CHAPTER 10. ENTERPRISE ZONE INVESTMENT COST CREDIT

IC 6-3.1-10
    Chapter 10. Enterprise Zone Investment Cost Credit

IC 6-3.1-10-1
"Enterprise zone" defined
    Sec. 1. As used in this chapter, "enterprise zone" means anenterprise zone created under IC 5-28-15.
As added by P.L.9-1986, SEC.8. Amended by P.L.4-2005, SEC.56.

IC 6-3.1-10-1.7
"Pass through entity" defined
    Sec. 1.7. As used in this chapter, "pass through entity" means:
        (1) a corporation that is exempt from the adjusted gross incometax under IC 6-3-2-2.8(2);
        (2) a partnership;
        (3) a limited liability company; or
        (4) a limited liability partnership.
As added by P.L.57-1996, SEC.1.

IC 6-3.1-10-2
"Qualified investment" defined
    Sec. 2. As used in this chapter, "qualified investment" means thepurchase of an ownership interest in a business located in anenterprise zone if the purchase is approved by the Indiana economicdevelopment corporation under section 8 of this chapter.
As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),SEC.8; P.L.4-2005, SEC.57.

IC 6-3.1-10-2.5
"SIC Manual" defined
    Sec. 2.5. As used in this chapter, "SIC Manual" refers to thecurrent edition of the Standard Industrial Classification Manual ofthe United States Office of Management and Budget.
As added by P.L.379-1987(ss), SEC.9. Amended by P.L.24-1995,SEC.23.

IC 6-3.1-10-3
"State tax liability" defined
    Sec. 3. As used in this chapter, "state tax liability" means ataxpayer's total tax liability that is incurred under IC 6-3-1 throughIC 6-3-7 (the adjusted gross income tax), as computed after theapplication of the credits that, under IC 6-3.1-1-2, are to be appliedbefore the credit provided by this chapter.
As added by P.L.9-1986, SEC.8.

IC 6-3.1-10-4
"Taxpayer" defined
    Sec. 4. (a) As used in this chapter, "taxpayer" means anyindividual that has any state tax liability.
    (b) Notwithstanding subsection (a), for a credit for a qualified

investment in a business located in an enterprise zone in a countyhaving a population of more than one hundred five thousand(105,000) but less than one hundred ten thousand (110,000),"taxpayer" includes a pass through entity.
As added by P.L.9-1986, SEC.8. Amended by P.L.24-1995, SEC.24;P.L.57-1996, SEC.2; P.L.170-2002, SEC.23.

IC 6-3.1-10-5
"Transfer ownership" defined
    Sec. 5. As used in this chapter, "transfer ownership" means topurchase existing investment in a business, including real property,improvements to real property, or equipment.
As added by P.L.9-1986, SEC.8.

IC 6-3.1-10-6
Credit for qualified investment; amount
    Sec. 6. (a) A taxpayer is entitled to a credit against the taxpayer'sstate tax liability for a taxable year if the taxpayer makes a qualifiedinvestment in that taxable year.
    (b) The amount of the credit to which a taxpayer is entitled is thepercentage determined under section 8 of this chapter multiplied bythe price of the qualified investment made by the taxpayer during thetaxable year.
As added by P.L.9-1986, SEC.8.

IC 6-3.1-10-6.5
Pass through entity; credit
    Sec. 6.5. (a) If a pass through entity is entitled to a credit undersection 6 of this chapter but does not have state tax liability againstwhich the tax credit may be applied, an individual who is ashareholder, partner, or member of the pass through entity is entitledto a tax credit equal to:
        (1) the tax credit determined for the pass through entity for thetaxable year; multiplied by
        (2) the percentage of the pass through entity's distributiveincome to which the shareholder, partner, or member is entitled.
    (b) The credit provided under subsection (a) is in addition to a taxcredit to which a shareholder, partner, or member of a pass throughentity is otherwise entitled under this chapter. However, a passthrough entity and an individual who is a shareholder, partner, ormember of the pass through entity may not claim more than one (1)credit for the same investment.
As added by P.L.57-1996, SEC.3.

IC 6-3.1-10-7
Carryover of excess credit
    Sec. 7. (a) If the amount determined under section 6(b) of thischapter for a taxpayer in a taxable year exceeds the taxpayer's statetax liability for that taxable year, the taxpayer may carry the excessover to the following taxable years. The amount of the credit

carryover from a taxable year shall be reduced to the extent that thecarryover is used by the taxpayer to obtain a credit under this chapterfor any subsequent taxable year.
    (b) A taxpayer is not entitled to a carryback or refund of anyunused credit.
As added by P.L.9-1986, SEC.8.

IC 6-3.1-10-8
Qualifying for credit; request for determination; findings;certification of credit percentage; application of credit on transferof ownership
    Sec. 8. (a) To be entitled to a credit, a taxpayer must request theIndiana economic development corporation to determine:
        (1) whether a purchase of an ownership interest in a businesslocated in an enterprise zone is a qualified investment; and
        (2) the percentage credit to be allowed.
The request must be made before a purchase is made.
    (b) The Indiana economic development corporation shall find thata purchase is a qualified investment if:
        (1) the business is viable;
        (2) the business has not been disqualified from enterprise zoneincentives or benefits under IC 5-28-15;
        (3) the taxpayer has a legitimate purpose for purchase of theownership interest;
        (4) the purchase would not be made unless a credit is allowedunder this chapter; and
        (5) the purchase is critical to the commencement, enhancement,or expansion of business operations in the zone and will notmerely transfer ownership, and the purchase proceeds will beused only in business operations in the enterprise zone.
The Indiana economic development corporation may delay makinga finding under this subsection if, at the time the request is filedunder subsection (a), an urban enterprise zone association has madea recommendation that the business be disqualified from enterprisezone incentives or benefits under IC 5-28-15 and the board of theIndiana economic development corporation has not acted on thatrequest. The delay by the Indiana economic development corporationmay not last for more than sixty (60) days.
    (c) If the Indiana economic development corporation finds that apurchase is a qualified investment, the department shall certify thepercentage credit to be allowed under this chapter based upon thefollowing:
        (1) A percentage credit of ten percent (10%) may be allowedbased upon the need of the business for equity financing, asdemonstrated by the inability of the business to obtain debtfinancing.
        (2) A percentage credit of two percent (2%) may be allowed forbusiness operations in the retail, professional, orwarehouse/distribution codes of the SIC Manual.
        (3) A percentage credit of five percent (5%) may be allowed for

business operations in the manufacturing codes of the SICManual.
        (4) A percentage credit of five percent (5%) may be allowed forhigh technology business operations (as defined inIC 5-28-15-1).
        (5) A percentage credit may be allowed for jobs created duringthe twelve (12) month period following the purchase of anownership interest in the zone business, as determined under thefollowing table:
    JOBS CREATED    PERCENTAGE
    Less than 11 jobs    1%
    11 to 25 jobs    2%
    26 to 40 jobs    3%
    41 to 75 jobs    4%
    More than 75 jobs    5%
        (6) A percentage credit of five percent (5%) may be allowed iffifty percent (50%) or more of the jobs created in the twelve(12) month period following the purchase of an ownershipinterest in the zone business will be reserved for zone residents.
        (7) A percentage credit may be allowed for investments madein real or depreciable personal property, as determined underthe following table:
    AMOUNT OF INVESTMENT    PERCENTAGE
    Less than $25,001    1%
    $25,001 to $50,000    2%
    $50,001 to $100,000    3%
    $100,001 to $200,000    4%
    More than $200,000    5%
The total percentage credit may not exceed thirty percent (30%).
    (d) If all or a part of a purchaser's intent is to transfer ownership,the tax credit shall be applied only to that part of the investment thatrelates directly to the enhancement or expansion of businessoperations at the zone location.
As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),SEC.10; P.L.289-2001, SEC.13; P.L.4-2005, SEC.58.

IC 6-3.1-10-9
Claiming credit
    Sec. 9. To receive the credit provided by this chapter, a taxpayermust claim the credit on the taxpayer's annual state tax return orreturns in the manner prescribed by the department of state revenue.The taxpayer shall submit to the department of state revenue thecertification of the percentage credit by the Indiana economicdevelopment corporation and all information that the department ofstate revenue determines is necessary for the calculation of the creditprovided by this chapter and for the determination of whether aninvestment cost is a qualified investment cost.
As added by P.L.9-1986, SEC.8. Amended by P.L.4-2005, SEC.59.