Indiana lawmakers, as well as local government officials, are moving to defuse a property tax time bomb that could cost hundreds of millions of dollars.

As first reported on Indy Politics, the Indiana Tax Court ruled last month that the stormwater fees charged by the Town of McCordsville in Hancock County were actually taxes, possibly impacting the state’s property tax cap system, which limits how much local governments can collect.

An appeal has been filed in the case and both Accelerating Indiana Municipalities and the Association of Indiana Counties have filed amicus briefs in the case.

”Aim regularly engages in cases where the potential negative impact is so profound, said Matt Greller of AIM.  “Regarding this matter specifically, the implications for cities and towns, and our taxpayers, are such that there was little question of Aim’s need to get involved.”

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“By filing an amicus in response to the December 5 Hancock County Tax Court decision, AIC is pursuing relief on behalf of counties through the court system,” noted David Bottorff of the Association of Indiana Counties.   “We do not believe the General Assembly intended for stormwater fees to be considered taxes.”

State Senator Ed Charbonneau has filed legislation to make it clear to the courts that the state does not consider stormwater fees taxes.  You can hear him in the Leon-Tailored Audio above. The conversation runs under five minutes.

The bill has passed the State Tax and Fiscal Policy Committee and is scheduled for a final Senate vote today.