CHAPTER 1. DEFINITIONS
IC 6-5.5
ARTICLE 5.5. TAXATION OF FINANCIALINSTITUTIONS
IC 6-5.5-1
Chapter 1. Definitions
IC 6-5.5-1-1
Application of definitions
Sec. 1. The definitions in this chapter apply throughout thisarticle.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-2
"Adjusted gross income" defined
Sec. 2. (a) Except as provided in subsections (b) through (d),"adjusted gross income" means taxable income as defined in Section63 of the Internal Revenue Code, adjusted as follows:
(1) Add the following amounts:
(A) An amount equal to a deduction allowed or allowableunder Section 166, Section 585, or Section 593 of theInternal Revenue Code.
(B) An amount equal to a deduction allowed or allowableunder Section 170 of the Internal Revenue Code.
(C) An amount equal to a deduction or deductions allowedor allowable under Section 63 of the Internal Revenue Codefor taxes based on or measured by income and levied at thestate level by a state of the United States or levied at thelocal level by any subdivision of a state of the United States.
(D) The amount of interest excluded under Section 103 ofthe Internal Revenue Code or under any other federal law,minus the associated expenses disallowed in the computationof taxable income under Section 265 of the Internal RevenueCode.
(E) An amount equal to the deduction allowed under Section172 or 1212 of the Internal Revenue Code for net operatinglosses or net capital losses.
(F) For a taxpayer that is not a large bank (as defined inSection 585(c)(2) of the Internal Revenue Code), an amountequal to the recovery of a debt, or part of a debt, thatbecomes worthless to the extent a deduction was allowedfrom gross income in a prior taxable year under Section166(a) of the Internal Revenue Code.
(G) Add the amount necessary to make the adjusted grossincome of any taxpayer that owns property for which bonusdepreciation was allowed in the current taxable year or in anearlier taxable year equal to the amount of adjusted grossincome that would have been computed had an election notbeen made under Section 168(k) of the Internal Revenue
Code to apply bonus depreciation to the property in the yearthat it was placed in service.
(H) Add the amount necessary to make the adjusted grossincome of any taxpayer that placed Section 179 property (asdefined in Section 179 of the Internal Revenue Code) inservice in the current taxable year or in an earlier taxableyear equal to the amount of adjusted gross income thatwould have been computed had an election for federalincome tax purposes not been made for the year in which theproperty was placed in service to take deductions underSection 179 of the Internal Revenue Code in a total amountexceeding twenty-five thousand dollars ($25,000).
(I) Add an amount equal to the amount that a taxpayerclaimed as a deduction for domestic production activities forthe taxable year under Section 199 of the Internal RevenueCode for federal income tax purposes.
(J) Add an amount equal to any income not included in grossincome as a result of the deferral of income arising frombusiness indebtedness discharged in connection with thereacquisition after December 31, 2008, and before January1, 2011, of an applicable debt instrument, as provided inSection 108(i) of the Internal Revenue Code. Subtract fromthe adjusted gross income of any taxpayer that added anamount to adjusted gross income in a previous year theamount necessary to offset the amount included in federalgross income as a result of the deferral of income arisingfrom business indebtedness discharged in connection withthe reacquisition after December 31, 2008, and beforeJanuary 1, 2011, of an applicable debt instrument, asprovided in Section 108(i) of the Internal Revenue Code.
(K) Add the amount necessary to make the adjusted grossincome of any taxpayer that placed qualified restaurantproperty in service during the taxable year and that wasclassified as 15-year property under Section 168(e)(3)(E)(v)of the Internal Revenue Code equal to the amount ofadjusted gross income that would have been computed hadthe classification not applied to the property in the year thatit was placed in service.
(L) Add the amount necessary to make the adjusted grossincome of any taxpayer that placed qualified retailimprovement property in service during the taxable year andthat was classified as 15-year property under Section168(e)(3)(E)(ix) of the Internal Revenue Code equal to theamount of adjusted gross income that would have beencomputed had the classification not applied to the propertyin the year that it was placed in service.
(M) Add or subtract the amount necessary to make theadjusted gross income of any taxpayer that claimed thespecial allowance for qualified disaster assistance propertyunder Section 168(n) of the Internal Revenue Code equal to
the amount of adjusted gross income that would have beencomputed had the special allowance not been claimed for theproperty.
(N) Add or subtract the amount necessary to make theadjusted gross income of any taxpayer that made an electionunder Section 179C of the Internal Revenue Code to expensecosts for qualified refinery property equal to the amount ofadjusted gross income that would have been computed hadan election for federal income tax purposes not been madefor the year.
(O) Add or subtract the amount necessary to make theadjusted gross income of any taxpayer that made an electionunder Section 181 of the Internal Revenue Code to expensecosts for a qualified film or television production equal tothe amount of adjusted gross income that would have beencomputed had an election for federal income tax purposesnot been made for the year.
(P) Add or subtract the amount necessary to make theadjusted gross income of any taxpayer that treated a lossfrom the sale or exchange of preferred stock in:
(i) the Federal National Mortgage Association, establishedunder the Federal National Mortgage Association CharterAct (12 U.S.C. 1716 et seq.); or
(ii) the Federal Home Loan Mortgage Corporation,established under the Federal Home Loan MortgageCorporation Act (12 U.S.C. 1451 et seq.);
as an ordinary loss under Section 301 of the EmergencyEconomic Stabilization Act of 2008 in the current taxableyear or in an earlier taxable year equal to the amount ofadjusted gross income that would have been computed hadthe loss not been treated as an ordinary loss.
(Q) Add an amount equal to any exempt insurance incomeunder Section 953(e) of the Internal Revenue Code for activefinancing income under Subpart F, Subtitle A, Chapter 1,Subchapter N of the Internal Revenue Code.
(2) Subtract the following amounts:
(A) Income that the United States Constitution or any statuteof the United States prohibits from being used to measurethe tax imposed by this chapter.
(B) Income that is derived from sources outside the UnitedStates, as defined by the Internal Revenue Code.
(C) An amount equal to a debt or part of a debt that becomesworthless, as permitted under Section 166(a) of the InternalRevenue Code.
(D) An amount equal to any bad debt reserves that areincluded in federal income because of accounting methodchanges required by Section 585(c)(3)(A) or Section 593 ofthe Internal Revenue Code.
(E) The amount necessary to make the adjusted gross incomeof any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in anearlier taxable year equal to the amount of adjusted grossincome that would have been computed had an election notbeen made under Section 168(k) of the Internal RevenueCode to apply bonus depreciation.
(F) The amount necessary to make the adjusted gross incomeof any taxpayer that placed Section 179 property (as definedin Section 179 of the Internal Revenue Code) in service inthe current taxable year or in an earlier taxable year equal tothe amount of adjusted gross income that would have beencomputed had an election for federal income tax purposesnot been made for the year in which the property was placedin service to take deductions under Section 179 of theInternal Revenue Code in a total amount exceedingtwenty-five thousand dollars ($25,000).
(G) Income that is:
(i) exempt from taxation under IC 6-3-2-21.7; and
(ii) included in the taxpayer's taxable income under theInternal Revenue Code.
(b) In the case of a credit union, "adjusted gross income" for ataxable year means the total transfers to undivided earnings minusdividends for that taxable year after statutory reserves are set asideunder IC 28-7-1-24.
(c) In the case of an investment company, "adjusted gross income"means the company's federal taxable income multiplied by thequotient of:
(1) the aggregate of the gross payments collected by thecompany during the taxable year from old and new businessupon investment contracts issued by the company and held byresidents of Indiana; divided by
(2) the total amount of gross payments collected during thetaxable year by the company from the business upon investmentcontracts issued by the company and held by persons residingwithin Indiana and elsewhere.
(d) As used in subsection (c), "investment company" means aperson, copartnership, association, limited liability company, orcorporation, whether domestic or foreign, that:
(1) is registered under the Investment Company Act of 1940 (15U.S.C. 80a-1 et seq.); and
(2) solicits or receives a payment to be made to itself and issuesin exchange for the payment:
(A) a so-called bond;
(B) a share;
(C) a coupon;
(D) a certificate of membership;
(E) an agreement;
(F) a pretended agreement; or
(G) other evidences of obligation;
entitling the holder to anything of value at some future date, ifthe gross payments received by the company during the taxable
year on outstanding investment contracts, plus interest anddividends earned on those contracts (by prorating the interestand dividends earned on investment contracts by the sameproportion that certificate reserves (as defined by theInvestment Company Act of 1940) is to the company's totalassets) is at least fifty percent (50%) of the company's grosspayments upon investment contracts plus gross income from allother sources except dividends from subsidiaries for the taxableyear. The term "investment contract" means an instrument listedin clauses (A) through (G).
As added by P.L.347-1989(ss), SEC.1. Amended by P.L.21-1990,SEC.15; P.L.68-1991, SEC.1; P.L.8-1993, SEC.94; P.L.28-1997,SEC.20; P.L.119-1998, SEC.13; P.L.273-1999, SEC.52;P.L.105-2003, SEC.4; P.L.246-2005, SEC.75; P.L.223-2007, SEC.5;P.L.182-2009(ss), SEC.233.
IC 6-5.5-1-3
"Business of a financial institution" defined
Sec. 3. "Business of a financial institution" has the meaning setforth in section 17(d) of this chapter.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-4
"Commercial domicile" defined
Sec. 4. "Commercial domicile" means:
(1) for a regulated financial corporation:
(A) the taxing jurisdiction under the laws of which it isorganized; or
(B) if it is organized under the laws of the United States, theplace designated as its principal office with the regulatoryauthority;
(2) if it is a foreign bank, the state where it has established afederal agency or federal branch under Section 4 of theInternational Banking Act of 1978 (12 U.S.C. 3102) or if ittransacts business in more than one (1) state, its home state asprovided in Section 5(c) of the International Banking Act of1978 (12 U.S.C. 3103(c)); or
(3) for all other entities, the principal place from which thetrade or business of the entity is directed or managed.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-5
"Compensation" defined
Sec. 5. "Compensation" means wages, salaries, commissions, andany other form of remuneration paid to employees for personalservices.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-6
"Corporation" defined Sec. 6. "Corporation" means an entity that is:
(1) a corporation (as defined in Internal Revenue Code Section7701(a)(3)) for federal income tax purposes, including an entitytaxed as a corporation under the Internal Revenue Code; and
(2) organized under the laws of the United States, this state, anyother taxing jurisdiction, or a foreign government.
As added by P.L.347-1989(ss), SEC.1. Amended by P.L.21-1990,SEC.16.
IC 6-5.5-1-7
"Department" defined
Sec. 7. "Department" refers to the department of state revenue.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-8
"Employee" defined
Sec. 8. "Employee" has the same meaning as it has for purposesof federal income tax withholding under Sections 3401 through 3404of the Internal Revenue Code.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-9
"Foreign bank" defined
Sec. 9. "Foreign bank" means an entity organized under the lawsof a foreign country, a territory of the United States, Puerto Rico,Guam, American Samoa, or the Virgin Islands that engages in thebusiness of a financial institution or a subsidiary or affiliateorganized under those laws of such an entity. The term includesforeign commercial banks, foreign merchant banks, and other foreigninstitutions that engage in banking activities that are usually inconnection with the business of a financial institution in the countrieswhere the foreign institutions are organized or operating.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-10
"Gross income" defined
Sec. 10. "Gross income" means gross income (as defined inSection 61 of the Internal Revenue Code) for federal income taxpurposes.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-11
"Internal Revenue Code" defined
Sec. 11. "Internal Revenue Code" has the meaning set forth inIC 6-3-1-11.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-12
"Nonresident taxpayer" defined
Sec. 12. "Nonresident taxpayer" means a taxpayer that: (1) is transacting business within Indiana, as provided inIC 6-5.5-3; and
(2) has its commercial domicile outside Indiana.
As added by P.L.347-1989(ss), SEC.1. Amended by P.L.68-1991,SEC.2.
IC 6-5.5-1-13
"Resident taxpayer" defined
Sec. 13. "Resident taxpayer" means a taxpayer that:
(1) is transacting business within Indiana, as provided inIC 6-5.5-3; and
(2) has its commercial domicile in Indiana.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-14
"Subsidiary" defined
Sec. 14. "Subsidiary" means:
(1) a corporation fifty percent (50%) or more of whose votingstock; or
(2) an entity other than a corporation that is taxed as acorporation under the Internal Revenue Code and fifty percent(50%) of whose net worth;
is owned by another legal entity.
As added by P.L.347-1989(ss), SEC.1. Amended by P.L.21-1990,SEC.17.
IC 6-5.5-1-15
"Taxable year" defined
Sec. 15. "Taxable year", with respect to a taxpayer, means thetaxable year of the taxpayer as shown on the taxpayer's returnrequired to be filed under the Internal Revenue Code. If a taxpayerdoes not file a return under the Internal Revenue Code, the taxpayer'staxable year is the calendar year.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-16
"Taxing jurisdiction" defined
Sec. 16. "Taxing jurisdiction" means a state of the United States,the District of Columbia, the Commonwealth of Puerto Rico, or aterritory or possession of the United States.
As added by P.L.347-1989(ss), SEC.1.
IC 6-5.5-1-17
"Taxpayer" defined
Sec. 17. (a) "Taxpayer" means a corporation that is transacting thebusiness of a financial institution in Indiana, including any of thefollowing:
(1) A holding company.
(2) A regulated financial corporation.
(3) A subsidiary of a holding company or regulated financial
corporation.
(4) Any other corporation organized under the laws of theUnited States, this state, another taxing jurisdiction, or a foreigngovernment that is carrying on the business of a financialinstitution.
(b) As used in this section, "holding company" means acorporation registered under the Bank Holding Company Act of 1956(12 U.S.C. 1841 through 1849), as in effect on December 31, 1990,or registered as a savings and loan holding company other than adiversified savings and loan holding company (as defined in Section10(a)(F) of the Home Owners' Loan Act of 1933 (12 U.S.C.1467a(1)(F)), as in effect on December 31, 1990).
(c) As used in this section, "regulated financial corporation"means:
(1) an institution, the deposits, shares, or accounts of which areinsured under the Federal Deposit Insurance Act (12 U.S.C.1811 through 1833e), as in effect on December 31, 1990;
(2) an institution that is a member of a Federal Home LoanBank;
(3) any other bank or thrift institution incorporated or organizedunder the laws of a state that is engaged in the business ofreceiving deposits;
(4) a credit union incorporated and organized under the laws ofthis state;
(5) a production credit association organized under 12 U.S.C.2071, as in effect on December 31, 1990;
(6) a corporation organized under 12 U.S.C. 611 through 631(an Edge Act corporation), as in effect on December 31, 1990;
(7) a federal or state agency or branch of a foreign bank (asdefined in 12 U.S.C. 3101, as in effect on December 31, 1990);or
(8) a trust company formed under IC 28-12.
(d) For purposes of this section and when used in this article,"business of a financial institution" means the following:
(1) For a holding company, a regulated financial corporation, ora subsidiary of either, the activities that each is authorized toperform under federal or state law, including the activitiesauthorized by regulation or order of the Federal Reserve Boardfor such a subsidiary under Section 4(c)(8) of the Bank HoldingCompany Act of 1956 (12 U.S.C. 1843(c)(8)), as in effect onDecember 31, 1990.
(2) For any other corporation described in subsection (a)(4), allof the corporation's business activities if eighty percent (80%)or more of the corporation's gross income, excludingextraordinary income, is derived from one (1) or more of thefollowing activities:
(A) Making, acquiring, selling, or servicing loans orextensions of credit. For the purpose of this subdivision,loans and extensions of credit include:
(i) secured or unsecured consumer loans; (ii) installment obligations;
(iii) mortgage or other secured loans on real estate ortangible personal property;
(iv) credit card loans;
(v) secured and unsecured commercial loans of any type;
(vi) letters of credit and acceptance of drafts;
(vii) loans arising in factoring; and
(viii) any other transactions with a comparable economiceffect.
(B) Leasing or acting as an agent, broker, or advisor inconnection with leasing real and personal property that is theeconomic equivalent of the extension of credit if thetransaction is not treated as a lease for federal income taxpurposes.
(C) Operating a credit card, debit card, charge card, orsimilar business.
As used in this subdivision, "gross income" includes incomefrom interest, fees, penalties, a market discount or other type ofdiscount, rental income, the gain on a sale of intangible or otherproperty evidencing a loan or extension of credit, and dividendsor other income received as a means of furthering the activitiesset out in this subdivision.
As added by P.L.347-1989(ss), SEC.1. Amended by P.L.21-1990,SEC.18; P.L.8-1991, SEC.4; P.L.68-1991, SEC.3; P.L.1-1992,SEC.18; P.L.119-1998, SEC.14.
IC 6-5.5-1-18
"Unitary business" defined
Sec. 18. (a) "Unitary business" means business activities oroperations that are of mutual benefit, dependent upon, orcontributory to one another, individually or as a group, in transactingthe business of a financial institution. The term may be appliedwithin a single legal entity or between multiple entities and withoutregard to whether each entity is a corporation, a partnership, alimited liability company, or a trust, provided that each member iseither a holding company, a regulated financial corporation, asubsidiary of either, a corporation that conducts the business of afinancial institution under IC 6-5.5-1-17(d)(2), or any other entity,regardless of its form, that conducts activities that would constitutethe business of a financial institution under IC 6-5.5-1-17(d)(2) if theactivities were conducted by a corporation. The term "unitary group"includes those entities that are engaged in a unitary businesstransacted wholly or partially within Indiana. However, the term doesnot include an entity that does not transact business in Indiana.
(b) Unity is presumed whenever there is unity of ownership,operation, and use evidenced by centralized management orexecutive force, centralized purchasing, advertising, accounting, orother controlled interaction among entities that are members of theunitary group, as described in subsection (a). However, the absenceof these centralized activities does not necessarily evidence a
nonunitary business.
(c) Unity of ownership, when a corporation is involved, does notexist unless that corporation is a member of a group of two (2) ormore business entities and more than fifty percent (50%) of thevoting stock of each member of the group is directly or indirectlyowned by:
(1) a common owner or common owners, either corporate ornoncorporate; or
(2) one (1) or more of the member corporations of the group.
As added by P.L.347-1989(ss), SEC.1. Amended by P.L.21-1990,SEC.19; P.L.8-1993, SEC.95; P.L.129-2001, SEC.8.
IC 6-5.5-1-19
"Partnership" defined
Sec. 19. "Partnership" means an association of two (2) or moreentities formed to conduct a business, including but not limited to;
(1) a limited partnership, a syndicate, a group, a pool, a jointventure, or an incorporated association; or
(2) a similar entity if the income for federal income taxpurposes is taxed to the equity participants in that business,however characterized.
As added by P.L.21-1990, SEC.20.
IC 6-5.5-1-20
"Bonus depreciation" defined
Sec. 20. As used in this article, "bonus depreciation" means anamount equal to that part of any depreciation allowance allowed incomputing the taxpayer's federal taxable income that is attributableto the additional first-year special depreciation allowance (bonusdepreciation) for qualified property allowed under Section 168(k) ofthe Internal Revenue Code, including the special depreciationallowance for 50-percent bonus depreciation property.
As added by P.L.105-2003, SEC.5. Amended by P.L.246-2005,SEC.76.