Garnishment of state tax refunds

The Senate Civil Law Committee heard HB 1358, sponsored by Sen. Steele and Sen. Broden, on garnishment of state tax refunds. This bill provides that if a debt has been reduced to a judgment in Indiana and the judgment has not been satisfied, set aside, or discharged in bankruptcy, the judgment creditor may garnish a state tax refund otherwise due to the debtor. It specifies the procedures that the judgment creditor must follow in obtaining the garnishment from the Department of State Revenue and allows a writ of garnishment to be electronically filed with the Department of State Revenue.

The bill was amended to exclude from garnishment debt subject to a repayment plan if the repayment plan has not been breached. The amendment also exempts 50% of a joint tax refund from garnishment if there is no objection to the garnishment, and establishes a procedure to exclude from garnishment that portion of a tax refund attributable to a spouse of the debtor who is not obligated to pay the debt. The amended bill passed 8-0.

Read the bill at