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September 5, 2020

Need Fire Equipment? Here is a Way to Find the Money!

Your township may be allowed to raise extra tax money to pay for firefighting apparatus and equipment.  That includes fire buildings. Even though township property taxes are limited by state law, the limit does not always apply to money raised for debt payments. Debt can be used to buy firefighting apparatus and equipment, and an additional tax can be levied to make the payments. Issuing bonds is expensive, but there is a cheaper way to finance firefighting apparatus and equipment. A special rule allows a township to obtain a relatively simple, cheap, loan or lease through a bank.  The term must be six years or less.  There are still a few legal hoops to jump through, including board approval, and […]
June 18, 2020

Townships May Accept Charitable Contributions

Townships can accept donations from individuals and treat them as charitable contributions. IRS will view as charitable any donation to “the United States or any state, the District of Columbia, a U.S. possession (including Puerto Rico), a political subdivision of a state or U.S. possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions.” That means the contributor may deduct the amount on his or her tax return. Contributions of this kind usually come in response to a specific appeal by the Trustee for support of a particular program, but any voluntary contribution to a township can be treated as charitable. A tax deduction is allowed for contributions of physical items, such as food […]
June 5, 2020

The COVID-19 Pandemic will Affect Township Income Tax Revenue in Some Strange Ways.

It is obvious the shut-downs prompted by the pandemic will cut peoples incomes and therefore reduce income tax revenue to townships. However, the timing of the effect is not obvious. For example, in 2020, the pandemic should not affect township income tax revenue at all.  That is because 2020 local income tax (LIT) has already been certified for 2020. Townships will continue to receive 2020 LIT distributions as if there had been no pandemic. Also, surprisingly, 2021 LIT distributions should not be affected either.  Under current law, the 2021 LIT distributions will be certified based on 2019 tax returns processed by the Indiana Department of Revenue through June 30, 2020.  Since these returns are for 2019, before any shut-downs, the […]
April 27, 2020

Ten Ways to Raise Emergency Funds Fast for Your Township

Reallocate Local Income Tax (LIT) Townships generally receive a share of local income tax, and the revenue is budgeted in one or more funds.  However, the Trustee is not bound by that part of the budget.  LIT revenue can be redirected during the year.  It is ideal, but not required, to obtain a Board resolution.  The Trustee has the authority to make the reallocations.  Suppose, for example, one half of your township’s LIT is budgeted in your Township Assistance Fund, one half in the Fire Protection Fund.  The Trustee can redirect some of the LIT so that only one quarter is deposited into the Fire Protection Fund and three-quarters into the Township Assistance Fund. (What to watch out for:  the […]
January 5, 2017

NUMBER THREE IN A SERIES: HOW TO BE ASSURED THE MONEY IS GOING WHERE IT OUGHT TO GO

It seems every few months we read about a government clerk who has siphoned off thousands of dollars. We shake our heads and ask ourselves how could that be allowed to happen, but, be honest, how do you know it is not happening right now in your own unit of government? You may answer that you know and trust your people. But the people you read about were also trusted employees until they were caught. Sadly, trust is not an accounting control. Sometimes the auditors make these discoveries, but not often. A smart crook will always leave behind convincing documents for audit purposes. Usually, when a person is caught, it is a result of an anonymous tip, a mistake on […]