This is the digest of the Tax Restructuring Bill, officially named HB1001ss (House Bill 1001, special session).  Until the next session of the General Assembly starts, this digest and the complete bill can be read on the General Assembly's website.  Just type "1001" in the box labeled "Go To Bill" and click "Go".

Click here to go to the bill information section of the General Assembly's Website.

DIGEST OF HB 1001 (Updated June 22, 2002 8:21 PM - DI 44)

Imposes spending limits on state general spending. Provides that a riverboat may implement flexible scheduling after submitting a plan to and obtaining the approval of the gaming commission. Provides that a riverboat that implements flexible scheduling may conduct gambling games and allow the continuous ingress and egress of passengers for the purpose of gambling while the riverboat is docked. Provides that a riverboat that implements flexible scheduling is subject to a $3 admissions tax for each person admitted to the riverboat and a graduated wagering tax with a top rate of 35% for adjusted gross receipts that exceed $150,000,000. Provides that in the case of a riverboat that does not implement flexible scheduling the admissions tax remains $3 for each person admitted to a gambling excursion and the wagering tax is increased to 22.5%. Provides that beginning in 2003 the various entities receiving riverboat admissions taxes and wagering taxes may not receive more tax revenue than each entity received in 2002. Provides
that if the admissions tax revenue received by an entity in a state fiscal year is less than the entity's 2002 revenue, the entity shall receive a supplemental distribution equal to the difference from wagering tax revenues deposited into the property tax replacement fund. Provides that admissions and wagering tax revenues that would otherwise be due to an entity under statute exceed the entity's 2002 admissions or wagering tax revenues, the amount of the excess is deposited into the property tax replacement fund. Provides that the first $33,000,000 of wagering taxes collected in a state fiscal year shall be set aside for revenue sharing. Provides revenue sharing to the counties that do not have riverboats based upon population. Distributes revenue sharing money within the counties to the cities, towns, and counties by population within the county. Provides wagering taxes not set aside for revenue sharing or designated for
distribution to the cities and counties that are the home docks of the riverboats shall be paid to the property tax replacement fund. Provides for a distribution from the property tax replacement fund to the build Indiana fund. Establishes the Indiana department of gaming research to research gaming issues. Reinstates the old administrative rules concerning personal property assessment beginning with the March 1, 2003, assessment date. For the March 1, 2002, assessment date, requires the assessment of tangible personal property under the new rules, except that assessment of construction in process at 10% of cost and the 35% inventory adjustment under the old rules apply. Establishes a property tax exemption for certain inventory that is altered into a new form and will be shipped, or will be incorporated into personal property that will be shipped, to a destination outside Indiana. Establishes a 100% deduction for the assessed value of inventory beginning with assessments made in 2006. Authorizes a county to provide a property tax deduction equal to 100% of the assessed value of inventory in that county for assessments made in a calendar year that ends before January 1, 2006. Provides that a county may impose an additional economic development income tax for the purpose of providing increased homestead credits to offset a county or statewide inventory tax deduction. Changes the assessed value growth quotient formula to allow property tax levies to increase at the rate that Indiana nonfarm personal income increases. Increases the standard property tax deduction for homesteads from $6,000 to $35,000. Increases the homestead credit to 20% beginning in 2003. Increases the property tax replacement credit (PTRC) rate for all property taxes levied for a school general fund to 60%. Provides that the PTRC rate for real property owned by individuals and businesses and for personal property owned by an individual is 20%. Provides additional remedies for the TIF areas that have reduced revenues as a result of certain changes in property tax laws. Establishes a utilities receipts tax. Eliminates references to the gross income tax in various laws. Increases the sales tax from 5% to 6%. Increases the adjusted gross income tax on corporations from 3.4% to 8.5%. Eliminates the adjusted gross income tax exemption for lottery winnings that exceed $1,200. Establishes procedures for withholding adjusted gross income taxes from riverboat gambling winnings and lottery winnings. Increases the renter's deduction from $2,000 to $2,500. Extends the earned income tax credit through 2005 and sets the credit at 6% of the federal earned income tax credit. Extends the research expense credit through 2004, eliminates the apportionment formula, and increases the credit from 5% to 10%. Establishes a venture capital investment tax credit. Increases the gasoline tax by three cents per gallon (to eighteen cents per gallon). Increases the cigarette tax from $0.155 per pack to $0.555 per pack. Increases the tobacco products tax from 15% to 18%. Prohibits the closure of Evansville state psychiatric treatment center for children without legislative approval and establishes certain protections for employees of the center. Authorizes a redevelopment commission to establish a certified technology park under certain conditions to promote high technology activities by capturing incremental property tax proceeds and incremental income taxes and sales taxes attributable to the technology park. Repeals: (1) the gross income tax and the offsetting credit against adjusted gross income tax for gross income tax paid by a taxpayer; (2) the supplemental net income tax; (3) a redundant provision concerning the northwest Indiana law enforcement training center; (4) the $37,500 business personal property tax credit against state tax liability; and (5) the obsolete bank, production credit association, and savings and loan association taxes. Voids rules of the department of local governmental finance concerning the shelter allowance and the personal property tax manual. Cancels the appropriation made in the 2001 budget bill to the twenty-first century research and technology fund and appropriates $15,000,000 to that fund from the state general fund for fiscal year 2003 and fiscal year 2004. Requires a notice from assessing officials to homeowners to described the property tax relief granted by this act. Makes other changes.