A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Plain English Breakdown

The bill summary and digest do not provide details on enforcement mechanisms or impacts on small businesses that do not use payroll services.

Rules for Payroll Service Providers

This bill changes Indiana laws about taxation by setting rules for companies that handle payroll for other businesses.

What This Bill Does

• It requires payroll service providers to give business clients the option to hold their funds in a bank account owned by the client, not the provider.
• Businesses must be able to choose an insured bank account from either the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund.
• Payroll service providers need to get a performance bond equal to the total yearly estimated payroll taxes of their business clients.

Who It Names or Affects

• Payroll service providers
• Businesses that use payroll services

Terms To Know

Performance Bond

A financial guarantee a company gives to protect against losses if they fail to meet their obligations.

Federal Deposit Insurance Corporation (FDIC)

An agency that protects bank deposits up to $250,000 per depositor in case the bank fails.

Limits and Unknowns

• The bill does not specify what happens if a payroll service provider does not follow these rules.
• It is unclear how this will affect small businesses that do not use payroll services.

Official Summary Text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation.
Regulation of payroll service providers.

Current Bill Text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Regulation of payroll service providers.

Requires a payroll service provider to provide the option to a business client that would allow the business client to hold the business client's funds in a bank account that is: (1) owned by the business client (as opposed to the payroll service provider's bank account); and (2) insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund. Requires a payroll service provider to obtain a performance bond equal to the amount of the business client's total annual estimated payroll taxes.