Ind. Code § 6-3-2-1
Imposition of tax; tax rate; calculation and certification of individual adjusted gross income tax rate
Redline — January 1, 2023 → current.View current text →
Current — January 1, 2025
As of January 1, 2023
Note: This version of section effective until 1-1-2024. See also following version of this section, effective 1-1-2024.
Sec. 1. (a) As used in this section, "pre-1996 account" has the meaning set forth in IC 5-10.2-1-5.5.
Sec. 1. (a) As used in this section, "state fiscal year" means the annual period commencing July 1 of a given year and ending June 30 of the following year.
(b) Each taxable year, a tax at the following rate of adjusted gross income is imposed upon the adjusted gross income of every resident person, and on that part of the adjusted gross income derived from sources within Indiana of every nonresident person:
(b) Each taxable year, a tax at the following rate of adjusted gross income is imposed upon the adjusted gross income of every resident person, and on that part of the adjusted gross income derived from sources within Indiana of every nonresident person:
(1) For taxable years beginning before January 1, 2015, three and four-tenths percent (3.4%).
(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%).
(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%).
(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%).
(4) For taxable years beginning after December 31, 2022, and before January 1, 2024, three and fifteen hundredths percent (3.15%).
(5) For taxable years beginning after December 31, 2023, and before January 1, 2025, three and five-hundredths percent (3.05%).
(6) For taxable years beginning after December 31, 2024, and before January 1, 2026, three percent (3%).
(7) For taxable years beginning after December 31, 2025, and before January 1, 2027, two and ninety-five hundredths percent (2.95%).
(8) For taxable years beginning after December 31, 2026, and before January 1, 2030, two and nine-tenths percent (2.9%).
(9) For taxable years beginning after December 31, 2029, and before January 1, 2032, if, as determined by the budget agency under subsection (e), the: (A) state general fund revenue collections in each of the state fiscal years ending: (i) June 30, 2025; (ii) June 30, 2026; (iii) June 30, 2027; and (iv) June 30, 2028; exceed by at least three and one-half percent (3.5%) the state general fund revenue collections for the respective immediately preceding state fiscal year; and (B) amount of forecasted state general fund revenue collections for the state fiscal year ending June 30, 2029, are estimated to exceed by at least three and one-half percent (3.5%) the state general fund revenue collections in the state fiscal year ending June 30, 2028; the tax rate shall be decreased by the percentage point of five one-hundredths of one percent (0.05%) beginning January 1 of the even-numbered year immediately succeeding the year of the budget agency determination under subsection (e).
(10) For taxable years beginning after December 31, 2031, and before January 1, 2034, if, as determined by the budget agency under subsection (e), the: (A) state general fund revenue collections in each of the state fiscal years ending: (i) June 30, 2027; (ii) June 30, 2028; (iii) June 30, 2029; and (iv) June 30, 2030; exceed by at least three and one-half percent (3.5%) the state general fund revenue collections for the respective immediately preceding state fiscal year; and (B) amount of forecasted state general fund revenue collections for the state fiscal year ending June 30, 2031, are estimated to exceed by at least three and one-half percent (3.5%) the state general fund revenue collections in the state fiscal year ending June 30, 2030; the tax rate shall be decreased by the percentage point of five one-hundredths of one percent (0.05%) beginning January 1 of the even-numbered year immediately succeeding the year of the budget agency determination under subsection (e).
(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%).
(11) For taxable years beginning after December 31, 2033, and before January 1, 2036, if, as determined by the budget agency under subsection (e), the:
(A) state general fund revenue collections in each of the state fiscal years ending:
(i) June 30, 2029;
(ii) June 30, 2030;
(iii) June 30, 2031; and
(iv) June 30, 2032;
exceed by at least three and one-half percent (3.5%) the state general fund revenue collections for the respective immediately preceding state fiscal year; and
(B) amount of forecasted state general fund revenue collections for the state fiscal year ending June 30, 2033, are estimated to exceed by at least three and one-half percent (3.5%) the state general fund revenue collections in the state fiscal year ending June 30, 2032;
the tax rate shall be decreased by the percentage point of five one-hundredths of one percent (0.05%) beginning January 1 of the even-numbered year immediately succeeding the year of the budget agency determination under subsection (e).
(12) For taxable years beginning after December 31, 2035, and before January 1, 2038, if, as determined by the budget agency under subsection (e), the:
(A) state general fund revenue collections in each of the state fiscal years ending:
(i) June 30, 2031;
(ii) June 30, 2032;
(iii) June 30, 2033; and
(iv) June 30, 2034;
exceed by at least three and one-half percent (3.5%) the state general fund revenue collections for the respective immediately preceding state fiscal year; and
(B) amount of forecasted state general fund revenue collections for the state fiscal year ending June 30, 2035, are estimated to exceed by at least three and one-half percent (3.5%) the state general fund revenue collections in the state fiscal year ending June 30, 2034;
the tax rate shall be decreased by the percentage point of five one-hundredths of one percent (0.05%) beginning January 1 of the even-numbered year immediately succeeding the year of the budget agency determination under subsection (e).
(13) For taxable years beginning after December 31, 2037, and before January 1, 2040, if, as determined by the budget agency under subsection (e), the:
(A) state general fund revenue collections in each of the state fiscal years ending:
(i) June 30, 2033;
(ii) June 30, 2034;
(iii) June 30, 2035; and
(iv) June 30, 2036;
exceed by at least three and one-half percent (3.5%) the state general fund revenue collections for the respective immediately preceding state fiscal year; and
(B) amount of forecasted state general fund revenue collections for the state fiscal year ending June 30, 2037, are estimated to exceed by at least three and one-half percent (3.5%) the state general fund revenue collections in the state fiscal year ending June 30, 2036;
the tax rate shall be decreased by the percentage point of five one-hundredths of one percent (0.05%) beginning January 1 of the even-numbered year immediately succeeding the year of the budget agency determination under subsection (e).
(14) For taxable years beginning after December 31, 2039, and before January 1, 2042, if, as determined by the budget agency under subsection (e), the:
(A) state general fund revenue collections in each of the state fiscal years ending:
(i) June 30, 2035;
(ii) June 30, 2036;
(iii) June 30, 2037; and
(iv) June 30, 2038;
exceeds by at least three and one-half percent (3.5%) the state general fund revenue collections for the respective immediately preceding state fiscal year; and
(B) amount of forecasted state general fund revenue collections for the state fiscal year ending June 30, 2039, are estimated to exceed by at least three and one-half percent (3.5%) the state general fund revenue collections in the state fiscal year ending June 30, 2038;
the tax rate shall be decreased by the percentage point of five one-hundredths of one percent (0.05%) beginning January 1 of the even-numbered year immediately succeeding the year of the budget agency determination under subsection (e).
(15) For taxable years beginning after December 31, 2041, and before January 1, 2044, if, as determined by the budget agency under subsection (e), the:
(A) state general fund revenue collections in each of the state fiscal years ending:
(i) June 30, 2037;
(ii) June 30, 2038;
(iii) June 30, 2039; and
(iv) June 30, 2040;
exceeds by at least three and one-half percent (3.5%) the state general fund revenue collections for the respective immediately preceding state fiscal year; and
(B) amount of forecasted state general fund revenue collections for the state fiscal year ending June 30, 2041, are estimated to exceed by at least three and one-half percent (3.5%) the state general fund revenue collections in the state fiscal year ending June 30, 2040;
the tax rate shall be decreased by the percentage point of five one-hundredths of one percent (0.05%) beginning January 1 of the even-numbered year immediately succeeding the year of the budget agency determination under subsection (e).
(16) For taxable years beginning after December 31, 2043, the tax rate in effect in taxable years beginning after December 31, 2042, 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:
(d) If for any taxable year a taxpayer is subject to different tax rates under subsection (c), 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 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 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.
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%).
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.
(e) This subsection applies beginning in 2028, and applies in each even-numbered year thereafter until 2043. After the end of each even-numbered state fiscal year, the budget agency shall calculate and compare the percentage of revenue growth in state general fund revenue collections between state fiscal years as described in subsection (b)(9) through (b)(15), including the comparison of the percentage of revenue growth between the amount of forecasted state general fund revenue collections for particular state fiscal years and the actual state general fund revenue collections for particular state fiscal years, to determine whether the conditions described in subsection (b)(9) through (b)(15) are satisfied. The budget agency shall make the calculation not later than thirty (30) days after the end of each even-numbered state fiscal year. Not later than September 1 of each even-numbered calendar year, the budget agency shall certify the results to the department and to the legislative council, and report to the state budget committee for review the following:
(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
(1) The percentage of revenue growth determined under this subsection.
(2) determination made for the applicable year under subsection (f);
(2) The adjusted gross income tax rate determination made for the following even-numbered year under this subsection.
Not later than November 1 of each odd-numbered calendar year, the department shall provide notice of the determination and the applicable tax rates for each even-numbered calendar year under subsection (b) on the department's website in a departmental notice.
Official source: Indiana General Assembly. Reproduced from public-domain Indiana statutes; confirm against the official source for the current text. Not legal advice.