Bill Text: IN SB0321 | 2012 | Regular Session | Amended
Bill Title: Transportation and logistics income tax credit.
Sponsorship: Slight Partisan Bill (Republican 4-2)
Status: (Engrossed - Dead) 2012-02-20 - Referred to Committee on Ways and Means pursuant to House Rule 127 [SB0321 Detail]
Download: Indiana-2012-SB0321-Amended.html
Citations Affected: IC 6-3.1; noncode.
Effective: January 1, 2013.
January 5, 2012, read first time and referred to Committee on Tax and Fiscal Policy.
January 25, 2012, amended, reported favorably _ Do Pass.
January 30, 2012, read second time, amended, ordered engrossed.
Digest Continued
multiplied by (2) the amount of the new qualified expenditures made by the taxpayer during the taxable year. Limits the credit that may be claimed for a taxable year to the taxpayer's state tax liability for that taxable year. Allows the taxpayer to carry over any unused credit for nine years. Provides that the credit may not be refunded, carried back, or transferred to another taxpayer. Limits the credit to $10,000,000 for each state fiscal year. Requires the department of state revenue to annually report to the state budget committee concerning the use of the credit, including summary information and the name and address of each taxpayer claiming the credit and the credit amount claimed by each taxpayer. Requires the IEDC to report to the general assembly regarding the credit.
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A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Chapter 34. Transportation and Logistics Tax Credit
Sec. 1. As used in this chapter, "corporation" means the Indiana economic development corporation established by IC 5-28-3-1.
Sec. 2. As used in this chapter, "director" means the president of the corporation.
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 trust;
(4) a limited liability company; or
(5) a limited liability partnership.
Sec. 4. As used in this chapter, "qualified expenditure" means an expenditure described in section 8 of this chapter.
Sec. 5. 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 6-5.5 (the financial institutions tax); and
(3) 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.
Sec. 6. As used in this chapter, "taxpayer" means an individual, a corporation, a pass through entity, or another entity that has state tax liability.
Sec. 7. (a) Subject to the limit on the annual amount of credits, the making of credit awards by the corporation, and the conditions set forth in this chapter, a taxpayer is entitled to a credit against the taxpayer's state tax liability in a taxable year for making new qualified expenditures before January 1, 2019.
(b) The amount of new qualified expenditures made by a taxpayer during the taxable year is the difference of:
(1) the qualified expenditures made by the taxpayer during the taxable year; minus
(2) the average annual qualified expenditures made by the taxpayer during the two (2) taxable years immediately preceding the taxable year for which the credit is being claimed.
However, if the qualified expenditures for the earlier year of the two (2) year average is zero (0) and the taxpayer has not claimed the credit for a year that precedes that year, the taxpayer shall, for purposes of subdivision (2), subtract only the amount of the qualified expenditures made during the taxable year immediately preceding the taxable year for which the credit is being claimed.
Sec. 8. (a) For purposes of this chapter, a qualified expenditure is an expenditure for one (1) or more of the following purposes:
(1) Making an improvement to real property located in Indiana that is related to constructing a new, or modernizing an existing, transportation or logistical distribution facility.
(2) Improving the transportation of goods on Indiana highways, limited to the following:
(A) Upgrading terminal facilities that serve tractors (as defined in IC 9-13-2-180) and semitrailers (as defined in IC 9-13-2-164).
(B) Improving paved access to terminal facilities.
(C) Adding new maintenance areas.
(D) Purchasing new shop equipment having a useful life of at least five (5) years, such as diagnostic equipment, oil delivery systems, air compressors, and truck lifts.
(3) Improving the transportation of goods by rail, limited to the following:
(A) Upgrading or building mainline, secondary, yard, and spur trackage.
(B) Upgrading or replacing bridges to obtain higher load bearing capability.
(C) Upgrading or replacing grade crossings to increase visibility for motorists, including improvements to roadway surfaces, signage and traffic signals, and signal system upgrades and replacements to meet Federal Railroad Administration Positive Train Control regulations.
(D) Upgrading fueling facilities, including upgrading fueling and sanding locomotives or tanks, pumps, piping, containment areas, track pans, lighting, and security.
(E) Upgrading team track facilities, including railroad owned warehouses, loading docks, and transfer stations for loading and unloading freight.
(F) Upgrading shop facilities, including upgrading structures, inspection pits, drop pits, cranes, employee fall protection, lighting, climate control, and break rooms.
(4) Improving the transportation of goods by water, limited to the following:
(A) Upgrading or replacing a permanent waterside dock.
(B) Upgrading or building a new terminal facility that serves waterborne transportation.
(C) Improving paved access to a waterborne terminal facility.
(D) Purchasing new equipment having a useful life of at least five (5) years, including diagnostic equipment, an oil delivery system, an air compressor, or a barge lift.
(5) Improving the transportation of goods by air, limited to the following:
(A) Upgrading or building a new cargo building, apron, hangar, warehouse facility, freight forwarding facility, cross-dock distribution facility, or aircraft maintenance facility.
(B) Improving paved access to a terminal or cargo facility.
(C) Upgrading a fueling facility.
(6) Improving warehousing and logistical capabilities, limited to the following:
(A) Upgrading warehousing facilities, including upgrading loading dock doors and loading dock plates, fueling equipment, fueling installations, or dolly drop pads for trailers.
(B) Improving logistical distribution by purchasing new equipment, limited to the following:
(i) Picking modules (systems of racks, conveyors, and controllers).
(ii) Racking equipment.
(iii) Warehouse management systems, including scanning or coding equipment.
(iv) Security equipment.
(v) Temperature control and monitoring equipment.
(vi) Dock levelers and pallet levelers and inverters.
(vii) Conveyors and related controllers, scales, and like equipment.
(viii) Packaging equipment.
(ix) Moving, separating, sorting, and picking equipment.
A qualified expenditure does not include an expenditure for maintenance expenses.
Sec. 9. (a) The corporation may make credit awards under this chapter if the new qualified expenditures will substantially enhance the logistics industry, create new jobs, preserve existing jobs that otherwise would be lost, increase wages in Indiana, and improve the overall Indiana economy.
(b) A person that proposes a project that involves new qualified expenditures in Indiana may apply to the corporation to enter into an agreement for a tax credit under this chapter. The director shall prescribe the form of the application. 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 the applicant's project will substantially enhance the logistics industry and all the following conditions exist:
(1) The project will create new jobs, preserve existing jobs that otherwise would be lost, or increase wages in Indiana.
(2) The project is economically sound and will improve the Indiana economy.
(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 creating new jobs 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.
(c) Determinations under this section shall be made by the
corporation.
Sec. 10. 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 new qualified expenditures
and 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 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 new qualified
expenditures are made, and any other information the
director needs to perform the director's duties under this
chapter.
(6) A requirement that the director is authorized to verify
with the appropriate state agencies the amounts reported
under subdivision (5), and that after doing so shall issue a
certificate to the taxpayer stating that the amounts have been
verified.
(7) A requirement that the taxpayer will maintain at the
location where the new qualified expenditures are 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
expenditures were made.
(8) Any other performance conditions that the corporation
determines are appropriate.
(c) 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 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.
Sec. 11. (a) 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 award under this chapter.
(b) The total amount of a tax credit award for a taxable year
under this chapter is a percentage determined by the corporation,
not to exceed twenty-five percent (25%) of the amount of the new
qualified expenditures made by the taxpayer in Indiana during that
taxable year.
(c) The corporation shall certify the amount of the new qualified
expenditures that are eligible for a credit under this chapter.
(d) 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.
Sec. 12. (a) If the amount of the credit under 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. However, the carryover period may not
exceed nine (9) consecutive taxable years, beginning with the
taxable year after the taxable year in which the taxpayer is first
granted the credit. 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.
(b) A taxpayer is not entitled to a refund or carryback of any
unused credit.
(c) A taxpayer may not assign, convey, sell, or otherwise
transfer the credit to any other taxpayer.
Sec. 13. 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.
Sec. 14. (a) The total amount of credits allowed under this
chapter may not exceed in the aggregate ten million dollars
($10,000,000) for all taxpayers per state fiscal year.
(b) Any person that desires to claim a tax credit provided in this
chapter shall file with the department, in the form that the
department may prescribe, an application:
(1) stating the amount of the new qualified expenditures that
have been approved by the corporation;
(2) stating the amount sought to be claimed as a credit; and
(3) identifying whether the credit will be claimed during the
state fiscal year in which the application is filed or the
immediately succeeding state fiscal year.
(c) The department shall record the time of filing of each
application for a credit under this chapter and shall, except as
provided in subsection (d), grant the credit to the taxpayer in the
chronological order in which the application is filed in the state
fiscal year, if the taxpayer's proposed new qualified expenditures
and the taxpayer otherwise qualify for a credit under this chapter.
The department shall promptly notify an applicant whether, or the
extent to which, the tax credit is allowable in the state fiscal year
proposed by the taxpayer.
(d) If the total credits approved under this section, including
carryover credits approved for a previous state fiscal year, equal
the maximum amount allowable in the state fiscal year, an
application for the credit that is filed later for that same state fiscal
year may not be approved. However, if an applicant for which a
credit has been approved fails to claim the credit applied for, an
amount equal to the credit previously applied for but not claimed
may be allowed to the next eligible applicant or applicants until the
total amount has been allowed.
(e) To receive the credit provided by this chapter, a taxpayer
must have an approved application and claim the credit in the
manner prescribed by the department. The taxpayer shall submit
to the department all information that the department determines
is necessary for the calculation of the credit, for the determination
of whether an expenditure is a new qualified expenditure, and for
the department to fulfill the reporting requirements of this
chapter.
Sec. 15. The department shall report, not later than December
15 each year, to the budget committee concerning the use of the
credit under this chapter. The report must include the following
with regard to the previous state fiscal year:
(1) Summary information regarding the taxpayers and the use
of the credit, including the amount of credits approved, the
number of taxpayers applying for the credit and claiming the
credit, the number of employees who are employed in Indiana
by the taxpayers claiming the credit, the amount and type of
new qualified expenditures for which the credit was granted,
the total dollar amount of new credits claimed and the
average amount of the credit claimed per taxpayer, the
amount of credits to be carried forward to a subsequent
taxable year, and the percentage of the total credits claimed
as compared to the total adjusted gross income of all the
taxpayers claiming the credit.
(2) The name and address of each taxpayer claiming the credit
and the amount of the credit applied for by and granted to
each taxpayer.
Sec. 16. On a biennial basis, the corporation shall provide for an
evaluation of the tax credit program established by this chapter.
The evaluation must include an assessment of the effectiveness of
the program in substantially enhancing the logistics industry,
creating new jobs, increasing wages in Indiana, and improving the
overall Indiana economy. The evaluation 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.
(b) This SECTION expires January 1, 2015.
