Senate Bill 0541
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DIGEST OF SB541 (Updated February 10, 2009 4:32 pm - DI 84)
Various tax matters. Makes changes to bring Indiana in conformance with the Streamlined Sales and Use Tax Agreement as amended through September 5, 2008. Updates the definition of "gross retail income" to coincide with the definition of "sales price". Requires the use tax to be paid at the time of registering a watercraft that is a United States Coast Guard documented vessel. Requires new retail merchants to file returns and remit sales tax electronically. Provides relief for retail merchants if there is a change in the sales and use tax rate. Makes permanent the sourcing rule for floral deliveries providing that a sale is sourced to the location of the florist where the order originated when the sale involves one florist taking an order and transferring the order to another florist for delivery to the final recipient. Provides that the sale of Internet access service or certain ancillary service telecommunication services are sourced to the customer's place of primary use. Requires refiners, terminal operators, and qualified distributors to remit prepaid state gross retail taxes through the department's online tax filing system. Requires the department of state revenue to determine a new sales tax prepayment rate on gasoline every three months. Eliminates the requirement to publish the prepayment rate change in the Indiana Register. Allows the department of state revenue, subject to office of management and budget approval, to make a new prepayment rate determination if the price of gasoline has changed by at least 25% since the most recent determination. Uses 80% instead of 90% of the estimated tax liability in making the determination. Provides that an inheritance tax lien terminates on the earlier of: (1) the date the inheritance tax is paid; (2) when certain affidavits are filed specifying that no tax is due; or (3) ten years (rather than five years, under current law) after the date of the decedent's death. Changes the inheritance tax interest accrual date. Provides that September 1 is the deadline for International Fuel Tax Agreement applications to be filed in order to receive the permit by January 1. Allows a repair and maintenance permit to be used by unregistered off-road vehicles to move from and to a quarry or mine for the purpose of repair. Requires the department of state revenue (department) to post on the department's web site the name of every registered retail merchant that has not renewed its retail merchant certificate or whose certificate has been revoked. Provides that a foreign real estate investment trust that has a tax treaty with the United States or a listed property trust will not be included in the add back to adjusted gross income as a captive REIT. Adds a definition of "pass through entity". Provides that income from a pass through entity shall be characterized in a manner consistent with the income's characterization for federal income tax purposes and attributed to Indiana as if the person, corporation, or pass through entity that received the income had directly engaged in the income producing activity. Provides that an individual may claim a deduction for state income tax purposes for property taxes that: (1) were imposed on the individual's principal place of residence for the March 1, 2007, assessment date or the January 15, 2008, assessment date; (2) are due after December 31, 2008; and (3) are paid in 2009 on or before the due date for the property taxes. For purposes of the tax credit for contributions to the college choice 529 education savings plan: (1) defines "contribution" to exclude rollovers from other 529 savings plans; and (2) excludes value added to the account through earnings of bonus points. Allows the department of state revenue to disallow the 529 savings plan income tax credit if tax avoidance is the principal purpose of the contribution. Includes vehicles that operate on biodiesel or diesel fuel for purposes of the Hoosier alternative fuel vehicle manufacturer income tax credit. Provides that the ability to opt out of electronic filing when using a paid tax preparer is available only to a taxpayer who claims the additional exemption for the elderly or who has opted out of participating in federal Social Security programs because of religious beliefs. Requires all new withholding tax registrants to file returns and remit the withholding taxes electronically through the department's online tax filing program. Provides that for winnings that exceed $1,200 on gambling games at racetracks, the operator is required to withhold adjusted gross income tax from the winnings. Amends the county adjusted gross income tax, county option income tax, and county economic development income tax statutes to provide that the budget agency (rather than the department) certifies the revenue distribution to counties. Requires the department to provide relief under the gasoline tax statutes where a shipment of gasoline is legitimately diverted from the represented destination state after the shipping paper has been issued by the terminal operator or where the terminal operator failed to cause proper information to be printed on the shipping paper. Repeals the requirement that a person must obtain an import verification number in certain circumstances to import special fuel into Indiana. Specifies that road tractors are included in the definition of "commercial vehicle" for purposes of the commercial vehicle excise tax. Provides that a taxing unit's calendar year commercial motor vehicle excise tax distribution is based on the amount of tax collected in the preceding state calendar year (rather than 105% of the prior year's base revenue). Provides that a county's base revenue for purposes of the commercial motor vehicle excise tax is equal to its distribution percentage multiplied by the amount of tax revenue collected in the preceding state fiscal year. Requires an airport operator to submit reports to the department listing aircraft stationed at the airport. Provides that if the airport operator submits an incomplete report, the airport operator is subject to a civil penalty of $100 per aircraft not properly included in the report. Specifies that the department has the sole authority to furnish forms used in the reporting of information in an electronic format. Allows the department to use statistical sampling in audits. Provides that if the taxpayer and the department agree on a sampling method to be used, the sampling method is binding on both parties. Specifies that if the department erroneously issues a refund check to a taxpayer, the department has two years from the time of issuing the erroneous refund to issue a proposed assessment. Requires (rather than allows) a taxpayer to round to the nearest dollar amount on income tax returns. Provides that partnerships and trusts are subject to the 20% penalty for failure to withhold and remit taxes required to be withheld for nonresident partners or nonresident beneficiaries. Provides that if a person has had more than one payment to the department returned for insufficient funds, the department may require that all future payments for all listed taxes be remitted with guaranteed funds. Allows the department to require a taxpayer that is on a payment plan for sales or withholding tax liabilities to make the payment using an automatic withdrawal from the person's bank account. Adds the utility receipts tax to the taxes for which a six, versus a three, year limit on assessment applies if gross receipts are understated by at least 25%. Exempts beer brand and packaged type from the department's confidentiality law. Provides that the legislative services agency may have access to employer specific information (ES202 data) for revenue forecasting. Provides a refund of gross income taxes erroneously paid for 2003 and 2004 by a town if the town also paid the utilities receipts tax for the same year.
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