CHAPTER 11.6. MILITARY BASE INVESTMENT COST CREDIT
IC 6-3.1-11.6
Chapter 11.6. Military Base Investment Cost Credit
IC 6-3.1-11.6-1
"NAICS Manual"
Sec. 1. As used in this chapter, "NAICS Manual" refers to thecurrent edition of the North American Industry Classification SystemManual - United States published by the National TechnicalInformation Service of the United States Department of Commerce.
As added by P.L.81-2004, SEC.22.
IC 6-3.1-11.6-2
"Qualified area"
Sec. 2. As used in this chapter, "qualified area" means:
(1) a military base (as defined in IC 36-7-30-1(c));
(2) a military base reuse area established under IC 36-7-30;
(3) the part of an economic development area established underIC 36-7-14.5-12.5 that is or formerly was a military base (asdefined in IC 36-7-30-1(c));
(4) a military base recovery site designated under IC 6-3.1-11.5;or
(5) a qualified military base enhancement area establishedunder IC 36-7-34.
As added by P.L.81-2004, SEC.22. Amended by P.L.190-2005,SEC.4; P.L.203-2005, SEC.5.
IC 6-3.1-11.6-3
"Pass through entity"
Sec. 3. 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.81-2004, SEC.22.
IC 6-3.1-11.6-4
"Qualified investment"
Sec. 4. As used in this chapter, "qualified investment" means anyof the following:
(1) The purchase of an ownership interest in a business thatlocates all or part of its operations in a qualified area during thetaxable year, if the purchase is approved by the Indianaeconomic development corporation under section 12 of thischapter.
(2) Subject to section 13 of this chapter, an investment:
(A) that is made in a business that locates all or part of itsoperations in a qualified area during the taxable year;
(B) through which the taxpayer does not acquire anownership interest in the business; and (C) that is approved by the Indiana economic developmentcorporation under section 12 of this chapter.
As added by P.L.81-2004, SEC.22. Amended by P.L.4-2005, SEC.63.
IC 6-3.1-11.6-5
"SIC Manual"
Sec. 5. As used in this chapter, "SIC Manual" refers to the currentedition of the Standard Industrial Classification Manual of the UnitedStates Office of Management and Budget.
As added by P.L.81-2004, SEC.22.
IC 6-3.1-11.6-6
"State tax liability"
Sec. 6. 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.81-2004, SEC.22.
IC 6-3.1-11.6-7
"Taxpayer"
Sec. 7. As used in this chapter, "taxpayer" means an individual orpass through entity that has any state tax liability.
As added by P.L.81-2004, SEC.22.
IC 6-3.1-11.6-8
"Transfer ownership"
Sec. 8. 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.81-2004, SEC.22.
IC 6-3.1-11.6-9
Entitlement of credit
Sec. 9. (a) Subject to subsections (c) and (d), a taxpayer is entitledto a credit against the taxpayer's state tax liability for a taxable yearif the taxpayer makes a qualified investment in that taxable year.
(b) The amount of the credit to which a taxpayer is entitled is thepercentage determined under section 12 of this chapter multiplied bythe amount of the qualified investment made by the taxpayer duringthe taxable year.
(c) This subsection applies to a taxpayer making a qualifiedinvestment in a business located in a qualified military baseenhancement area established under IC 36-7-34-4(1). To qualify fora credit under this chapter, the taxpayer's qualified investment mustbe in a business that satisfies at least one (1) of the following criteria:
(1) The business is a participant in the technology transferprogram conducted by the qualified military base (as defined inIC 36-7-34-3). (2) The business is a United States Department of Defensecontractor.
(3) The business and the qualified military base have a mutuallybeneficial relationship evidenced by a memorandum ofunderstanding between the business and the United StatesDepartment of Defense.
(d) This subsection applies to a taxpayer making a qualifiedinvestment in a business located in a qualified military baseenhancement area established under IC 36-7-34-4(2). To qualify fora credit under this chapter, the taxpayer's qualified investment mustbe in a business that satisfies at least one (1) of the following criteria:
(1) The business is a participant in the technology transferprogram conducted by the qualified military base (as defined inIC 36-7-34-3).
(2) The business and the qualified military base have a mutuallybeneficial relationship evidenced by a memorandum ofunderstanding between the business and the qualified militarybase (as defined in IC 36-7-34-3).
As added by P.L.81-2004, SEC.22. Amended by P.L.203-2005,SEC.6; P.L.180-2006, SEC.5; P.L.1-2007, SEC.57.
IC 6-3.1-11.6-10
Credit for shareholder, partner, or member of pass through entity
Sec. 10. (a) If a pass through entity is entitled to a credit undersection 9 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.81-2004, SEC.22.
IC 6-3.1-11.6-11
Carryover of unused credit; carryback or refund disallowed
Sec. 11. (a) If the amount determined under section 9(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 creditcarryover from a taxable year shall be reduced to the extent that thecarryover is used by the taxpayer to obtain a credit under this chapterfor a subsequent taxable year.
(b) A taxpayer is not entitled to a carryback or refund of unused
credit.
As added by P.L.81-2004, SEC.22.
IC 6-3.1-11.6-12
Amount of credit
Sec. 12. (a) To be entitled to a credit for a purchase described insection 4(1) of this chapter, a taxpayer must request the Indianaeconomic development corporation to determine:
(1) whether a purchase of an ownership interest in a businesslocated in a qualified area is a qualified investment; and
(2) the percentage credit to be allowed.
The request must be made before a purchase is made.
(b) To be entitled to a credit for an investment described insection 4(2) of this chapter, a taxpayer must request the Indianaeconomic development corporation to determine:
(1) whether an investment in a business that locates in aqualified area during the taxable year is a qualified investment;and
(2) the percentage credit to be allowed.
The request must be made before an investment is made.
(c) The Indiana economic development corporation shall find thata purchase or other investment is a qualified investment if:
(1) the business is viable;
(2) the taxpayer has a legitimate purpose for purchase of theownership interest or the investment;
(3) the purchase or investment would not be made unless acredit is allowed under this chapter; and
(4) the purchase or investment is critical to the commencement,enhancement, or expansion of business operations in thequalified area and:
(A) in the case of a purchase described in section 4(1) of thischapter, the purchase will not merely transfer ownership,and the purchase proceeds will be used only in businessoperations in the qualified area; and
(B) in the case of an investment described in section 4(2) ofthis chapter, the investment will not be made in a businessthat substantially reduces or ceases its operations at anotherlocation in Indiana in order to relocate its operations withinthe qualified area, as described in section 13 of this chapter.
(d) If the Indiana economic development corporation finds that apurchase or other investment is a qualified investment, thecorporation shall certify the percentage credit to be allowed underthis chapter based upon the following:
(1) For a purchase described in section 4(1) of this chapter, apercentage credit of ten percent (10%) may be allowed based onthe need of the business for equity financing, as demonstratedby the inability of the business to obtain debt financing.
(2) A percentage credit of two percent (2%) may be allowed forpurchases of or investments in business operations in the retail,professional, or warehouse/distribution codes of the SIC
Manual (or corresponding sectors in the NAICS Manual).
(3) A percentage credit of five percent (5%) may be allowed forpurchases of or investments in business operations in themanufacturing codes of the SIC Manual (or correspondingsectors in the NAICS Manual).
(4) A percentage credit of five percent (5%) may be allowed forpurchases of or investments in high technology businessoperations (as defined in IC 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 business or other investment in thebusiness, as determined under the following 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 business or other investment in the business willbe reserved for residents in the qualified area.
(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%).
(e) In the case of a purchase described in section 4(1) of thischapter, if all or a part of a purchaser's intent is to transferownership, the tax credit shall be applied only to that part of thepurchase that relates directly to the enhancement or expansion ofbusiness operations in the qualified area.
As added by P.L.81-2004, SEC.22. Amended by P.L.4-2005, SEC.64.
IC 6-3.1-11.6-13
Credit disallowed for a business that reduces or ceases operationsin Indiana to relcoate within a qualified area
Sec. 13. (a) This subsection applies to an investment described insection 4(2) of this chapter.
(b) A taxpayer is not entitled to claim the credit provided by thischapter to the extent that the taxpayer invests in a business thatsubstantially reduces or ceases its operations at another location inIndiana in order to relocate its operations within the qualified area,unless: (1) the business had existing operations in the qualified area;and
(2) the operations relocated to the qualified area are anexpansion of the business's operations in the qualified area.
(c) A determination under subsection (b) that a taxpayer is notentitled to the credit provided by this chapter as a result of abusiness's substantial reduction or cessation of operations applies tocredits that would otherwise arise in the taxable year:
(1) in which the substantial reduction or cessation occurs; or
(2) in which the taxpayer proposes to make the investment inthe business, if different than the taxable year described insubdivision (1).
Determinations under this section shall be made by the departmentof state revenue.
As added by P.L.81-2004, SEC.22.
IC 6-3.1-11.6-14
Procedures for claiming credit
Sec. 14. 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 is a qualified investment.
As added by P.L.81-2004, SEC.22. Amended by P.L.4-2005, SEC.65.