LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7436 NOTE PREPARED: Feb 6, 2025
BILL NUMBER: SB 316 BILL AMENDED: Feb 4, 2025
SUBJECT: Investment Partnership Tax.
FIRST AUTHOR: Sen. Baldwin BILL STATUS: 2
nd
Reading - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: The bill provides certain sourcing rules for the adjusted gross income of an
investment partnership. It defines "investment partnership".
Effective Date: January 1, 2026.
Explanation of State Expenditures: Department of State Revenue (DOR): The DOR will incur additional
expenses to revise tax forms, instructions, and computer programs to enact the provisions in the bill. The
DOR's current level of resources should be sufficient to implement these changes.
Explanation of State Revenues: The bill provides that "qualifying investment partnership income" means
the adjusted gross income from qualifying investment securities, excluding any income or loss from a
partnership interest that, in the hands of the partnership, qualifies as a security. For tax year 2026 and
thereafter, the bill provides that a nonresident partner shall not be taxable in Indiana on investment income
distributed by a qualified investment partnership. This could reduce the state Individual Adjusted Gross
Income Tax by an indeterminable amount beginning FY 2027. Individual Income Tax is deposited in the
General Fund.
Additional Information - The bill defines the term ‘investment partnership’ and defines ‘qualifying
investment securities’. It provides that a qualifying investment security is common stock, bonds, foreign and
domestic currency deposits, mortgage or asset-backed securities, repurchase agreements, foreign currency
exchange contracts, stock and bond index securities, options for the purchase or sale of any of the securities,
currencies, contracts, or financial instruments, regulated futures contracts, commodities derivatives, a
partnership interest in another partnership that is an investment partnership, and a partnership interest that,
in the hands of the partnership, qualifies as a security. It provides further description of these investment
instruments.
Explanation of Local Expenditures:
SB 316 1 Explanation of Local Revenues: Because the provisions in the bill will decrease taxable income for
individual income tax payers, counties imposing a local income tax would experience a decrease in revenue
by an indeterminable amount. The fiscal impact will potentially begin in FY 2027.
State Agencies Affected: Department of State Revenue.
Local Agencies Affected: All local units.
Information Sources:
https://www.mtc.gov/wp-content/uploads/2023/02/White-Paper-on-Investment-Partnerships-3-22-22-DR
AFT.pdf
Fiscal Analyst: Randhir Jha, 317-232-9556.
SB 316 2