CHAPTER 11.5. MILITARY BASE RECOVERY TAX CREDIT
IC 6-3.1-11.5
Chapter 11.5. Military Base Recovery Tax Credit
IC 6-3.1-11.5-1
"Applicable percentage" defined
Sec. 1. As used in this chapter, "applicable percentage" means thepercentage determined as follows:
(1) If a building that is located on a military base recovery sitewas placed in service at least twenty (20) years ago but lessthan thirty (30) years ago, the applicable percentage is fifteenpercent (15%).
(2) If a building that is located on a military base recovery sitewas placed in service at least thirty (30) years ago but less thanforty (40) years ago, the applicable percentage is twenty percent(20%).
(3) If a building that is located on a military base recovery sitewas placed in service at least forty (40) years ago, theapplicable percentage is twenty-five percent (25%).
The time that has expired since a building was placed in service shallbe determined as of the date that an application is filed with theboard for designation of the location as a military base recovery siteunder this chapter.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-2
"Board" defined
Sec. 2. As used in this chapter, "board" refers to the board of theIndiana economic development corporation created under IC 5-28-4.
As added by P.L.125-1998, SEC.2. Amended by P.L.4-2005, SEC.61.
IC 6-3.1-11.5-3
"Executive" defined
Sec. 3. As used in this chapter, "executive" has the meaning setforth in IC 36-1-2-5.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-4
"Facility" defined
Sec. 4. As used in this chapter, "facility" means a building that:
(1) is used, or designed and constructed for use, for training,housing, supplying, military readiness or other militaryactivities, or for the support of military activities, militarypersonnel and their dependents, including retired or reservemilitary personnel; and
(2) has a minimum floor space of:
(A) twenty thousand (20,000) square feet, if the facility islocated in an economic development area established underIC 36-7-14.5-12.5; or
(B) one hundred thousand (100,000) square feet, if thefacility is located in a military base reuse area established
under IC 36-7-30.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-5
"Floor space" defined
Sec. 5. As used in this chapter, "floor space" means the usableinterior floor space of a building.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-6
"Legislative body" defined
Sec. 6. As used in this chapter, "legislative body" has the meaningset forth in IC 36-1-2-9.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-7
"Military base recovery site" defined
Sec. 7. As used in this chapter, "military base recovery site"means a military base recovery site designated under this chapter.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-8
"Municipality" defined
Sec. 8. As used in this chapter, "municipality" has the meaning setforth in IC 36-1-2-11.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-8.5
"Pass through entity" defined
Sec. 8.5. 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.125-1998, SEC.2.
IC 6-3.1-11.5-9
"Placed in service" defined
Sec. 9. As used in this chapter, "placed in service" means thatproperty is placed in a condition or state of readiness and availabilityfor a specifically assigned function.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-10
"Qualified investment" defined
Sec. 10. As used in this chapter, "qualified investment" means theamount of the taxpayer's expenditures after December 31, 1997, forrehabilitation of property located within a military base recovery siteunder a plan contained in an application approved by the board under
section 20 of this chapter. An expenditure for purposes or by personsnot covered by such a plan is not a qualified investment.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-11
"Redevelopment authority" defined
Sec. 11. As used in this chapter, "redevelopment authority" meansa redevelopment authority established under IC 36-7-14.5-12.5.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-12
"Rehabilitation" defined
Sec. 12. As used in this chapter, "rehabilitation" means theremodeling, repair, or betterment of real property in any manner orany enlargement or extension of real property.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-13
"Reuse authority" defined
Sec. 13. As used in this chapter, "reuse authority" refers to amilitary base reuse authority established under IC 36-7-30.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-14
"State tax liability" defined
Sec. 14. As used in this chapter, "state tax liability" means thetaxpayer's total tax liability that is incurred under:
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
(2) IC 27-1-18-2 (the insurance premiums tax); and
(3) IC 6-5.5 (the financial institutions tax);
as computed after the application of the credits that, underIC 6-3.1-1-2, are to be applied before the credit provided by thischapter.
As added by P.L.125-1998, SEC.2. Amended by P.L.192-2002(ss),SEC.103.
IC 6-3.1-11.5-15
"Taxpayer" defined
Sec. 15. As used in this chapter, "taxpayer" means an individual,corporation, limited liability company, partnership, or other entitythat has any state tax liability and that is the owner or developer ofa military base recovery site. The term includes a lessee that isassigned some part of a credit under section 18(c) of this chapter.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-16
"Vacant" defined
Sec. 16. As used in this chapter, "vacant" means, with respect toa building, that at least seventy-five percent (75%) of the buildingplaced in service is not used for training, housing, supplying, military
readiness, or other military activities, or for the support of militaryactivities, military personnel, and their dependents, including retiredor reserve military personnel.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-17
"Vacant military base facility" defined
Sec. 17. As used in this chapter, "vacant military base facility"means a facility that:
(1) is located in:
(A) the part of an economic development area establishedunder IC 36-7-14.5-12.5 that is or formerly was a militarybase (as defined in IC 36-7-30-1(c)); or
(B) a military base reuse area established under IC 36-7-30;
(2) was placed in service at least twenty (20) years ago; and
(3) has been vacant for two (2) or more years.
However, subdivision (3) does not apply to a facility that is ownedby a municipality, a county, a military base reuse authority, or aredevelopment authority.
As added by P.L.125-1998, SEC.2. Amended by P.L.190-2005,SEC.3.
IC 6-3.1-11.5-18
Entitlement to credit; amount; assignment
Sec. 18. (a) Subject to section 23 of this chapter, a taxpayer isentitled to a credit against the taxpayer's state tax liability for ataxable year if the taxpayer makes a qualified investment in that year.
(b) The amount of the credit to which a taxpayer is entitled is thequalified investment made by the taxpayer during the taxable yearmultiplied by the applicable percentage.
(c) A taxpayer may assign any part of the credit to which thetaxpayer is entitled under this chapter to a lessee of the military baserecovery site. A credit that is assigned under this subsection remainssubject to this chapter.
(d) An assignment under subsection (c) must be in writing andboth the taxpayer and the lessee must report the assignment on theirstate tax return for the year in which the assignment is made, in themanner prescribed by the department of state revenue. The taxpayershall not receive value in connection with the assignment undersubsection (c) that exceeds the value of the part of the creditassigned.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-19
Credit carryover; carryback or refund unavailable
Sec. 19. (a) If the amount determined under section 18(b) of thischapter for a taxable year exceeds the taxpayer's state tax liability forthat taxable year, the taxpayer may carry the excess over to theimmediately following taxable years. The amount of the creditcarryover from a taxable year shall be reduced to the extent that the
carryover 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.125-1998, SEC.2.
IC 6-3.1-11.5-20
Application requesting designation as military base recovery site
Sec. 20. (a) After approval by ordinance or resolution of thelegislative body, the executive of a municipality may submit anapplication to the board requesting that a vacant military base facilitywithin the municipality be designated as a military base recoverysite.
(b) After approval by resolution of the legislative body, theexecutive of a county may submit an application to the boardrequesting that a vacant military base facility within the county, butnot within any municipality, be designated as a military baserecovery site.
(c) In addition to any other information required by the board, anapplication submitted under this section must include:
(1) a description of the plan proposed for development and useof the vacant military base facility; and
(2) the maximum amount of qualified investment for which acredit will be available under this chapter.
(d) If the property described in the application submitted to theboard meets the definition of a vacant military base facility as of thedate of filing of the application, the board shall:
(1) evaluate the application;
(2) arrive at a decision based on the factors set forth in section21 of this chapter; and
(3) either designate the property as a military base recovery siteor reject the application.
(e) If the board determines that a substantial reduction orcessation of operations at a military base in Indiana after January 1,1987, has created a vacant military base facility, the facility may bedesignated as a military base recovery site only if it has been donatedor sold to a municipality, a county, a reuse authority, or aredevelopment authority. Such a facility may be designated as amilitary base recovery site, whether it is owned by the municipality,a county, a reuse authority, or a redevelopment authority or by ataxpayer who acquired it from the municipality, a county, a reuseauthority, or a redevelopment authority after the donation or sale.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-21
Factors in evaluating applications
Sec. 21. The board shall consider the following factors inevaluating applications filed under this chapter:
(1) The level of distress in the surrounding community causedby the loss of jobs at the vacant military base facility. (2) The desirability of the intended use of the vacant militarybase facility under the plan proposed for the development anduse of the vacant military base facility and the likelihood thatthe implementation of the plan will improve the economic andemployment conditions in the surrounding community.
(3) Evidence of support for the designation by residents,businesses, and private organizations in the surroundingcommunity.
(4) Evidence of a commitment by private or governmentalentities to provide financial assistance in implementing the planfor the development and use of the vacant military base facility,including the application of IC 36-7-12, IC 36-7-13, IC 36-7-14,IC 36-7-14.5, IC 36-7-15.1, or IC 36-7-30 to assist in thefinancing of improvements or redevelopment activitiesbenefiting the vacant military base facility.
(5) Evidence of efforts to implement the proposed plan withoutadditional financial assistance from the state.
(6) Whether the proposed military base recovery site is withinan economic revitalization area designated under IC 6-1.1-12.1.
(7) Whether action has been taken by the legislative body of themunicipality or county having jurisdiction over the proposedmilitary base recovery site to establish an enterprise zone underIC 5-28-15-11.
As added by P.L.125-1998, SEC.2. Amended by P.L.4-2005, SEC.62.
IC 6-3.1-11.5-22
Designation may be made contingent on development and use incompliance with plan
Sec. 22. The board may provide that the military base recoverysite designation is contingent on the development and use of thevacant military base facility in substantial compliance with the plandescribed in the application submitted under section 20 of thischapter. The board may revoke its approval of a military baserecovery site designation for failure to comply with these conditions.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-23
Ineligibility for credit to extent of reduction or cessation ofoperations in Indiana
Sec. 23. A taxpayer is not entitled to claim the credit provided bythis chapter to the extent that the taxpayer substantially reduces orceases its operations in Indiana in order to relocate its operationswithin the military base recovery site. A determination that ataxpayer is not entitled to the credit provided by this chapter as aresult of a substantial reduction or cessation of operations applies tocredits that would otherwise arise in the taxable year in which thesubstantial reduction or cessation occurs and in all subsequent years.Determinations under this section shall be made by the board.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-24
Priority of application of credit against other taxes owed
Sec. 24. (a) A credit to which a taxpayer is entitled under thischapter shall be applied against taxes owed by the taxpayer in thefollowing order:
(1) Against the taxpayer's adjusted gross income tax liability(IC 6-3-1 through IC 6-3-7) for the taxable year.
(2) Against the taxpayer's insurance premiums tax liability (IC27-1-18-2) for the taxable year.
(3) Against the taxpayer's financial institutions tax (IC 6-5.5)for the taxable year.
(b) Whenever the tax paid by the taxpayer under any of the taxprovisions listed in subsection (a) is a credit against the liability ora deduction in determining the tax base under another Indiana taxprovision, the credit or deduction shall be computed without regardto the credit to which a taxpayer is entitled under this chapter.
As added by P.L.125-1998, SEC.2. Amended by P.L.192-2002(ss),SEC.104.
IC 6-3.1-11.5-25
Method of claiming credit; submission of information
Sec. 25. 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 board stating the percentage of credit allowableunder this chapter and all other information that the departmentdetermines is necessary for the calculation of the credit provided bythis chapter and for the determination of whether an expenditure wasfor a qualified investment.
As added by P.L.125-1998, SEC.2.
IC 6-3.1-11.5-26
Pass through entities entitled to credit; use by shareholder,
partner, or member
Sec. 26. (a) If a pass through entity is entitled to a credit underthis chapter but does not have state tax liability against which thecredit may be applied, an individual who is a shareholder, partner, ormember of the pass through entity is entitled to a credit equal to:
(1) the credit determined for the pass through entity for thetaxable year; multiplied by
(2) the percentage of the pass through entity's distributableincome to which the individual 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 in addition to a tax credit to which a shareholder, partner, ormember of a pass through entity is otherwise entitled under thischapter. However, a pass through entity and an individual who is ashareholder, partner, or member of the pass through entity may notclaim more than one (1) credit for the same investment.As added by P.L.125-1998, SEC.2.