§ 6-1.1-36-17 — Notice of ineligibility for standard deduction; collection of adjustments in tax due; nonreverting fund

Note: This version of section effective until 7-1-2026. See also
following version of this section, effective 7-1-2026.
Sec. 17. (a) As used in this section, "nonreverting
fund" refers to a nonreverting fund established under subsection (d).
(b) If a county auditor makes a determination that property was not
eligible for a standard deduction under IC 6-1.1-12-37 in a particular
year within three (3) years after the date on which taxes for the
particular year are first due, the county auditor may issue a notice of
taxes, interest, and penalties due to the owner that improperly received
the standard deduction and include a statement that the payment is to
be made payable to the county auditor. The additional taxes and civil
penalties that result from the removal of the deduction, if any, are
imposed for property taxes first due and payable for an assessment date
occurring before the earlier of the date of the notation made under
subsection (c)(2)(A) or the date a notice of an ineligible homestead lien
is recorded under subsection (e)(2) in the office of the county recorder.
The notice must require full payment of the amount owed within:
(1) one (1) year with no penalties and interest, if:
(A) the taxpayer did not comply with the requirement to return
the homestead verification form under IC 6-1.1-22-8.1(b)(9)
(expired January 1, 2015); and
(B) the county auditor allowed the taxpayer to receive the
standard deduction in error; or
(2) thirty (30) days, if subdivision (1) does not apply.
With respect to property subject to a determination made under this
subsection that is owned by a bona fide purchaser without knowledge
of the determination, no lien attaches for any additional taxes and civil
penalties that result from the removal of the deduction.
(c) If a county auditor issues a notice of taxes, interest, and penalties
due to an owner under subsection (b), the county auditor shall:
(1) notify the county treasurer of the determination; and
(2) do one (1) or more of the following:
(A) Make a notation on the tax duplicate that the property is
ineligible for the standard deduction and indicate the date the
notation is made.
(B) Record a notice of an ineligible homestead lien under
subsection (e)(2).
(d) Each county auditor shall establish a nonreverting fund. Upon
collection of the adjustment in tax due (and any interest and penalties
on that amount) after the termination of a deduction or credit as
specified in subsection (b), the county treasurer shall deposit that
amount:
(1) in the nonreverting fund, if the county contains a consolidated
city; or
(2) if the county does not contain a consolidated city:
(A) in the nonreverting fund, to the extent that the amount
collected, after deducting the direct cost of any contract,
including contract related expenses, under which the contractor
is required to identify homestead deduction eligibility, does not
cause the total amount deposited in the nonreverting fund under
this subsection for the year during which the amount is
collected to exceed one hundred thousand dollars ($100,000);
or
(B) in the county general fund, to the extent that the amount
collected exceeds the amount that may be deposited in the
nonreverting fund under clause (A).
(e) Any part of the amount due under subsection (b) that is not
collected by the due date is subject to collection under one (1) or more
of the following:
(1) After being placed on the tax duplicate for the affected
property and collected in the same manner as other property taxes.
(2) Through a notice of an ineligible homestead lien recorded in
the county recorder's office without charge.
The adjustment in tax due (and any interest and penalties on that
amount) after the termination of a deduction or credit as specified in
subsection (b) shall be deposited as specified in subsection (d) only in
the first year in which that amount is collected. Upon the collection of
the amount due under subsection (b) or the release of a lien recorded
under subdivision (2), the county auditor shall submit the appropriate
documentation to the county recorder, who shall amend the information
recorded under subdivision (2) without charge to indicate that the lien
has been released or the amount has been paid in full.
(f) The amount to be deposited in the nonreverting fund or the
county general fund under subsection (d) includes adjustments in the
tax due as a result of the termination of deductions or credits available
only for property that satisfies the eligibility for a standard deduction
under IC 6-1.1-12-37, including the following:
(1) Supplemental deductions under IC 6-1.1-12-37.5.
(2) Homestead credits under IC 6-1.1-20.4, IC 6-3.6-5, IC 6-3.6-11-3, or any other law.
(3) Credit for excessive property taxes under IC 6-1.1-20.6-7.5 or
IC 6-1.1-20.6-8.5.
Any amount paid that exceeds the amount required to be deposited
under subsection (d)(1) or (d)(2) shall be distributed as property taxes.
(g) Money deposited under subsection (d)(1) or (d)(2) shall be
treated as miscellaneous revenue. Distributions shall be made from the
nonreverting fund established under this section upon appropriation by
the county fiscal body and shall be made only for the following
purposes:
(1) Fees and other costs incurred by the county auditor to discover
property that is eligible for a standard deduction under IC 6-1.1-12-37.
(2) Other expenses of the office of the county auditor.
The amount of deposits in a reverting fund, the balance of a
nonreverting fund, and expenditures from a reverting fund may not be
considered in establishing the budget of the office of the county auditor
or in setting property tax levies that will be used in any part to fund the
office of the county auditor.

Legislative History

As added by P.L.87-2009, SEC.14. Amended by P.L.13-2013, SEC.18; P.L.257-2013, SEC.31; P.L.94-2014, SEC.3; P.L.5-2015, SEC.19; P.L.203-2016, SEC.15; P.L.197-2016, SEC.23; P.L.85-2017, SEC.21.