Rep. Morris's first bill passes out of the Indiana House of Representatives
STATEHOUSE - Rep. Bob Morris (R- Fort Wayne) authored House Bill 1170, which addresses public safety local option income tax. This bill provides that for the first two years after a local option income tax for public safety is adopted; a county or municipality that receives revenue from a public safety local option income tax may use the public safety local option income tax only to increase the total amount available for expenditure for public safety purposes.
House Bill 1170 provides that for the first two years after a public safety local option income tax is adopted, the public safety local option income tax may not be used to reduce or replace revenue devoted to public safety purposes from any other source of revenue.
"I am excited to see this bill pass out of the House and onto the Senate," said Rep. Morris. "This bill is pro-public safety, without raising taxes, and was needed to address the issues pertaining to public safety local option income tax."
This bill restricts counties and municipalities receiving revenue from the public safety local option income tax from using the revenue for any purpose other than increasing the amount available for public safety purposes for the two calendar years following the calendar year in which a county imposes the public safety local option income tax (LOIT).
Under current law, counties may adopt a public safety LOIT if they have also adopted either the property tax freeze LOIT or the property tax relief LOIT. The maximum income tax rate is 0.50% in Marion County and 0.25% in all other counties. Revenue from the public safety LOIT is distributed to the county taxing unit and municipalities using the county's normal LOIT distribution basis. As of October 25, 2010, 20 counties were imposing the public safety LOIT with a total CY 2011 certified distribution of $92.2M.