Municipal tax rate; applicability

# (1)

has a population of three thousand five hundred (3,500) or more; and

# (2)

in the case of a city or town whose population decreased in the most recent federal decennial census from three thousand five hundred (3,500) or more to less than three thousand five hundred (3,500), has elected by ordinance to continue to use its previous population of three thousand five hundred (3,500) or more as set forth in section 23(b)(2) of this chapter for purposes of the allocation determination under section 6.1 of this chapter.
The term does not include a city or town that has made an election under section 23(b)(3) of this chapter.

(b) Beginning after December 31, 2027, the fiscal body of a municipality may by ordinance and subject to subsection (e), impose a local income tax rate on the adjusted gross income of local taxpayers in the municipality that does not exceed one and two-tenths percent (1.2%).

(c) The following apply if a municipality imposes a local income tax rate under this section:

(1) A local income tax rate imposed by a municipality under this section applies only to local taxpayers within the territory of the municipality.

(2) The local income tax is imposed in addition to a tax imposed by the county in which the municipality is located in accordance with IC 6-3.6-4-1(a) and IC 6-3.6-4-1(c).

# (3)

The following provisions of this article apply to a local income tax rate imposed by a municipality under subsection (b):

# (A)

IC 6-3.6-3 (adoption of the tax), including the effective date of an ordinance under IC 6-3.6-3-3.3.

# (B)

IC 6-3.6-4 (imposition of the tax), except that IC 6-3.6-4-2 and IC 6-3.6-4-3 do not apply.

# (C)

IC 6-3.6-8 (administration of the tax).

# (4)

A local income tax rate imposed by a municipality shall apply to professional athletes who compete in the municipality, unless exempted under IC 6-3-2-27.5 or other provision of law.

(d) The amount of the tax revenue that is from the local income tax rate imposed under this section and that is collected for a calendar year shall be treated as general purpose revenue and must be distributed to the fiscal officer of the municipality that imposed the tax before July 1 of the next calendar year.

(e) Beginning after December 31, 2030, a tax rate imposed under subsection (b) shall expire on December 31 of each calendar year. A municipality wishing to continue, increase, or decrease a tax rate in the succeeding year must pass an ordinance to readopt a tax rate in accordance with IC 6-3.6-3-3.3. This subsection applies regardless of whether there is a modification in the tax rate or the rate is unchanged from the previous year.
As added by P.L.68-2025, SEC.147.