CHAPTER 9. NEIGHBORHOOD ASSISTANCE CREDITS
IC 6-3.1-9
Chapter 9. Neighborhood Assistance Credits
IC 6-3.1-9-1
Definitions
Sec. 1. (a) As used in this chapter, "authority" means the Indiana
housing and community development authority established by
IC 5-20-1-3.
(b) As used in this chapter, "business firm" means any business
entity authorized to do business in the state of Indiana that has state
tax liability.
(c) As used in this chapter, "community services" means any type
of:
(1) counseling and advice;
(2) emergency assistance;
(3) medical care;
(4) recreational facilities;
(5) housing facilities; or
(6) economic development assistance;
provided to individuals, economically disadvantaged households,
groups, or neighborhood organizations in an economically
disadvantaged area.
(d) As used in this chapter, "crime prevention" means any activity
which aids in the reduction of crime in an economically
disadvantaged area or an economically disadvantaged household.
(e) As used in this chapter, "economically disadvantaged area"
means an enterprise zone, or any other federally or locally designated
economically disadvantaged area in Indiana. The certification shall
be made on the basis of current indices of social and economic
conditions, which shall include but not be limited to the median per
capita income of the area in relation to the median per capita income
of the state or standard metropolitan statistical area in which the area
is located.
(f) As used in this chapter, "economically disadvantaged
household" means a household with an annual income that is at or
below eighty percent (80%) of the area median income or any other
federally designated target population.
(g) As used in this chapter, "education" means any type of
scholastic instruction or scholarship assistance to an individual who
resides in an economically disadvantaged area that enables the
individual to prepare for better life opportunities.
(h) As used in this chapter, "enterprise zone" means an enterprise
zone created under IC 5-28-15.
(i) As used in this chapter, "job training" means any type of
instruction to an individual who resides in:
(1) an economically disadvantaged area; or
(2) an economically disadvantaged household;
that enables the individual to acquire vocational skills so that the
individual can become employable or be able to seek a higher grade
of employment.
(j) As used in this chapter, "neighborhood assistance" means
either:
(1) furnishing financial assistance, labor, material, and technical
advice to aid in the physical or economic improvement of any
part or all of an economically disadvantaged area; or
(2) furnishing technical advice to promote higher employment
in any neighborhood in Indiana.
(k) As used in this chapter, "neighborhood organization" means
any organization, including but not limited to a nonprofit
development corporation doing both of the following:
(1) Performing community services:
(A) in an economically disadvantaged area; or
(B) for an economically disadvantaged household.
(2) Holding a ruling:
(A) from the Internal Revenue Service of the United States
Department of the Treasury that the organization is exempt
from income taxation under the provisions of the Internal
Revenue Code; and
(B) from the department of state revenue that the
organization is exempt from income taxation under
IC 6-2.5-5-21.
(l) As used in this chapter, "person" means any individual subject
to Indiana gross or adjusted gross income tax.
(m) As used in this chapter, "state fiscal year" means a twelve
(12) month period beginning on July 1 and ending on June 30.
(n) As used in this chapter, "state tax liability" means the
taxpayer's total tax liability that is incurred under:
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
and
(2) 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.
(o) As used in this chapter, "tax credit" means a deduction from
any tax otherwise due and payable under IC 6-3 or IC 6-5.5.
As added by P.L.51-1984, SEC.1. Amended by P.L.21-1990, SEC.12;
P.L.25-1993, SEC.10; P.L.192-2002(ss), SEC.99; P.L.4-2005,
SEC.53; P.L.235-2005, SEC.95; P.L.1-2006, SEC.140;
P.L.181-2006, SEC.44; P.L.1-2007, SEC.54.
IC 6-3.1-9-2
Eligible persons; proposals; approval
Sec. 2. (a) A business firm or a person who contributes to a
neighborhood organization that engages in the activities of providing
neighborhood assistance, job training, or education for individuals
not employed by the business firm or person, or for community
services or crime prevention in an economically disadvantaged area
shall receive a tax credit as provided in section 3 of this chapter if the
authority approves the proposal of the business firm or person,
setting forth the program to be conducted, the area selected, the
estimated amount to be invested in the program, and the plans for
implementing the program.
(b) The authority, after consultation with the community services
agency and the commissioner of revenue, may adopt rules for the
approval or disapproval of these proposals.
As added by P.L.51-1984, SEC.1. Amended by P.L.4-2005, SEC.54;
P.L.235-2005, SEC.96; P.L.1-2006, SEC.141; P.L.181-2006,
SEC.45; P.L.1-2007, SEC.55.
IC 6-3.1-9-3
Amount of credit; application; pass through entities; shareholders
or partners of firms without tax liability
Sec. 3. (a) Subject to the limitations provided in subsection (b)
and sections 4, 5, and 6 of this chapter, the department shall grant a
tax credit against any state tax liability due equal to fifty percent
(50%) of the amount invested by a business firm or person in a
program the proposal for which was approved under section 2 of this
chapter.
(b) The credit provided by this chapter shall only be applied
against any state tax liability owed by the taxpayer after the
application of any credits, which under IC 6-3.1-1-2 must be applied
before the credit provided by this chapter. In addition, the tax credit
which a taxpayer receives under this chapter may not exceed
twenty-five thousand dollars ($25,000) for any taxable year of the
taxpayer.
(c) If a business firm that is:
(1) exempt from adjusted gross income tax (IC 6-3-1 through
IC 6-3-7) under IC 6-3-2-2.8(2); or
(2) a partnership;
does not have any tax liability against which the credit provided by
this section may be applied, a shareholder or a partner of the business
firm is entitled to a credit against the shareholder's or the partner's
liability under the adjusted gross income tax.
(d) The amount of the credit provided by this section is equal to:
(1) the tax credit determined for the business firm for the
taxable year under subsection (a); multiplied by
(2) the percentage of the business firm's distributive income to
which the shareholder or the partner is entitled.
The credit provided by this section is in addition to any credit to
which a shareholder or partner is otherwise entitled under this
chapter. However, a business firm and a shareholder or partner of
that business firm may not claim a credit under this chapter for the
same investment.
As added by P.L.51-1984, SEC.1. Amended by P.L.25-1993, SEC.11;
P.L.1-1994, SEC.29; P.L.192-2002(ss), SEC.100.
IC 6-3.1-9-4
Application for credit; form; contents; priority; notification of
credit allowable; filing of statement; disallowance
Sec. 4. (a) Any business firm or person which desires to claim a
tax credit as provided in this chapter shall file with the department,
in the form that the department may prescribe, an application stating
the amount of the contribution or investment which it proposes to
make which would qualify for a tax credit, and the amount sought to
be claimed as a credit. The application shall include a certificate
evidencing approval of the contribution or program by the authority.
(b) The authority shall give priority in issuing certificates to
applicants whose contributions or programs directly benefit
enterprise zones.
(c) The department shall promptly notify an applicant whether, or
the extent to which, the tax credit is allowable in the state fiscal year
in which the application is filed, as provided in section 5 of this
chapter. If the credit is allowable in that state fiscal year, the
applicant shall within thirty (30) days after receipt of the notice file
with the department of state revenue a statement, in the form and
accompanied by the proof of payment as the department may
prescribe, setting forth that the amount to be claimed as a credit
under this chapter has been paid to an organization for an approved
program or purpose, or permanently set aside in a special account to
be used solely for an approved program or purpose.
(d) The department may disallow any credit claimed under this
chapter for which the statement or proof of payment is not filed
within the thirty (30) day period.
As added by P.L.51-1984, SEC.1. Amended by P.L.4-2005, SEC.55;
P.L.235-2005, SEC.97; P.L.1-2006, SEC.142; P.L.181-2006,
SEC.46; P.L.1-2007, SEC.56.
IC 6-3.1-9-5
Limitation on tax credits; approval of applications; failure to file
statement of proof of payment
Sec. 5. (a) The amount of tax credits allowed under this chapter
may not exceed two million five hundred thousand dollars
($2,500,000) in the state fiscal year beginning July 1, 1997, and
ending June 30, 1998, and each state fiscal year thereafter.
(b) The department shall record the time of filing of each
application for allowance of a credit required under section 4 of this
chapter and shall approve the applications, if they otherwise qualify
for a tax credit under this chapter, in the chronological order in
which the applications are filed in the state fiscal year.
(c) When the total credits approved under this section equal the
maximum amount allowable in any state fiscal year, no application
thereafter filed for that same fiscal year shall be approved. However,
if any applicant for whom a credit has been approved fails to file the
statement of proof of payment required under section 4 of this
chapter, an amount equal to the credit previously allowed or set aside
for the applicant may be allowed to any subsequent applicant in the
year. In addition, the department may, if the applicant so requests,
approve a credit application, in whole or in part, with respect to the
next succeeding state fiscal year.
As added by P.L.51-1984, SEC.1. Amended by P.L.95-1995, SEC.1;
P.L.64-1997, SEC.1.
IC 6-3.1-9-6
Allowable years of credit
Sec. 6. A tax credit shall be allowable under this chapter only for
the taxable year of the taxpayer in which the contribution qualifying
for the credit is paid or permanently set aside in a special account for
the approved program or purpose.
As added by P.L.51-1984, SEC.1.