INDIANAPOLIS – What do mixed martial arts, property tax caps and golf courses have in common? The topics were all crammed into a 186-page omnibus bill at the end of the legislative session.
“There are things that are important to just a few people and then things that are important to lots of people,” said Rep. Peggy Welch, D-Bloomington, author of House Bill 1086.
The legislation passed the House 89-7 and the Senate 50-1.
Much of the bill relates to Indiana tax code, including the original goal of the bill – to update Indiana’s tax laws to reflect federal changes.
In a few instances, legislators decided to decouple from the federal tax code, or adopt different tax rules for the state. This saves about $50 million a year for the state.
“This is money that could be claimed by taxpayers but that would be a huge loss to the revenue of the state of Indiana,” Welch said. “For that alone I had to bite my lip on a few other items.”
Disappointments
For instance, she and several other lawmakers were disappointed at what was taken out of the bill at the last minute.
The first concept was cyclical reassessment.
Currently, assessors adjust property values annually using sales data – a process called trending. In addition, a general reassessment is done every eight to 10 years – depending on delays – in which every property in a county must be inspected.
This ensures that basic information about a property is accurate, such as the number of bedrooms, whether the basement is finished and whether additional garages or other improvements have been added without the property owner having obtained a building permit.
Allen County Assessor Stacy O’Day and others are pushing for a cyclical assessment in which between 20 percent and 25 percent of all properties would be inspected each year over a four- or five-year cycle.
“I really thought people would see the common-sense approach to it, but a few people just don’t understand the concept,” she said.
O’Day noted that the current reassessment happens in a rushed, 18-month period and that mistakes are made.
“You just can’t do a good job in that amount of time,” she said.
She also contends that money can be saved because staffing levels can be kept more constant.
Several Republican legislators have questioned the fairness of one person’s home being reassessed three years before another.
O’Day is concerned that without this change, the hard work around the state to return to on-time property tax billing will be jeopardized. That’s because counties always fall behind in a reassessment year, which starts July 1.
Another area of disappointment was a move to budget transparency for state taxpayers.
Rep. Eric Turner, R-Marion, said 30 states now have a similar law, but Democratic leadership in the House blocked it for the second year in a row at the last minute.
The idea behind the law is for the state auditor to break down state spending on the Internet, including comparisons to recent years.
“You can read the budget and not understand a thing. It doesn’t mean anything because you don’t have anything to compare it to,” Turner said. “That’s what this would do.”
He noted that some lawmakers just don’t feel the provision is necessary.
Welch said this is one measure she wishes had survived, and she said she will try again next year.
Highlights of the bill
But there were many things that stayed in the bill. Here are some highlights:
Homestead definition – Lawmakers tweaked the definition of what counts as a homestead for purposes of property tax deductions and credits.
The definition now includes a deck, patio, gazebo or other residential yard structure attached to the dwelling as defined by the Indiana Department of Local Government Finance.
It does not, however, cover swimming pools. Some legislators felt Hoosiers should get the benefit of the 1 percent property tax cap and supplemental deduction for pools, tennis courts and gazebos. But others feel the valuable homestead deduction shouldn’t be given on luxury items.
Tax cap-ballot provision – The bill spells out the exact ballot question that Hoosiers will see in November when deciding whether to place property tax caps into the Indiana Constitution.
The provision is straightforward and stipulates that the caps don’t include property taxes imposed as the result of a public referendum.
Boxing and mixed martial arts – The legislature transferred regulation of boxing, wrestling and mixed martial arts to the Indiana Gaming Commission.
Sen. Dennis Kruse, R-Auburn, said the bill also decreases the gross receipts tax on these events in comparison to other states.
This is so Indianapolis can host major events, such as the Ultimate Fighting Championship.
Retroactive tax breaks – The bill allows a number of non-profit entities to receive retroactive property tax exemptions.
These groups, including an American Legion post, a Boy Scouts council, a youth sports club or social service center, church and women’s fraternity, failed to file timely applications under the law.
Tax exemptions – The measure means that cities or towns owning municipal golf courses don’t have to pay sales tax on personal property for the land, such as lawn mowers.
There is also a use-tax exemption for certain aircraft brought into Indiana.
Public questions – The Department of Local Government Finance will get to review all referendum questions posed to citizens.
The provision was added after a ballot question in Indianapolis last year didn’t include the cost of the project.
