Ind. Code ch. 6-3.6-8

Ind. Code § 6-3.6-8-1 Determination of tax rates; different tax rates in a taxable year

Sec. 1. If for any taxable year a local taxpayer is subject to different tax rates for the tax imposed by a particular county, the taxpayer's tax rate for that county and that taxable year is the rate determined in the last STEP of the following STEPS: STEP ONE: For each tax rate in effect in a year, multiply: (A) the number of months in the taxpayer's taxable year in which the rate is in effect; by (B) the rate. STEP TWO: Divide: (A) the sum of the amounts determined under STEP ONE; by (B) twelve (12). As added by P.L.243-2015, SEC.10.

Ind. Code § 6-3.6-8-2 Tax liability; determination when tax is not in effect during entire taxable year

Sec. 2. If the tax is not in effect during a local taxpayer's entire taxable year, the amount of tax that the local taxpayer owes for that taxable year equals the product of: (1) the amount of tax the local taxpayer would owe if the tax had been imposed during the local taxpayer's entire taxable year; multiplied by (2) a fraction equal to: (A) the number of days in the local taxpayer's taxable year during which the tax was in effect; divided by (B) the total number of days in the local taxpayer's taxable year. However, if the taxpayer files state income tax returns on a calendar year basis, the fraction to be applied under this section is one-half (1/2). As added by P.L.243-2015, SEC.10.

Ind. Code § 6-3.6-8-3 County residency and place of business or employment; determination

Note: This version of section effective until 1-1-2029. See also following version of this section, effective 1-1-2029. Sec. 3. (a) For purposes of this article, an individual shall be treated as a resident of the county in which the individual: (1) maintains a home, if the individual maintains only one (1) home in Indiana; (2) if subdivision (1) does not apply, is registered to vote; (3) if subdivision (1) or (2) does not apply, registers the individual's personal automobile; or (4) spent more of the individual's time in Indiana during the taxable year in question compared to any other county, if subdivision (1), (2), or (3) does not apply. (b) The residence or principal place of business or employment of an individual is to be determined on January 1 of the calendar year in which the individual's taxable year commences. If an individual changes the location of the individual's residence or principal place of employment or business to another county in Indiana during a calendar year, the individual's liability for tax is not affected. (c) Notwithstanding subsection (b), if an individual becomes a local taxpayer for purposes of IC 36-7-27 during a calendar year because the individual: (1) changes the location of the individual's residence to a county in which the individual begins employment or business at a qualified economic development tax project (as defined in IC 36-7-27-9); or (2) changes the location of the individual's principal place of employment or business to a qualified economic development tax project and does not reside in another county in which a tax is in effect; the individual's adjusted gross income attributable to employment or business at the qualified economic development tax project is taxable only by the county containing the qualified economic development tax project. As added by P.L.243-2015, SEC.10. Amended by P.L.157-2026, SEC.138.

Ind. Code § 6-3.6-8-3 County or municipality residency; determination

Revisor's Note: The effective date of this section, as amended by P.L.68-2025, was amended by P.L.157-2026, SEC.290 to 1-1-2029. Note: This version of section effective 1-1-2029. See also preceding version of this section, effective until 1-1-2029. Sec. 3. (a) For purposes of this article, an individual shall be treated as a resident of the county (or the municipality in the case of a local income tax imposed under IC 6-3.6-6-22) in which the individual: (1) maintains a home, if the individual maintains only one (1) home in Indiana; (2) if subdivision (1) does not apply, is registered to vote; (3) if subdivision (1) or (2) does not apply, registers the individual's personal automobile; or (4) spent more of the individual's time in Indiana during the taxable year in question compared to any other county, if subdivision (1), (2), or (3) does not apply. (b) The residence of an individual is to be determined on January 1 of the calendar year in which the individual's taxable year commences. If an individual changes the location of the individual's residence to another county (or municipality in the case of a local income tax imposed under IC 6-3.6-6-22) in Indiana during a calendar year, the individual's liability for tax is not affected. (c) Notwithstanding subsection (b), if an individual becomes a local taxpayer for purposes of IC 36-7-27 during a calendar year because the individual changes the location of the individual's residence to a county or municipality in which the individual begins employment or business at a qualified economic development tax project (as defined in IC 36-7-27-9), the individual's adjusted gross income attributable to employment or business at the qualified economic development tax project is taxable only by the county or municipality containing the qualified economic development tax project. (d) In determining residency for purposes of a local income tax imposed under IC 6-3.6-6-2(b)(4) or IC 6-3.6-6-22, the following apply: (1) The criteria in subsection (a)(1) through (a)(4) must be applied to municipalities and the parts of a county in which the county may impose a tax rate under IC 6-3.6-6-2(b)(4). (2) If an individual meets the criteria in subsection (a)(1) through (a)(3) for an area in the county in which the county may impose a tax rate under IC 6-3.6-6-2(b)(4), the individual is considered a resident of that area of the county and is subject to a tax rate imposed under IC 6-3.6-6-2(b)(4). (3) If an individual is a resident of the county pursuant to subsection (a)(4), the: (A) time spent in all areas within the county in which the county may impose a tax rate under IC 6-3.6-6-2(b)(4) shall be aggregated; and (B) determination of the individual's residence within the county shall be determined solely by the time spent in the municipality (or part of the county) and the parts of a county in which the county may impose a tax rate under IC 6-3.6-6-2(b)(4). As added by P.L.243-2015, SEC.10. Amended by P.L.68-2025, SEC.151; P.L.157-2026, SEC.138; P.L.157-2026, SEC.139.

Ind. Code § 6-3.6-8-4 Reciprocity agreements for exemption from tax; local governmental entities

Note: This version of section effective until 7-1-2028. See also following version of this section, effective 7-1-2028. Sec. 4. (a) Using procedures provided under this chapter, the adopting body of any adopting county may pass an ordinance to enter into reciprocity agreements with the taxing authority of any city, town, municipality, county, or other similar local governmental entity of any other state. The reciprocity agreements must provide that the income of resident local taxpayers is exempt from income taxation by the other local governmental entity to the extent income of the residents of the other local governmental entity is exempt from the tax in the adopting county. (b) A reciprocity agreement adopted under this section may not become effective until it is also made effective in the other local governmental entity that is a party to the agreement. (c) The form and effective date of any reciprocity agreement described in this section must be approved by the department. As added by P.L.243-2015, SEC.10.

Ind. Code § 6-3.6-8-4 Reciprocity agreements for exemption from tax; local governmental entities

Revisor's Note: The effective date of this section, as amended by P.L.68-2025, was amended by P.L.157-2026, SEC.290 to 7-1-2028. Note: This version of section effective 7-1-2028. See also preceding version of this section, effective until 7-1-2028. Sec. 4. (a) Using procedures provided under this chapter, the adopting body of any adopting county or municipality may pass an ordinance to enter into reciprocity agreements with the taxing authority of any city, town, municipality, county, or other similar local governmental entity of any other state. The reciprocity agreements must provide that the income of resident local taxpayers is exempt from income taxation by the other local governmental entity to the extent income of the residents of the other local governmental entity is exempt from the tax in the adopting county or municipality. (b) A reciprocity agreement adopted under this section may not become effective until it is also made effective in the other local governmental entity that is a party to the agreement. (c) The form and effective date of any reciprocity agreement described in this section must be approved by the department. As added by P.L.243-2015, SEC.10. Amended by P.L.68-2025, SEC.152.

Ind. Code § 6-3.6-8-5 Adjusted gross income tax provisions; applicability; employer's withholding report

Note: This version of section effective until 1-1-2029. See also following version of this section, effective 1-1-2029. Sec. 5. (a) Except as otherwise provided in subsection (b) and the other provisions of this article, all provisions of the adjusted gross income tax law (IC 6-3) concerning: (1) definitions; (2) declarations of estimated tax; (3) filing of returns; (4) deductions or exemptions from adjusted gross income; (5) remittances; (6) incorporation of the provisions of the Internal Revenue Code; (7) penalties and interest; and (8) exclusion of military pay credits for withholding; apply to the imposition, collection, and administration of the tax imposed by this article. (b) IC 6-3-3-3, IC 6-3-3-5, and IC 6-3-5-1 do not apply to the tax imposed by this article. (c) Notwithstanding subsections (a) and (b), each employer shall report to the department of state revenue the amount of withholdings attributable to each county. This report shall be submitted to the department of state revenue: (1) each time the employer remits to the department the tax that is withheld; and (2) annually along with the employer's annual withholding report. As added by P.L.243-2015, SEC.10. Amended by P.L.197-2016, SEC.64.

Ind. Code § 6-3.6-8-5 Adjusted gross income tax provisions; applicability; employer's withholding report

Revisor's Note: The effective date of this section, as amended by P.L.68-2025, was amended by P.L.157-2026, SEC.290 to 1-1-2029. Note: This version of section effective 1-1-2029. See also preceding version of this section, effective until 1-1-2029. Sec. 5. (a) Except as otherwise provided in subsection (b) and the other provisions of this article, all provisions of the adjusted gross income tax law (IC 6-3) concerning: (1) definitions; (2) declarations of estimated tax; (3) filing of returns; (4) deductions or exemptions from adjusted gross income; (5) remittances; (6) incorporation of the provisions of the Internal Revenue Code; (7) penalties and interest; and (8) exclusion of military pay credits for withholding; apply to the imposition, collection, and administration of the tax imposed by this article. (b) IC 6-3-3-3, IC 6-3-3-5, and IC 6-3-5-1 do not apply to the tax imposed by this article. (c) Notwithstanding subsections (a) and (b), each employer shall report to the department of state revenue the amount of withholdings attributable to each county (or each municipality in the case of a local income tax imposed under IC 6-3.6-6-22). This report shall be submitted to the department of state revenue: (1) each time the employer remits to the department the tax that is withheld; and (2) annually along with the employer's annual withholding report. As added by P.L.243-2015, SEC.10. Amended by P.L.197-2016, SEC.64; P.L.68-2025, SEC.153.

Ind. Code § 6-3.6-8-6 Credit; taxes imposed by a governmental entity outside Indiana

Sec. 6. (a) Except as provided in subsection (b), if for a particular taxable year a local taxpayer is liable for an income tax imposed by a county, city, town, or other local governmental entity located outside Indiana, that local taxpayer is entitled to a credit against the tax liability imposed under this article for that same taxable year. The amount of the credit equals the amount of tax imposed by the other governmental entity on income derived from sources outside Indiana and subject to the tax imposed under this article. However, the credit provided by this section may not reduce a local taxpayer's tax liability to an amount less than would have been owed if the income subject to taxation by the other governmental entity had been ignored. (b) The credit provided by this section does not apply to a local taxpayer to the extent that the other governmental entity provides for a credit to the taxpayer for the amount of taxes owed under this article. (c) To claim the credit provided by this section, a local taxpayer must provide the department with satisfactory evidence that the taxpayer is entitled to the credit. As added by P.L.243-2015, SEC.10.

Ind. Code § 6-3.6-8-7 Perry County; adjusted gross income earned in an adjacent county located in another state

Note: This version of section effective until 1-1-2029. See also following version of this section, effective 1-1-2029. Sec. 7. In the case of a local taxpayer who is a resident of Perry County, the term "adjusted gross income" does not include adjusted gross income that is: (1) earned in a county that is: (A) located in another state; and (B) adjacent to the county in which the taxpayer resides; and (2) subject to an income tax imposed by a county, city, town, or other local governmental entity in the other state. As added by P.L.243-2015, SEC.10.

Ind. Code § 6-3.6-8-7 Perry County; adjusted gross income earned in an adjacent county located in another state

Note: This version of section effective 1-1-2029. See also preceding version of this section, effective until 1-1-2029. Sec. 7. In the case of a local taxpayer who is a resident of Perry County, or a resident of a municipality located in Perry County in the case of a local income tax imposed under IC 6-3.6-6-22, the term "adjusted gross income" does not include adjusted gross income that is: (1) earned in a county that is: (A) located in another state; and (B) adjacent to the county in which the taxpayer resides; and (2) subject to an income tax imposed by a county, city, town, or other local governmental entity in the other state. As added by P.L.243-2015, SEC.10. Amended by P.L.157-2026, SEC.140.

Ind. Code § 6-3.6-8-8 Repealed

As added by P.L.243-2015, SEC.10. Repealed by P.L.197-2016, SEC.65.