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

Plain English Breakdown

The bill summary text does not provide detailed information on how multiple principal places of employment or specific credit calculations would be handled, leaving these areas unclear.

Indiana Local Income Tax Law

This law requires people who work in one county but live in another to pay income taxes to both counties, with specific rules for tax rates and credits.

What This Bill Does

• People who reside in a county with local income tax and have their principal place of employment in a different county must also pay local income tax to the county where they work.
• The tax rate for these workers is set at one fourth of the total local income tax rates applied to residents of the county where they work.
• Workers are entitled to a credit on their taxes from their home county equal to what they paid in the other county.

Who It Names or Affects

• People who live and work in different counties
• Counties with local income taxes

Terms To Know

Local Income Tax

A tax that a city or county can choose to collect from its residents.

Principal Place of Employment

The main place where someone works, usually their primary job location.

Limits and Unknowns

• It is not clear what happens if a person has multiple principal places of employment in different counties.
• This law does not specify how the tax credit will be calculated or applied by each county.

Official Summary Text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation.
Local option income taxes.

Current Bill Text

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

Local option income taxes.

Provides that an individual who resides in a county with a local income tax and has a principal place of employment or business in a different county shall also pay a local income tax in the county where the individual maintains the principal place of employment. Provides that the local income tax rate in effect for a local taxpayer in the county where the local taxpayer maintains the local taxpayer's principal place of business or employment is one fourth of the sum of the local income tax rates imposed on the adjusted gross income of local taxpayers who reside in the county where the local taxpayer maintains the local taxpayer's principal place of business or employment. Provides that a local taxpayer is entitled to a credit against the tax imposed by a county in the county where the local taxpayer resides equal to the amount of the tax paid in the county where the local taxpayer has a principal place of business or employment.