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 changes to the procedures governing when a manufacturing facility gets a new utility use meter (used to document an exemption). Full details.

Chamber position: Support in Part

The latest: The bill was amended and voted out of the Senate Tax and Fiscal Policy Committee 13-0.

Indiana Chamber action/commentary: The Chamber expressed appreciation to Sen. Holdman and the IDOR for working with us on provisions in this bill. We are especially grateful for the work that staff has 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. This has proven complicated and the IDOR has devoted a good deal of time and effort to work out details with knowledgeable tax consultants. It is recognized that the effort may not yet be complete and these procedures will probably have to be tweaked in the future. Our expression to the committee was that while perhaps imperfect, it remains important to reflect changes in our state code. The Chamber also supported the changes concerning the reporting of new utility use meters, citing those changes an example of IDOR’s willingness to fix administrative matters when they are brought to its attention.

SB 188 – Revised Uniform Unclaimed Property Act
Authored by Sen. Eric Koch (R-Bedford)

This bill repeals the unclaimed property act and replaces it with the revised unclaimed property act.

Chamber position: Oppose in Part

The latest: The Senate Judiciary Committee amended and passed the bill 8-0.

The bill is intended to update and recodify the unclaimed property statutes in the manner proposed by the Uniform Laws Commission. But it was discovered that a wholesale repeal raised many concerns among the affected parties. Thus, the author engaged in a series of discussions to sort out the main issues that were raised when it was first heard. The result this week was a lengthy amendment. And it was acknowledged by the author that some additional amendments would still be needed to address what the chair called remaining “glitches.”  So, look for those when the bill reaches the Senate floor or when considered by the House. The committee amendment did restore the business-to-business exemption that is in current law, but was removed in the introduced bill. It also inserts some language to “phase in” the new reporting requirement. This provision appears to be one of those glitches that still needs work.

Indiana Chamber action/commentary: The Chamber’s primary concerns with the bill were: (1) the elimination of the business-to-business exclusion, and (2) the 10-year lookback period that would have effectively made the new reporting requirements retroactive. The business-to-business exemption was restored and the phase-in provision was presented as an attempt to address the retroactive application. However, it is not clear that the phase-in provisions adequately remedy the problem of the 10-year lookback, retroactive application. We appreciate the changes that were made and will continue to work with the author and interested parties to determine if additional improvements can be made.

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