SB 402 Summary

• Authorizes cities and towns (except Indianapolis) to adopt a municipal income tax up to 1% on residents, with revenue deposited in the municipality's general fund for any general fund purpose and requiring re-adoption every four years.

• Allows counties, cities, and towns to adopt a local option sales tax on tangible personal property delivered within their geographic boundaries, with revenue usable for any lawful purpose and re-adoption required every four years.

• Requires the Department of State Revenue to maintain databases of local sales tax data, including boundary changes, tax rates, and ZIP code information, in accordance with the Streamlined Sales and Use Tax Agreement.

• Adds municipal option income tax and local option sales tax to the list of taxes that may be captured by the state for unpaid debt obligations and as sources for local debt service payments.

• Requires taxpayers to identify their principal city or town residence on individual income tax returns beginning with tax year 2010.