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Considering Changes in Your Local Income Tax

By Jason G. Semler, CPA, Partner, March 08, 2017

You have probably finished submitting your 1782 notices and finalized your budgets for 2017. Now is the time to think ahead to your 2018 budget. Making changes now to your Local Income Tax calculations could increase revenues or reduce circuit breaker losses.

Last year in Vision, we told you the Indiana General Assembly combined county adjusted gross income tax (CAGIT), county option income tax (COIT) and county economic development income tax (EDIT) into one local income tax.  In many cases, the new LIT provides communities more flexibility and more opportunity to increase taxes than the prior law allowed.

Public notice is still required

Before the adopting body can vote on a proposed ordinance converting to the new LIT, it must first provide proper notice to taxpayers and hold public hearings. If you’re not sure about this procedure, please call Umbaugh.

Umbaugh has prepared this table to keep your budgeting process on track:

Purpose

Rate Change Adopted

Effective Date

Year Revenue Received

Ordinance that increases, decreases, rescinds or changes an expenditure rate

Jan. 1, 2017- Aug. 31, 2017

Oct. 1, 2017

Pay 2018

Sept. 1, 2017- Oct. 31, 2017

Jan. 1, 2018

Pay 2018

Nov. 1, 2017- Dec. 31, 2017

Oct. 1, 2018

Pay 2019

Modification Allocation

Jan. 1, 2017-June 30, 2017

 

Pay 2018

Ordinance that increases, decreases, rescinds or changes a property tax relief rate

Jan. 1, 2017- Aug. 31, 2017

Oct. 1, 2017

Pay 2018

Sept. 1, 2017- Oct. 31, 2017

Jan. 1, 2018

Pay 2018

Nov. 1, 2017- Dec. 31, 2017

Jan. 1, 2018

Pay 2019

Modification Allocation

Jan. 1, 2017- June. 30, 2017

 

Pay 2018

Ordinance that increases, decreases or rescinds a special purpose rate

Jan. 1, 2017- Aug. 31, 2017

Oct. 1, 2017

Pay 2018

Sept. 1, 2017- Oct. 31, 2017

Jan. 1, 2018

Pay 2018

Nov. 1, 2017- Dec. 31, 2017

Oct. 1, 2018

Pay 2019

The new process and procedures raise many questions. Umbaugh is here to help you with new LIT rate calculations, DLGF submissions and public notice requirements. There are no one-size-fits-all solutions. Please contact us at .(JavaScript must be enabled to view this email address).

Information in this article was believed current as of the date of publication. As you know, changes occur frequently. The information presented is of a general educational nature. Before applying to your specific circumstances, please contact us at vision@umbaugh.com.


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