HB 1281 Summary

• Repeals the county adjusted gross income tax, county option income tax, and county economic development tax effective January 1, 2014, consolidating them into a new unified local income tax framework under IC 6-3.6.

• Establishes three categories of local income taxes: expenditure rate taxes (up to 1.25%), property tax relief rates (up to 2.5%), and restricted purpose rates for specific county needs like jail construction or economic development.

• Creates county income tax councils in certain counties to collectively approve tax ordinances through a voting system weighted by population, requiring public hearings before members can propose or vote on tax measures.

• Directs revenue distribution through certified shares allocated to civil taxing units, with allocations for public safety, economic development, and general municipal purposes, while allowing pledges of revenue for bond repayment.

• Authorizes the budget agency to certify county distributions by August 2 annually based on prior year tax collections, with provisions for supplemental distributions when county accounts exceed 150% of the next year's certified distribution.