SB 383 – Various Tax Matters
Authored by Sen. Travis Holdman (R-Markle)

This is the Indiana Department of Revenue’s (IDOR) annual bill containing a collection of changes the agency has identified as needed to improve state tax administration. Among the many provisions are those establishing new procedures for how individual partners must amend their tax state when the Internal Revenue Service audits and changes their partnership’s federal tax liability (on which their state income tax return is based). It also makes numerous other changes. Full details.

Chamber position: Support in Part

The latest: The bill was presented to the House Ways and Means Committee and held for a later vote at a future meeting.

 Indiana Chamber action/commentary: The Chamber expressed its appreciation to IDOR for working with us on provisions in this bill. We are especially grateful for the work that staff and many tax professionals have put into the provisions that address the state tax procedures for adjusting partner liabilities in response to a federal partnership adjustment. Changes made at the federal level to audit partnerships as an entity (rather than individual partners) created the need for Indiana to establish procedures for how individual partner liabilities would be adjusted at the state level when their partnership’s federal liability is altered. Sorting through how to fit model legislation on this subject into our Indiana Code and our established practices has proven challenging for all. We highlighted the importance of putting new provisions in place so tax practitioners and taxpayers can know their obligations when a federal audit adjustment occurs. We also indicated that there may well be a need for additional work on these provisions – both before the bill is ultimately passed and even next year.

SB 234 – Withholding Tax Remittance
Authored by Sen. Linda Rogers (R-Granger)

This bill takes a very different approach to addressing the issue of potential mishandling of withholding tax remittances than what Sen. Rogers offered last year. Rather than requiring businesses to set up direct deposit accounts with the Indiana Department of Revenue to protect against fraud, this year’s bill instead establishes registration requirements, notifications and more frequent deposits. Full details.

Chamber position: Support

The latest: The House Ways and Means Committee heard testimony from interested parties. Like the treatment this bill received in the Senate committee, the chair indicated he too is interested in looking at some amendments before a vote is taken.

Indiana Chamber action/commentary: The Chamber offered support for the bill given the substantial differences from the bill proposed last year, with which we had serious issues. We expressed our appreciation to Sen. Rogers’ for her work in finding these different means of reaching the objective of lessening the possibility of a payroll service provider committing fraud at the expense of their business clients. Senator Rogers worked with payroll company representatives, the Chamber and other stakeholders to find reasonable means for improving the withholding procedures. Our focus has been to assure that any changes do not create new problems or makes compliance more cumbersome or costly. A couple additional changes are still anticipated to address remaining concerns. And while we can’t be certain how smooth the implementation of procedural changes will go, we believe every effort is being made to make the bill as workable as possible.

Resource: Bill Waltz at (317) 264-6887 or email: bwaltz@indianachamber.com