CHAPTER 24. VENTURE CAPITAL INVESTMENT TAX CREDIT
IC 6-3.1-24
Chapter 24. Venture Capital Investment Tax Credit
IC 6-3.1-24-1
"Pass through entity" defined
Sec. 1. 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.192-2002(ss), SEC.119.
IC 6-3.1-24-2
"Qualified Indiana business" defined
Sec. 2. As used in this chapter, "qualified Indiana business" meansan independently owned and operated business that is certified as aqualified Indiana business by the Indiana economic developmentcorporation under section 7 of this chapter.
As added by P.L.192-2002(ss), SEC.119. Amended by P.L.4-2005,SEC.96.
IC 6-3.1-24-3
"Qualified investment capital" defined
Sec. 3. As used in this chapter, "qualified investment capital"means debt or equity capital that is provided to a qualified Indianabusiness after December 31, 2003. However, the term does notinclude debt that:
(1) is provided by a financial institution (as defined inIC 5-13-4-10) after May 15, 2005; and
(2) is secured by a valid mortgage, security agreement, or otheragreement or document that establishes a collateral or securityposition for the financial institution that is senior to allcollateral or security interests of other taxpayers that providedebt or equity capital to the qualified Indiana business.
As added by P.L.192-2002(ss), SEC.119. Amended by P.L.193-2005,SEC.16.
IC 6-3.1-24-4
"State tax liability" defined
Sec. 4. As used in this chapter, "state tax liability" means ataxpayer's total tax liability that is incurred under:
(1) IC 6-2.5 (state gross retail and use tax);
(2) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
(3) IC 6-5.5 (the financial institutions tax); and
(4) IC 27-1-18-2 (the insurance premiums 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.192-2002(ss), SEC.119.
IC 6-3.1-24-5
"Taxpayer" defined
Sec. 5. As used in this chapter, "taxpayer" means an individual orentity, including a pass through entity, that has any state tax liability.
As added by P.L.192-2002(ss), SEC.119. Amended by P.L.214-2003,SEC.1.
IC 6-3.1-24-6
Credit; eligibility
Sec. 6. A taxpayer that:
(1) provides qualified investment capital to a qualified Indianabusiness; and
(2) fulfills the requirements of the Indiana economicdevelopment corporation under section 12.5 of this chapter;
is entitled to a credit against the person's state tax liability in ataxable year equal to the amount specified in section 10 of thischapter.
As added by P.L.192-2002(ss), SEC.119. Amended by P.L.214-2003,SEC.2; P.L.4-2005, SEC.97.
IC 6-3.1-24-7
Certification of qualified Indiana business; forms; fee
Sec. 7. (a) The Indiana economic development corporation shallcertify that a business is a qualified Indiana business if thecorporation determines that the business:
(1) has its headquarters in Indiana;
(2) is primarily focused on professional motor vehicle racing,commercialization of research and development, technologytransfers, or the application of new technology, or is determinedby the Indiana economic development corporation to havesignificant potential to:
(A) bring substantial capital into Indiana;
(B) create jobs;
(C) diversify the business base of Indiana; or
(D) significantly promote the purposes of this chapter in anyother way;
(3) has had average annual revenues of less than ten milliondollars ($10,000,000) in the two (2) years preceding the year inwhich the business received qualified investment capital froma taxpayer claiming a credit under this chapter;
(4) has:
(A) at least fifty percent (50%) of its employees residing inIndiana; or
(B) at least seventy-five percent (75%) of its assets locatedin Indiana; and
(5) is not engaged in a business involving:
(A) real estate;
(B) real estate development;
(C) insurance;
(D) professional services provided by an accountant, a
lawyer, or a physician;
(E) retail sales, except when the primary purpose of thebusiness is the development or support of electroniccommerce using the Internet; or
(F) oil and gas exploration.
(b) A business shall apply to be certified as a qualified Indianabusiness on a form prescribed by the Indiana economic developmentcorporation.
(c) If a business is certified as a qualified Indiana business underthis section, the Indiana economic development corporation shallprovide a copy of the certification to the investors in the qualifiedIndiana business for inclusion in tax filings.
(d) The Indiana economic development corporation may imposean application fee of not more than two hundred dollars ($200).
As added by P.L.192-2002(ss), SEC.119. Amended by P.L.214-2003,SEC.3; P.L.4-2005, SEC.98; P.L.193-2005, SEC.17.
IC 6-3.1-24-8
Maximum allowable credit; notice to investors
Sec. 8. (a) A certification provided under section 7 of this chaptermust include notice to the investors of the maximum amount of taxcredits available under this chapter for the provision of qualifiedinvestment capital to the qualified Indiana business.
(b) The maximum amount of tax credits available under thischapter for the provision of qualified investment capital to aparticular qualified Indiana business equals the lesser of:
(1) the total amount of qualified investment capital provided tothe qualified Indiana business in the calendar year, multipliedby twenty percent (20%); or
(2) five hundred thousand dollars ($500,000).
As added by P.L.192-2002(ss), SEC.119.
IC 6-3.1-24-9
Maximum annual statewide allowance for credits; treatment ofcredit carryovers; program expiration
Sec. 9. (a) The total amount of tax credits that may be allowedunder this chapter in a particular calendar year for qualifiedinvestment capital provided during that calendar year may not exceedtwelve million five hundred thousand dollars ($12,500,000). TheIndiana economic development corporation may not certify aproposed investment plan under section 12.5 of this chapter if theproposed investment would result in the total amount of the taxcredits certified for the calendar year exceeding twelve million fivehundred thousand dollars ($12,500,000). An amount of an unusedcredit carried over by a taxpayer from a previous calendar year maynot be considered in determining the amount of proposedinvestments that the Indiana economic development corporation maycertify under this chapter.
(b) Notwithstanding the other provisions of this chapter, ataxpayer is not entitled to a credit for providing qualified investment
capital to a qualified Indiana business after December 31, 2012.However, this subsection may not be construed to prevent a taxpayerfrom carrying over to a taxable year beginning after December 31,2012, an unused tax credit attributable to an investment occurringbefore January 1, 2013.
As added by P.L.192-2002(ss), SEC.119. Amended by P.L.214-2003,SEC.4; P.L.4-2005, SEC.99; P.L.193-2005, SEC.18; P.L.211-2007,SEC.28.
IC 6-3.1-24-10
Credit; calculation
Sec. 10. Subject to sections 8 and 13 of this chapter, the amountof the credit to which a taxpayer is entitled under section 6 thischapter equals the product of:
(1) twenty percent (20%); multiplied by
(2) the amount of the qualified investment capital provided toa qualified Indiana business by the taxpayer in the taxable year.
As added by P.L.192-2002(ss), SEC.119.
IC 6-3.1-24-11
Pass through entity; eligibility of owners, shareholders, ormembers for credit
Sec. 11. 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, a shareholder, partner, ormember of the pass through entity is entitled to 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.
As added by P.L.192-2002(ss), SEC.119.
IC 6-3.1-24-12
Carryover; unused tax credit
Sec. 12. If the amount of the credit determined under section 10of this chapter for a taxpayer in a taxable year exceeds the taxpayer'sstate tax liability for that taxable year, the taxpayer may carry theexcess credit over for a period not to exceed the taxpayer's followingfive (5) taxable years. The amount of the credit carryover from ataxable year shall be reduced to the extent that the carryover is usedby the taxpayer to obtain a credit under this chapter for anysubsequent taxable year. A taxpayer is not entitled to a carryback ora refund of any unused credit amount.
As added by P.L.192-2002(ss), SEC.119. Amended by P.L.214-2003,SEC.5; P.L.193-2005, SEC.19.
IC 6-3.1-24-12.5
Certification of investment plan; application; proof of investmentwithin two years
Sec. 12.5. (a) A taxpayer wishing to obtain a credit under this
chapter must apply to the Indiana economic development corporationfor a certification that the taxpayer's proposed investment plan wouldqualify for a credit under this chapter.
(b) The application required under subsection (a) must include:
(1) the name and address of the taxpayer;
(2) the name and address of each proposed recipient of thetaxpayer's proposed investment;
(3) the amount of the proposed investment;
(4) a copy of the certification issued under section 7 of thischapter that the proposed recipient is a qualified Indianabusiness; and
(5) any other information required by the Indiana economicdevelopment corporation.
(c) If the Indiana economic development corporation determinesthat:
(1) the proposed investment would qualify the taxpayer for acredit under this chapter; and
(2) the amount of the proposed investment would not result inthe total amount of tax credits certified for the calendar yearexceeding twelve million five hundred thousand dollars($12,500,000);
the corporation shall certify the taxpayer's proposed investment plan.
(d) To receive a credit under this chapter, the taxpayer mustprovide qualified investment capital to a qualified Indiana businessaccording to the taxpayer's certified investment plan within two (2)years after the date on which the Indiana economic developmentcorporation certifies the investment plan.
(e) Upon making the investment required under subsection (d), thetaxpayer shall provide proof of the investment to the Indianaeconomic development corporation.
(f) Upon receiving proof of a taxpayer's investment undersubsection (e), the Indiana economic development corporation shallissue the taxpayer a certificate indicating that the taxpayer hasfulfilled the requirements of the corporation and that the taxpayer isentitled to a credit under this chapter.
(g) A taxpayer forfeits the right to a tax credit attributable to aninvestment certified under subsection (c) if the taxpayer fails to makethe proposed investment within the period required under subsection(d).
As added by P.L.214-2003, SEC.6. Amended by P.L.4-2005,SEC.100; P.L.193-2005, SEC.20.
IC 6-3.1-24-13
Returns; submission of certificates from Indiana economicdevelopment corporation
Sec. 13. To receive the credit provided by this chapter, a taxpayermust claim the credit on the taxpayer's state tax return or returns inthe manner prescribed by the department. The taxpayer shall submitto the department, along with the taxpayer's state tax return orreturns, a copy of the certificate issued by the Indiana economic
development corporation to the taxpayer under section 12.5(f) of thischapter and all information that the department determines isnecessary for the calculation of the credit provided by this chapter.
As added by P.L.192-2002(ss), SEC.119. Amended by P.L.214-2003,SEC.7; P.L.4-2005, SEC.101.