Senate Bill 309 – Indiana

• Eliminates the exemption for property taxes during the planning and construction of a residence that is conveyed upon completion to a low income individual by a nonprofit organization.

• Restricts but does not eliminate the exemption for property taxes for improvements on real property that are constructed, rehabilitated, or acquired for the purpose of providing low income housing.

• Specifies that the payments in lieu of taxes (PILOTS) that may be required from a property owner claiming such an exemption may not be imposed for an assessment date occurring after January 1, 2017.

• Eliminates the property tax deduction for residential rehabilitation of a dwelling.

• Eliminates the property tax deduction for rehabilitation of a structure over 50 years old.

• Provides that the state use tax is imposed on a contractor’s conversion of construction material into real property if that construction material was purchased by the contractor.

• Specifies, however, that the use tax does not apply to conversions of construction material if:

(1) the sales or use tax has been previously imposed on the contractor’s acquisition or use of that construction material.

(2) the person for whom the construction material is being converted could have purchased the construction material exempt from the sales and use tax (as evidenced by an exemption certificate) if that person had directly purchased the material from a retail merchant in a retail transaction; or

(3) the conversion of the construction material into real property is governed by a time and material contract.

Provides that a contractor is a retail merchant making a retail transaction when the contractor disposes of tangible personal property or converts tangible personal property into real property under a time and material contract.

Specifies that a person is a retail merchant making a retail transaction for purposes of state gross retail and use taxes when the person rents or furnishes rooms, lodgings, or accommodations (lodgings) that:

(1) are rented or furnished for periods of less than 30 days; and

(2) are located in a house, condominium, or apartment in which lodgings are rented or furnished for transient residential housing for consideration.

Defines “facilitator” as a person who:

(1) contracts with a person who rents or furnishes lodgings for consideration to market the lodgings through the Internet; and

(2) accepts payment from the consumer for the lodging. Provides that a facilitator is a retail merchant making a retail transaction when the facilitator accepts payment from the consumer for lodgings rented or furnished in Indiana.

• Provides that a retail merchant who rents or furnishes lodgings shall provide to the consumer of the lodging an itemized statement separately stating all of the following:

(1) The part of the gross retail income that is charged for the rental or furnishing of the lodging.

(2) Any taxes collected by the person renting or furnishing the lodging.

(3) Any part of the gross retail income that is a fee, commission, or other charge of a facilitator.

• Provides that a penalty of $25 is imposed on a facilitator for each transaction in which the facilitator fails to separately state such information.

• Repeals the state sales tax exemption for the cutting of steel bars into billets after 2016.

• Provides that the exemption applies retroactively to transactions occurring from 2010 through 2015, but that a taxpayer is not entitled to a refund of state sales taxes paid on those transactions.

• Provides that for taxable years beginning after December 31, 2017, a taxpayer may claim the $1,500 additional dependent deduction for a dependent child for whom the taxpayer is the legal guardian.

• Provides that the state income tax credit for certain acute care hospitals for part of the property taxes paid by the hospital may be carried forward if the hospital cannot use the entire credit because of the taxpayer’s income tax liability for that taxable year.

• Repeals the state income tax credit for contributions to the twenty-first century scholars program support fund. Makes conforming changes. Sets forth criteria for determining the date on which a taxpayer has made a contribution to a 529 plan.

• Provides that if an ordinance has been adopted requiring the payment of the innkeeper’s tax to the county treasurer instead of the department, the county treasurer has the same rights and powers with respect to refunding the innkeeper’s tax as the department.

• Provides that if a partnership, a trust, or an estate fails to withhold and pay any amount of tax required to be withheld and thereafter the tax is paid by the partners of the partnership (or the beneficiaries in the case of a trust or estate), the amount of tax paid by partners (or the beneficiaries in the case of a trust or estate) may not be collected from the partnership, trust, or estate.

• Specifies that the partnership, trust, or estate remains liable for interest or penalty based on the failure to withhold the tax. Provides that if the department issues to a person a demand notice for the payment of a tax, the person has 20 days (rather than 10 days, under current law) to either pay the amount demanded or show reasonable cause for not paying the amount demanded.

• Provides that a public-private agreement for communications systems infrastructure may be entered into using the procedures that apply to requests for proposals by the Indiana finance authority (IFA) or using a request for information and entering into negotiations with a single offeror.

• Provides that the IFA may set user fees as part of the public-private agreement. Specifies that any improvements on any real property interests may be owned by the IFA, a governmental entity, an operator, or a private entity instead of having to be owned in the name of the state or by a governmental entity.

• Provides that local planning and zoning laws do not restrict or regulate the exercise of the power of eminent domain by the IFA or the use of property owned or occupied by the IFA.

• Reconciles a conflict with SEA 23-2016 and HEA 1036-2016.

• Urges the legislative council to assign to a study committee the topic of the eligibility of low income housing for a property tax exemption.


According with Citizens Action Coalition: “The bill effectively ends net metering when the utilities meet a total subscription rate of 1% of their summer peak load, or by 2027, whichever comes first. However, at the rate rooftop solar is being installed, all 5 utilities will likely hit that 1% threshold well before 2027. Indeed, several of the utilities may reach that limit within the next few years. Without net metering, the economics of rooftop solar significantly change by reducing the bill credit customers receive for the excess energy delivered to the grid. This will effectively steal the financial benefits of the solar system from the customer (who made the investment) and give it to the monopoly utility. This will dramatically reduce solar investment in our State, like what has recently occurred in Nevada when they ended net metering. We’d be happy to discuss further. Feel free to write us at or give us a call at 317-205-3535 for more information.”



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