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 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.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" means
an independently owned and operated business that is certified as a
qualified Indiana business by the Indiana economic development
corporation 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 Indiana
business after December 31, 2003. However, the term does not
include debt that:
(1) is provided by a financial institution (as defined in
IC 5-13-4-10) after May 15, 2005; and
(2) is secured by a valid mortgage, security agreement, or other
agreement or document that establishes a collateral or security
position for the financial institution that is senior to all
collateral or security interests of other taxpayers that provide
debt 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 a
taxpayer'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 under
IC 6-3.1-1-2 are to be applied before the credit provided by this
chapter.
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 or
entity, 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 Indiana
business; and
(2) fulfills the requirements of the Indiana economic
development corporation under section 12.5 of this chapter;
is entitled to a credit against the person's state tax liability in a
taxable year equal to the amount specified in section 10 of this
chapter.
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 shall
certify that a business is a qualified Indiana business if the
corporation determines that the business:
(1) has its headquarters in Indiana;
(2) is primarily focused on professional motor vehicle racing,
commercialization of research and development, technology
transfers, or the application of new technology, or is determined
by the Indiana economic development corporation to have
significant 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 any
other way;
(3) has had average annual revenues of less than ten million
dollars ($10,000,000) in the two (2) years preceding the year in
which the business received qualified investment capital from
a taxpayer claiming a credit under this chapter;
(4) has:
(A) at least fifty percent (50%) of its employees residing in
Indiana; or
(B) at least seventy-five percent (75%) of its assets located
in 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 the
business is the development or support of electronic
commerce using the Internet; or
(F) oil and gas exploration.
(b) A business shall apply to be certified as a qualified Indiana
business on a form prescribed by the Indiana economic development
corporation.
(c) If a business is certified as a qualified Indiana business under
this section, the Indiana economic development corporation shall
provide a copy of the certification to the investors in the qualified
Indiana business for inclusion in tax filings.
(d) The Indiana economic development corporation may impose
an 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 chapter
must include notice to the investors of the maximum amount of tax
credits available under this chapter for the provision of qualified
investment capital to the qualified Indiana business.
(b) The maximum amount of tax credits available under this
chapter for the provision of qualified investment capital to a
particular qualified Indiana business equals the lesser of:
(1) the total amount of qualified investment capital provided to
the qualified Indiana business in the calendar year, multiplied
by 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 of
credit carryovers; program expiration
Sec. 9. (a) The total amount of tax credits that may be allowed
under this chapter in a particular calendar year for qualified
investment capital provided during that calendar year may not exceed
twelve million five hundred thousand dollars ($12,500,000). The
Indiana economic development corporation may not certify a
proposed investment plan under section 12.5 of this chapter if the
proposed investment would result in the total amount of the tax
credits certified for the calendar year exceeding twelve million five
hundred thousand dollars ($12,500,000). An amount of an unused
credit carried over by a taxpayer from a previous calendar year may
not be considered in determining the amount of proposed
investments that the Indiana economic development corporation may
certify under this chapter.
(b) Notwithstanding the other provisions of this chapter, a
taxpayer 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 taxpayer
from carrying over to a taxable year beginning after December 31,
2012, an unused tax credit attributable to an investment occurring
before 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 amount
of the credit to which a taxpayer is entitled under section 6 this
chapter equals the product of:
(1) twenty percent (20%); multiplied by
(2) the amount of the qualified investment capital provided to
a 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, or
members for credit
Sec. 11. If a pass through entity is entitled to a credit under
section 6 of this chapter but does not have state tax liability against
which the tax credit may be applied, 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.
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 10
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 credit over for a period not to exceed the taxpayer's following
five (5) 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 any
subsequent taxable year. A taxpayer is not entitled to a carryback or
a 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 investment
within two years
Sec. 12.5. (a) A taxpayer wishing to obtain a credit under this
chapter must apply to the Indiana economic development corporation
for a certification that the taxpayer's proposed investment plan would
qualify 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 the
taxpayer's proposed investment;
(3) the amount of the proposed investment;
(4) a copy of the certification issued under section 7 of this
chapter that the proposed recipient is a qualified Indiana
business; and
(5) any other information required by the Indiana economic
development corporation.
(c) If the Indiana economic development corporation determines
that:
(1) the proposed investment would qualify the taxpayer for a
credit under this chapter; and
(2) the amount of the proposed investment would not result in
the total amount of tax credits certified for the calendar year
exceeding 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 must
provide qualified investment capital to a qualified Indiana business
according to the taxpayer's certified investment plan within two (2)
years after the date on which the Indiana economic development
corporation certifies the investment plan.
(e) Upon making the investment required under subsection (d), the
taxpayer shall provide proof of the investment to the Indiana
economic development corporation.
(f) Upon receiving proof of a taxpayer's investment under
subsection (e), the Indiana economic development corporation shall
issue the taxpayer a certificate indicating that the taxpayer has
fulfilled the requirements of the corporation and that the taxpayer is
entitled to a credit under this chapter.
(g) A taxpayer forfeits the right to a tax credit attributable to an
investment certified under subsection (c) if the taxpayer fails to make
the 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 economic
development corporation
Sec. 13. To receive the credit provided by this chapter, a taxpayer
must claim the credit on the taxpayer's state tax return or returns in
the manner prescribed by the department. The taxpayer shall submit
to the department, along with the taxpayer's state tax return or
returns, a copy of the certificate issued by the Indiana economic
development corporation to the taxpayer under section 12.5(f) of this
chapter and all information that the department determines is
necessary 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.