SB 0349 Summary

• Eliminates property taxes on primary residences (homesteads) effective January 1, 2012, and provides annual state distributions to offset lost property tax revenue using gross assessed values of homesteads.

• Decreases the state sales and use tax rate from 7% to 5.5% effective July 1, 2011, and expands the sales tax to apply to services (excluding legal services, health/mental health services, and services for charitable tax-exempt organizations).

• Increases the maximum renter's deduction for income tax from $3,000 to $8,000 per taxable year effective January 1, 2012.

• Prohibits governmental units, including special benefit districts, from placing liens on homestead properties exempt under the new law after December 31, 2011.

• Repeals previous homestead credit and standard deduction provisions (IC 6-1.1-12-37, IC 6-1.1-12-41, IC 6-1.1-12-42, etc.) and makes conforming changes throughout the Indiana Code; includes an ongoing appropriation to fund the state homestead property tax replacement distributions.