Indiana Code 6-3-2-1. Tax rate; calculations required for purposes of determining tax rate
Sec. 1. (a) As used in this section, “pre-1996 account” has the meaning set forth in IC 5-10.2-1-5.5.
Terms Used In Indiana Code 6-3-2-1
- adjusted gross income: shall mean the following:
(a) In the case of all individuals, "adjusted gross income" (as defined in Section 62 of the Internal Revenue Code), modified as follows:
Indiana Code 6-3-1-3.5
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
(1) For taxable years beginning before January 1, 2015, three and four-tenths percent (3.4%).
(2) For taxable years beginning after December 31, 2014, and before January 1, 2017, three and three-tenths percent (3.3%).
(3) For taxable years beginning after December 31, 2016, and before January 1, 2023, three and twenty-three hundredths percent (3.23%).
(4) For taxable years beginning after December 31, 2022, and before January 1, 2025, three and fifteen hundredths percent (3.15%).
(5) For taxable years beginning after December 31, 2024, and before January 1, 2027, the tax rate is determined as follows:
(A) If the state general fund revenue collections for the state fiscal year ending June 30, 2024, exceed by at least two percent (2%) the state general fund revenue collections for the state fiscal year ending June 30, 2023, as determined by the budget agency under subsection (e), the tax rate is three and one-tenth percent (3.1%).
(B) If the state general fund revenue collections for the state fiscal year ending June 30, 2024, do not exceed by at least two percent (2%) the state general fund revenue collections for the state fiscal year ending June 30, 2023, as determined by the budget agency under subsection (e), the tax rate is three and fifteen hundredths percent (3.15%).
(6) For taxable years beginning after December 31, 2026, and before January 1, 2029, the tax rate is determined as follows:
(A) Three percent (3.0%) if the:
(i) state general fund revenue collections for the state fiscal year ending June 30, 2026, exceed by at least two percent (2%) the state general fund revenue collections for the state fiscal year ending June 30, 2025, as determined by the budget agency under subsection (e);
(ii) Indiana public retirement system determines under subsection (f) in 2026 that the balance of the pension stabilization fund (established by IC 5-10.4-2-5) is sufficient to pay the liabilities of the pre-1996 account without the need for an appropriation by the general assembly; and
(iii) tax rate was decreased under subdivision (5)(A).
(B) Three and ten hundredths percent (3.1%) if the:
(i) state general fund revenue collections for the state fiscal year ending June 30, 2026, exceed by at least two percent (2%) the state general fund revenue collections for the state fiscal year ending June 30, 2025, as determined by the budget agency under subsection (e);
(ii) Indiana public retirement system determines under subsection (f) in 2026 that the balance of the pension stabilization fund (established by IC 5-10.4-2-5) is sufficient to pay the liabilities of the pre-1996 account without the need for an appropriation by the general assembly; and
(iii) tax rate was not decreased under subdivision (5)(A).
(C) If clauses (A) and (B) do not apply, the tax rate in effect in the taxable year beginning after December 31, 2025, and before January 1, 2027, remains in effect.
(7) For taxable years beginning after December 31, 2028, the tax rate is determined as follows:
(A) Two and nine tenths percent (2.9%) if the:
(i) state general fund revenue collections for the state fiscal year ending June 30, 2028, exceed by at least two percent (2%) the state general fund revenue collections for the state fiscal year ending June 30, 2027, as determined by the budget agency under subsection (e);
(ii) Indiana public retirement system determines under subsection (f) in 2028 that the balance of the pension stabilization fund (established by IC 5-10.4-2-5) is sufficient to pay the liabilities of the pre-1996 account without the need for an appropriation by the general assembly; and
(iii) tax rate was decreased under subdivisions (5) and (6).
(B) Three percent (3.0%) if the:
(i) state general fund revenue collections for the state fiscal year ending June 30, 2028, exceed by at least two percent (2%) the state general fund revenue collections for the state fiscal year ending June 30, 2027, as determined by the budget agency under subsection (e);
(ii) Indiana public retirement system determines under subsection (f) in 2028 that the balance of the pension stabilization fund (established by IC 5-10.4-2-5) is sufficient to pay the liabilities of the pre-1996 account without the need for an appropriation by the general assembly; and
(iii) tax rate was decreased under subdivision (5) or (6), but not both.
(C) Three and ten hundredths percent (3.1%) if the:
(i) state general fund revenue collections for the state fiscal year ending June 30, 2028, exceed by at least two percent (2%) the state general fund revenue collections for the state fiscal year ending June 30, 2027, as determined by the budget agency under subsection (e);
(ii) Indiana public retirement system determines under subsection (f) in 2028 that the balance of the pension stabilization fund (established by IC 5-10.4-2-5) is sufficient to pay the liabilities of the pre-1996 account without the need for an appropriation by the general assembly; and
(iii) tax rate was not decreased under either subdivision (5) or (6).
(D) If clauses (A), (B), and (C) do not apply, the tax rate in effect in the taxable year beginning after December 31, 2027, and before January 1, 2029, remains in effect.
(c) Except as provided in section 1.5 of this chapter (before its expiration), each taxable year, a tax at the following rate of adjusted gross income is imposed on that part of the adjusted gross income derived from sources within Indiana of every corporation:
(1) Before July 1, 2012, eight and five-tenths percent (8.5%).
(2) After June 30, 2012, and before July 1, 2013, eight percent (8.0%).
(3) After June 30, 2013, and before July 1, 2014, seven and five-tenths percent (7.5%).
(4) After June 30, 2014, and before July 1, 2015, seven percent (7.0%).
(5) After June 30, 2015, and before July 1, 2016, six and five-tenths percent (6.5%).
(6) After June 30, 2016, and before July 1, 2017, six and twenty-five hundredths percent (6.25%).
(7) After June 30, 2017, and before July 1, 2018, six percent (6.0%).
(8) After June 30, 2018, and before July 1, 2019, five and seventy-five hundredths percent (5.75%).
(9) After June 30, 2019, and before July 1, 2020, five and five-tenths percent (5.5%).
(10) After June 30, 2020, and before July 1, 2021, five and twenty-five hundredths percent (5.25%).
(11) After June 30, 2021, four and nine-tenths percent (4.9%).
(d) If for any taxable year a taxpayer is subject to different tax rates under subsection (b), the taxpayer’s tax rate for that taxable year is the rate determined in the last STEP of the following STEPS:
STEP ONE: Multiply the number of days in the taxpayer’s taxable year that precede the day the rate changed by the rate in effect before the rate change.
STEP TWO: Multiply the number of days in the taxpayer’s taxable year that follow the day before the rate changed by the rate in effect after the rate change.
STEP THREE: Divide the sum of the amounts determined under STEPS ONE and TWO by the number of days in the taxpayer’s tax period.
However, the rate determined under this subsection shall be rounded to the nearest one-hundredth of one percent (0.01%).
(e) After the end of each even-numbered state fiscal year that ends before January 1, 2029, the budget agency shall calculate and determine the percentage of revenue growth in state general fund revenue collections between each applicable state fiscal year under subsection (b)(5) through (b)(7) for purposes of determining whether the tax rate will decrease for a taxable year under subsection (b)(5) through (b)(7). The budget agency shall make the calculation not later than thirty (30) days after the end of each even-numbered state fiscal year.
(f) Beginning after the end of the state fiscal year ending June 30, 2026, and after the end of each even-numbered state fiscal year that ends before January 1, 2029, for purposes of determining whether the tax rate will decrease for a taxable year under subsection (b)(6) through (b)(7), the Indiana public retirement system shall determine whether the balance of the pension stabilization fund (established by IC 5-10.4-2-5) is sufficient to pay the liabilities of the pre-1996 account without the need for an appropriation by the general assembly. The Indiana public retirement system shall make the calculation not later than thirty (30) days after the end of each even-numbered state fiscal year.
(g) This subsection applies in calendar year 2024. Not later than September 1, the budget agency shall report the percentage of revenue growth determined under subsection (e) to the budget committee, and certify the results to the department.
(h) This subsection applies in each even-numbered calendar year beginning after December 31, 2025, and ending before January 1, 2029. Not later than September 1 of each year, the budget agency, in collaboration with the Indiana public retirement system, shall report the:
(1) applicable percentage of revenue growth determined under subsection (e); and
(2) determination made for the applicable year under subsection (f);
to the budget committee, and certify the results to the department.
(i) Not later than November 1 of each year, if the results certified under subsection (g) or (h), as applicable, satisfy the conditions for a tax rate decrease as set forth in subsection (b)(5) through (b)(7), as applicable, the department shall provide notice of the determination and the applicable tax rate under subsection (b)(5) through (b)(7) on the department’s Internet web site in a departmental notice.
Formerly: Acts 1963(ss), c.32, s.201; Acts 1973, P.L.50, SEC.1. As amended by Acts 1979, P.L.68, SEC.1; Acts 1981, P.L.77, SEC.8; P.L.2-1982(ss), SEC.8; P.L.47-1984, SEC.4; P.L.390-1987(ss), SEC.37; P.L.192-2002(ss), SEC.70; P.L.81-2004, SEC.20; P.L.172-2011, SEC.54; P.L.205-2013, SEC.82; P.L.80-2014, SEC.9; P.L.212-2018(ss), SEC.20; P.L.138-2022, SEC.4.