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Indiana Tax Developments:
Fall 2022
Dentons SALT Insights
Grow | Protect | Operate | Finance
KE Y CO NTACT S
Mark Loyd
Je Bennett
Bradley Hasler
Bailey Roe se
Stephanie Bruns
I. SELECTED NEW LEGISLATION
SPECIAL LEGISLATIVE SESSION: P.L. 180 SIGNED BY GOVERNO
ON AUG. 5, 2022
As part of a special legislative session to appropriate Indiana’s $6.1 billion
surplus, S.B. 2 enacted a number of iscal matters. The law provides for an
additional automatic taxpayer refund of $200 for the 2021 tax year to taxpayers
who were already eligible for an automatic refund under prior law. The law
also establishes the Hoosiers Family First Fund and appropriates s $45 million
to the fund from the state general fund for 2023. Further, the law caps the
gasoline use tax rate at $0.295 per gallon until June 30, 2023. An additional
$1,000,000,000 million will be appropriated from the state general fund for
pension stabilization in 2023 if the amount of excess reserves meets a certain
threshold.
AUTOMATIC TAXPAYER REFUND: SEA 1 EFF. MARCH 7, 2022 Provides that in
order to qualify for the automatic taxpayer refund, a taxpayer must have iled
a 2020 tax return on or before December 31, 2021. Eliminated qualiication
for automatic refund that required a taxpayer to have tax liability for 2021 tax
year and established that the automatic refund is subject to oset against any
outstanding state, local, and federal tax liabilities..
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REPORTING FOR WAGERING TAXES: SEA 382
EFF. JULY 1, 2022
Requires the wagering tax for pari-mutuel wagering,
riverboat wagering, slot machine wagering, and
sports wagering to be reported and remitted
electronically through the Department of Revenue’s
online tax iling program.
MARKETPLACE FACILITATORS: SEA 382, SECTION
20 EFF. JULY 1, 2022
Clariies that a marketplace facilitator is considered
a retail merchant of retail sales occurring on its
marketplace, regardless of whether the marketplace
facilitator has a contractual relationship with the
seller, if the marketplace facilitator engages in any
of the following on behalf of the seller: collects
sales price or purchase price, provides access to
payment processing services, or charges, collects
or otherwise receives fees from the purchaser for
transactions made on its electronic marketplace.
TAXABLE TOBACCO PRODUCTS: SEA 382
EFF. JULY 1, 2022
Adds a tax of $0.40 per ounce on alternative
nicotine products, deined as noncombustible
products containing nicotine that are intended for
human consumption, whether chewed, absorbed,
dissolved, or ingested by other means. Reduces the
rate of tax on closed system cartridges from 25% to
15% and clariies that if the closed system cartridge
is sold in the same packages as a vapor product
device, the tax is imposed only on the wholesale
price of the closed system cartridge if separated
on the invoice. Eective July 1, 2023, remote sellers
are required to collect the taxes imposed on
tobacco products, alternative nicotine products,
and closed system cartridges and comply with
licensing requirement if the remote seller meets the
economic threshold requirements for sales tax.
UTILITY TAX: HEA 1002, SECTION 3
EFF. JULY 1, 2022
Repeals the utility receipts tax and the utility
services use tax and provides procedures for
prorating deduction for taxable years that include
June 30, 2022.
INDIVIDUAL INCOME TAX: HEA 10 02, SECTION 4
EFF. JULY 1, 2022
Lowers the individual income tax rate from 3.23% to
3.15% for 2023 and 2024 and provides for further
reduction of the individual income tax rate, depending
on state revenue growth reviewed in July of even-
numbered years, with a minimum rate of 2.9%.
STEEL MANUFACTURING: P.L. 138
MARCH 15, 2022
Expands applicability of “Pool 5” depreciation to
include certain “mini-mill” steel production facilities
which use electric arc furnaces to produce steel.
PROPERTY TAX: P.L. 174 MARCH 21, 2022
Amends the “burden shift rule” in property tax
appeals where assessments have increased by
more than 5% (See discussion of Supreme Court
decision in Southlake, infra.) with the addition of
new IC 61.11520, which provides that if an increase
of more than 5% has occurred, that assessment is
no longer presumed to be equal to true tax value,
and the Board can decide the appeal based upon
the totality of the evidence. If the totality of the
evidence is insuicient for such a determination,
the assessment reverts to the prior assessed value.
These amendments apply to assessment appeals
iled after the eective date of this public law, which
was March 21, 2022.
ELECTRONIC CIGARET TE TAX: HEA 1001, SEC. 119
House Enrolled Act 1001, Section 119, creates a
new chapter of the Indiana Code at IC 674 which
imposes an electronic cigarette tax. The tax is
imposed on the retail sale of consumable material
and vapor products in Indiana at a rate of 15% on the
gross retail income received by the retail dealer. The
person who acquires consumable material or vapor
products in a retail transaction is liable for the tax on
the transaction, typically paid to the retail dealer as a
separate added amount to the consideration in the
transaction.
