Indiana Code 6-3-2.1-5. Computation of tax; refundable credit; applicability of other credits
Indiana Code 6-3-1-35
Terms Used In Indiana Code 6-3-2.1-5
(c) All other credits arising from the operations of the electing entity, or which are passed through to or assigned to the electing entity, shall pass through to the entity owners as provided in this article or IC 6-3.1 and shall not apply to the tax imposed in section 4 of this chapter. All such other credits shall apply before the application of the pass through entity tax credit. This subsection also applies to pass through entities that pass the tax under this chapter through to their owners. However, this subsection shall not limit the ability of an electing entity or pass through entity to claim credit for taxes withheld or paid on the entity’s behalf.
As added by P.L.1-2023, SEC.5.
Indiana Code 6-3-2-1.5. “Qualified area”; tax rate in qualified area; application of tax rate after December 31, 2018; expiration
(1) a military base (as defined in IC 36-7-30-1(c));
Terms Used In Indiana Code 6-3-2-1.5
- adjusted gross income: shall mean the following:
(a) In the case of all individuals, "adjusted gross income" (as defined in Section 62 of the Internal Revenue Code), modified as follows:
Indiana Code 6-3-1-3.5
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- corporation: includes all corporations, associations, real estate investment trusts (as defined in the Internal Revenue Code), joint stock companies, whether organized for profit or not-for-profit, any receiver, trustee or conservator thereof, business trusts, Massachusetts trusts, any proprietorship or partnership taxable under Section 1361 of the Internal Revenue Code, and any publicly traded partnership that is treated as a corporation for federal income tax purposes under Section 7704 of the Internal Revenue Code. See Indiana Code 6-3-1-10
- United States: includes the District of Columbia and the commonwealths, possessions, states in free association with the United States, and the territories. See Indiana Code 1-1-4-5
- Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
(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)); or
(4) a qualified military base enhancement area established under IC 36-7-34.
(b) Except as provided in subsections (e) and (h), a tax at the lesser of:
(1) the rate of five percent (5%) of adjusted gross income; or
(2) the rate imposed under section 1(b) of this chapter;
is imposed on that part of the adjusted gross income of a corporation that is derived from sources within a qualified area if the corporation locates all or part of its operations in a qualified area during the taxable year, as determined under subsection (g). The tax rate under this section applies to the taxable year in which the corporation locates its operations in the qualified area and to the next succeeding four (4) taxable years, and the tax rate shall be determined as provided in this subsection in each of those taxable years.
(c) In the case of a corporation that locates all or part of its operations in a qualified military base enhancement area established under IC 36-7-34-4(1), the tax rate imposed under this section applies to the corporation only if the corporation meets at least one (1) of the following criteria:
(1) The corporation is a participant in the technology transfer program conducted by the qualified military base (as defined in IC 36-7-34-3).
(2) The corporation is a United States Department of Defense contractor.
(3) The corporation and the qualified military base have a mutually beneficial relationship evidenced by a memorandum of understanding between the corporation and the United States Department of Defense.
(d) In the case of a business that uses the services or commodities in a qualified military base enhancement area established under IC 36-7-34-4(2), the business must satisfy 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).
(e) A taxpayer is not entitled to the tax rate described in subsection (b) to the extent that the taxpayer substantially reduces or ceases its operations at another location in Indiana in order to relocate its operations within the qualified area, unless:
(1) the taxpayer had existing operations in the qualified area; and
(2) the operations relocated to the qualified area are an expansion of the taxpayer’s operations in the qualified area.
(f) A determination under subsection (e) that a taxpayer is not entitled to the tax rate provided by this section as a result of a substantial reduction or cessation of operations applies to the taxable year in which the substantial reduction or cessation occurs and in all subsequent years. Determinations under this section shall be made by the department of state revenue.
(g) The department of state revenue:
(1) shall adopt rules under IC 4-22-2 to establish a procedure for determining the part of a corporation’s adjusted gross income that was derived from sources within a qualified area; and
(2) may adopt other rules that the department considers necessary for the implementation of this chapter.
(h) The tax rate under this section applies only to a corporation that locates all or part of its operations in a qualified area before January 1, 2019. However, this subsection may not be construed to prevent the tax rate from applying to succeeding taxable years of a corporation after December 31, 2018, if the corporation locates all or part of its operations in a qualified area before January 1, 2019.
(i) This section expires January 1, 2025.
As added by P.L.81-2004, SEC.21. Amended by P.L.190-2005, SEC.2; P.L.203-2005, SEC.4; P.L.180-2006, SEC.4; P.L.288-2013, SEC.32; P.L.212-2018(ss), SEC.21; P.L.138-2022, SEC.5; P.L.201-2023, SEC.96.