From the Elkhart Truth:
The Elkhart City Council adopted a resolution Monday, Dec. 2, agreeing to join Goshen and Elkhart County in using the same type of application when companies seek tax breaks.
The resolution is non-binding, but establishes a sense of continuity of expectations that companies can depend on when looking to locate or expand in most parts of Elkhart County.
Most importantly for some council members is that the new policy establishes a salary threshold that companies will be expected to meet when asking for a tax abatement when expanding or relocating.
While the city is not locked into the policy, the resolution embraces the use of a salary benchmark based on state statistics.
For now, companies seeking tax breaks will be expected to provide a median salary of $29,990 to at least 70 percent of the new employees being added as a result of the expansion or relocation.
That figure reflects a hourly wage of $14.42.
The benchmark will shift each year depending on a statistic summary collected by the state for the Elkhart-Goshen metropolitan statistical area, officials said.
The current figures are based on 2012 data.
In the past — especially as the city worked to recover from the recent economic recession — the city council had approved tax abatement for companies knowing the average wages were closer to $10 per hour.
“At least this gives us a measuring stick that says this is the kind of wage we want to see — this or something higher,” said Barkley Garrett, director of economic development for the city.
The Middlebury Town Council is also expected to consider a similar proposal already embraced by Goshen, Elkhart and the county. Wakarusa and Nappanee were also encouraged to participate, but representatives from those towns have not responded.
...
http://www.elkharttruth.com/article/20131202/NEWS01/712029929
Wednesday, December 4, 2013
Revenue Finds Taxpayer Failed to Establish Reasonable Cause for Late Payment
Excerpts of Revenue's Determination follow:
Taxpayer is a company doing business in Indiana. Taxpayer made a payment for withholding taxes to the Indiana Department of Revenue ("Department"); Taxpayer's payment was not honored by Taxpayer's bank. As a result of this, the Department issued a 100 percent penalty assessment against Taxpayer. Taxpayer filed a protest regarding the 100 percent penalty assessment.
...
Taxpayer is a company doing business in Indiana. Taxpayer made a payment for withholding taxes to the Indiana Department of Revenue ("Department"); Taxpayer's payment was not honored by Taxpayer's bank. As a result of this, the Department issued a 100 percent penalty assessment against Taxpayer. Taxpayer filed a protest regarding the 100 percent penalty assessment.
...
Taxpayer argues that it is entitled to abatement of the penalty for late payment of employee withholding tax. Taxpayer in its protest letter states in relevant part:
I would like the 100 [percent] penalty that was charged to be reduced to the standard 10 [percent] fee.
On May 15th I sent in a payment on my payment plan for April & September 2012 withholding. Unbeknownst to me it was returned by my bank. I immediately sent out another check on June 7th. On June 10th the Department issued me 2 notices of returned payment. I did not read them as thoroughly as I should have because I had already sent in a replacement check. If I had I would have seen there was a 10 [percent] fee added to the amounts that I paid. Unfortunately, I only repaid the original amount that was returned and as a result I was charged a 100 [percent] penalty.
...
...
Taxpayer has not established reasonable cause for the payment not being honored. At the hearing, Taxpayer stated that it was in litigation with another company, and that Taxpayer's bank account was frozen due to the litigation. Additionally, Taxpayer stated in the protest letter that the Department's notice was not thoroughly read. Taxpayer, under IC § 6-8.1-5-1(c) bears the burden of proof; in the case at hand, Taxpayer has not met that burden.
Tuesday, December 3, 2013
Revenue Finds Penalty Abated for 2010 Should Have Also Been Abated for 2009
Excerpts of Revenue's Determination follow:
Taxpayer is a communications company headquartered outside Indiana but conducting business within this state and within numerous other states. Taxpayer prepared 2009 and 2010 Indiana corporate tax returns and submitted those returns to the Indiana Department of Revenue ("Department"). Taxpayer failed to correctly calculate the amount of tax due. On the ground that Taxpayer had underreported its income, the Department assessed ten-percent penalties for both 2009 and 2010.
Taxpayer is a communications company headquartered outside Indiana but conducting business within this state and within numerous other states. Taxpayer prepared 2009 and 2010 Indiana corporate tax returns and submitted those returns to the Indiana Department of Revenue ("Department"). Taxpayer failed to correctly calculate the amount of tax due. On the ground that Taxpayer had underreported its income, the Department assessed ten-percent penalties for both 2009 and 2010.
Taxpayer disagreed with the penalty assessments and submitted a protest to that effect. An administrative hearing was conducted during which Taxpayer's representative explained the basis for the protest. A Letter of Finding ("LOF") was issued addressing the penalty imposed for the year 2010 on the ground that "Taxpayer has met its burden . . . of establishing that the ten-percent negligence should be abated."
...
Taxpayer explains that it "files a combined basis return, including a large number of corporate subsidiaries" and that its apportionment calculation employs a "special methodology outlined in [Tax Policy Directive 6 (June 1992)]." In addition, Taxpayer stated that the calculation of its liability was complicated "as a result of the multi-year transition from 3-factor multistate apportionment to single-sales factor apportionment." Taxpayer further explained that it "inadvertently experienced software issues when calculating the proper apportionment and tax due calculation" and that the software issue "directly resulted in the additional amounts of tax shown on the notices."
The Department erred when it failed to fully address the penalties for both the years 2009 and 2010 in the original LOF. Taxpayer correctly points out that the circumstances which led to the imposition of the 2010 penalty are identical to the circumstances which led to the imposition of the 2009 penalty. Similarly, the standards under which penalties may be abated are applicable to both the 2009 and 2010 penalty.
As explained in the original LOF, Taxpayer is a substantial, sophisticated business entity which is fully capable of routinely calculating the amount of income tax owed Indiana. There is insufficient information to establish that Taxpayer's error in these circumstances was so egregious as to constitute "willful neglect" or that Taxpayer failed to exercise the "ordinary business care and prudence" expected of an "ordinary reasonable taxpayer." 45 IAC 15-11-2 (b), (c). Based on a "case-by-case" analysis and after reviewing "the facts and circumstances of each taxpayer" the Department agrees that Taxpayer has met its burden under IC § 6-8.1-5-1(c) of establishing that the ten-percent negligence penalty should be abated for both the years 2009 and 2010.
Palladium-Item Reports Wayne County Tax Abatement Group Meets Wednesday
From the Richmond Palladium-Item:
The Wayne County Property Tax Abatement Committee will meet at about 10:30 a.m. Wednesday.
The meeting will be in the Wayne County commissioners' conference room at the Wayne County Administration Building.
An agenda for the meeting was not included in the announcement.
http://www.pal-item.com/apps/pbcs.dll/article?AID=2013312010015
The Wayne County Property Tax Abatement Committee will meet at about 10:30 a.m. Wednesday.
The meeting will be in the Wayne County commissioners' conference room at the Wayne County Administration Building.
An agenda for the meeting was not included in the announcement.
http://www.pal-item.com/apps/pbcs.dll/article?AID=2013312010015
Star Reports Johnson County Could Join Neighbors in Adopting Hotel Tax
From the Indianapolis Star:
Two Johnson County officials on Monday asked fellow council members to adopt a 5 percent tax on hotel guests that would fund tourism efforts.
Anita Knowles and Loren Snyder introduced the measure to institute the innkeeper's tax at the Johnson County Council meeting. No vote will be taken at that meeting.
"We need to market Johnson County," Snyder said.
Marketing is critical to the county's growth and economic development, Snyder told a crowd of about 60 people at the council meeting.
The state gives counties the power to collect the tax of up to 5 percent, which must be spent to promote local tourism through brochures, websites, advertising, billboards and similar marketing efforts.
In the nine-county metropolitan area, only Johnson County is without a hotel tax that funds a convention and visitors bureau.
Johnson County officials considered the innkeeper's tax four years ago, but the measure failed after council members disagreed over whether some of the money should be spent on parks. Using hotel tax money for non-tourism expenses requires approval of state lawmakers.
http://www.indystar.com/story/news/local/johnson-county/2013/12/02/johnson-county-could-join-neighbors-in-adopting-hotel-tax/3819217/
Two Johnson County officials on Monday asked fellow council members to adopt a 5 percent tax on hotel guests that would fund tourism efforts.
Anita Knowles and Loren Snyder introduced the measure to institute the innkeeper's tax at the Johnson County Council meeting. No vote will be taken at that meeting.
"We need to market Johnson County," Snyder said.
Marketing is critical to the county's growth and economic development, Snyder told a crowd of about 60 people at the council meeting.
The state gives counties the power to collect the tax of up to 5 percent, which must be spent to promote local tourism through brochures, websites, advertising, billboards and similar marketing efforts.
In the nine-county metropolitan area, only Johnson County is without a hotel tax that funds a convention and visitors bureau.
Johnson County officials considered the innkeeper's tax four years ago, but the measure failed after council members disagreed over whether some of the money should be spent on parks. Using hotel tax money for non-tourism expenses requires approval of state lawmakers.
http://www.indystar.com/story/news/local/johnson-county/2013/12/02/johnson-county-could-join-neighbors-in-adopting-hotel-tax/3819217/
Times Reports Munster Approves Abatement for Buddig
From the Northwest Indiana Times:
Following a recent public hearing with no remonstrators, the Munster Town Council approved a seven-year tax abatement for Carl Buddig & Co., the second lunch meat producer to move part of its operation from Illinois to the town.
In the first year, Buddig & Co. will have a 100 percent tax abatement. The amount of the abatement decreases each of the next six years, with the company paying increased amounts of taxes during those years.
One percent of the tax abatement’s value will be donated by Carl Buddig & Co. to the Munster Civic Foundation for public art.
...
The warehouse/distribution site is within the Munster Economic Revitalization Zone. Businesses in this area can be granted tax abatements for improvements made to the spaces occupied, Johnson said.
“Currently the facility pays $85,087 in real estate taxes. We will look to capture Buddig’s personal property investment in the near future by making them a designated tax payer,” Johnson said, adding personal property tax dollars from a designated taxpayer go directly into the Munster Tax Increment Financing fund.
The Indiana Economic Development Corp. also offered Carl Buddig & Co. up to $300,000 in tax breaks if the company employs as many people as promised.
Following a recent public hearing with no remonstrators, the Munster Town Council approved a seven-year tax abatement for Carl Buddig & Co., the second lunch meat producer to move part of its operation from Illinois to the town.
In the first year, Buddig & Co. will have a 100 percent tax abatement. The amount of the abatement decreases each of the next six years, with the company paying increased amounts of taxes during those years.
One percent of the tax abatement’s value will be donated by Carl Buddig & Co. to the Munster Civic Foundation for public art.
...
The warehouse/distribution site is within the Munster Economic Revitalization Zone. Businesses in this area can be granted tax abatements for improvements made to the spaces occupied, Johnson said.
“Currently the facility pays $85,087 in real estate taxes. We will look to capture Buddig’s personal property investment in the near future by making them a designated tax payer,” Johnson said, adding personal property tax dollars from a designated taxpayer go directly into the Munster Tax Increment Financing fund.
The Indiana Economic Development Corp. also offered Carl Buddig & Co. up to $300,000 in tax breaks if the company employs as many people as promised.
Star Reports Fishers Tables Proposed 1% Food and Beverage Tax
From the Indianapolis Star:
In a surprise
move, the Fishers Town Council tabled a proposal for a 1 percent food and
beverage tax intended to generate annual revenue for economic development
projects and property tax relief.
Some council
members said passage of the tax is now uncertain — a turnabout Monday night
that surprised even critics of the tax.
"It is
dead until four people decide to untable it," said Councilwoman Renee Cox.
Michael Colby,
a councilor, was more blunt: "Do I think it is dead? I do."
The General
Assembly passed a law earlier this year that allowed the Fishers council to
pass the tax, but it must be done before Dec. 31. The council meets next Dec.
16.
Critics of the
proposal have demanded to know how $1 million of estimated annual tax revenue
from such a tax would be spent. Pete Peterson, council vice president, said he
would like to have a project that could use the revenue lined up before another
vote.
A small yet
vocal minority of business owners and residents have questioned the tax during
two public hearings.
Tax opponent
Bill Smythe, owner of Claude & Annie's, said he was shocked by the council
action and hopeful the proposal would die.
If the tax is
approved, restaurant and bar tabs will be taxed at a rate of 9 percent in
Fishers - the same as nearby communities Carmel, Noblesville and Westfield. The
rate includes the state's 7 percent sales tax and a 1 percent county tax passed
earlier.
Town to help
build construction firm HQ
…
Revenue Hires Chief Financial Officer
Department Announces
Chief Financial Officer
INDIANAPOLIS (Dec. 2, 2013) — The Indiana Department of Revenue announces Valerie Hunt, CPA, MBA, as the department’s new chief financial officer. Hunt has served as deputy controller for the department since July 2012.
As chief financial officer, Hunt will lead the department’s finance division, which includes accounting operations and reporting, electronic funds transfer and related banking functions, contracts and accounts payable, internal audit, and financial planning and analysis.
“Valerie has done an outstanding job of enhancing our accounting and budgeting process and reporting,” said Commissioner Mike Alley. “She is uniquely qualified to assume the role of chief financial officer for the department and build on our recent success.”
Hunt brings strong finance and accounting experience to the department having been engaged in financial management roles at Brightpoint, Rolls Royce and Guidant Corporation.
Hunt is a CPA with a BS in accounting and an MBA in finance from the Kelley School of Business at Indiana University, Bloomington. She replaces Mike Ashley, who was appointed chief financial officer by Governor Mitch Daniels in May 2012. Ashley is retiring at the end of the year.
For a picture of Hunt, click here.
IBJ Reports US Supreme Court Won't Hear Appeal Over Internet Taxation
From the Indianapolis Business Journal:
On
perhaps the busiest online shopping day of the year, the Supreme Court refused
Monday to wade into a dispute over New York state's taxes on purchases on
websites like Amazon.com.
The move likely will prompt more states to attempt to collect taxes on Internet sales — and ignite a furious battle in Congress between Internet sellers, brick-and-mortar stores and states hungry for extra tax revenue.
The high court without comment turned away appeals from Amazon.com LLC and Overstock.com Inc., in their fights against a New York court decision forcing them to remit sales tax the same way in-state businesses do. This could affect online shopping in that state, since for many shoppers one of the attractions of Internet purchasing is the lack of a state sales tax, which makes some items a little cheaper than they would be inside a brick-and-mortar store.
The National Council of State Legislatures estimated that states didn't get an estimated $23.3 billion in 2012 as a result of not collecting sales tax on online and catalog purchases.
Web retailers generally have not had to charge sales taxes in states where they lack a store or some other physical presence. But New York and other states say that a retailer has a physical presence when it uses affiliates — people and businesses that refer customers to the retailer's website and collect a commission on sales. These affiliates range from one-person blogs promoting the latest gadgets to companies that run coupon and deal sites.
Amazon and Overstock both use affiliate programs. Seattle-based Amazon has been collecting sales tax in New York as it fights the state over a 2008 law that was the first to consider local affiliates enough of an in-state presence to require sales tax collection. Overstock ended its affiliate program in 2008 after the law passed.
But each state has its own rules on Internet sales taxes. While this settles the issue for New York state, other states like Illinois have come to different conclusions — meaning that some Americans will still get state-tax free Internet purchases from certain websites, while others won't simply because of where they live.
And the big Internet sellers aren't giving up. After the decision, both Amazon and Overstock said they plan to take their case to Congress in hopes of getting a federal decision on state-level Internet sales taxes that would apply to every state uniformly.
...
In Indiana, Amazon has so far avoided collecting sales taxes, but must begin collecting them in 2014 under an agreement reached in 2012 with former Gov. Mitch Daniels. Lawmakers at the last General Assembly tried to move up that deadline to July, but the legislation failed.
The move likely will prompt more states to attempt to collect taxes on Internet sales — and ignite a furious battle in Congress between Internet sellers, brick-and-mortar stores and states hungry for extra tax revenue.
The high court without comment turned away appeals from Amazon.com LLC and Overstock.com Inc., in their fights against a New York court decision forcing them to remit sales tax the same way in-state businesses do. This could affect online shopping in that state, since for many shoppers one of the attractions of Internet purchasing is the lack of a state sales tax, which makes some items a little cheaper than they would be inside a brick-and-mortar store.
The National Council of State Legislatures estimated that states didn't get an estimated $23.3 billion in 2012 as a result of not collecting sales tax on online and catalog purchases.
Web retailers generally have not had to charge sales taxes in states where they lack a store or some other physical presence. But New York and other states say that a retailer has a physical presence when it uses affiliates — people and businesses that refer customers to the retailer's website and collect a commission on sales. These affiliates range from one-person blogs promoting the latest gadgets to companies that run coupon and deal sites.
Amazon and Overstock both use affiliate programs. Seattle-based Amazon has been collecting sales tax in New York as it fights the state over a 2008 law that was the first to consider local affiliates enough of an in-state presence to require sales tax collection. Overstock ended its affiliate program in 2008 after the law passed.
But each state has its own rules on Internet sales taxes. While this settles the issue for New York state, other states like Illinois have come to different conclusions — meaning that some Americans will still get state-tax free Internet purchases from certain websites, while others won't simply because of where they live.
And the big Internet sellers aren't giving up. After the decision, both Amazon and Overstock said they plan to take their case to Congress in hopes of getting a federal decision on state-level Internet sales taxes that would apply to every state uniformly.
...
In Indiana, Amazon has so far avoided collecting sales taxes, but must begin collecting them in 2014 under an agreement reached in 2012 with former Gov. Mitch Daniels. Lawmakers at the last General Assembly tried to move up that deadline to July, but the legislation failed.
Tribune Reports Kokomo Council Orders Repayment of Tax Abatement
From the Kokomo Tribune:
Council
orders repayment of tax abatement
Businesses who left Kokomo area
targeted.
The Kokomo Common Council set what it hopes will be an important precedent Monday for businesses collecting tax abatements by ordering a business that have left the Kokomo area to repay the city.
The council passed a resolution Monday requiring Westwind Wood Specialties of Indiana to repay its entire tax abatement savings after the business ceased operation at its 1104 Touby Pike location July 19.
The city is seeking $16,725.93 in tax abatements the business received as part of the city's Economic Revitalization Area, passed by the council in October 2010. It is the first time the council has pursued the recovery of abatement savings since implementing the ERA.
“It’s not a large amount of money but there’s a principle behind it,” councilman-at-large Bob Hayes said. “We want to make sure that all businesses that come before us for tax abatements are serious about meeting the criteria to get the tax abatement.
“I think we have to go after anyone that leaves, not because the business failed, but because they wanted to go somewhere else to make a profit,” he added. “That’s not right. Somebody had to make up that money that was abated, so that means it was on the backs of taxpayers to come up with that money.”
The agreement states that if a business ceases operation in an Economic Revitalization Area at any time during the term of the agreement, the city may immediately terminate tax abatement deductions and require the recipient to repay all or a portion of those tax savings.
Westwind Wood Specialties now has 30 days to respond to the council for an appeal or repay the abatement savings from 2011 ($7,410.79) and 2012 ($9,315.14).
Kokomo Director of Development Steve Whikehart said the council’s decision to recover tax abatement savings was based on ensuring that businesses pursue those savings in good faith in an attempt to grow business in Kokomo.
...
http://www.kokomotribune.com/local/x517507355/Council-orders-repayment-of-tax-abatement
Council
orders repayment of tax abatement
Businesses who left Kokomo area
targeted.
The Kokomo Common Council set what it hopes will be an important precedent Monday for businesses collecting tax abatements by ordering a business that have left the Kokomo area to repay the city.
The council passed a resolution Monday requiring Westwind Wood Specialties of Indiana to repay its entire tax abatement savings after the business ceased operation at its 1104 Touby Pike location July 19.
The city is seeking $16,725.93 in tax abatements the business received as part of the city's Economic Revitalization Area, passed by the council in October 2010. It is the first time the council has pursued the recovery of abatement savings since implementing the ERA.
“It’s not a large amount of money but there’s a principle behind it,” councilman-at-large Bob Hayes said. “We want to make sure that all businesses that come before us for tax abatements are serious about meeting the criteria to get the tax abatement.
“I think we have to go after anyone that leaves, not because the business failed, but because they wanted to go somewhere else to make a profit,” he added. “That’s not right. Somebody had to make up that money that was abated, so that means it was on the backs of taxpayers to come up with that money.”
The agreement states that if a business ceases operation in an Economic Revitalization Area at any time during the term of the agreement, the city may immediately terminate tax abatement deductions and require the recipient to repay all or a portion of those tax savings.
Westwind Wood Specialties now has 30 days to respond to the council for an appeal or repay the abatement savings from 2011 ($7,410.79) and 2012 ($9,315.14).
Kokomo Director of Development Steve Whikehart said the council’s decision to recover tax abatement savings was based on ensuring that businesses pursue those savings in good faith in an attempt to grow business in Kokomo.
...
http://www.kokomotribune.com/local/x517507355/Council-orders-repayment-of-tax-abatement
Monday, December 2, 2013
One Appeal Filed in November; One Hearing Scheduled for December in Tax Court
Appeals
filed in Tax Court in November:
|
11/14/13
|
N/A
|
49T10-1311-TA-72
|
Hearings
scheduled in December:
|
Muir Woods, Inc. v. Joseph P.
O'Connor, Assessor of Marion County (View)
|
|
Friday, December 06, 2013 10:00 AM
- 11:00 AM
|
|
49T10-1302-TA-38
The taxpayer challenges whether the Indiana Board erred in dismissing its its appeal on the basis that the issued raised by taxpayer on its Form 133 (that common areas of development have a zero value) was not an objective error, but rather a subjective error which necessitated the filing of a Form 131. Location: State House, Room 413 Indianapolis, IN 46204 |
Riley: TIF Disticts Drawing Scrutiny in Muncie
By Larry Riley in the Muncie Star-Press:
Twice in the last two weeks at meetings of Muncie local government the topic of tax increment financing districts have taken center stage and from perspectives possibly at approbation odds.
At its regular monthly meeting, the Muncie Public Library board had invited a retired Bruce Baldwin to discuss TIF districts. Baldwin spent 25 years heading up the Muncie Redevelopment Commission before stepping down last December.
“I haven’t even thought about TIF districts since then,” Baldwin began, adding with a smile. “I don’t even know how to spell it.”
What he doesn’t know about TIF districts probably isn’t worth knowing, given Baldwin was around at the creation of TIFs in Delaware County.
That would be in 1989, when the MRC spawned the Muncie Central City TIF district, a unique initial TIF that had no specific plan of public improvements needing a bond issuance.
TIF districts typically are formed to issue a bond for millions of dollars to be spent on improvements in infrastructure: new streets, sidewalks, utility relocation, additional sewers.
The upgrades attract private investment — new buildings, stores, industry, parking lots — and the increase in property taxes from the additional investment pays off the bonds rather than getting distributed to the various local governments, like a library board, to defray costs of public services.
The TIF district’s original base amount of assessed value on which property taxes are collected still gets allotted to those local government units, but the incremental taxes get diverted to the hands of a redevelopment commission.
We have three such commissions in Delaware County, one for Muncie, one for Yorktown, and one for the county. They each cover exclusive territories, except when part of a TIF district already created gets annexed by, say, Muncie.
That happened with the Morrison Road TIF district, half of which now is inside Muncie city limits, yet the county redevelopment commission still controls the money.
...
See the full article here:
http://www.thestarpress.com/apps/pbcs.dll/article?AID=2013312010027
Twice in the last two weeks at meetings of Muncie local government the topic of tax increment financing districts have taken center stage and from perspectives possibly at approbation odds.
At its regular monthly meeting, the Muncie Public Library board had invited a retired Bruce Baldwin to discuss TIF districts. Baldwin spent 25 years heading up the Muncie Redevelopment Commission before stepping down last December.
“I haven’t even thought about TIF districts since then,” Baldwin began, adding with a smile. “I don’t even know how to spell it.”
What he doesn’t know about TIF districts probably isn’t worth knowing, given Baldwin was around at the creation of TIFs in Delaware County.
That would be in 1989, when the MRC spawned the Muncie Central City TIF district, a unique initial TIF that had no specific plan of public improvements needing a bond issuance.
TIF districts typically are formed to issue a bond for millions of dollars to be spent on improvements in infrastructure: new streets, sidewalks, utility relocation, additional sewers.
The upgrades attract private investment — new buildings, stores, industry, parking lots — and the increase in property taxes from the additional investment pays off the bonds rather than getting distributed to the various local governments, like a library board, to defray costs of public services.
The TIF district’s original base amount of assessed value on which property taxes are collected still gets allotted to those local government units, but the incremental taxes get diverted to the hands of a redevelopment commission.
We have three such commissions in Delaware County, one for Muncie, one for Yorktown, and one for the county. They each cover exclusive territories, except when part of a TIF district already created gets annexed by, say, Muncie.
That happened with the Morrison Road TIF district, half of which now is inside Muncie city limits, yet the county redevelopment commission still controls the money.
...
See the full article here:
http://www.thestarpress.com/apps/pbcs.dll/article?AID=2013312010027
Star Reports Fishers Votes Monday on Food and Beverage Tax
From the Indianapolis Star:
Eight years ago, Bill Smythe fought a proposed 1 percent tax that would have been added to burgers and beers served at his tavern, Claude & Annie’s.
He is again questioning the merits of a new effort to tax food and beverages in Fishers. The proposed tax is back, served up by the Indiana General Assembly and facing the community a year before it transitions into a city.
Smythe isn’t alone. A small but vocal group of residents have spoken out on community blogs and at two public hearings, where they questioned how revenue from the tax would be used.
On Monday, the council plans to vote on whether to OK the tax. If approved, restaurant and bar tabs would be taxed at a rate of 9 percent in Fishers. That includes the state’s 7 percent sales tax and a 1 percent county tax passed earlier. The new tax would generate an estimated $1 million in 2014.
Smythe said his objections are based in principle and practice. He estimates a loss between $7,500 and $10,000 in sales at Claude & Annie’s if the tax is passed and he does not raise prices.
“One: Raising taxes generally dissuades commerce,” Smythe said. “And two: This tax is specifically targeted at one industry alone — ours — and not shared equally by the business community that is supposed to benefit from the ‘economic development’ yet unspecified.”
John Weingardt, Town Council president, said he has received little community feedback about the tax compared to other issues, such as a rejected plan for a single contractor to collect residential trash. He won’t offer how he’ll vote but says the tax, if approved, would be a “win” for the community. The legislature limits the tax dollars’ use — for economic development purposes and to reduce the property tax levy — and the community could weigh in on how it is divided, he said.
If $1 million reduced property tax bills, homeowners could see an average $30 reduction, he said. Or the tax could go toward an economic development fund. Weingardt said if a “game-changer” project was offered to the city, there would be money available.
Last week, council member Scott Faultless said approval of the tax could be a make-or-break vote for an unnamed $100 million project. Weingardt said a number of projects are in the works, but, “I don’t feel comfortable laying out what this deal would be.”
The food and beverage tax debate goes back to 2005. That’s when Hamilton County, along with surrounding counties, agreed to help fund Lucas Oil Stadium by adopting a 1 percent food and beverage tax. State lawmakers allowed communities such as Fishers, Carmel, Noblesville and Westfield to approve another 1 percent dining tax to generate an additional bucket of revenue. Fishers rejected the additional tax. but it was adopted in the other communities.
The legislature passed a bill earlier this year giving Fishers until Dec. 31 to approve the tax.
...
http://www.indystar.com/story/news/local/hamilton-county/2013/11/30/fishers-votes-monday-on-food-beverage-tax/3796107/
Eight years ago, Bill Smythe fought a proposed 1 percent tax that would have been added to burgers and beers served at his tavern, Claude & Annie’s.
He is again questioning the merits of a new effort to tax food and beverages in Fishers. The proposed tax is back, served up by the Indiana General Assembly and facing the community a year before it transitions into a city.
Smythe isn’t alone. A small but vocal group of residents have spoken out on community blogs and at two public hearings, where they questioned how revenue from the tax would be used.
On Monday, the council plans to vote on whether to OK the tax. If approved, restaurant and bar tabs would be taxed at a rate of 9 percent in Fishers. That includes the state’s 7 percent sales tax and a 1 percent county tax passed earlier. The new tax would generate an estimated $1 million in 2014.
Smythe said his objections are based in principle and practice. He estimates a loss between $7,500 and $10,000 in sales at Claude & Annie’s if the tax is passed and he does not raise prices.
“One: Raising taxes generally dissuades commerce,” Smythe said. “And two: This tax is specifically targeted at one industry alone — ours — and not shared equally by the business community that is supposed to benefit from the ‘economic development’ yet unspecified.”
John Weingardt, Town Council president, said he has received little community feedback about the tax compared to other issues, such as a rejected plan for a single contractor to collect residential trash. He won’t offer how he’ll vote but says the tax, if approved, would be a “win” for the community. The legislature limits the tax dollars’ use — for economic development purposes and to reduce the property tax levy — and the community could weigh in on how it is divided, he said.
If $1 million reduced property tax bills, homeowners could see an average $30 reduction, he said. Or the tax could go toward an economic development fund. Weingardt said if a “game-changer” project was offered to the city, there would be money available.
Last week, council member Scott Faultless said approval of the tax could be a make-or-break vote for an unnamed $100 million project. Weingardt said a number of projects are in the works, but, “I don’t feel comfortable laying out what this deal would be.”
The food and beverage tax debate goes back to 2005. That’s when Hamilton County, along with surrounding counties, agreed to help fund Lucas Oil Stadium by adopting a 1 percent food and beverage tax. State lawmakers allowed communities such as Fishers, Carmel, Noblesville and Westfield to approve another 1 percent dining tax to generate an additional bucket of revenue. Fishers rejected the additional tax. but it was adopted in the other communities.
The legislature passed a bill earlier this year giving Fishers until Dec. 31 to approve the tax.
...
http://www.indystar.com/story/news/local/hamilton-county/2013/11/30/fishers-votes-monday-on-food-beverage-tax/3796107/
Waltz: Personal Property Tax Hurts Indiana Businesses
By Bill Waltz in the Indianapolis Star:
Reducing the state’s dependence on the taxation of business machinery and equipment came into the spotlight recently with legislative leaders and the Indiana Chamber of Commerce announcing it was a top priority for 2014.
Since then, some attention has focused on the approximately $1 billion in revenue that local governments would have to do without if the tax were eliminated.
But absolutely no one has called for that money to be taken away without some type of replacement revenue stream. What’s more, there is no way that all personal property tax can be eliminated overnight — that will not be the proposal. So those fears can be calmed.
With that aspect clarified, let’s look at why the matter is being brought up in the first place.
Indiana is the only state in the Midwest, other than Kentucky, that taxes machinery and equipment (personal property) – and Kentucky taxes it at a much lower rate. In fact, only a handful of states tax personal property at a higher rate than Indiana.
In fact, the effective property tax rate for our business commercial and industrial property taxpayers is near the top in every category (big, small, urban or rural), and this is largely due to the state’s tax on business equipment. Numerous studies clearly support that. Tax policy experts, economists and academics all acknowledge that personal property tax deters investment in new capital.
And new investment in the capital — machines and equipment — that is necessary for a business to expand and thrive should not be encouraged, not discouraged. New investments mean the business is growing. This means workers are being added and the company is spending money on the services and products of other local businesses. In other words, the businesses that local communities depend on to employ their residents are more motivated to invest in the community.
All true economic growth comes from a strong business community. Without it, the government will have nobody to serve. Nobody wants to deny local governments the means to operate effectively. Everybody wants them to provide the services and infrastructure necessary to a make their community an enjoyable place to live. So fair revenue replacements can and will be found to protect the integrity of needed local government operations.
While nobody likes taxes, some taxes are truly more detrimental than others. That’s why our legislators and other elected officials have identified the need to wean us off the taxation of capital investment; they are looking to further improve our tax climate and make Indiana as competitive as it can possibly be.
This is not a goal that should be attacked or obstructed. It is one that should be embraced by all who want their communities and state to reach their greatest potential. So, let’s keep these things in mind as the debate progresses on this initiative.
http://www.indystar.com/story/opinion/readers/2013/12/01/personal-property-tax-hurts-indiana-businesses/3786751/
Reducing the state’s dependence on the taxation of business machinery and equipment came into the spotlight recently with legislative leaders and the Indiana Chamber of Commerce announcing it was a top priority for 2014.
Since then, some attention has focused on the approximately $1 billion in revenue that local governments would have to do without if the tax were eliminated.
But absolutely no one has called for that money to be taken away without some type of replacement revenue stream. What’s more, there is no way that all personal property tax can be eliminated overnight — that will not be the proposal. So those fears can be calmed.
With that aspect clarified, let’s look at why the matter is being brought up in the first place.
Indiana is the only state in the Midwest, other than Kentucky, that taxes machinery and equipment (personal property) – and Kentucky taxes it at a much lower rate. In fact, only a handful of states tax personal property at a higher rate than Indiana.
In fact, the effective property tax rate for our business commercial and industrial property taxpayers is near the top in every category (big, small, urban or rural), and this is largely due to the state’s tax on business equipment. Numerous studies clearly support that. Tax policy experts, economists and academics all acknowledge that personal property tax deters investment in new capital.
And new investment in the capital — machines and equipment — that is necessary for a business to expand and thrive should not be encouraged, not discouraged. New investments mean the business is growing. This means workers are being added and the company is spending money on the services and products of other local businesses. In other words, the businesses that local communities depend on to employ their residents are more motivated to invest in the community.
All true economic growth comes from a strong business community. Without it, the government will have nobody to serve. Nobody wants to deny local governments the means to operate effectively. Everybody wants them to provide the services and infrastructure necessary to a make their community an enjoyable place to live. So fair revenue replacements can and will be found to protect the integrity of needed local government operations.
While nobody likes taxes, some taxes are truly more detrimental than others. That’s why our legislators and other elected officials have identified the need to wean us off the taxation of capital investment; they are looking to further improve our tax climate and make Indiana as competitive as it can possibly be.
This is not a goal that should be attacked or obstructed. It is one that should be embraced by all who want their communities and state to reach their greatest potential. So, let’s keep these things in mind as the debate progresses on this initiative.
http://www.indystar.com/story/opinion/readers/2013/12/01/personal-property-tax-hurts-indiana-businesses/3786751/
Revenue Finds Adjustment of Additional Taxable Sales Warrants Adjustment of Income Tax
Excerpt of Revenue's Determination follow:
Taxpayer is an individual who is one of the shareholders of two Indiana S corporations. One of the S corporations owns a gas station and convenience store located in Indiana. The Indiana Department of Revenue ("Department") performed sales and income tax audits of the S corporations for the 2009, 2010, and 2011 tax years. The second S Corporation owns two convenience store locations that are attached to gas stations. The Department performed sales and income tax audits of this S corporation for the 2010 and 2011 tax years. As a shareholder of the S corporations, those income tax assessments flow through to Taxpayer. The Department reviewed the S corporations' business records. The Department determined that the S corporations' records were inadequate. Taxpayer did not have daily cash register Z-tapes, original sales records, expense reports, and/or monthly sales recaps.
Taxpayer is an individual who is one of the shareholders of two Indiana S corporations. One of the S corporations owns a gas station and convenience store located in Indiana. The Indiana Department of Revenue ("Department") performed sales and income tax audits of the S corporations for the 2009, 2010, and 2011 tax years. The second S Corporation owns two convenience store locations that are attached to gas stations. The Department performed sales and income tax audits of this S corporation for the 2010 and 2011 tax years. As a shareholder of the S corporations, those income tax assessments flow through to Taxpayer. The Department reviewed the S corporations' business records. The Department determined that the S corporations' records were inadequate. Taxpayer did not have daily cash register Z-tapes, original sales records, expense reports, and/or monthly sales recaps.
As a result of the Department's audits, the Department issued proposed assessments of additional sales tax based on the "best information available." The Department determined that the S-corporations had not collected and/or reported the proper amount of sales tax on its sales of diesel fuel, gasoline, and convenience store items. Pursuant to IC § 6-8.1-5-1 and 45 IAC 2.2-6-8 , sales tax was assessed on these additional taxable sales. The S corporations protested the sales tax assessments. For further information relating to either of the sales tax assessments, please refer to Letters of Findings 04-20130028 and 04-20130228, in which each of the S Corporations were denied in part and sustained in part subject to the results of the supplemental audits.
The Department also made adjustments to each of the S corporation's adjusted gross income based upon the additional taxable sales adjustments. Since these income tax assessments flow through to Taxpayer as a shareholder in the S corporations, the Department issued proposed assessments to Taxpayer for the additional adjusted gross income tax on his share of each of the S corporation's income, as well as penalty and interest. Taxpayer protested the income tax assessments pending resolution of the related sales tax investigation (See Letters of Findings 04-20130028 and 04-20130228). This Letter of Findings ensues. Additional facts will be provided as necessary.
...
Taxpayer was assessed additional income tax based upon the adjustments made to each of the S corporation's adjusted gross income from the "additional taxable sales" determinations made in each of the S corporation's sales and use tax audit. The S corporations protested the sales tax assessments. Please refer to Letters of Findings 04-20130028 and 04-20130228 for further information relating to the S corporations' sales tax protests. Since the S corporations' protests were denied in part and sustained in part subject to the results of a supplemental audit, the amount of "additional taxable sales" may be adjusted by the results of the supplemental audits. If the "additional taxable sales" in each of the S corporation's sales tax audits are adjusted by the results of the supplemental audits, then the "additional taxable sales" in each of the S corporation's income tax audits should also be adjusted.
Accordingly, Taxpayer's protest of the imposition of additional individual income tax–based upon each S corporation's additional income from the "additional taxable sales" determined in the audits–is also sustained subject to the results of each of the S corporation's sales tax supplemental audits. However, Taxpayer's protest is denied to the extent that the supplemental audits of the additional documentation do not result in the audit division making an adjustment to the "additional taxable sales" of the S corporations.
Tribune Reports Porter County Looking into Details of Hospital Tax Abatement
From the Chesterton Tribune:
Wrapping up what will be their final regular meeting for the year, the Porter County Council said it would schedule a meeting next year to revisit the property tax abatement for Porter Regional Hospital in Liberty Twp.
Wrapping up what will be their final regular meeting for the year, the Porter County Council said it would schedule a meeting next year to revisit the property tax abatement for Porter Regional Hospital in Liberty Twp.
Council members have asked when the 10-year abatement for the hospital granted in 2009 is supposed to start, whether it should start with the first complete assessment or earlier.
County Auditor Bob Wichlinski said he had his attorney John Schmaltz look into documents in the auditor’s office regarding the abatement to offer the Council his interpretation of the facts.
According to Wichlinski, Schmaltz purports the following:
* No abatement has been applied during the years 2011, 2012, 2013 for the purpose of calculating the hospital’s tax bills.
* For each of the three years, no abatement deduction form or compliance statement has been filed.
* The hospital has been billed taxes in 2011, 2012 and 2013 for $7,593, $6,651, and $595,434 respectively.
* There is insufficient information on whether the abatement was to be applied to the land and structures for each year.
* In 2009, upon petitioning for the abatement, the hospital said that it would retain 1,500 existing jobs and by the “end of year two” 126 new jobs would be created as a result of building the new facility.
* Based on the records from the auditor’s office, it is ambiguous as to whether the Council made a determination on the number of years the deduction is to be applied.
County Council President Bob Poparad, D-At Large, said hospital officials will be invited to the meeting as will the auditor and the assessor to present their views on the abatement to the Council.
Board's HJM Decision: Assessor Properly Denied Abatement Where Taxpayer Failed to Timely File Verified Deduction Schedule and Personal Property Tax Return
Excerpts of the Board's Determination follow:
http://www.in.gov/ibtr/2536.htm
Indiana’s personal property tax
system is a self-assessment system. Every person, including any firm, company,
partnership, association, corporation, fiduciary, or individual owning,
holding, possessing, or controlling personal property with a tax situs in
Indiana on March 1 of a year must file a personal property tax return on or
before May 15 of that year unless the person obtains a timely extension of
time. Ind. Code § 6-1.1-3-7; 50 IAC 4.2-2-2.
Additional documentation must be
attached to the return to claim the tax abatement. Specifically, to obtain a
deduction, a taxpayer must file a verified deduction schedule with a
timely-filed personal property return. Ind. Code § 6-1.1-12.1-5.4. The statute
is clear that a timely-filed return is a statutory prerequisite for claiming
the tax abatement. See Id. (stating the deduction is applied in the
amount claimed in a certified schedule that a person files with: (1) a timely
personal property return under IC 6-1.1-3-7(a) or IC 6-1.1-3-7(b)).
Emphasis added.
Indiana statutes are clear that
the personal property return and accompanying abatement filing must be timely
for a taxpayer to get the abatement. Smith argument. Specifically, Indiana
Code section 6-1.1-12.1-5.4 states that a person who desires to obtain the deduction
must file a verified deduction schedule with the person’s timely filed
personal property return. Id. Indiana Code section 6-1.1-1-7 defines the
filing date as May 15. Id. Further, Forms 103-EL and 103-ERA, which are
abatement forms, both state that they must be submitted with a timely filed
Form 103 to receive the deduction. Id.
Legal precedent suggests that the
Board has jurisdiction and authority to review the untimely filing of a
Certified Deduction Application and underlying Business Tangible Personal
Property Return. In State Bd. of Tax Comm’rs.
v. New Energy Co.,
585 N.E.2d 38 (Ind. Ct. App. 1992), the issue before the Court was whether “the
Board had the authority to consider New Energy’s application for deduction
notwithstanding the untimely filing.” Id. at 39.7 In resolving
this issue, the Court of Appeals found that the Board had jurisdiction and
authority to consider an untimely filed return.
In Dalton Foundries v. State Bd. of Tax Comm’rs., 653 N.E.2d 548
(Ind. Tax Ct. 1995), the issue before the Indiana Tax Court was an untimely
filed Resource Recovery System (“RRS”) property tax deduction. The Court found
that the assessor had the authority and must consider an untimely application,
but did not go so far as to hold that the assessor must grant the deduction.
More recently, in Graybar
Elec. Co. v. State Bd. of Tax Commrs., 723 N.E.2d 491 (Ind. Tax Ct. 2001),
the Tax Court interpreted New Energy to mean that the Board may not deny
the abatement at issue solely because it was not timely filed.
However, it appears the General
Assembly has vested in the designating body, in this case the Town of Markle,
the discretion to waive non-compliance through resolution. Specifically,
Indiana Code section 6-1.1-12.1-11.3 states that a designating body may by resolution
waive non-compliance, which includes the failure to timely file a deduction application
pursuant to Indiana Code section 6-1.1-12.1-5.4. See also Ind. Code §
6-1.1-12.1-9.5; 50 IAC 4.2-11.1-7(a)(5). Thus, because the General Assembly
specifically vested such authority in the Town of Markle, the Board does not
have the authority to waive the late filing.
Here, the parties agree that
neither the verified deduction schedule nor the underlying personal property
return were timely filed. Thus, in asking that the Board grant its tax abatement,
HJM is, in effect, asking the Board to waive the filing deadlines. The Board is
sympathetic to the seemingly harsh consequence of HJM’s failure to timely file
Form 104. Nevertheless, the use of the word “shall” by the General Assembly
when setting forth the filing deadlines for personal property returns in
Indiana Code sections 6-1.1-3-7 and 6-1.1-1-7 means that filing such a return
by on or before the May 15 deadline is mandatory, if a timely extension is not
obtained. Truedell-Bell v. Marion Cty. Treasurer, 955 N.E.2d 872, 875
(Ind. Tax Ct. 2011). Further, HJM provided the Board no legal authority on
which to base this request or on which the Board could excuse or waive the untimely
filing. HJM did not timely file its verified deduction schedule or personal property
return, and, as such, the Assessor properly denied its tax abatement.
http://www.in.gov/ibtr/2536.htm
Revenue Publishes Local Option Income Tax Handbook
Local Option Income Tax
Handbook
for
County
Auditors
Herald-Times Reports Concerns Deepen Over Monroe County's Delayed Finance Reports
From the Bloomington Herald-Times:
By the time county offices closed Wednesday, the June report from the Monroe County Treasurer’s Office was completed — months late, and not soon enough to alleviate the fears of other county officials that the end-of-year tax settlement could be late.
By state law, the treasurer should file a report before the 16th of each month that shows the county’s bank accounts have been balanced for the previous month. The last treasurer’s report approved by the Monroe County Board of Commissioners was the May 2013 report, which the board received in November.
http://www.heraldtimesonline.com/news/local/concerns-deepen-over-delayed-county-finance-reports/article_a861f6a3-c103-572b-aa8b-1ceb370ee2d7.html
By the time county offices closed Wednesday, the June report from the Monroe County Treasurer’s Office was completed — months late, and not soon enough to alleviate the fears of other county officials that the end-of-year tax settlement could be late.
By state law, the treasurer should file a report before the 16th of each month that shows the county’s bank accounts have been balanced for the previous month. The last treasurer’s report approved by the Monroe County Board of Commissioners was the May 2013 report, which the board received in November.
http://www.heraldtimesonline.com/news/local/concerns-deepen-over-delayed-county-finance-reports/article_a861f6a3-c103-572b-aa8b-1ceb370ee2d7.html
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