HB 1149 Summary

• Authorizes taxing units to impose a variable local option income tax on adjusted gross income of residents and nonresidents with principal places of business or employment in the unit.

• Tax revenue may replace property tax revenue lost from circuit breaker credits under IC 6-1.1-20.6-7.5 or from elimination of property taxes on real property wholly owned by individuals residing in the taxing unit.

• Tax does not apply to real property owned by corporations, public utilities, certain trusts, or entities taxed as corporations, nor to property where not all owners are subject to the tax.

• Establishes procedures for tax adoption by ordinance or resolution, rate setting by the Department of Local Government Finance, and monthly distribution of collected revenue to taxing units.

• Establishes rainy day funds in taxing units equal to 5% of prior year tax distributions, with excess balances used to maintain lower tax rates in subsequent years.