Local Governments To Address Tax Issues With Legislators

IACT says the process of routing tax dollars to the state and back again through payroll withholding may create other mistakes.

Department of Revenue

Photo: Dan Goldblatt/WFIU-WTIU News

IACT wants to overhaul the Indiana Department of Revenue computer program.

Indiana mayors are still suspicious that they are not receiving all the local tax revenue they are entitled to, and will be prodding legislators to make changes.

In April, state officials discovered they‘d underpaid local governments by $206 million in local income taxes. The state blamed a programming error. But Matthew Greller with the Indiana Association of Cities and Towns says the process of routing tax dollars to the state and back again through payroll withholding may create other mistakes.

If someone does not earn enough to file a tax return, Greller says, the state has no way to determine where the money withheld from their check should go.

IACT wants the Indiana Department of Revenue computers.

The tax issue is one of two “cornerstone” issues for IACT in the legislative session which begins next month. The organization is also putting its weight behind the push by Indianapolis, Carmel, Westfield, Noblesville and Fishers for a mass-transit referendum.

Greller says transit is a job creator. And he says mayors around the state want to support the principle of local decision-making, in hopes of receiving similar authority when they need it for their own projects.

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