HB 1541 Summary

• Repeals the automatic taxpayer refund provision and redirects excess state reserves to the pension stabilization fund instead of taxpayer refunds.

• Reduces individual income tax rate from 3.4% to 3.06% over three years: 3.4% for tax years beginning before January 1, 2014; 3.25% for 2014; 3.15% for 2015; and 3.06% for tax years beginning after December 31, 2015.

• Eliminates Indiana's inheritance tax for property transferred by decedents whose deaths occur after December 31, 2017, and phases out county inheritance tax replacement distributions from 2013 to 2017.

• Modifies inheritance tax credit percentages for deaths between 2013-2017, increasing from 10% in 2013 to 90% in 2017, with complete elimination after 2017.

• Changes inheritance tax replacement amount calculation to use the 1997-2012 formula and limits distributions to counties that received replacement amounts in state fiscal year 2011-2012.