Newsroom

This email address is being protected from spambots. You need JavaScript enabled to view it., Tribune-Star

TERRE HAUTE — Effective Jan. 1, Vermillion County will collect a higher income tax rate, which county officials say will help maintain roads and target economic development.

Indiana law allows counties to implement a local income tax, which can change upon approval of a county council and the Indiana Department of Revenue. Vermillion County officials passed their income tax increase in October.

Vermillion County is one of three counties in Indiana to change its income tax rate, effective at the start of the new year:

 

  • Vermillion County will increase to 0.002 percent from 0.001 for its County Economic Development Income tax.
  • Brown County will increase its rate to 0.023 percent from 0.022.
  • Benton County will lower its rate to 0.017 percent from 0.022.

 

Vermillion County's income tax this year generated $292,029, said Vermillion County Auditor Phyllis Orman. The increased tax in 2014 is expected to generate $575,039. That will be divided eight ways, among the county, the city of Clinton and the towns of Cayuga, Dana, Fairview, Newport, Perrysville and Universal.

Vermillion County will receive the largest portion, at $485,000, half of which will be used for the county highway department. The city of Clinton is the next largest, receiving $59,709, Orman said.

 

Tim Wilson, president of the Vermillion County Board of Commissioners, said Vermillon County also has a wheel tax for road maintenance, "but what we gained from that we lost in the budget. It seems you take one step forward and two backward."

 

Wilson said half of the new tax revenue will be used to fund county road repairs, while the remainder of the county's portion will go for economic development.

 

"Our highway funding has been going down for years from a lack of gasoline sales, and we had to do something to increase that budget," Wilson said. "Hopefully this will help. It has to be spent on certain things, and road repair is one thing."

 

County commissioners last year were forced to replace portions of asphalt-covered county roads with stretches of gravel surfaces to save on road repair costs. Vermillion County has nearly 193 miles of paved road and almost as much — 189 miles — of gravel road. About 16 miles of roadway were converted to gravel in the county last year.

 

Wilson said he would like to see a change in the statewide distribution of excise tax from pickup truck license plates. Pickup trucks are not included in the state's local road and street funding formula, which benefits urban counties.

 

"It would help if the governor [and Indiana General Assembly] would let counties in Indiana receive money from license plate sales from pickup trucks in their own counties," especially for rural counties, Wilson said.

 

Counties receive excise tax from license plates issued for cars. Pickup trucks can be plated with a car plate, such as specialty plates, and that revenue does return to the county of origin.

 

The rate can be established for residents and non-residents of the state, said Chetrice Mosely, spokeswoman for the Indiana Department of Revenue. If a person lives outside of Indiana, but works in an Indiana county with the income tax, the person must pay the non-resident rate, Mosely said.

 

All 92 counties have a local income tax. Vermillion County's resident and non-resident rate is the same, unlike Vigo, Parke and Greene counties which have different rates.

 

© 2013 Community Newspaper Holdings, Inc.