally, the DLGF will need to work in conjunction with the DOR and SBA to calculate certified shares
at the taxing district level in Hamilton County and Johnson County.
State Budget Agency (SBA): This bill’s requirement will result in an increase in the SBA’s administrative
workload. The SBA would need to update its processes to implement the bill’s changes. Currently, the SBA
SB 263 1 certifies distributions of LIT at the overall county level. The bill’s requirements specify that the SBA must -
in partnership with the DOR and DLGF - now include an estimation of the certified shares distributions by
each taxing district in Hamilton County and in Johnson County. In order to derive the estimate at the taxing
district level, the SBA - along with the DOR and DLGF - will need additional data from the Hamilton County
auditor’s office and Johnson County auditor’s office as it pertains to the addresses of taxpayers so that they
can determine in which taxing district in Hamilton County and Johnson County an individual income
taxpayer is located.
Explanation of State Revenues:
Explanation of Local Expenditures: Hamilton County Auditor and Johnson County Auditor: This bill’s
requirement will result in an increase in the county auditor’s office’s administrative workload. The office
will to need to share additional property record address data (in particular, taxing districts) with the SBA,
DLGF, and DOR so that all three agencies can work in conjunction to calculate certified shares at the taxing
district level in Hamilton County and Johnson County.
Explanation of Local Revenues: Civil Taxing Units in Hamilton County and Johnson County: The total
amount of certified shares distribution from Hamilton County’s LIT and Johnson County’s LIT would not
change as a result of the provisions in this bill. Additionally, the impact on the allocation of the certified
shares distribution to the individual civil taxing units in Hamilton County and Johnson County is estimated
to remain unchanged as a result of the formula for the certified shares distribution in the bill.
Additional Information - For CY 2024, Hamilton County had a certified shares distribution of $234.0 M, and
Johnson County has a certified shares distribution of $59.2 M.
State Agencies Affected: Department of Local Government Finance; Department of State Revenue; State
Budget Agency.
Local Agencies Affected: Civil taxing units in Hamilton County and Johnson County; Hamilton County
auditor’s office; Johnson County auditor’s office.
Information Sources: U.S. Census Bureau, 2017-2021 American Community Survey 5-Year Estimates;
LSA Local Government Budget Database; State Personnel Department staffing table.
Fiscal Analyst: James Johnson, 317-232-9869.
SB 263 2