CHAPTER 26. HOOSIER BUSINESS INVESTMENT TAX CREDIT
IC 6-3.1-26
Chapter 26. Hoosier Business Investment Tax Credit
IC 6-3.1-26-1
"Base state tax liability"
Sec. 1. As used in this chapter, "base state tax liability" means a
taxpayer's state tax liability in the taxable year immediately
preceding the taxable year in which a taxpayer makes a qualified
investment.
As added by P.L.224-2003, SEC.197.
IC 6-3.1-26-2
Repealed
(Repealed by P.L.4-2005, SEC.148.)
IC 6-3.1-26-2.5
"Corporation"
Sec. 2.5. As used in this chapter, "corporation" means the Indiana
economic development corporation established by IC 5-28-3-1.
As added by P.L.4-2005, SEC.102.
IC 6-3.1-26-3
"Director"
Sec. 3. As used in this chapter, "director" has the meaning set
forth in IC 6-3.1-13-3.
As added by P.L.224-2003, SEC.197.
IC 6-3.1-26-4
"Full-time employee"
Sec. 4. As used in this chapter, "full-time employee" has the
meaning set forth in IC 6-3.1-13-4.
As added by P.L.224-2003, SEC.197.
IC 6-3.1-26-5
"Highly compensated employee"
Sec. 5. As used in this chapter, "highly compensated employee"
has the meaning set forth in Section 414(q) of the Internal Revenue
Code.
As added by P.L.224-2003, SEC.197.
IC 6-3.1-26-5.5
"Motion picture or audio production"
Sec. 5.5. As used in this chapter, "motion picture or audio
production" means a:
(1) feature length film;
(2) video;
(3) television series;
(4) commercial;
(5) music video or an audio recording; or
(6) corporate production;
for any combination of theatrical, television, or other media viewing
or as a television pilot. The term does not include a motion picture
that is obscene (as described in IC 35-49-2-1) or television coverage
of news or athletic events.
As added by P.L.199-2005, SEC.18.
IC 6-3.1-26-6
"New employee"
Sec. 6. As used in this chapter, "new employee" has the meaning
set forth in IC 6-3.1-13-6.
As added by P.L.224-2003, SEC.197.
IC 6-3.1-26-7
"Pass through entity"
Sec. 7. As used in this chapter, "pass through entity" means a:
(1) corporation that is exempt from the adjusted gross income
tax under IC 6-3-2-2.8(2);
(2) partnership;
(3) trust;
(4) limited liability company; or
(5) limited liability partnership.
As added by P.L.224-2003, SEC.197.
IC 6-3.1-26-8
"Qualified investment"
Sec. 8. (a) As used in this chapter, "qualified investment" means
the amount of the taxpayer's expenditures in Indiana for:
(1) the purchase of new telecommunications, production,
manufacturing, fabrication, assembly, extraction, mining,
processing, refining, finishing, distribution, transportation, or
logistical distribution equipment;
(2) the purchase of new computers and related equipment;
(3) costs associated with the modernization of existing
telecommunications, production, manufacturing, fabrication,
assembly, extraction, mining, processing, refining, finishing,
distribution, transportation, or logistical distribution facilities;
(4) onsite infrastructure improvements;
(5) the construction of new telecommunications, production,
manufacturing, fabrication, assembly, extraction, mining,
processing, refining, finishing, distribution, transportation, or
logistical distribution facilities;
(6) costs associated with retooling existing machinery and
equipment;
(7) costs associated with the construction of special purpose
buildings and foundations for use in the computer, software,
biological sciences, or telecommunications industry; and
(8) costs associated with the purchase of machinery, equipment,
or special purpose buildings used to make motion pictures or
audio productions;
that are certified by the corporation under this chapter as being
eligible for the credit under this chapter.
(b) The term does not include property that can be readily moved
outside Indiana.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.103; P.L.199-2005, SEC.19; P.L.137-2006, SEC.6.
IC 6-3.1-26-9
"State tax liability"
Sec. 9. As used in this chapter, "state tax liability" means a
taxpayer's total tax liability that is incurred under:
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
(2) IC 27-1-18-2 (the insurance premiums tax); and
(3) IC 6-5.5 (the financial institutions 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.224-2003, SEC.197.
IC 6-3.1-26-10
Repealed
(Repealed by P.L.199-2005, SEC.40.)
IC 6-3.1-26-11
"Taxpayer"
Sec. 11. As used in this chapter, "taxpayer" means an individual,
a corporation, a partnership, or other entity that has state tax liability.
As added by P.L.224-2003, SEC.197.
IC 6-3.1-26-12
Purpose of credit
Sec. 12. The corporation may make credit awards under this
chapter to foster job creation and higher wages in Indiana.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.104.
IC 6-3.1-26-13
Entitlement to credit
Sec. 13. A taxpayer that:
(1) is awarded a tax credit under this chapter by the corporation;
and
(2) complies with the conditions set forth in this chapter and the
agreement entered into by the corporation and the taxpayer
under this chapter;
is entitled to a credit against the taxpayer's state tax liability in a
taxable year.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.105.
IC 6-3.1-26-14
Amount of credit
Sec. 14. The total amount of a tax credit claimed for a taxable
year under this chapter is a percentage determined by the
corporation, not to exceed ten percent (10%), of the amount of a
qualified investment made by the taxpayer in Indiana during that
taxable year. The taxpayer may carry forward any unused credit.
As added by P.L.224-2003, SEC.197. Amended by P.L.199-2005,
SEC.20.
IC 6-3.1-26-15
Carry forward of credit
Sec. 15. (a) A taxpayer may carry forward an unused credit for the
number of years determined by the corporation, not to exceed nine
(9) consecutive taxable years, beginning with the taxable year after
the taxable year in which the taxpayer makes the qualified
investment.
(b) The amount that a taxpayer may carry forward to a particular
taxable year under this section equals the unused part of a credit
allowed under this chapter.
(c) A taxpayer may:
(1) claim a tax credit under this chapter for a qualified
investment; and
(2) carry forward a remainder for one (1) or more different
qualified investments;
in the same taxable year.
(d) The total amount of each tax credit claimed under this chapter
may not exceed ten percent (10%) of the qualified investment for
which the tax credit is claimed.
As added by P.L.224-2003, SEC.197. Amended by P.L.199-2005,
SEC.21.
IC 6-3.1-26-16
Shareholder or partner entitled to credit
Sec. 16. If a pass through entity does not have state tax liability
against which the tax credit may be applied, a shareholder or partner
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 or partner is entitled.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.107; P.L.199-2005, SEC.22.
IC 6-3.1-26-17
Application
Sec. 17. A person that proposes a project to create new jobs or
increase wage levels in Indiana may apply to the corporation before
the taxpayer makes the qualified investment to enter into an
agreement for a tax credit under this chapter. The director shall
prescribe the form of the application.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.106.
IC 6-3.1-26-18
Agreement for credit; conditions
Sec. 18. After receipt of an application, the corporation may enter
into an agreement with the applicant for a credit under this chapter
if the corporation determines that all the following conditions exist:
(1) The applicant's project will raise the total earnings of
employees of the applicant in Indiana.
(2) The applicant's project is economically sound and will
benefit the people of Indiana by increasing opportunities for
employment and strengthening the economy of Indiana.
(3) Receiving the tax credit is a major factor in the applicant's
decision to go forward with the project and not receiving the tax
credit will result in the applicant not raising the total earnings
of employees in Indiana.
(4) Awarding the tax credit will result in an overall positive
fiscal impact to the state, as certified by the budget agency
using the best available data.
(5) The credit is not prohibited by section 19 of this chapter.
(6) The average wage that will be paid by the taxpayer to its
employees (excluding highly compensated employees) at the
location after the credit is given will be at least equal to one
hundred fifty percent (150%) of the hourly minimum wage
under IC 22-2-2-4 or its equivalent.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.107; P.L.199-2005, SEC.23; P.L.1-2006, SEC.143.
IC 6-3.1-26-19
Credit disallowed for relocated jobs
Sec. 19. A person is not entitled to claim the credit provided by
this chapter for any jobs that the person relocates from one (1) site
in Indiana to another site in Indiana. Determinations under this
section shall be made by the corporation.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.108.
IC 6-3.1-26-20
Amount
Sec. 20. The corporation shall certify the amount of the qualified
investment that is eligible for a credit under this chapter. In
determining the credit amount that should be awarded, the
corporation shall grant a credit only for the amount of the qualified
investment that is directly related to expanding the workforce in
Indiana.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.109.
IC 6-3.1-26-21
Agreement for credit; contents
Sec. 21. The corporation shall enter into an agreement with an
applicant that is awarded a credit under this chapter. The agreement
must include all the following:
(1) A detailed description of the project that is the subject of the
agreement.
(2) The first taxable year for which the credit may be claimed.
(3) The amount of the taxpayer's state tax liability for each tax
in the taxable year of the taxpayer that immediately preceded
the first taxable year in which the credit may be claimed.
(4) The maximum tax credit amount that will be allowed for
each taxable year.
(5) A requirement that the taxpayer shall maintain operations at
the project location for at least ten (10) years during the term
that the tax credit is available.
(6) A specific method for determining the number of new
employees employed during a taxable year who are performing
jobs not previously performed by an employee.
(7) A requirement that the taxpayer shall annually report to the
corporation the number of new employees who are performing
jobs not previously performed by an employee, the average
wage of the new employees, the average wage of all employees
at the location where the qualified investment is made, and any
other information the director needs to perform the director's
duties under this chapter.
(8) A requirement that the director is authorized to verify with
the appropriate state agencies the amounts reported under
subdivision (7), and that after doing so shall issue a certificate
to the taxpayer stating that the amounts have been verified.
(9) A requirement that the taxpayer shall pay an average wage
to all its employees other than highly compensated employees
in each taxable year that a tax credit is available that equals at
least one hundred fifty percent (150%) of the hourly minimum
wage under IC 22-2-2-4 or its equivalent.
(10) A requirement that the taxpayer will keep the qualified
investment property that is the basis for the tax credit in Indiana
for at least the lesser of its useful life for federal income tax
purposes or ten (10) years.
(11) A requirement that the taxpayer will maintain at the
location where the qualified investment is made during the term
of the tax credit a total payroll that is at least equal to the
payroll level that existed before the qualified investment was
made.
(12) A requirement that the taxpayer shall provide written
notification to the director and the corporation not more than
thirty (30) days after the taxpayer makes or receives a proposal
that would transfer the taxpayer's state tax liability obligations
to a successor taxpayer.
(13) Any other performance conditions that the corporation
determines are appropriate.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.110.
IC 6-3.1-26-22
Certificate of verification
Sec. 22. A taxpayer claiming a credit under this chapter shall
submit to the department of state revenue a copy of the director's
certificate of verification under this chapter for the taxable year.
However, failure to submit a copy of the certificate does not
invalidate a claim for a credit.
As added by P.L.224-2003, SEC.197.
IC 6-3.1-26-23
Noncompliance; assessment
Sec. 23. If the director determines that a taxpayer who has
received a credit under this chapter is not complying with the
requirements of the tax credit agreement or all the provisions of this
chapter, the director shall, after giving the taxpayer an opportunity
to explain the noncompliance, notify the Indiana economic
development corporation and the department of state revenue of the
noncompliance and request an assessment. The department of state
revenue, with the assistance of the director, shall state the amount of
the assessment, which may not exceed the sum of any previously
allowed credits under this chapter. After receiving the notice, the
department of state revenue shall make an assessment against the
taxpayer under IC 6-8.1.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.111.
IC 6-3.1-26-24
Repealed
(Repealed by P.L.222-2007, SEC.2.)
IC 6-3.1-26-25
Biennial evaluation; report
Sec. 25. On a biennial basis, the corporation shall provide for an
evaluation of the tax credit program. The evaluation must include an
assessment of the effectiveness of the program in creating new jobs
and increasing wages in Indiana and of the revenue impact of the
program and may include a review of the practices and experiences
of other states with similar programs. The director shall submit a
report on the evaluation to the governor, the president pro tempore
of the senate, and the speaker of the house of representatives after
June 30 and before November 1 in each odd-numbered year. The
report provided to the president pro tempore of the senate and the
speaker of the house of representatives must be in an electronic
format under IC 5-14-6.
As added by P.L.224-2003, SEC.197. Amended by P.L.4-2005,
SEC.113.
IC 6-3.1-26-26
Expiration
Sec. 26. (a) This chapter applies to taxable years beginning after
December 31, 2003.
(b) Notwithstanding the other provisions of this chapter, the
corporation may not approve a credit for a qualified investment made
after December 31, 2013. However, this section may not be
construed to prevent a taxpayer from carrying an unused tax credit
attributable to a qualified investment made before January 1, 2014,
forward to a taxable year beginning after December 31, 2013, in the
manner provided by section 15 of this chapter.
As added by P.L.224-2003, SEC.197. Amended by P.L.81-2004,
SEC.16; P.L.137-2006, SEC.7; P.L.182-2009(ss), SEC.202.