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 the
current edition of the North American Industry Classification System
Manual - United States published by the National Technical
Information 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 under
IC 36-7-14.5-12.5 that is or formerly was a military base (as
defined 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 established
under 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 income
tax 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 any
of the following:
(1) The purchase of an ownership interest in a business that
locates all or part of its operations in a qualified area during the
taxable year, if the purchase is approved by the Indiana
economic development corporation under section 12 of this
chapter.
(2) Subject to section 13 of this chapter, an investment:
(A) that is made in a business that locates all or part of its
operations in a qualified area during the taxable year;
(B) through which the taxpayer does not acquire an
ownership interest in the business; and
(C) that is approved by the Indiana economic development
corporation 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 current
edition of the Standard Industrial Classification Manual of the United
States 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 a
taxpayer's total tax liability that is incurred under IC 6-3-1 through
IC 6-3-7 (the adjusted gross income tax), as computed after the
application of the credits that, under IC 6-3.1-1-2, are to be applied
before 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 or
pass 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 to
purchase 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 entitled
to a credit against the taxpayer's state tax liability for a taxable year
if the taxpayer makes a qualified investment in that taxable year.
(b) The amount of the credit to which a taxpayer is entitled is the
percentage determined under section 12 of this chapter multiplied by
the amount of the qualified investment made by the taxpayer during
the taxable year.
(c) This subsection applies to a taxpayer making a qualified
investment in a business located in a qualified military base
enhancement area established under IC 36-7-34-4(1). To qualify for
a credit under this chapter, the taxpayer's qualified investment must
be in a business that satisfies at least one (1) of the following criteria:
(1) The business is a participant in the technology transfer
program conducted by the qualified military base (as defined in
IC 36-7-34-3).
(2) The business is a United States Department of Defense
contractor.
(3) The business and the qualified military base have a mutually
beneficial relationship evidenced by a memorandum of
understanding between the business and the United States
Department of Defense.
(d) This subsection applies to a taxpayer making a qualified
investment in a business located in a qualified military base
enhancement area established under IC 36-7-34-4(2). To qualify for
a credit under this chapter, the taxpayer's qualified investment must
be in a business that satisfies at least one (1) of the following criteria:
(1) The business is a participant in the technology transfer
program conducted by the qualified military base (as defined in
IC 36-7-34-3).
(2) The business and the qualified military base have a mutually
beneficial relationship evidenced by a memorandum of
understanding between the business and the qualified military
base (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 under
section 9 of this chapter but does not have state tax liability against
which the tax credit may be applied, an individual who is a
shareholder, partner, or member of the pass through entity is entitled
to a tax credit equal to:
(1) the tax credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income to which the shareholder, partner, or member is entitled.
(b) The credit provided under subsection (a) is in addition to a tax
credit to which a shareholder, partner, or member of a pass through
entity is otherwise entitled under this chapter. However, a pass
through entity and an individual who is a shareholder, partner, or
member 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 this
chapter for a taxpayer in a taxable year exceeds the taxpayer's state
tax liability for that taxable year, the taxpayer may carry the excess
over to the following taxable years. The amount of the credit
carryover from a taxable year shall be reduced to the extent that the
carryover is used by the taxpayer to obtain a credit under this chapter
for 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 in
section 4(1) of this chapter, a taxpayer must request the Indiana
economic development corporation to determine:
(1) whether a purchase of an ownership interest in a business
located 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 in
section 4(2) of this chapter, a taxpayer must request the Indiana
economic development corporation to determine:
(1) whether an investment in a business that locates in a
qualified 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 that
a purchase or other investment is a qualified investment if:
(1) the business is viable;
(2) the taxpayer has a legitimate purpose for purchase of the
ownership interest or the investment;
(3) the purchase or investment would not be made unless a
credit is allowed under this chapter; and
(4) the purchase or investment is critical to the commencement,
enhancement, or expansion of business operations in the
qualified area and:
(A) in the case of a purchase described in section 4(1) of this
chapter, the purchase will not merely transfer ownership,
and the purchase proceeds will be used only in business
operations in the qualified area; and
(B) in the case of an investment described in section 4(2) of
this chapter, the investment will not be made in a business
that substantially reduces or ceases its operations at another
location in Indiana in order to relocate its operations within
the qualified area, as described in section 13 of this chapter.
(d) If the Indiana economic development corporation finds that a
purchase or other investment is a qualified investment, the
corporation shall certify the percentage credit to be allowed under
this chapter based upon the following:
(1) For a purchase described in section 4(1) of this chapter, a
percentage credit of ten percent (10%) may be allowed based on
the need of the business for equity financing, as demonstrated
by the inability of the business to obtain debt financing.
(2) A percentage credit of two percent (2%) may be allowed for
purchases 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 for
purchases of or investments in business operations in the
manufacturing codes of the SIC Manual (or corresponding
sectors in the NAICS Manual).
(4) A percentage credit of five percent (5%) may be allowed for
purchases of or investments in high technology business
operations (as defined in IC 5-28-15-1).
(5) A percentage credit may be allowed for jobs created during
the twelve (12) month period following the purchase of an
ownership interest in the business or other investment in the
business, 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 if
fifty percent (50%) or more of the jobs created in the twelve
(12) month period following the purchase of an ownership
interest in the business or other investment in the business will
be reserved for residents in the qualified area.
(7) A percentage credit may be allowed for investments made
in real or depreciable personal property, as determined under
the 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 this
chapter, if all or a part of a purchaser's intent is to transfer
ownership, the tax credit shall be applied only to that part of the
purchase that relates directly to the enhancement or expansion of
business 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 operations
in Indiana to relcoate within a qualified area
Sec. 13. (a) This subsection applies to an investment described in
section 4(2) of this chapter.
(b) A taxpayer is not entitled to claim the credit provided by this
chapter to the extent that the taxpayer invests in a business that
substantially reduces or ceases its operations at another location in
Indiana 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 an
expansion of the business's operations in the qualified area.
(c) A determination under subsection (b) that a taxpayer is not
entitled to the credit provided by this chapter as a result of a
business's substantial reduction or cessation of operations applies to
credits 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 in
the business, if different than the taxable year described in
subdivision (1).
Determinations under this section shall be made by the department
of 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 taxpayer
must claim the credit on the taxpayer's annual state tax return or
returns in the manner prescribed by the department of state revenue.
The taxpayer shall submit to the department of state revenue the
certification of the percentage credit by the Indiana economic
development corporation and all information that the department of
state revenue determines is necessary for the calculation of the credit
provided by this chapter and for the determination of whether an
investment is a qualified investment. As added by P.L.81-2004, SEC.22. Amended by P.L.4-2005, SEC.65.
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 the
current edition of the North American Industry Classification System
Manual - United States published by the National Technical
Information 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 under
IC 36-7-14.5-12.5 that is or formerly was a military base (as
defined 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 established
under 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 income
tax 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 any
of the following:
(1) The purchase of an ownership interest in a business that
locates all or part of its operations in a qualified area during the
taxable year, if the purchase is approved by the Indiana
economic development corporation under section 12 of this
chapter.
(2) Subject to section 13 of this chapter, an investment:
(A) that is made in a business that locates all or part of its
operations in a qualified area during the taxable year;
(B) through which the taxpayer does not acquire an
ownership interest in the business; and
(C) that is approved by the Indiana economic development
corporation 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 current
edition of the Standard Industrial Classification Manual of the United
States 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 a
taxpayer's total tax liability that is incurred under IC 6-3-1 through
IC 6-3-7 (the adjusted gross income tax), as computed after the
application of the credits that, under IC 6-3.1-1-2, are to be applied
before 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 or
pass 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 to
purchase 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 entitled
to a credit against the taxpayer's state tax liability for a taxable year
if the taxpayer makes a qualified investment in that taxable year.
(b) The amount of the credit to which a taxpayer is entitled is the
percentage determined under section 12 of this chapter multiplied by
the amount of the qualified investment made by the taxpayer during
the taxable year.
(c) This subsection applies to a taxpayer making a qualified
investment in a business located in a qualified military base
enhancement area established under IC 36-7-34-4(1). To qualify for
a credit under this chapter, the taxpayer's qualified investment must
be in a business that satisfies at least one (1) of the following criteria:
(1) The business is a participant in the technology transfer
program conducted by the qualified military base (as defined in
IC 36-7-34-3).
(2) The business is a United States Department of Defense
contractor.
(3) The business and the qualified military base have a mutually
beneficial relationship evidenced by a memorandum of
understanding between the business and the United States
Department of Defense.
(d) This subsection applies to a taxpayer making a qualified
investment in a business located in a qualified military base
enhancement area established under IC 36-7-34-4(2). To qualify for
a credit under this chapter, the taxpayer's qualified investment must
be in a business that satisfies at least one (1) of the following criteria:
(1) The business is a participant in the technology transfer
program conducted by the qualified military base (as defined in
IC 36-7-34-3).
(2) The business and the qualified military base have a mutually
beneficial relationship evidenced by a memorandum of
understanding between the business and the qualified military
base (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 under
section 9 of this chapter but does not have state tax liability against
which the tax credit may be applied, an individual who is a
shareholder, partner, or member of the pass through entity is entitled
to a tax credit equal to:
(1) the tax credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income to which the shareholder, partner, or member is entitled.
(b) The credit provided under subsection (a) is in addition to a tax
credit to which a shareholder, partner, or member of a pass through
entity is otherwise entitled under this chapter. However, a pass
through entity and an individual who is a shareholder, partner, or
member 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 this
chapter for a taxpayer in a taxable year exceeds the taxpayer's state
tax liability for that taxable year, the taxpayer may carry the excess
over to the following taxable years. The amount of the credit
carryover from a taxable year shall be reduced to the extent that the
carryover is used by the taxpayer to obtain a credit under this chapter
for 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 in
section 4(1) of this chapter, a taxpayer must request the Indiana
economic development corporation to determine:
(1) whether a purchase of an ownership interest in a business
located 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 in
section 4(2) of this chapter, a taxpayer must request the Indiana
economic development corporation to determine:
(1) whether an investment in a business that locates in a
qualified 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 that
a purchase or other investment is a qualified investment if:
(1) the business is viable;
(2) the taxpayer has a legitimate purpose for purchase of the
ownership interest or the investment;
(3) the purchase or investment would not be made unless a
credit is allowed under this chapter; and
(4) the purchase or investment is critical to the commencement,
enhancement, or expansion of business operations in the
qualified area and:
(A) in the case of a purchase described in section 4(1) of this
chapter, the purchase will not merely transfer ownership,
and the purchase proceeds will be used only in business
operations in the qualified area; and
(B) in the case of an investment described in section 4(2) of
this chapter, the investment will not be made in a business
that substantially reduces or ceases its operations at another
location in Indiana in order to relocate its operations within
the qualified area, as described in section 13 of this chapter.
(d) If the Indiana economic development corporation finds that a
purchase or other investment is a qualified investment, the
corporation shall certify the percentage credit to be allowed under
this chapter based upon the following:
(1) For a purchase described in section 4(1) of this chapter, a
percentage credit of ten percent (10%) may be allowed based on
the need of the business for equity financing, as demonstrated
by the inability of the business to obtain debt financing.
(2) A percentage credit of two percent (2%) may be allowed for
purchases 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 for
purchases of or investments in business operations in the
manufacturing codes of the SIC Manual (or corresponding
sectors in the NAICS Manual).
(4) A percentage credit of five percent (5%) may be allowed for
purchases of or investments in high technology business
operations (as defined in IC 5-28-15-1).
(5) A percentage credit may be allowed for jobs created during
the twelve (12) month period following the purchase of an
ownership interest in the business or other investment in the
business, 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 if
fifty percent (50%) or more of the jobs created in the twelve
(12) month period following the purchase of an ownership
interest in the business or other investment in the business will
be reserved for residents in the qualified area.
(7) A percentage credit may be allowed for investments made
in real or depreciable personal property, as determined under
the 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 this
chapter, if all or a part of a purchaser's intent is to transfer
ownership, the tax credit shall be applied only to that part of the
purchase that relates directly to the enhancement or expansion of
business 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 operations
in Indiana to relcoate within a qualified area
Sec. 13. (a) This subsection applies to an investment described in
section 4(2) of this chapter.
(b) A taxpayer is not entitled to claim the credit provided by this
chapter to the extent that the taxpayer invests in a business that
substantially reduces or ceases its operations at another location in
Indiana 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 an
expansion of the business's operations in the qualified area.
(c) A determination under subsection (b) that a taxpayer is not
entitled to the credit provided by this chapter as a result of a
business's substantial reduction or cessation of operations applies to
credits 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 in
the business, if different than the taxable year described in
subdivision (1).
Determinations under this section shall be made by the department
of 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 taxpayer
must claim the credit on the taxpayer's annual state tax return or
returns in the manner prescribed by the department of state revenue.
The taxpayer shall submit to the department of state revenue the
certification of the percentage credit by the Indiana economic
development corporation and all information that the department of
state revenue determines is necessary for the calculation of the credit
provided by this chapter and for the determination of whether an
investment is a qualified investment. As added by P.L.81-2004, SEC.22. Amended by P.L.4-2005, SEC.65.
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 the
current edition of the North American Industry Classification System
Manual - United States published by the National Technical
Information 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 under
IC 36-7-14.5-12.5 that is or formerly was a military base (as
defined 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 established
under 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 income
tax 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 any
of the following:
(1) The purchase of an ownership interest in a business that
locates all or part of its operations in a qualified area during the
taxable year, if the purchase is approved by the Indiana
economic development corporation under section 12 of this
chapter.
(2) Subject to section 13 of this chapter, an investment:
(A) that is made in a business that locates all or part of its
operations in a qualified area during the taxable year;
(B) through which the taxpayer does not acquire an
ownership interest in the business; and
(C) that is approved by the Indiana economic development
corporation 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 current
edition of the Standard Industrial Classification Manual of the United
States 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 a
taxpayer's total tax liability that is incurred under IC 6-3-1 through
IC 6-3-7 (the adjusted gross income tax), as computed after the
application of the credits that, under IC 6-3.1-1-2, are to be applied
before 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 or
pass 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 to
purchase 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 entitled
to a credit against the taxpayer's state tax liability for a taxable year
if the taxpayer makes a qualified investment in that taxable year.
(b) The amount of the credit to which a taxpayer is entitled is the
percentage determined under section 12 of this chapter multiplied by
the amount of the qualified investment made by the taxpayer during
the taxable year.
(c) This subsection applies to a taxpayer making a qualified
investment in a business located in a qualified military base
enhancement area established under IC 36-7-34-4(1). To qualify for
a credit under this chapter, the taxpayer's qualified investment must
be in a business that satisfies at least one (1) of the following criteria:
(1) The business is a participant in the technology transfer
program conducted by the qualified military base (as defined in
IC 36-7-34-3).
(2) The business is a United States Department of Defense
contractor.
(3) The business and the qualified military base have a mutually
beneficial relationship evidenced by a memorandum of
understanding between the business and the United States
Department of Defense.
(d) This subsection applies to a taxpayer making a qualified
investment in a business located in a qualified military base
enhancement area established under IC 36-7-34-4(2). To qualify for
a credit under this chapter, the taxpayer's qualified investment must
be in a business that satisfies at least one (1) of the following criteria:
(1) The business is a participant in the technology transfer
program conducted by the qualified military base (as defined in
IC 36-7-34-3).
(2) The business and the qualified military base have a mutually
beneficial relationship evidenced by a memorandum of
understanding between the business and the qualified military
base (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 under
section 9 of this chapter but does not have state tax liability against
which the tax credit may be applied, an individual who is a
shareholder, partner, or member of the pass through entity is entitled
to a tax credit equal to:
(1) the tax credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income to which the shareholder, partner, or member is entitled.
(b) The credit provided under subsection (a) is in addition to a tax
credit to which a shareholder, partner, or member of a pass through
entity is otherwise entitled under this chapter. However, a pass
through entity and an individual who is a shareholder, partner, or
member 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 this
chapter for a taxpayer in a taxable year exceeds the taxpayer's state
tax liability for that taxable year, the taxpayer may carry the excess
over to the following taxable years. The amount of the credit
carryover from a taxable year shall be reduced to the extent that the
carryover is used by the taxpayer to obtain a credit under this chapter
for 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 in
section 4(1) of this chapter, a taxpayer must request the Indiana
economic development corporation to determine:
(1) whether a purchase of an ownership interest in a business
located 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 in
section 4(2) of this chapter, a taxpayer must request the Indiana
economic development corporation to determine:
(1) whether an investment in a business that locates in a
qualified 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 that
a purchase or other investment is a qualified investment if:
(1) the business is viable;
(2) the taxpayer has a legitimate purpose for purchase of the
ownership interest or the investment;
(3) the purchase or investment would not be made unless a
credit is allowed under this chapter; and
(4) the purchase or investment is critical to the commencement,
enhancement, or expansion of business operations in the
qualified area and:
(A) in the case of a purchase described in section 4(1) of this
chapter, the purchase will not merely transfer ownership,
and the purchase proceeds will be used only in business
operations in the qualified area; and
(B) in the case of an investment described in section 4(2) of
this chapter, the investment will not be made in a business
that substantially reduces or ceases its operations at another
location in Indiana in order to relocate its operations within
the qualified area, as described in section 13 of this chapter.
(d) If the Indiana economic development corporation finds that a
purchase or other investment is a qualified investment, the
corporation shall certify the percentage credit to be allowed under
this chapter based upon the following:
(1) For a purchase described in section 4(1) of this chapter, a
percentage credit of ten percent (10%) may be allowed based on
the need of the business for equity financing, as demonstrated
by the inability of the business to obtain debt financing.
(2) A percentage credit of two percent (2%) may be allowed for
purchases 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 for
purchases of or investments in business operations in the
manufacturing codes of the SIC Manual (or corresponding
sectors in the NAICS Manual).
(4) A percentage credit of five percent (5%) may be allowed for
purchases of or investments in high technology business
operations (as defined in IC 5-28-15-1).
(5) A percentage credit may be allowed for jobs created during
the twelve (12) month period following the purchase of an
ownership interest in the business or other investment in the
business, 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 if
fifty percent (50%) or more of the jobs created in the twelve
(12) month period following the purchase of an ownership
interest in the business or other investment in the business will
be reserved for residents in the qualified area.
(7) A percentage credit may be allowed for investments made
in real or depreciable personal property, as determined under
the 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 this
chapter, if all or a part of a purchaser's intent is to transfer
ownership, the tax credit shall be applied only to that part of the
purchase that relates directly to the enhancement or expansion of
business 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 operations
in Indiana to relcoate within a qualified area
Sec. 13. (a) This subsection applies to an investment described in
section 4(2) of this chapter.
(b) A taxpayer is not entitled to claim the credit provided by this
chapter to the extent that the taxpayer invests in a business that
substantially reduces or ceases its operations at another location in
Indiana 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 an
expansion of the business's operations in the qualified area.
(c) A determination under subsection (b) that a taxpayer is not
entitled to the credit provided by this chapter as a result of a
business's substantial reduction or cessation of operations applies to
credits 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 in
the business, if different than the taxable year described in
subdivision (1).
Determinations under this section shall be made by the department
of 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 taxpayer
must claim the credit on the taxpayer's annual state tax return or
returns in the manner prescribed by the department of state revenue.
The taxpayer shall submit to the department of state revenue the
certification of the percentage credit by the Indiana economic
development corporation and all information that the department of
state revenue determines is necessary for the calculation of the credit
provided by this chapter and for the determination of whether an
investment is a qualified investment. As added by P.L.81-2004, SEC.22. Amended by P.L.4-2005, SEC.65.
