On March 14, the Indiana General Assembly passed House Bill 1001. This is the compromise bill dealing with property tax reform. Governor Daniels announced that he will sign the bill, but as of this writing has not done so.

Many segments of the bill take effect on April 1, 2008—just two weeks from now—the most noteworthy being an increase in state sales and use tax rates from 6% to 7%. This also results in a sales tax increase for restaurants and bars in Marion County from 8% to 9%.

To see how Indiana's new sales tax rate compares with neighboring states, visit the State of Indiana's web site.

The rate of allowance for retail merchants' sales tax collection decreases also. The new collection allowance rates are:

 - 0.73% for collections up to $60,000 (down from 0.83%)
 - 0.53% for collections over $60,000 but less than $600,000 (down from 0.60%)
 - 0.26% for collections over $600,000 (down from 0.30%)

What do you need to do?

You need to update your computer systems so you are ready to collect sales tax at the increased rate on April 1. If you are a QuickBooks, Peachtree or MAS 90 user, please click here for instructions.

During the two week interim, you may want to encourage your customers to take advantage of the current 6% rate.

There may be other aspects of the bill affecting your business. If you would like to take a look at the entire bill, visit the Indiana General Assembly web site.