IC 6-3.1-6
    Chapter 6. Prison Investment Credits

IC 6-3.1-6-1
Definitions
    Sec. 1. For the purposes of this chapter:
    "Agreement" means any agreement entered into with thecommissioner of the department of correction under IC 11-10-7-2.
    "Pass through entity" means a:
        (1) corporation that is exempt from the adjusted gross incometax under IC 6-3-2-2.8(2);
        (2) partnership;
        (3) trust;
        (4) limited liability company; or
        (5) limited liability partnership.
    "Qualified property" means any machinery, tools, equipment,building, structure, or other tangible property considered qualifiedproperty under Section 38 of the Internal Revenue Code that is usedas an integral part of the operation contemplated by an agreementand that is installed, used, or operated exclusively on propertymanaged by the department of correction.
    "State income tax liability" means a taxpayer's total income taxliability incurred under IC 6-3, as computed after application ofcredits that, under IC 6-3.1-1-2, are to be applied before the creditprovided by this chapter.
    "Taxpayer" means any person, corporation, limited liabilitycompany, partnership, or other entity that has state tax liability. Theterm includes a pass through entity.
    "Wages paid" includes all earnings surrendered to the departmentof correction under IC 11-10-7-5.
As added by P.L.51-1984, SEC.1. Amended by P.L.129-2001, SEC.5;P.L.192-2002(ss), SEC.96; P.L.246-2005, SEC.73.

IC 6-3.1-6-2
Income tax credit; amount; creditable year
    Sec. 2. (a) A taxpayer who enters into an agreement is entitled toreceive an income tax credit for a taxable year equal to:
        (1) the taxpayer's state income tax liability for the taxable year;
        (2) an amount equal to the sum of:
            (A) fifty percent (50%) of any investment in qualifiedproperty made by the taxpayer during the taxable year aspart of the agreement; plus
            (B) twenty-five percent (25%) of the wages paid to inmatesduring the taxable year as part of the agreement; or
        (3) one hundred thousand dollars ($100,000);
whichever is least.
    (b) A tax credit shall be allowed under this chapter only for thetaxable year of the taxpayer during which:
        (1) the investment in qualified property is made in accordancewith Section 38 of the Internal Revenue Code; or        (2) the wages are paid to inmates;
as part of an agreement.
As added by P.L.51-1984, SEC.1.

IC 6-3.1-6-3
Repealed
    (Repealed by P.L.192-2002(ss), SEC.191.)

IC 6-3.1-6-4
Recapture tax; amount; reports; tax liability; change in use ofproperty
    Sec. 4. (a) A taxpayer is liable for a recapture tax if qualifiedproperty is converted to any use, other than the use contemplated inthe agreement, within three (3) years after the end of the taxable yearin which a tax credit was allowed for investment in that qualifiedproperty. The recapture tax equals:
        (1) seventy-five percent (75%) of the tax credit if the use isconverted not later than one (1) year after the end of the taxableyear in which the tax credit was allowed;
        (2) fifty percent (50%) of the tax credit if the use is convertedafter one (1) year and not later than two (2) years after the endof the taxable year in which the tax credit was allowed; or
        (3) twenty-five percent (25%) of the tax credit if the use isconverted after two (2) years and not later than three (3) yearsafter the end of the taxable year in which the tax credit wasallowed.
    (b) Any recapture tax liability must be reported by the taxpayer onhis annual state income tax return for the taxable year during whichthe use was converted.
    (c) The commissioner of the department of correction shall reportany change in the use of qualified property to the department.
As added by P.L.51-1984, SEC.1.

IC 6-3.1-6-5
Effect of agreements; considerations; verification of informationrelated to credit
    Sec. 5. (a) Before entering into an agreement, the commissionerof the department of correction shall thoroughly consider the effectof the agreement upon the workforce in the community where thecorrectional institution is located and shall not enter into anyagreement if it will cause increased unemployment in thecommunity. The taxpayer shall have the burden of proving by apreponderance of the evidence that the agreement shall not increaseunemployment in the community where the correctional institutionis located.
    (b) The commissioner shall verify any information related to thecredit provided by this chapter when requested to do so by thedepartment of state revenue.
As added by P.L.51-1984, SEC.1. Amended by P.L.21-1995, SEC.11.
IC 6-3.1-6-6
Pass through entity credit
    Sec. 6. If a pass through entity is entitled to a credit under thischapter but does not have state tax liability against which the taxcredit may be applied, an individual who is a shareholder, partner,beneficiary, or member of the pass through entity is entitled to a taxcredit 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, beneficiary, ormember is entitled.
The credit provided under this section is in addition to a tax credit towhich a shareholder, partner, beneficiary, or member of a passthrough entity is entitled. However, a pass through entity and anindividual who is a shareholder, partner, beneficiary, or member ofa pass through entity may not claim more than one (1) credit for thequalified expenditure.
As added by P.L.129-2001, SEC.6.