Indiana · 2026 Regular Session
Various tax matters. Provides that the overall local income tax (LIT) rate cap (excluding certain special purpose LIT rates) is 3.75% beginning in 2028.~ (Under current law, the overall rate cap is 3.75% in every county other than Marion County and 4.0% in Marion County and is scheduled to be reduced to 2.9% in all counties in 2028.) Repeals provisions that require counties and municipalities to readopt their LIT rate each year beginning in 2031. Requires LIT revenue from a fire protection and emergency medical services rate adopted by a consolidated county to be distributed to the fire special service district established under the UNIGOV statute. Specifies that an included town that is part of the consolidated city under the UNIGOV statute is not a separate municipality for purposes of the LIT provisions enacted in SEA 1 in the 2025 session. Decouples the special purpose LIT rate for central Indiana public transportation projects from the LIT expenditure rate. (Under current law, the special rate for transportation projects is included in a county's total expenditure rate.) Repeals a provision regarding Marion County's allocation of LIT revenue. Expands the population threshold…
First reading: referred to Committee on Tax and Fiscal Policy (2025-12-08)