Bill Text: IN SB0589 | 2011 | Regular Session | Engrossed
Bill Title: Economic development and state tax matters.
Spectrum: Partisan Bill (Republican 5-0)
Status: (Enrolled - Dead) 2011-04-25 - House advisors appointed: Espich, Cherry, Baird, Pelath, Goodin and Tyler [SB0589 Detail]
Download: Indiana-2011-SB0589-Engrossed.html
Citations Affected: IC 2-5; IC 5-28; IC 6-1.1; IC 6-2.5; IC 6-3;
IC 6-3.1; IC 6-3.5; IC 6-5.5; IC 6-7; IC 6-8.1; IC 20-19; IC 21-18;
IC 22-4; IC 22-4.1; IC 36-7; IC 36-7.6; noncode.
(HOUSE SPONSORS _ TURNER, CROUCH, ESPICH, WELCH)
January 20, 2011, read first time and referred to Committee on Tax and Fiscal Policy.
February 17, 2011, amended, reported favorably _ Do Pass.
February 21, 2011, read second time, amended, ordered engrossed.
February 22, 2011, engrossed. Read third time, passed. Yeas 39, nays 10.
March 28, 2011, read first time and referred to Committee on Ways and Means.
April 13, 2011, amended, reported _ Do Pass.
April 20, 2011, read second time, amended, ordered engrossed.
Digest Continued
emphasized by the state and by local economic development organizations within geographic regions in Indiana. (5) Provides that a claim for a sales tax refund must be filed within 18 months if the claim is based on the predominant use of electrical energy, natural or artificial gas, water, steam, and steam heat by certain businesses or based on the sales tax exemption for these services or commodities. (6) Decreases the corporate income tax rate from 8.5% to 6.5% over four years. (7) Provides that the adjusted gross income tax and financial institutions tax (for credit unions and investment companies) apply to interest on state and local bonds that are issued by a state other than Indiana or issued by a political subdivision of such a state. (8) Revises the attribution rules applicable to business income and sales receipts from certain intangibles under the adjusted gross income tax. (9) Eliminates the carry back of net operating losses under the adjusted gross income tax. (10) Extends the time in which a person must file an amended Indiana adjusted gross income tax return to reflect modifications made in a federal income tax return. (11) Prohibits the department of state revenue from taking an action to collect a protested listed tax until the later of the time to file a tax appeal has expired or a final decision is made in a tax appeal. (12) Requires higher education institutions to expand technology and innovation commercialization programs. (13) Provides that in the case of a county that becomes a member of a regional development authority (other than the northwest Indiana regional development authority) after June 30, 2011, and before July 1, 2013, the county may impose an additional county economic development income tax at a rate of 0.025% (rather than 0.05%, under current law). (14) Removes outdated individual income tax adjustments. (15) Requires a study of ways to reduce fraud and abuse of the Indiana earned income tax credit and all aspects of phasing out the state inheritance tax. (16) Allows counties that are more than two years behind on issuing tax bills to petition the department of local government finance to postpone the deadline for paying the first installment on a 2011 provisional property tax statement. (17) Provides that the tobacco products tax on moist snuff is based on the weight of the moist snuff and calculated at the rate of $0.38 per ounce. (18) Extends the time in which the city of Marion or a second class may establish a professional sports development area. (19) Permits a person who received an overpayment of unemployment compensation to repay the excess over 36 months. (20) Eliminates provisions requiring certain projects in a community revitalization enhancement district be approved by an advisory commission.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
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A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
Chapter 31.8. Interim Study Committee on Economic Development
Sec. 1. The interim study committee on economic development is established.
Sec. 2. (a) The committee consists of the following members:
(1) Two (2) members of the senate, who must be affiliated with different political parties, appointed by the president pro tempore of the senate.
(2) Two (2) members of the house of representatives, who must be affiliated with different political parties, appointed by the speaker of the house of representatives.
(3) The chief executive officer of the Indiana economic
development corporation (or the chief executive officer's
designee).
(4) The following twelve (12) members appointed as follows:
(A) The following four (4) members appointed by the
governor, not more than two (2) of whom may be affiliated
with the same political party and at least one (1) of whom
must be a woman who is an owner of a women's business
enterprise (as defined in IC 4-13-16.5-1.3) that is certified
under IC 4-13-16.5 or a member of a minority group (as
defined in IC 4-13-16.5-1) who is an owner of a minority
business enterprise (as defined in IC 4-13-16.5-1) that is
certified under IC 4-13-16.5:
(i) One (1) member to represent large businesses.
(ii) One (1) member to represent small businesses.
(iii) One (1) member to represent banking and finance.
(iv) One (1) member to represent labor interests.
(B) The following four (4) members appointed by the
president pro tempore of the senate, not more than two (2)
of whom may be affiliated with the same political party:
(i) One (1) member to represent higher education.
(ii) One (1) member to represent local economic
development organizations and officials.
(iii) One (1) member to represent cities.
(iv) One (1) member to represent counties.
(C) The following four (4) members appointed by the
speaker of the house of representatives, not more than two
(2) of whom may be affiliated with the same political
party:
(i) One (1) member to represent agricultural interests.
(ii) One (1) member to represent the public at large.
(iii) One (1) member to represent kindergarten through
grade 12 education.
(iv) One (1) member to represent quality of life issues.
(b) The president pro tempore of the senate shall appoint one (1)
of the members appointed by the president under subsection (a)(1)
as a co-chair of the committee. The speaker of the house of
representatives shall appoint one (1) of the members appointed by
the speaker under subsection (a)(2) as a co-chair of the committee.
(c) The affirmative votes of a majority of the voting members
appointed to the committee are required for the committee to take
action on any measure, including final reports.
Sec. 3. The committee shall study the following during each
interim:
(1) Best practices in state and local economic development
policies and activities.
(2) The use and effectiveness of tax credits and deductions.
(3) Whether there are any specific sectors of the economy for
which Indiana might have comparative advantages over other
states.
(4) The extent to which Indiana's tax laws encourage business
investment, and any improvements that might be made to
Indiana's tax laws.
(5) The extent to which Indiana's education systems support
economic development.
(6) The benefits of existing community revitalization
enhancement districts and possible new community
revitalization enhancement districts as an economic
development tool.
(7) Methods for eliminating or reducing the personal property
tax statewide and the appropriateness of allowing local
government the option of eliminating or abating personal
property tax for new investment and economic development
purposes.
(8) Any other issue assigned to the committee by the
legislative council or as directed by the committee's co-chairs.
Sec. 4. The committee shall issue a final report before November
1 each year to the legislative council containing any findings and
recommendations of the committee. The report must be in an
electronic format under IC 5-14-6.
Sec. 5. Except as otherwise provided in this chapter, the
committee shall operate under the policies governing study
committees adopted by the legislative council.
Sec. 6. This chapter expires December 31, 2014.
(1) Create and regularly update a strategic economic development plan based on a statewide study to determine specific economic sectors that should be emphasized by the state and by local economic development organizations within geographic regions in Indiana.
(2) Establish strategic benchmarks and performance measures.
(3) Monitor and report on Indiana's economic performance.
(4) Market Indiana to businesses worldwide.
(5) Assist Indiana businesses that want to grow.
(6) Solicit funding from the private sector for selected initiatives.
(7) Provide for the orderly economic development and growth of Indiana.
(8) Establish and coordinate the operation of programs commonly available to all citizens of Indiana to implement a strategic plan for the state's economic development and enhance the general welfare.
(9) Evaluate and analyze the state's economy to determine the direction of future public and private actions, and report and make recommendations to the general assembly in an electronic format under IC 5-14-6 with respect to the state's economy.
(1) Cooperate with federal, state, and local governments and agencies in the coordination of programs to make the best use of Indiana resources, based on a statewide study to determine specific economic sectors that should be emphasized by the state and by local economic development organizations within geographic regions in Indiana.
(2) Receive and expend funds, grants, gifts, and contributions of money, property, labor, interest accrued from loans made by the corporation, and other things of value from public and private sources, including grants from agencies and instrumentalities of the state and the federal government. The corporation:
(A) may accept federal grants for providing planning assistance, making grants, or providing other services or functions necessary to political subdivisions, planning commissions, or other public or private organizations;
(B) shall administer these grants in accordance with the terms of the grants; and
(C) may contract with political subdivisions, planning commissions, or other public or private organizations to carry out the purposes for which the grants were made.
(3) Direct that assistance, information, and advice regarding the duties and functions of the corporation be given to the corporation by an officer, agent, or employee of the executive branch of the state. The head of any other state department or agency may
assign one (1) or more of the department's or agency's employees
to the corporation on a temporary basis or may direct a division
or an agency under the department's or agency's supervision and
control to make a special study or survey requested by the
corporation.
(b) The corporation shall perform the following duties:
(1) Develop and implement industrial development programs to
encourage expansion of existing industrial, commercial, and
business facilities in Indiana and to encourage new industrial,
commercial, and business locations in Indiana.
(2) Assist businesses and industries in acquiring, improving, and
developing overseas markets and encourage international plant
locations in Indiana. The corporation, with the approval of the
governor, may establish foreign offices to assist in this function.
(3) Promote the growth of minority business enterprises by doing
the following:
(A) Mobilizing and coordinating the activities, resources, and
efforts of governmental and private agencies, businesses, trade
associations, institutions, and individuals.
(B) Assisting minority businesses in obtaining governmental
or commercial financing for expansion or establishment of
new businesses or individual development projects.
(C) Aiding minority businesses in procuring contracts from
governmental or private sources, or both.
(D) Providing technical, managerial, and counseling assistance
to minority business enterprises.
(4) Assist the office of the lieutenant governor in:
(A) community economic development planning;
(B) implementation of programs designed to further
community economic development; and
(C) the development and promotion of Indiana's tourist
resources.
(5) Assist the secretary of agriculture and rural development in
promoting and marketing of Indiana's agricultural products and
provide assistance to the director of the Indiana state department
of agriculture.
(6) With the approval of the governor, implement federal
programs delegated to the state to carry out the purposes of this
article.
(7) Promote the growth of small businesses by doing the
following:
(A) Assisting small businesses in obtaining and preparing the
permits required to conduct business in Indiana.
(B) Serving as a liaison between small businesses and state
agencies.
(C) Providing information concerning business assistance
programs available through government agencies and private
sources.
(8) Establish a public information page on its current Internet site
on the world wide web. The page must provide the following:
(A) By program, cumulative information on the total amount
of incentives awarded, the total number of companies that
received the incentives and were assisted in a year, and the
names and addresses of those companies.
(B) A mechanism on the page whereby the public may request
further information online about specific programs or
incentives awarded.
(C) A mechanism for the public to receive an electronic
response.
(c) The corporation may do the following:
(1) Disseminate information concerning the industrial,
commercial, governmental, educational, cultural, recreational,
agricultural, and other advantages of Indiana.
(2) Plan, direct, and conduct research activities.
(3) Assist in community economic development planning and the
implementation of programs designed to further community
economic development.
(b) The county treasurer may mail or transmit the provisional statement one (1) time each year at least fifteen (15) days before the date on which the first installment is due under subsection (a) in the manner provided in IC 6-1.1-22-8.1, regardless of whether the notice required under section 6(b) of this chapter has been published.
(c) This subsection applies to a provisional statement issued under section 6 of this chapter. Except when the second installment of a provisional statement is replaced by a final reconciling statement providing for taxes to be due on November 10, the amount of tax due for each installment of a provisional statement issued for a year after 2010 is fifty percent (50%) of the tax that was due for the immediately preceding year under IC 6-1.1-22 subject to any adjustments to the tax liability as prescribed by the department of local government finance. If no bill was issued in the prior year, the provisional bill shall be based on the amount that would have been due if a provisional tax statement had been issued for the immediately preceding year. The department of local government finance may prescribe standards to implement this subsection, including a method of calculating the taxes due when an abstract or other information is not complete.
(d) This subsection applies only if a provisional statement for payment of property taxes and special assessments by electronic mail is transmitted to a person under IC 6-1.1-22-8.1(h). If a response to the transmission of electronic mail to a person indicates that the electronic mail was not received, the county treasurer shall mail to the person a hard copy of the provisional statement in the manner required by this chapter for persons who do not opt to receive statements by electronic mail. The due date for the property taxes and special assessments under a provisional statement mailed to a person under this subsection is the due date indicated in the statement transmitted to the person by electronic mail.
(e) This subsection applies only to property taxes first due and payable in 2011. If a county is more than two (2) years behind in issuing property tax bills, the county treasurer of the county may petition the department in writing to extend the deadline for making the first installment payment on a provisional statement issued under this chapter. Upon receiving a petition under this subsection, the department may extend the payment deadline to a date that is not later than July 1, 2011.
(b) Transactions involving tangible personal property are exempt from the state gross retail tax if the person acquiring the property acquires it for direct consumption as a material to be consumed in the direct production of other tangible personal property in the person's business of manufacturing, processing, refining, repairing, mining, agriculture, horticulture, floriculture, or arboriculture. This exemption includes transactions involving acquisitions of tangible personal property used in commercial printing.
(c) A refund claim based on the exemption provided by this section for electrical energy, natural or artificial gas, water, steam, and steam heat may not cover transactions that occur more than eighteen (18) months before the date of the refund claim.
(a) In the case of all individuals, "adjusted gross income" (as defined in Section 62 of the Internal Revenue Code), modified as follows:
(1) Subtract income that is exempt from taxation under this article by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction or deductions allowed or allowable pursuant to Section 62 of the Internal Revenue Code for taxes based on or measured by income and levied at the state level by any state of the United States.
(3) Subtract one thousand dollars ($1,000), or in the case of a joint return filed by a husband and wife, subtract for each spouse one thousand dollars ($1,000).
(4) Subtract one thousand dollars ($1,000) for:
(A) each of the exemptions provided by Section 151(c) of the Internal Revenue Code;
(B) each additional amount allowable under Section 63(f) of the Internal Revenue Code; and
(C) the spouse of the taxpayer if a separate return is made by the taxpayer and if the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer.
(5) Subtract:
(A)
(B) five hundred dollars ($500) for each additional amount allowable under Section 63(f)(1) of the Internal Revenue Code if the adjusted gross income of the taxpayer, or the taxpayer and the taxpayer's spouse in the case of a joint return, is less than forty thousand dollars ($40,000).
This amount is in addition to the amount subtracted under subdivision (4).
(6) Subtract an amount equal to the lesser of:
(A) that part of the individual's adjusted gross income (as defined in Section 62 of the Internal Revenue Code) for that taxable year that is subject to a tax that is imposed by a political subdivision of another state and that is imposed on or measured by income; or
(B) two thousand dollars ($2,000).
(7) Add an amount equal to the total capital gain portion of a lump sum distribution (as defined in Section 402(e)(4)(D) of the Internal Revenue Code) if the lump sum distribution is received by the individual during the taxable year and if the capital gain portion of the distribution is taxed in the manner provided in Section 402 of the Internal Revenue Code.
(8) Subtract any amounts included in federal adjusted gross income under Section 111 of the Internal Revenue Code as a recovery of items previously deducted as an itemized deduction from adjusted gross income.
(9) Subtract any amounts included in federal adjusted gross income under the Internal Revenue Code which amounts were received by the individual as supplemental railroad retirement annuities under 45 U.S.C. 231 and which are not deductible under subdivision (1).
entire taxable year, the total amount of the deductions allowed
pursuant to subdivisions (3), (4), (5), and (6) shall be reduced to
an amount which bears the same ratio to the total as the taxpayer's
income taxable in Indiana bears to the taxpayer's total income.
(14) (12) In the case of an individual who is a recipient of
assistance under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or
IC 12-15-7, subtract an amount equal to that portion of the
individual's adjusted gross income with respect to which the
individual is not allowed under federal law to retain an amount to
pay state and local income taxes.
(15) (13) In the case of an eligible individual, subtract the amount
of a Holocaust victim's settlement payment included in the
individual's federal adjusted gross income.
(16) For taxable years beginning after December 31, 1999, (14)
Subtract an amount equal to the portion of any premiums paid
during the taxable year by the taxpayer for a qualified long term
care policy (as defined in IC 12-15-39.6-5) for the taxpayer or the
taxpayer's spouse, or both.
(17) (15) Subtract an amount equal to the lesser of:
(A) for a taxable year:
(i) including any part of 2004, the amount determined under
subsection (f); and
(ii) beginning after December 31, 2004, two thousand five
hundred dollars ($2,500); or
(B) the amount of property taxes that are paid during the
taxable year in Indiana by the individual on the individual's
principal place of residence.
(18) (16) Subtract an amount equal to the amount of a September
11 terrorist attack settlement payment included in the individual's
federal adjusted gross income.
(19) (17) Add or subtract the amount necessary to make the
adjusted gross income of any taxpayer that owns property for
which bonus depreciation was allowed in the current taxable year
or in an earlier taxable year equal to the amount of adjusted gross
income that would have been computed had an election not been
made under Section 168(k) of the Internal Revenue Code to apply
bonus depreciation to the property in the year that it was placed
in service.
(20) (18) Add an amount equal to any deduction allowed under
Section 172 of the Internal Revenue Code.
(21) (19) Add or subtract the amount necessary to make the
adjusted gross income of any taxpayer that placed Section 179
property (as defined in Section 179 of the Internal Revenue Code)
in service in the current taxable year or in an earlier taxable year
equal to the amount of adjusted gross income that would have
been computed had an election for federal income tax purposes
not been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding twenty-five thousand
dollars ($25,000).
(22) (20) Add an amount equal to the amount that a taxpayer
claimed as a deduction for domestic production activities for the
taxable year under Section 199 of the Internal Revenue Code for
federal income tax purposes.
(23) (21) Subtract an amount equal to the amount of the taxpayer's
qualified military income that was not excluded from the
taxpayer's gross income for federal income tax purposes under
Section 112 of the Internal Revenue Code.
(24) (22) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7; and
(B) included in the individual's federal adjusted gross income
under the Internal Revenue Code.
(25) (23) Subtract any amount of a credit (including an advance
refund of the credit) that is provided to an individual under 26
U.S.C. 6428 (federal Economic Stimulus Act of 2008) and
included in the individual's federal adjusted gross income.
(26) (24) Add any amount of unemployment compensation
excluded from federal gross income, as defined in Section 61 of
the Internal Revenue Code, under Section 85(c) of the Internal
Revenue Code.
(27) (25) Add the amount excluded from gross income under
Section 108(a)(1)(e) of the Internal Revenue Code for the
discharge of debt on a qualified principal residence.
(28) (26) Add an amount equal to any income not included in
gross income as a result of the deferral of income arising from
business indebtedness discharged in connection with the
reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code. Subtract the amount
necessary from the adjusted gross income of any taxpayer that
added an amount to adjusted gross income in a previous year to
offset the amount included in federal gross income as a result of
the deferral of income arising from business indebtedness
discharged in connection with the reacquisition after December
31, 2008, and before January 1, 2011, of an applicable debt
instrument, as provided in Section 108(i) of the Internal Revenue
Code.
(29) (27) Add the amount necessary to make the adjusted gross
income of any taxpayer that placed qualified restaurant property
in service during the taxable year and that was classified as
15-year property under Section 168(e)(3)(E)(v) of the Internal
Revenue Code equal to the amount of adjusted gross income that
would have been computed had the classification not applied to
the property in the year that it was placed in service.
(30) (28) Add the amount necessary to make the adjusted gross
income of any taxpayer that placed qualified retail improvement
property in service during the taxable year and that was classified
as 15-year property under Section 168(e)(3)(E)(ix) of the Internal
Revenue Code equal to the amount of adjusted gross income that
would have been computed had the classification not applied to
the property in the year that it was placed in service.
(31) (29) Add or subtract the amount necessary to make the
adjusted gross income of any taxpayer that claimed the special
allowance for qualified disaster assistance property under Section
168(n) of the Internal Revenue Code equal to the amount of
adjusted gross income that would have been computed had the
special allowance not been claimed for the property.
(32) (30) Add or subtract the amount necessary to make the
adjusted gross income of any taxpayer that made an election
under Section 179C of the Internal Revenue Code to expense
costs for qualified refinery property equal to the amount of
adjusted gross income that would have been computed had an
election for federal income tax purposes not been made for the
year.
(33) (31) Add or subtract the amount necessary to make the
adjusted gross income of any taxpayer that made an election
under Section 181 of the Internal Revenue Code to expense costs
for a qualified film or television production equal to the amount
of adjusted gross income that would have been computed had an
election for federal income tax purposes not been made for the
year.
(34) (32) Add or subtract the amount necessary to make the
adjusted gross income of any taxpayer that treated a loss from the
sale or exchange of preferred stock in:
(A) the Federal National Mortgage Association, established
under the Federal National Mortgage Association Charter Act
(12 U.S.C. 1716 et seq.); or
(B) the Federal Home Loan Mortgage Corporation, established
under the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1451 et seq.);
as an ordinary loss under Section 301 of the Emergency
Economic Stabilization Act of 2008 in the current taxable year or
in an earlier taxable year equal to the amount of adjusted gross
income that would have been computed had the loss not been
treated as an ordinary loss.
(33) Add the amount excluded from federal gross income
under Section 103 of the Internal Revenue Code for interest
received on an obligation of a state other than Indiana or a
political subdivision of such a state.
(b) In the case of corporations, the same as "taxable income" (as
defined in Section 63 of the Internal Revenue Code) adjusted as
follows:
(1) Subtract income that is exempt from taxation under this article
by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction or deductions allowed
or allowable pursuant to Section 170 of the Internal Revenue
Code.
(3) Add an amount equal to any deduction or deductions allowed
or allowable pursuant to Section 63 of the Internal Revenue Code
for taxes based on or measured by income and levied at the state
level by any state of the United States.
(4) Subtract an amount equal to the amount included in the
corporation's taxable income under Section 78 of the Internal
Revenue Code.
(5) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross income
that would have been computed had an election not been made
under Section 168(k) of the Internal Revenue Code to apply bonus
depreciation to the property in the year that it was placed in
service.
(6) Add an amount equal to any deduction allowed under Section
172 of the Internal Revenue Code.
(7) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in service
in the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding twenty-five thousand
dollars ($25,000).
(8) Add an amount equal to the amount that a taxpayer claimed as
a deduction for domestic production activities for the taxable year
under Section 199 of the Internal Revenue Code for federal
income tax purposes.
(9) Add to the extent required by IC 6-3-2-20 the amount of
intangible expenses (as defined in IC 6-3-2-20) and any directly
related intangible interest expenses (as defined in IC 6-3-2-20) for
the taxable year that reduced the corporation's taxable income (as
defined in Section 63 of the Internal Revenue Code) for federal
income tax purposes.
(10) Add an amount equal to any deduction for dividends paid (as
defined in Section 561 of the Internal Revenue Code) to
shareholders of a captive real estate investment trust (as defined
in section 34.5 of this chapter).
(11) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7; and
(B) included in the corporation's taxable income under the
Internal Revenue Code.
(12) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from business
indebtedness discharged in connection with the reacquisition after
December 31, 2008, and before January 1, 2011, of an applicable
debt instrument, as provided in Section 108(i) of the Internal
Revenue Code. Subtract from the adjusted gross income of any
taxpayer that added an amount to adjusted gross income in a
previous year the amount necessary to offset the amount included
in federal gross income as a result of the deferral of income
arising from business indebtedness discharged in connection with
the reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(13) Add the amount necessary to make the adjusted gross income
of any taxpayer that placed qualified restaurant property in service
during the taxable year and that was classified as 15-year property
under Section 168(e)(3)(E)(v) of the Internal Revenue Code equal
to the amount of adjusted gross income that would have been
computed had the classification not applied to the property in the
year that it was placed in service.
(14) Add the amount necessary to make the adjusted gross income
of any taxpayer that placed qualified retail improvement property
in service during the taxable year and that was classified as
15-year property under Section 168(e)(3)(E)(ix) of the Internal
Revenue Code equal to the amount of adjusted gross income that
would have been computed had the classification not applied to
the property in the year that it was placed in service.
(15) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that claimed the special allowance
for qualified disaster assistance property under Section 168(n) of
the Internal Revenue Code equal to the amount of adjusted gross
income that would have been computed had the special allowance
not been claimed for the property.
(16) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that made an election under Section
179C of the Internal Revenue Code to expense costs for qualified
refinery property equal to the amount of adjusted gross income
that would have been computed had an election for federal
income tax purposes not been made for the year.
(17) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that made an election under Section
181 of the Internal Revenue Code to expense costs for a qualified
film or television production equal to the amount of adjusted
gross income that would have been computed had an election for
federal income tax purposes not been made for the year.
(18) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that treated a loss from the sale or
exchange of preferred stock in:
(A) the Federal National Mortgage Association, established
under the Federal National Mortgage Association Charter Act
(12 U.S.C. 1716 et seq.); or
(B) the Federal Home Loan Mortgage Corporation, established
under the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1451 et seq.);
as an ordinary loss under Section 301 of the Emergency
Economic Stabilization Act of 2008 in the current taxable year or
in an earlier taxable year equal to the amount of adjusted gross
income that would have been computed had the loss not been
treated as an ordinary loss.
(19) Add the amount excluded from federal gross income
under Section 103 of the Internal Revenue Code for interest
received on an obligation of a state other than Indiana or a
political subdivision of such a state.
(c) In the case of life insurance companies (as defined in Section
816(a) of the Internal Revenue Code) that are organized under Indiana
law, the same as "life insurance company taxable income" (as defined
in Section 801 of the Internal Revenue Code), adjusted as follows:
(1) Subtract income that is exempt from taxation under this article
by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction allowed or allowable
under Section 170 of the Internal Revenue Code.
(3) Add an amount equal to a deduction allowed or allowable
under Section 805 or Section 831(c) of the Internal Revenue Code
for taxes based on or measured by income and levied at the state
level by any state.
(4) Subtract an amount equal to the amount included in the
company's taxable income under Section 78 of the Internal
Revenue Code.
(5) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross income
that would have been computed had an election not been made
under Section 168(k) of the Internal Revenue Code to apply bonus
depreciation to the property in the year that it was placed in
service.
(6) Add an amount equal to any deduction allowed under Section
172 or Section 810 of the Internal Revenue Code.
(7) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in service
in the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding twenty-five thousand
dollars ($25,000).
(8) Add an amount equal to the amount that a taxpayer claimed as
a deduction for domestic production activities for the taxable year
under Section 199 of the Internal Revenue Code for federal
income tax purposes.
(9) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7; and
(B) included in the insurance company's taxable income under the Internal Revenue Code.
(10) Add an amount equal to any income not included in gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code. Subtract from the adjusted gross income of any taxpayer that added an amount to adjusted gross income in a previous year the amount necessary to offset the amount included in federal gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code.
(11) Add the amount necessary to make the adjusted gross income of any taxpayer that placed qualified restaurant property in service during the taxable year and that was classified as 15-year property under Section 168(e)(3)(E)(v) of the Internal Revenue Code equal to the amount of adjusted gross income that would have been computed had the classification not applied to the property in the year that it was placed in service.
(12) Add the amount necessary to make the adjusted gross income of any taxpayer that placed qualified retail improvement property in service during the taxable year and that was classified as 15-year property under Section 168(e)(3)(E)(ix) of the Internal Revenue Code equal to the amount of adjusted gross income that would have been computed had the classification not applied to the property in the year that it was placed in service.
(13) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that claimed the special allowance for qualified disaster assistance property under Section 168(n) of the Internal Revenue Code equal to the amount of adjusted gross income that would have been computed had the special allowance not been claimed for the property.
(14) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that made an election under Section 179C of the Internal Revenue Code to expense costs for qualified refinery property equal to the amount of adjusted gross income that would have been computed had an election for federal
income tax purposes not been made for the year.
(15) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that made an election under Section
181 of the Internal Revenue Code to expense costs for a qualified
film or television production equal to the amount of adjusted
gross income that would have been computed had an election for
federal income tax purposes not been made for the year.
(16) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that treated a loss from the sale or
exchange of preferred stock in:
(A) the Federal National Mortgage Association, established
under the Federal National Mortgage Association Charter Act
(12 U.S.C. 1716 et seq.); or
(B) the Federal Home Loan Mortgage Corporation, established
under the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1451 et seq.);
as an ordinary loss under Section 301 of the Emergency
Economic Stabilization Act of 2008 in the current taxable year or
in an earlier taxable year equal to the amount of adjusted gross
income that would have been computed had the loss not been
treated as an ordinary loss.
(17) Add an amount equal to any exempt insurance income under
Section 953(e) of the Internal Revenue Code that is active
financing income under Subpart F of Subtitle A, Chapter 1,
Subchapter N of the Internal Revenue Code.
(18) Add the amount excluded from federal gross income
under Section 103 of the Internal Revenue Code for interest
received on an obligation of a state other than Indiana or a
political subdivision of such a state.
(d) In the case of insurance companies subject to tax under Section
831 of the Internal Revenue Code and organized under Indiana law, the
same as "taxable income" (as defined in Section 832 of the Internal
Revenue Code), adjusted as follows:
(1) Subtract income that is exempt from taxation under this article
by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction allowed or allowable
under Section 170 of the Internal Revenue Code.
(3) Add an amount equal to a deduction allowed or allowable
under Section 805 or Section 831(c) of the Internal Revenue Code
for taxes based on or measured by income and levied at the state
level by any state.
(4) Subtract an amount equal to the amount included in the
company's taxable income under Section 78 of the Internal
Revenue Code.
(5) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross income
that would have been computed had an election not been made
under Section 168(k) of the Internal Revenue Code to apply bonus
depreciation to the property in the year that it was placed in
service.
(6) Add an amount equal to any deduction allowed under Section
172 of the Internal Revenue Code.
(7) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in service
in the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding twenty-five thousand
dollars ($25,000).
(8) Add an amount equal to the amount that a taxpayer claimed as
a deduction for domestic production activities for the taxable year
under Section 199 of the Internal Revenue Code for federal
income tax purposes.
(9) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7; and
(B) included in the insurance company's taxable income under
the Internal Revenue Code.
(10) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from business
indebtedness discharged in connection with the reacquisition after
December 31, 2008, and before January 1, 2011, of an applicable
debt instrument, as provided in Section 108(i) of the Internal
Revenue Code. Subtract from the adjusted gross income of any
taxpayer that added an amount to adjusted gross income in a
previous year the amount necessary to offset the amount included
in federal gross income as a result of the deferral of income
arising from business indebtedness discharged in connection with
the reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(11) Add the amount necessary to make the adjusted gross income
of any taxpayer that placed qualified restaurant property in service
during the taxable year and that was classified as 15-year property
under Section 168(e)(3)(E)(v) of the Internal Revenue Code equal
to the amount of adjusted gross income that would have been
computed had the classification not applied to the property in the
year that it was placed in service.
(12) Add the amount necessary to make the adjusted gross income
of any taxpayer that placed qualified retail improvement property
in service during the taxable year and that was classified as
15-year property under Section 168(e)(3)(E)(ix) of the Internal
Revenue Code equal to the amount of adjusted gross income that
would have been computed had the classification not applied to
the property in the year that it was placed in service.
(13) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that claimed the special allowance
for qualified disaster assistance property under Section 168(n) of
the Internal Revenue Code equal to the amount of adjusted gross
income that would have been computed had the special allowance
not been claimed for the property.
(14) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that made an election under Section
179C of the Internal Revenue Code to expense costs for qualified
refinery property equal to the amount of adjusted gross income
that would have been computed had an election for federal
income tax purposes not been made for the year.
(15) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that made an election under Section
181 of the Internal Revenue Code to expense costs for a qualified
film or television production equal to the amount of adjusted
gross income that would have been computed had an election for
federal income tax purposes not been made for the year.
(16) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that treated a loss from the sale or
exchange of preferred stock in:
(A) the Federal National Mortgage Association, established
under the Federal National Mortgage Association Charter Act
(12 U.S.C. 1716 et seq.); or
(B) the Federal Home Loan Mortgage Corporation, established
under the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1451 et seq.);
as an ordinary loss under Section 301 of the Emergency Economic Stabilization Act of 2008 in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had the loss not been treated as an ordinary loss.
(17) Add an amount equal to any exempt insurance income under Section 953(e) of the Internal Revenue Code that is active financing income under Subpart F of Subtitle A, Chapter 1, Subchapter N of the Internal Revenue Code.
(18) Add the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana or a political subdivision of such a state.
(e) In the case of trusts and estates, "taxable income" (as defined for trusts and estates in Section 641(b) of the Internal Revenue Code) adjusted as follows:
(1) Subtract income that is exempt from taxation under this article by the Constitution and statutes of the United States.
(2) Subtract an amount equal to the amount of a September 11 terrorist attack settlement payment included in the federal adjusted gross income of the estate of a victim of the September 11 terrorist attack or a trust to the extent the trust benefits a victim of the September 11 terrorist attack.
(3) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that owns property for which bonus depreciation was allowed in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election not been made under Section 168(k) of the Internal Revenue Code to apply bonus depreciation to the property in the year that it was placed in service.
(4) Add an amount equal to any deduction allowed under Section 172 of the Internal Revenue Code.
(5) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that placed Section 179 property (as defined in Section 179 of the Internal Revenue Code) in service in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election for federal income tax purposes not been made for the year in which the property was placed in service to take deductions under Section 179 of the Internal Revenue Code in a total amount exceeding twenty-five thousand
dollars ($25,000).
(6) Add an amount equal to the amount that a taxpayer claimed as
a deduction for domestic production activities for the taxable year
under Section 199 of the Internal Revenue Code for federal
income tax purposes.
(7) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7; and
(B) included in the taxpayer's taxable income under the
Internal Revenue Code.
(8) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from business
indebtedness discharged in connection with the reacquisition after
December 31, 2008, and before January 1, 2011, of an applicable
debt instrument, as provided in Section 108(i) of the Internal
Revenue Code. Subtract from the adjusted gross income of any
taxpayer that added an amount to adjusted gross income in a
previous year the amount necessary to offset the amount included
in federal gross income as a result of the deferral of income
arising from business indebtedness discharged in connection with
the reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(9) Add the amount necessary to make the adjusted gross income
of any taxpayer that placed qualified restaurant property in service
during the taxable year and that was classified as 15-year property
under Section 168(e)(3)(E)(v) of the Internal Revenue Code equal
to the amount of adjusted gross income that would have been
computed had the classification not applied to the property in the
year that it was placed in service.
(10) Add the amount necessary to make the adjusted gross income
of any taxpayer that placed qualified retail improvement property
in service during the taxable year and that was classified as
15-year property under Section 168(e)(3)(E)(ix) of the Internal
Revenue Code equal to the amount of adjusted gross income that
would have been computed had the classification not applied to
the property in the year that it was placed in service.
(11) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that claimed the special allowance
for qualified disaster assistance property under Section 168(n) of
the Internal Revenue Code equal to the amount of adjusted gross
income that would have been computed had the special allowance
not been claimed for the property.
(12) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that made an election under Section 179C of the Internal Revenue Code to expense costs for qualified refinery property equal to the amount of adjusted gross income that would have been computed had an election for federal income tax purposes not been made for the year.
(13) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that made an election under Section 181 of the Internal Revenue Code to expense costs for a qualified film or television production equal to the amount of adjusted gross income that would have been computed had an election for federal income tax purposes not been made for the year.
(14) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that treated a loss from the sale or exchange of preferred stock in:
(A) the Federal National Mortgage Association, established under the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.); or
(B) the Federal Home Loan Mortgage Corporation, established under the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.);
as an ordinary loss under Section 301 of the Emergency Economic Stabilization Act of 2008 in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had the loss not been treated as an ordinary loss.
(15) Add the amount excluded from gross income under Section 108(a)(1)(e) of the Internal Revenue Code for the discharge of debt on a qualified principal residence.
(16) Add the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana or a political subdivision of such a state.
(b) Except as provided in section 1.5 of this chapter, each taxable year, a tax at the following rate
(1) Before July 1, 2012, eight and five-tenths percent (8.5%).
(2) After June 30, 2012, and before July 1, 2013, eight percent (8.0%).
(3) After June 30, 2013, and before July 1, 2014, seven and five-tenths percent (7.5%).
(4) After June 30, 2014, and before July 1, 2015, seven percent (7.0%).
(5) After June 30, 2015, six and five-tenths percent (6.5%).
(c) If for any taxable year a taxpayer is subject to different tax rates under subsection (b), the taxpayer's tax rate for that taxable year is the rate determined in the last STEP of the following STEPS:
STEP ONE: Multiply the number of months in the taxpayer's taxable year that precede the month the rate changed by the rate in effect before the rate change.
STEP TWO: Multiply the number of months in the taxpayer's taxable year that follow the month before the rate changed by the rate in effect after the rate change.
STEP THREE: Divide the sum of the amounts determined under STEPS ONE and TWO by twelve (12).
However, the rate determined under this subsection shall be rounded to the nearest one-hundredth of one percent (0.01%).
SECTION 191, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2011 (RETROACTIVE)]: Sec. 2. (a) With
regard to corporations and nonresident persons, "adjusted gross income
derived from sources within Indiana", for the purposes of this article,
shall mean and include:
(1) income from real or tangible personal property located in this
state;
(2) income from doing business in this state;
(3) income from a trade or profession conducted in this state;
(4) compensation for labor or services rendered within this state;
and
(5) income from stocks, bonds, notes, bank deposits, patents,
copyrights, secret processes and formulas, good will, trademarks,
trade brands, franchises, and other intangible personal property if
the receipt from the intangible is attributable to Indiana under
section 2.2 of this chapter. to the extent that the income is
apportioned to Indiana under this section or if the income is
allocated to Indiana or considered to be derived from sources
within Indiana under this section.
Income from a pass through entity shall be characterized in a manner
consistent with the income's characterization for federal income tax
purposes and shall be considered Indiana source income as if the
person, corporation, or pass through entity that received the income had
directly engaged in the income producing activity. Income that is
derived from one (1) pass through entity and is considered to pass
through to another pass through entity does not change these
characteristics or attribution provisions. In the case of nonbusiness
income described in subsection (g), only so much of such income as is
allocated to this state under the provisions of subsections (h) through
(k) shall be deemed to be derived from sources within Indiana. In the
case of business income, only so much of such income as is
apportioned to this state under the provision of subsection (b) shall be
deemed to be derived from sources within the state of Indiana. In the
case of compensation of a team member (as defined in section 2.7 of
this chapter), only the portion of income determined to be Indiana
income under section 2.7 of this chapter is considered derived from
sources within Indiana. In the case of a corporation that is a life
insurance company (as defined in Section 816(a) of the Internal
Revenue Code) or an insurance company that is subject to tax under
Section 831 of the Internal Revenue Code, only so much of the income
as is apportioned to Indiana under subsection (r) is considered derived
from sources within Indiana.
(b) Except as provided in subsection (l), if business income of a corporation or a nonresident person is derived from sources within the state of Indiana and from sources without the state of Indiana, the business income derived from sources within this state shall be determined by multiplying the business income derived from sources both within and without the state of Indiana by the following:
(1) For all taxable years that begin after December 31, 2006, and before January 1, 2008, a fraction. The:
(A) numerator of the fraction is the sum of the property factor plus the payroll factor plus the product of the sales factor multiplied by three (3); and
(B) denominator of the fraction is five (5).
(2) For all taxable years that begin after December 31, 2007, and before January 1, 2009, a fraction. The:
(A) numerator of the fraction is the property factor plus the payroll factor plus the product of the sales factor multiplied by four and sixty-seven hundredths (4.67); and
(B) denominator of the fraction is six and sixty-seven hundredths (6.67).
(3) For all taxable years beginning after December 31, 2008, and before January 1, 2010, a fraction. The:
(A) numerator of the fraction is the property factor plus the payroll factor plus the product of the sales factor multiplied by eight (8); and
(B) denominator of the fraction is ten (10).
(4) For all taxable years beginning after December 31, 2009, and before January 1, 2011, a fraction. The:
(A) numerator of the fraction is the property factor plus the payroll factor plus the product of the sales factor multiplied by eighteen (18); and
(B) denominator of the fraction is twenty (20).
(5) For all taxable years beginning after December 31, 2010, the sales factor.
(c) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the taxable year and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during the taxable year. However, with respect to a foreign corporation, the denominator does not include the average value of real or tangible personal property owned or rented and used in a place that is outside the United States. Property owned by the taxpayer is valued at its original cost. Property
rented by the taxpayer is valued at eight (8) times the net annual rental
rate. Net annual rental rate is the annual rental rate paid by the taxpayer
less any annual rental rate received by the taxpayer from subrentals.
The average of property shall be determined by averaging the values at
the beginning and ending of the taxable year, but the department may
require the averaging of monthly values during the taxable year if
reasonably required to reflect properly the average value of the
taxpayer's property.
(d) The payroll factor is a fraction, the numerator of which is the
total amount paid in this state during the taxable year by the taxpayer
for compensation, and the denominator of which is the total
compensation paid everywhere during the taxable year. However, with
respect to a foreign corporation, the denominator does not include
compensation paid in a place that is outside the United States.
Compensation is paid in this state if:
(1) the individual's service is performed entirely within the state;
(2) the individual's service is performed both within and without
this state, but the service performed without this state is incidental
to the individual's service within this state; or
(3) some of the service is performed in this state and:
(A) the base of operations or, if there is no base of operations,
the place from which the service is directed or controlled is in
this state; or
(B) the base of operations or the place from which the service
is directed or controlled is not in any state in which some part
of the service is performed, but the individual is a resident of
this state.
(e) The sales factor is a fraction, the numerator of which is the total
sales of the taxpayer in this state during the taxable year, and the
denominator of which is the total sales of the taxpayer everywhere
during the taxable year. Sales include receipts from intangible property
and receipts from the sale or exchange of intangible property. However,
with respect to a foreign corporation, the denominator does not include
sales made in a place that is outside the United States. Receipts from
intangible personal property are derived from sources within Indiana
if the receipts from the intangible personal property are attributable to
Indiana under section 2.2 of this chapter. Regardless of the f.o.b. point
or other conditions of the sale, sales of tangible personal property are
in this state if:
(1) the property is delivered or shipped to a purchaser that is
within Indiana, other than the United States government; or
(2) the property is shipped from an office, a store, a warehouse, a
factory, or other place of storage in this state and:
(A) the purchaser is the United States government; or
(B) the taxpayer is not taxable in the state of the purchaser.
Gross receipts derived from commercial printing as described in
IC 6-2.5-1-10 shall be treated as sales of tangible personal property for
purposes of this chapter.
(f) Sales, other than receipts from intangible property covered by
subsection (e) and sales of tangible personal property, are in this state
if:
(1) the income-producing activity is performed in this state; or
(2) the income-producing activity is performed both within and
without this state and a greater proportion of the
income-producing activity is performed in this state than in any
other state, based on costs of performance.
(g) Rents and royalties from real or tangible personal property,
capital gains, interest, dividends, or patent or copyright royalties, to the
extent that they constitute nonbusiness income, shall be allocated as
provided in subsections (h) through (k).
(h)(1) Net rents and royalties from real property located in this state
are allocable to this state.
(2) Net rents and royalties from tangible personal property are
allocated to this state:
(i) if and to the extent that the property is utilized in this state; or
(ii) in their entirety if the taxpayer's commercial domicile is in this
state and the taxpayer is not organized under the laws of or
taxable in the state in which the property is utilized.
(3) The extent of utilization of tangible personal property in a state
is determined by multiplying the rents and royalties by a fraction, the
numerator of which is the number of days of physical location of the
property in the state during the rental or royalty period in the taxable
year, and the denominator of which is the number of days of physical
location of the property everywhere during all rental or royalty periods
in the taxable year. If the physical location of the property during the
rental or royalty period is unknown or unascertainable by the taxpayer,
tangible personal property is utilized in the state in which the property
was located at the time the rental or royalty payer obtained possession.
(i)(1) Capital gains and losses from sales of real property located in
this state are allocable to this state.
(2) Capital gains and losses from sales of tangible personal property
are allocable to this state if:
(i) the property had a situs in this state at the time of the sale; or
(ii) the taxpayer's commercial domicile is in this state and the
taxpayer is not taxable in the state in which the property had a
situs.
(3) Capital gains and losses from sales of intangible personal
property are allocable to this state if the taxpayer's commercial
domicile is in this state.
(j) Interest and dividends are allocable to this state if the taxpayer's
commercial domicile is in this state.
(k)(1) Patent and copyright royalties are allocable to this state:
(i) if and to the extent that the patent or copyright is utilized by
the taxpayer in this state; or
(ii) if and to the extent that the patent or copyright is utilized by
the taxpayer in a state in which the taxpayer is not taxable and the
taxpayer's commercial domicile is in this state.
(2) A patent is utilized in a state to the extent that it is employed
in production, fabrication, manufacturing, or other processing in
the state or to the extent that a patented product is produced in the
state. If the basis of receipts from patent royalties does not permit
allocation to states or if the accounting procedures do not reflect
states of utilization, the patent is utilized in the state in which the
taxpayer's commercial domicile is located.
(3) A copyright is utilized in a state to the extent that printing or
other publication originates in the state. If the basis of receipts
from copyright royalties does not permit allocation to states or if
the accounting procedures do not reflect states of utilization, the
copyright is utilized in the state in which the taxpayer's
commercial domicile is located.
(l) If the allocation and apportionment provisions of this article do
not fairly represent the taxpayer's income derived from sources within
the state of Indiana, the taxpayer may petition for or the department
may require, in respect to all or any part of the taxpayer's business
activity, if reasonable:
(1) separate accounting;
(2) for a taxable year beginning before January 1, 2011, the
exclusion of any one (1) or more of the factors, except the sales
factor;
(3) the inclusion of one (1) or more additional factors which will
fairly represent the taxpayer's income derived from sources within
the state of Indiana; or
(4) the employment of any other method to effectuate an equitable
allocation and apportionment of the taxpayer's income.
(m) In the case of two (2) or more organizations, trades, or
businesses owned or controlled directly or indirectly by the same
interests, the department shall distribute, apportion, or allocate the
income derived from sources within the state of Indiana between and
among those organizations, trades, or businesses in order to fairly
reflect and report the income derived from sources within the state of
Indiana by various taxpayers.
(n) For purposes of allocation and apportionment of income under
this article, a taxpayer is taxable in another state if:
(1) in that state the taxpayer is subject to a net income tax, a
franchise tax measured by net income, a franchise tax for the
privilege of doing business, or a corporate stock tax; or
(2) that state has jurisdiction to subject the taxpayer to a net
income tax regardless of whether, in fact, the state does or does
not.
(o) Notwithstanding subsections (l) and (m), the department may
not, under any circumstances, require that income, deductions, and
credits attributable to a taxpayer and another entity be reported in a
combined income tax return for any taxable year, if the other entity is:
(1) a foreign corporation; or
(2) a corporation that is classified as a foreign operating
corporation for the taxable year by section 2.4 of this chapter.
(p) Notwithstanding subsections (l) and (m), the department may not
require that income, deductions, and credits attributable to a taxpayer
and another entity not described in subsection (o)(1) or (o)(2) be
reported in a combined income tax return for any taxable year, unless
the department is unable to fairly reflect the taxpayer's adjusted gross
income for the taxable year through use of other powers granted to the
department by subsections (l) and (m).
(q) Notwithstanding subsections (o) and (p), one (1) or more
taxpayers may petition the department under subsection (l) for
permission to file a combined income tax return for a taxable year. The
petition to file a combined income tax return must be completed and
filed with the department not more than thirty (30) days after the end
of the taxpayer's taxable year. A taxpayer filing a combined income tax
return must petition the department within thirty (30) days after the end
of the taxpayer's taxable year to discontinue filing a combined income
tax return.
(r) This subsection applies to a corporation that is a life insurance
company (as defined in Section 816(a) of the Internal Revenue Code)
or an insurance company that is subject to tax under Section 831 of the
Internal Revenue Code. The corporation's adjusted gross income that
is derived from sources within Indiana is determined by multiplying the
corporation's adjusted gross income by a fraction:
(1) the numerator of which is the direct premiums and annuity considerations received during the taxable year for insurance upon property or risks in the state; and
(2) the denominator of which is the direct premiums and annuity considerations received during the taxable year for insurance upon property or risks everywhere.
The term "direct premiums and annuity considerations" means the gross premiums received from direct business as reported in the corporation's annual statement filed with the department of insurance.
(b) Resident persons are entitled to a net operating loss deduction. The amount of the deduction taken in a taxable year may not exceed the taxpayer's unused Indiana net operating losses
(c) An Indiana net operating loss equals the taxpayer's federal net operating loss for a taxable year as calculated under Section 172 of the Internal Revenue Code, adjusted for the modifications required by IC 6-3-1-3.5.
(d) The following provisions apply for purposes of subsection (c):
(1) The modifications that are to be applied are those modifications required under IC 6-3-1-3.5 for the same taxable year in which each net operating loss was incurred.
(2) An Indiana net operating loss includes a net operating loss that arises when the modifications required by IC 6-3-1-3.5 exceed the taxpayer's federal adjusted gross income (as defined in Section 62 of the Internal Revenue Code) for the taxable year in which the Indiana net operating loss is determined.
(e) Subject to the limitations contained in subsection (g), an Indiana net operating loss
(f)
operating loss carryover to each of the carryover years following
the taxable year of the loss.
(3) Carryback years shall be determined by reference to the
number of years allowed for carrying back a net operating loss
under Section 172(b) of the Internal Revenue Code. However,
with respect to the carryback period for a net operating loss:
(A) for which a taxpayer made an election to use five (5) years
instead of two (2) years under Section 172(b)(1)(H) of the
Internal Revenue Code, two (2) years shall be used instead of
five (5) years; or
(B) that is a qualified disaster loss for which the taxpayer
elected to have the net operating loss carryback period with
respect to the loss year determined without regard to Section
172(b)(1)(J) of the Internal Revenue Code, five (5) years shall
be used.
(4) (2) Carryover years shall be determined by reference to the
number of years allowed for carrying over net operating losses
under Section 172(b) of the Internal Revenue Code.
(5) A taxpayer who makes an election under Section 172(b)(3) of
the Internal Revenue Code to relinquish the carryback period with
respect to a net operating loss for any taxable year shall be
considered to have also relinquished the carryback of the Indiana
net operating loss for purposes of this section.
(g) The entire amount of the Indiana net operating loss for any
taxable year shall be carried to the earliest of the taxable years to which
(as determined under subsection (f)) the loss may be carried. The
amount of the Indiana net operating loss remaining after the deduction
is taken under this section in a taxable year may be carried back or
carried over as provided in subsection (f). The amount of the Indiana
net operating loss carried back or carried over from year to year shall
be reduced to the extent that the Indiana net operating loss carryback
or carryover is used by the taxpayer to obtain a deduction in a taxable
year until the occurrence of the earlier of the following:
(1) The entire amount of the Indiana net operating loss has been
used as a deduction.
(2) The Indiana net operating loss has been carried over to each
of the carryover years provided by subsection (f).
(b) Corporations and nonresident persons are entitled to a net
operating loss deduction. The amount of the deduction taken in a
taxable year may not exceed the taxpayer's unused Indiana net
operating losses carried back or carried over to that year. A taxpayer
is not entitled to carryback any net operating losses after
December 31, 2012.
(c) An Indiana net operating loss equals the taxpayer's federal net
operating loss for a taxable year as calculated under Section 172 of the
Internal Revenue Code, derived from sources within Indiana and
adjusted for the modifications required by IC 6-3-1-3.5.
(d) The following provisions apply for purposes of subsection (c):
(1) The modifications that are to be applied are those
modifications required under IC 6-3-1-3.5 for the same taxable
year in which each net operating loss was incurred.
(2) The amount of the taxpayer's net operating loss that is derived
from sources within Indiana shall be determined in the same
manner that the amount of the taxpayer's adjusted income derived
from sources within Indiana is determined under section 2 of this
chapter for the same taxable year during which each loss was
incurred.
(3) An Indiana net operating loss includes a net operating loss that
arises when the modifications required by IC 6-3-1-3.5 exceed the
taxpayer's federal taxable income (as defined in Section 63 of the
Internal Revenue Code), if the taxpayer is a corporation, or when
the modifications required by IC 6-3-1-3.5 exceed the taxpayer's
federal adjusted gross income (as defined by Section 62 of the
Internal Revenue Code), if the taxpayer is a nonresident person,
for the taxable year in which the Indiana net operating loss is
determined.
(e) Subject to the limitations contained in subsection (g), an Indiana
net operating loss carryback or carryover shall be available as a
deduction from the taxpayer's adjusted gross income derived from
sources within Indiana (as defined in section 2 of this chapter) in the
carryback or carryover year provided in subsection (f).
(f) Carrybacks and Carryovers shall be determined under this
subsection as follows:
(1) An Indiana net operating loss shall be an Indiana net operating
loss carryback to each of the carryback years preceding the
taxable year of the loss.
(2) (1) An Indiana net operating loss shall be an Indiana net
operating loss carryover to each of the carryover years following
the taxable year of the loss.
(3) Carryback years shall be determined by reference to the
number of years allowed for carrying back a net operating loss
under Section 172(b) of the Internal Revenue Code. However,
with respect to the carryback period for a net operating loss:
(A) for which a taxpayer made an election to use five (5) years
instead of two (2) years under Section 172(b)(1)(H) of the
Internal Revenue Code, two (2) years shall be used instead of
five (5) years; or
(B) that is a qualified disaster loss for which the taxpayer
elected to have the net operating loss carryback period with
respect to the loss year determined without regard to Section
172(b)(1)(J) of the Internal Revenue Code, five (5) years shall
be used.
(4) (2) Carryover years shall be determined by reference to the
number of years allowed for carrying over net operating losses
under Section 172(b) of the Internal Revenue Code.
(5) A taxpayer who makes an election under Section 172(b)(3) of
the Internal Revenue Code to relinquish the carryback period with
respect to a net operating loss for any taxable year shall be
considered to have also relinquished the carryback of the Indiana
net operating loss for purposes of this section.
(g) The entire amount of the Indiana net operating loss for any
taxable year shall be carried to the earliest of the taxable years to which
(as determined under subsection (f)) the loss may be carried. The
amount of the Indiana net operating loss remaining after the deduction
is taken under this section in a taxable year may be carried back or
carried over as provided in subsection (f). The amount of the Indiana
net operating loss carried back or carried over from year to year shall
be reduced to the extent that the Indiana net operating loss carryback
or carryover is used by the taxpayer to obtain a deduction in a taxable
year until the occurrence of the earlier of the following:
(1) The entire amount of the Indiana net operating loss has been
used as a deduction.
(2) The Indiana net operating loss has been carried over to each
of the carryover years provided by subsection (f).
(h) An Indiana net operating loss deduction determined under this
section shall be allowed notwithstanding the fact that in the year the
taxpayer incurred the net operating loss the taxpayer was not subject to
the tax imposed under section 1 of this chapter because the taxpayer
was:
(1) a life insurance company (as defined in Section 816(a) of the
Internal Revenue Code); or
(2) an insurance company subject to tax under Section 831 of the
Internal Revenue Code.
(i) In the case of a life insurance company that claims an operations
loss deduction under Section 810 of the Internal Revenue Code, this
section shall be applied by:
(1) substituting the corresponding provisions of Section 810 of the
Internal Revenue Code in place of references to Section 172 of
the Internal Revenue Code; and
(2) substituting life insurance company taxable income (as
defined in Section 801 the Internal Revenue Code) in place of
references to taxable income (as defined in Section 63 of the
Internal Revenue Code).
(j) For purposes of an amended return filed to carry back an Indiana
net operating loss:
(1) the term "due date of the return", as used in IC 6-8.1-9-1(a)(1),
means the due date of the return for the taxable year in which the
net operating loss was incurred; and
(2) the term "date the payment was due", as used in
IC 6-8.1-9-2(c), means the due date of the return for the taxable
year in which the net operating loss was incurred.
(b) Each taxpayer shall notify the department of any modification of:
(1) a federal income tax return filed by the taxpayer after January 1, 1978; or
(2) the taxpayer's federal income tax liability for a taxable year which begins after December 31, 1977.
The taxpayer shall file the notice on the form prescribed by the department within one hundred twenty (120) days after the modification is made if the modification was made before January 1, 2011, and one hundred eighty (180) days after the modification is made if the modification is made after December 31, 2010.
(c) If the federal modification results in a change in the taxpayer's federal or Indiana adjusted gross income, the taxpayer shall file an Indiana amended return within one hundred twenty (120) days after the modification is made if the modification was made before January 1, 2011, and one hundred eighty (180) days after the modification
is made if the modification is made after December 31, 2010.
(b) The amount of the credit to which a taxpayer is entitled is the qualified investment made by the taxpayer during the taxable year multiplied by twenty-five percent (25%).
(c) A taxpayer may assign any part of the credit to which the taxpayer is entitled under this chapter to a lessee of property redeveloped or rehabilitated under section 2 of this chapter. A credit that is assigned under this subsection remains subject to this chapter.
(d) An assignment under subsection (c) must be in writing and both the taxpayer and the lessee must report the assignment on their state tax return for the year in which the assignment is made, in the manner prescribed by the department. The taxpayer may not receive value in connection with the assignment under subsection (c) that exceeds the value of the part of the credit assigned.
(e) If a pass through entity is entitled to a credit under this chapter but does not have state and local 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.
The credit provided under this subsection is in addition to a tax credit to which a shareholder, partner, or member of a pass through entity is otherwise entitled under this chapter. However, a pass through entity and an individual who is a shareholder, partner, or member of the pass through entity may not claim more than one (1) credit for the same investment.
(f) A taxpayer that is otherwise entitled to a credit under this chapter for a taxable year may claim the credit regardless of whether any income tax incremental amount or gross retail incremental amount has been:
(1) deposited in the incremental tax financing fund established for the community revitalization enhancement district; or
(2) allocated to the district.
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2011]: Sec. 28. (a) This section applies only to a county that
is a member of a regional development authority under IC 36-7.6.
(b) In addition to the rates permitted by section 5 of this chapter, the
entity that imposed the county economic development income tax
under section 5 of this chapter (or, in the case of a county that has not
imposed the county economic development income tax, the entity that
may impose the county economic development income tax under
section 5(a)(3) of this chapter) may by ordinance impose an additional
county economic development income tax at a rate of:
(1) in the case of a county described in IC 36-7.6-4-2(b)(2),
twenty-five thousandths of one percent (0.025%); or
(2) in the case of any other county to which this section
applies, five-hundredths of one percent (0.05%);
on the adjusted gross income of county taxpayers.
(c) If an additional county economic development income tax is
imposed under this section, the county treasurer shall establish a county
regional development authority fund. Notwithstanding any other
provision of this chapter, the county economic development income tax
revenues derived from the additional county economic development
income tax imposed under this section must be deposited in the county
regional development authority fund before any certified distributions
are made under section 12 of this chapter.
(d) County economic development income tax revenues derived
from the additional county economic development income tax imposed
under this section and deposited in the county regional development
authority fund:
(1) shall, not more than thirty (30) days after being deposited in
the county regional development authority fund, be transferred as
provided in IC 36-7.6-4-2 to the development fund of the regional
development authority for which the county is a member; and
(2) may not be considered by the department of local government
finance in determining the county's maximum permissible
property tax levy under IC 6-1.1-18.5.
(e) Notwithstanding sections 5 and 6 of this chapter, if a county
becomes a member of a regional development authority under
IC 36-7.6 and imposes an additional county economic development
income tax under this section, then, notwithstanding section 11 or any
other provision of this chapter, the initial certified distribution of the
tax revenue that results from the additional tax shall be distributed to
the county treasurer from the account established for the county under
this chapter according to the following schedule during the eighteen
(18) month period beginning on July 1 of the year in which the county
adopts the ordinance to impose the additional tax:
(1) One-fourth (1/4) on October 1 of the year in which the
ordinance to impose the additional tax is adopted.
(2) One-fourth (1/4) on January 1 of the calendar year following
the year in which the ordinance to impose the additional tax is
adopted.
(3) One-fourth (1/4) on May 1 of the calendar year following the
year in which the ordinance to impose the additional tax is
adopted.
(4) One-fourth (1/4) on November 1 of the calendar year
following the year in which the ordinance to impose the additional
tax is adopted.
(1) Add the following amounts:
(A) An amount equal to a deduction allowed or allowable under Section 166, Section 585, or Section 593 of the Internal Revenue Code.
(B) An amount equal to a deduction allowed or allowable under Section 170 of the Internal Revenue Code.
(C) An amount equal to a deduction or deductions allowed or allowable under Section 63 of the Internal Revenue Code for taxes based on or measured by income and levied at the state level by a state of the United States or levied at the local level by any subdivision of a state of the United States.
(D) The amount of interest excluded under Section 103 of the Internal Revenue Code or under any other federal law, minus the associated expenses disallowed in the computation of taxable income under Section 265 of the Internal Revenue Code.
(E) An amount equal to the deduction allowed under Section 172 or 1212 of the Internal Revenue Code for net operating losses or net capital losses.
(F) For a taxpayer that is not a large bank (as defined in Section 585(c)(2) of the Internal Revenue Code), an amount equal to the recovery of a debt, or part of a debt, that becomes worthless to the extent a deduction was allowed from gross
income in a prior taxable year under Section 166(a) of the
Internal Revenue Code.
(G) Add the amount necessary to make the adjusted gross
income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross
income that would have been computed had an election not
been made under Section 168(k) of the Internal Revenue Code
to apply bonus depreciation to the property in the year that it
was placed in service.
(H) Add the amount necessary to make the adjusted gross
income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in
service in the current taxable year or in an earlier taxable year
equal to the amount of adjusted gross income that would have
been computed had an election for federal income tax
purposes not been made for the year in which the property was
placed in service to take deductions under Section 179 of the
Internal Revenue Code in a total amount exceeding
twenty-five thousand dollars ($25,000).
(I) Add an amount equal to the amount that a taxpayer claimed
as a deduction for domestic production activities for the
taxable year under Section 199 of the Internal Revenue Code
for federal income tax purposes.
(J) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from
business indebtedness discharged in connection with the
reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code. Subtract from the
adjusted gross income of any taxpayer that added an amount
to adjusted gross income in a previous year the amount
necessary to offset the amount included in federal gross
income as a result of the deferral of income arising from
business indebtedness discharged in connection with the
reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(K) Add the amount necessary to make the adjusted gross
income of any taxpayer that placed qualified restaurant
property in service during the taxable year and that was
classified as 15-year property under Section 168(e)(3)(E)(v) of
the Internal Revenue Code equal to the amount of adjusted
gross income that would have been computed had the
classification not applied to the property in the year that it was
placed in service.
(L) Add the amount necessary to make the adjusted gross
income of any taxpayer that placed qualified retail
improvement property in service during the taxable year and
that was classified as 15-year property under Section
168(e)(3)(E)(ix) of the Internal Revenue Code equal to the
amount of adjusted gross income that would have been
computed had the classification not applied to the property in
the year that it was placed in service.
(M) Add or subtract the amount necessary to make the
adjusted gross income of any taxpayer that claimed the special
allowance for qualified disaster assistance property under
Section 168(n) of the Internal Revenue Code equal to the
amount of adjusted gross income that would have been
computed had the special allowance not been claimed for the
property.
(N) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that made an election under
Section 179C of the Internal Revenue Code to expense costs
for qualified refinery property equal to the amount of adjusted
gross income that would have been computed had an election
for federal income tax purposes not been made for the year.
(O) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that made an election under
Section 181 of the Internal Revenue Code to expense costs for
a qualified film or television production equal to the amount
of adjusted gross income that would have been computed had
an election for federal income tax purposes not been made for
the year.
(P) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that treated a loss from the sale
or exchange of preferred stock in:
(i) the Federal National Mortgage Association, established
under the Federal National Mortgage Association Charter
Act (12 U.S.C. 1716 et seq.); or
(ii) the Federal Home Loan Mortgage Corporation,
established under the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1451 et seq.);
as an ordinary loss under Section 301 of the Emergency
Economic Stabilization Act of 2008 in the current taxable year
or in an earlier taxable year equal to the amount of adjusted
gross income that would have been computed had the loss not
been treated as an ordinary loss.
(Q) Add an amount equal to any exempt insurance income
under Section 953(e) of the Internal Revenue Code for active
financing income under Subpart F, Subtitle A, Chapter 1,
Subchapter N of the Internal Revenue Code.
(2) Subtract the following amounts:
(A) Income that the United States Constitution or any statute
of the United States prohibits from being used to measure the
tax imposed by this chapter.
(B) Income that is derived from sources outside the United
States, as defined by the Internal Revenue Code.
(C) An amount equal to a debt or part of a debt that becomes
worthless, as permitted under Section 166(a) of the Internal
Revenue Code.
(D) An amount equal to any bad debt reserves that are
included in federal income because of accounting method
changes required by Section 585(c)(3)(A) or Section 593 of
the Internal Revenue Code.
(E) The amount necessary to make the adjusted gross income
of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross
income that would have been computed had an election not
been made under Section 168(k) of the Internal Revenue Code
to apply bonus depreciation.
(F) The amount necessary to make the adjusted gross income
of any taxpayer that placed Section 179 property (as defined
in Section 179 of the Internal Revenue Code) in service in the
current taxable year or in an earlier taxable year equal to the
amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding twenty-five
thousand dollars ($25,000).
(G) Income that is:
(i) exempt from taxation under IC 6-3-2-21.7; and
(ii) included in the taxpayer's taxable income under the
Internal Revenue Code.
(b) In the case of a credit union, "adjusted gross income" for a taxable year means the total transfers to undivided earnings plus the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana or a political subdivision of such a state minus dividends for that taxable year after statutory reserves are set aside under IC 28-7-1-24.
(c) In the case of an investment company, "adjusted gross income" means the company's federal taxable income plus the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana or a political subdivision of such a state multiplied by the quotient of:
(1) the aggregate of the gross payments collected by the company during the taxable year from old and new business upon investment contracts issued by the company and held by residents of Indiana; divided by
(2) the total amount of gross payments collected during the taxable year by the company from the business upon investment contracts issued by the company and held by persons residing within Indiana and elsewhere.
(d) As used in subsection (c), "investment company" means a person, copartnership, association, limited liability company, or corporation, whether domestic or foreign, that:
(1) is registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.); and
(2) solicits or receives a payment to be made to itself and issues in exchange for the payment:
(A) a so-called bond;
(B) a share;
(C) a coupon;
(D) a certificate of membership;
(E) an agreement;
(F) a pretended agreement; or
(G) other evidences of obligation;
entitling the holder to anything of value at some future date, if the gross payments received by the company during the taxable year on outstanding investment contracts, plus interest and dividends earned on those contracts (by prorating the interest and dividends earned on investment contracts by the same proportion that certificate reserves (as defined by the Investment Company Act of 1940) is to the company's total assets) is at least fifty percent
(50%) of the company's gross payments upon investment
contracts plus gross income from all other sources except
dividends from subsidiaries for the taxable year. The term
"investment contract" means an instrument listed in clauses (A)
through (G).
(1) smoked; or
(2) placed in the nasal cavity.
(1) any product made from tobacco, other than a cigarette (as defined in IC 6-7-1-2), that is made for smoking, chewing, or both; or
(2) snuff, including moist snuff.
(1) twenty-four percent (24%) of the wholesale price of
(2) for moist snuff, thirty-eight cents ($0.38) per ounce, and a proportionate tax at the same rate on all fractional parts of an ounce. If the tax calculated for a fractional part of an ounce carried to the third decimal place results in the numeral in the third decimal place being greater than four (4), the amount of the tax shall be rounded to the next additional cent.
(b) The distributor of the tobacco products is liable for the tax imposed under subsection (a). The tax is imposed at the time the distributor:
(1) brings or causes tobacco products to be brought into Indiana for distribution;
(2) manufactures tobacco products in Indiana for distribution; or
(3) transports tobacco products to retail dealers in Indiana for resale by those retail dealers.
by this chapter shall:
(1) file a return with the department that includes all information
required by the department including, but not limited to:
(A) name of distributor;
(B) address of distributor;
(C) license number of distributor;
(D) invoice date;
(E) invoice number;
(F) name and address of person from whom tobacco products
were purchased or name and address of person to whom
tobacco products were sold; and
(G) the wholesale price for tobacco products other than
moist snuff; and
(H) for moist snuff, the weight of the moist snuff; and
(2) pay the tax for which it is liable under this chapter for the
preceding month minus the amount specified in section 13 of this
chapter.
(b) If the department reasonably believes that a person has not reported the proper amount of tax due, the department shall make a proposed assessment of the amount of the unpaid tax on the basis of the best information available to the department. The amount of the assessment is considered a tax payment not made by the due date and is subject to IC 6-8.1-10 concerning the imposition of penalties and interest. The department shall send the person a notice of the proposed assessment through the United States mail.
(c) If the person has a surety bond guaranteeing payment of the tax for which the proposed assessment is made, the department shall furnish a copy of the proposed assessment to the surety. The notice of proposed assessment is prima facie evidence that the department's claim for the unpaid tax is valid. The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.
(d) The notice shall state that the person has forty-five (45) days from the date the notice is mailed, if the notice was mailed before January 1, 2011, and sixty (60) days from the date the notice is mailed, if the notice was mailed after December 31, 2010, to pay the assessment or to file a written protest. If the person files a protest and requires a hearing on the protest, the department shall:
(1) set the hearing at the department's earliest convenient time; and
(2) notify the person by United States mail of the time, date, and location of the hearing.
(e) The department may hold the hearing at the location of its choice within Indiana if that location complies with IC 6-8.1-3-8.5.
(f) No later than sixty (60) days after conducting a hearing on a protest, or after making a decision on a protest when no hearing is requested, the department shall issue a letter of findings and shall send a copy of the letter through the United States mail to the person who filed the protest and to the person's surety, if the surety was notified of the proposed assessment under subsection (b). The department may continue the hearing until a later date if the taxpayer presents additional information at the hearing or the taxpayer requests an opportunity to present additional information after the hearing.
(g) A person that disagrees with a decision in a letter of findings may request a rehearing not more than thirty (30) days after the date on which the letter of findings is issued by the department. The department shall consider the request and may grant the rehearing if the department reasonably believes that a rehearing would be in the best interests of the taxpayer and the state.
(h) If a person disagrees with a decision in a letter of findings, the person may appeal the decision to the tax court. However, the tax court does not have jurisdiction to hear an appeal that is filed more than sixty (60) days after the date on which:
(1) the letter of findings is issued by the department, if the person does not make a timely request for a rehearing under subsection (g) on the letter of findings; or
(2) the department issues a denial of the person's timely request for a rehearing under subsection (g) on the letter of findings.
(i) The tax court shall hear an appeal under subsection (h) de novo and without a jury. The tax court may do the following:
(1) Uphold or deny any part of the assessment that is appealed.
(2) Assess the court costs in a manner that the court believes to be equitable.
(3) Enjoin the collection of a listed tax under IC 33-26-6-2.
(j) The department shall demand payment, as provided in IC 6-8.1-8-2(a), of any part of the proposed tax assessment, interest, and penalties that it finds owing because:
(1) the person failed to properly respond within the forty-five (45) day period;
(2) the person requested a hearing but failed to appear at that
hearing; or
(3) after consideration of the evidence presented in the protest or
hearing, the department finds that the person still owes tax.
(k) The department shall make the demand for payment in the
manner provided in IC 6-8.1-8-2.
(l) Subsection (b) does not apply to a motor carrier fuel tax return.
(1) That the person has ten (10) days from the date the department mails the notice to either pay the amount demanded or show reasonable cause for not paying the amount demanded.
(2) The statutory authority of the department for the issuance of a tax warrant.
(3) The earliest date on which a tax warrant may be filed and recorded.
(4) The statutory authority for the department to levy against a person's property that is held by a financial institution.
(5) The remedies available to the taxpayer to prevent the filing and recording of the judgment.
If the department files a tax warrant in more than one (1) county, the department is not required to issue more than one (1) demand notice.
(b) If the person does not pay the amount demanded or show reasonable cause for not paying the amount demanded within the ten (10) day period, the department may issue a tax warrant for the amount of the tax, interest, penalties, collection fee, sheriff's costs, clerk's costs, and fees established under section 4(b) of this chapter when applicable.
When the department issues a tax warrant, a collection fee of ten percent (10%) of the unpaid tax is added to the total amount due.
(c) When the department issues a tax warrant, it may not file the warrant with the circuit court clerk of any county in which the person owns property until at least twenty (20) days after the date the demand notice was mailed to the taxpayer. The department may also send the warrant to the sheriff of any county in which the person owns property and direct the sheriff to file the warrant with the circuit court clerk:
(1) at least twenty (20) days after the date the demand notice was
mailed to the taxpayer; and
(2) no later than five (5) days after the date the department issues
the warrant.
(d) When the circuit court clerk receives a tax warrant from the
department or the sheriff, the clerk shall record the warrant by making
an entry in the judgment debtor's column of the judgment record,
listing the following:
(1) The name of the person owing the tax.
(2) The amount of the tax, interest, penalties, collection fee,
sheriff's costs, clerk's costs, and fees established under section
4(b) of this chapter when applicable.
(3) The date the warrant was filed with the clerk.
(e) When the entry is made, the total amount of the tax warrant
becomes a judgment against the person owing the tax. The judgment
creates a lien in favor of the state that attaches to all the person's
interest in any:
(1) chose in action in the county; and
(2) real or personal property in the county;
excepting only negotiable instruments not yet due.
(f) A judgment obtained under this section is valid for ten (10) years
from the date the judgment is filed. The department may renew the
judgment for additional ten (10) year periods by filing an alias tax
warrant with the circuit court clerk of the county in which the judgment
previously existed.
(g) A judgment arising from a tax warrant in a county may be
released by the department:
(1) after the judgment, including all accrued interest to the date of
payment, has been fully satisfied; or
(2) if the department determines that the tax assessment or the
issuance of the tax warrant was in error.
(h) If the department determines that the filing of a tax warrant was
in error, the department shall mail a release of the judgment to the
taxpayer and the circuit court clerk of each county where the warrant
was filed. The circuit court clerk of each county where the warrant
was filed shall expunge the warrant from the judgment debtor's
column of the judgment record. The department shall mail the
release and the order for the warrant to be expunged as soon as
possible but no later than seven (7) days after:
(1) the determination by the department that the filing of the
warrant was in error; and
(2) the receipt of information by the department that the judgment
has been recorded under subsection (d).
(i) If the department determines that a judgment described in subsection (h) is obstructing a lawful transaction, the department shall immediately upon making the determination mail a release of the judgment to the taxpayer and an order requiring the circuit court clerk of each county where the judgment was filed
(j) A release issued under subsection (h) or (i) must state that the filing of the tax warrant was in error. Upon the request of the taxpayer, the department shall mail a copy of a release and the order for the warrant to be expunged issued under subsection (h) or (i) to each major credit reporting company located in each county where the judgment was filed.
(k) The commissioner shall notify each state agency or officer supplied with a tax warrant list of the issuance of a release under subsection (h) or (i).
(l) If the sheriff collects the full amount of a tax warrant, the sheriff shall disburse the money collected in the manner provided in section 3(c) of this chapter. If a judgment has been partially or fully satisfied by a person's surety, the surety becomes subrogated to the department's rights under the judgment. If a sheriff releases a judgment:
(1) before the judgment is fully satisfied;
(2) before the sheriff has properly disbursed the amount collected; or
(3) after the sheriff has returned the tax warrant to the department;
the sheriff commits a Class B misdemeanor and is personally liable for the part of the judgment not remitted to the department.
(b) Except as provided in IC 6-8.1-5-3, no demand notice, warrant, levy, or proceeding in court for the collection of a protested listed tax or any penalties and interest on a listed tax may be issued, commenced, or conducted against a taxpayer and no lien on the taxpayer's property may be imposed until after the later of the following:
(1) The expiration of the period in which the taxpayer may appeal the listed tax to the tax court.
(2) A decision of the tax court concerning the listed tax becomes final, if the taxpayer filed a timely appeal.
SECTION 256, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 1. (a) If a person has paid more
tax than the person determines is legally due for a particular taxable
period, the person may file a claim for a refund with the department.
Except as provided in subsections (f), and (g), and (h), in order to
obtain the refund, the person must file the claim with the department
within three (3) years after the latter of the following:
(1) The due date of the return.
(2) The date of payment.
For purposes of this section, the due date for a return filed for the state
gross retail or use tax, the gasoline tax, the special fuel tax, the motor
carrier fuel tax, the oil inspection fee, or the petroleum severance tax
is the end of the calendar year which contains the taxable period for
which the return is filed. The claim must set forth the amount of the
refund to which the person is entitled and the reasons that the person
is entitled to the refund.
(b) When the department receives a claim for refund, the
department shall consider the claim for refund and shall, if the taxpayer
requests, hold a hearing on the claim for refund to obtain and consider
additional evidence. After considering the claim and all evidence
relevant to the claim, the department shall issue a decision on the
claim, stating the part, if any, of the refund allowed and containing a
statement of the reasons for any part of the refund that is denied. The
department shall mail a copy of the decision to the person who filed the
claim. If the person disagrees with a part of the decision, the person
may file a protest and request a hearing with the department. The
department shall mail a copy of the decision to the person who filed
the protest. If the department allows the full amount of the refund
claim, a warrant for the payment of the claim is sufficient notice of the
decision.
(c) If the person disagrees with any part of the department's
decision, the person may appeal the decision, regardless of whether or
not the person protested the tax payment or whether or not the person
has accepted a refund. The person must file the appeal with the tax
court. The tax court does not have jurisdiction to hear a refund appeal
suit, if:
(1) the appeal is filed more than three (3) years after the date the
claim for refund was filed with the department;
(2) the appeal is filed more than ninety (90) days after the later
of the date the department mails:
(A) the decision of denial of the claim to the person; or
(B) the decision made on the protest filed under subsection
(b); or
(3) the appeal is filed both before the decision is issued and
before the one hundred eighty-first day after the date the person
files the claim for refund with the department.
(d) The tax court shall hear the appeal de novo and without a jury,
and after the hearing may order or deny any part of the appealed
refund. The court may assess the court costs in any manner that it feels
is equitable. The court may enjoin the collection of any of the listed
taxes under IC 33-26-6-2. The court may also allow a refund of taxes,
interest, and penalties that have been paid to and collected by the
department.
(e) With respect to the motor vehicle excise tax, this section applies
only to penalties and interest paid on assessments of the motor vehicle
excise tax. Any other overpayment of the motor vehicle excise tax is
subject to IC 6-6-5.
(f) If a taxpayer's federal income tax liability for a taxable year is
modified by the Internal Revenue Service, and the modification would
result in a reduction of the tax legally due, the due date by which the
taxpayer must file a claim for refund with the department is the later of:
(1) the date determined under subsection (a); or
(2) the date that is six (6) months one hundred eighty (180) days
after the date on which the taxpayer is notified of the modification
by the Internal Revenue Service.
(g) If an agreement to extend the assessment time period is entered
into under IC 6-8.1-5-2(h), the period during which a person may file
a claim for a refund under subsection (a) is extended to the same date
to which the assessment time period is extended.
(h) If a taxpayer's claim for a refund of gross retail or use tax is
based on:
(1) IC 6-2.5-4-5(c)(3); or
(2) the exemption provided by IC 6-2.5-5-5.1 for electrical
energy, natural or artificial gas, water, steam, and steam heat;
the person must file the claim with the department within eighteen
(18) months after the date of payment.
(1) Establish the educational goals of the state, developing standards and objectives for local school corporations.
(2) Assess the attainment of the established goals.
(3) Assure compliance with established standards and objectives.
(4) Coordinate with the commission for higher education
(IC 21-18-1) and the department of workforce development
(IC 22-4.1-2) to develop entrepreneurship education programs
for elementary and secondary education, higher education,
and individuals in the work force.
(4) (5) Make recommendations to the governor and general
assembly concerning the educational needs of the state, including
financial needs.
(b) The commission shall require each state educational institution to expand technology and innovation commercialization programs.
(1) for whom the department has established an overpayment by a final written determination under section 1(a) or 1(b) of this chapter; and
(2) whose overpayment amount that is due and payable equals or exceeds:
(A) the individual's weekly benefit amount; multiplied by
(B) four (4).
(b) Notwithstanding any other law and subject to subsection (c), an individual is entitled to repay the established amount of an overpayment over a period:
(1) beginning on the date the determination of the amount of the overpayment is final; and
(2) ending on a date not later than the date occurring thirty-six (36) months after the date specified in subdivision (1).
(c) An individual to whom this section applies may repay an overpayment over time as provided in subsection (b) not more than once during the individual's lifetime.
commission for higher education (IC 21-18-1) and the Indiana state
board of education (IC 20-19-2) to develop entrepreneurship
education programs for elementary and secondary education,
higher education, and individuals in the work force.
fund established for the district under subsection (a):
(1) The aggregate amount of state gross retail and use taxes that
are remitted under IC 6-2.5 by businesses operating in the district,
until the amount of state gross retail and use taxes deposited
equals the gross retail incremental amount for the district.
(2) The aggregate amount of state and local income taxes paid by
employees employed in the district with respect to wages earned
for work in the district, until the amount of state and local income
taxes deposited equals the income tax incremental amount.
(d) (c) The aggregate amount of revenues that is:
(1) attributable to:
(A) the state gross retail and use taxes established under
IC 6-2.5; and
(B) the adjusted gross income tax established under IC 6-3-1
through IC 6-3-7; and
(2) deposited during any state fiscal year in each incremental tax
financing fund established for a district;
may not exceed one million dollars ($1,000,000) per district designated
under section 10.5 or 12 of this chapter and seven hundred fifty
thousand dollars ($750,000) per district for a district designated under
section 10.1 or 12.1 of this chapter.
(e) (d) On or before the twentieth day of each month, all amounts
held in the incremental tax financing fund established for a district
shall be distributed to the district's advisory commission on industrial
development for deposit in the industrial development fund of the unit
that requested designation of the district.
(1) except as provided in subdivision (2) before July 1, 1999; or
(2) before January 1,
(A) a second class city; or
(B) the city of Marion;
according to the procedures set forth for the establishment of an economic development area under IC 36-7-14. Before May 15, 2005, a tax area established before January 1, 2005, may be changed or the terms governing the tax area revised in the same manner as the establishment of the initial tax area. After May 14, 2005, a tax area established before January 1, 2005, may not be changed and the terms governing a tax area may not be revised. Only one (1) tax area may be created in each county.
(b) In establishing the tax area, the designating body must make the following findings instead of the findings required for the establishment of economic development areas:
(1) Except for a tax area in a city having a population of:
(A) more than one hundred fifty thousand (150,000) but less than five hundred thousand (500,000); or
(B) more than ninety thousand (90,000) but less than one hundred five thousand (105,000);
there is a capital improvement that will be undertaken or has been undertaken in the tax area for a facility that is used by a professional sports franchise for practice or competitive sporting events. A tax area to which this subdivision applies may also include a capital improvement that will be undertaken or has been undertaken in the tax area for a facility that is used for any purpose specified in section 8(a)(2) of this chapter.
(2) For a tax area in a city having a population of more than one hundred fifty thousand (150,000) but less than five hundred thousand (500,000), there is a capital improvement that will be undertaken or has been undertaken in the tax area for a facility that is used for any purpose specified in section 8(a) of this chapter.
(3) For a tax area in a city having a population of more than ninety thousand (90,000) but less than one hundred five thousand (105,000), there is a capital improvement that will be undertaken or has been undertaken in the tax area for a facility that is used for any purpose specified in section 8(a)(2) of this chapter.
(4) The capital improvement that will be undertaken or that has been undertaken in the tax area will benefit the public health and welfare and will be of public utility and benefit.
(5) The capital improvement that will be undertaken or that has been undertaken in the tax area will protect or increase state and local tax bases and tax revenues.
(c) The tax area established under this chapter is a special taxing district authorized by the general assembly to enable the designating body to provide special benefits to taxpayers in the tax area by promoting economic development that is of public use and benefit.
subsection (b) to the development authority for deposit in the
development authority fund.
(b) The amount of the transfer required each year by subsection (a)
from each county and each municipality is equal to the following:
(1) Except as provided in subdivision (2), the amount that
would be distributed to the county or the municipality as certified
distributions of county economic development income tax
revenue raised from a county economic development income tax
rate of five-hundredths of one percent (0.05%) in the county.
(2) In the case of a county or municipality that becomes a
member of a development authority after June 30, 2011, and
before July 1, 2013, the amount that would be distributed to
the county or municipality as certified distributions of county
economic development income tax revenue raised from a
county economic development income tax rate of twenty-five
thousandths of one percent (0.025%) in the county.
(c) Notwithstanding subsection (b), if the additional county
economic development income tax under IC 6-3.5-7-28 is in effect in
a county, the obligations of the county and each municipality in the
county under this section are satisfied by the transfer to the
development fund of all county economic development income tax
revenue derived from the additional tax and deposited in the county
regional development authority fund.
(d) The following apply to the transfers required by this section:
(1) The transfers shall be made without appropriation by the fiscal
body of the county or the fiscal body of the municipality.
(2) Except as provided in subdivision (3), the fiscal officer of
each county and each municipality that is a member of the
development authority shall transfer twenty-five percent (25%) of
the total transfers due for the year before the last business day of
January, April, July, and October of each year.
(3) County economic development income tax revenue derived
from the additional county economic development income tax
under IC 6-3.5-7-28 must be transferred to the development fund
not more than thirty (30) days after being deposited in the county
regional development fund.
(4) This subdivision does not apply to a county in which the
additional county economic development income tax under
IC 6-3.5-7-28 has been imposed or to any municipality in the
county. The transfers required by this section may be made from
any local revenue (other than property tax revenue) of the county
or municipality, including excise tax revenue, income tax
revenue, local option tax revenue, riverboat tax revenue,
distributions, incentive payments, or money deposited in the
county's or municipality's local major moves construction fund
under IC 8-14-16.
; (11)ES0589.2.32. --> SECTION 32. THE FOLLOWING ARE REPEALED [EFFECTIVE UPON PASSAGE]: IC 6-3.1-19-5.5; IC 36-7-13-23.
(b) This SECTION expires January 1, 2014.
(b) The commission on state tax and financing policy shall study all aspects, including the advantages and disadvantages of phasing out the state inheritance tax. The commission on state tax and financing policy shall prepare a report containing its findings and recommendations and submit the report to the legislative council in an electronic format under IC 5-14-6 before November 1, 2011.
(c) This SECTION expires January 1, 2012.
(1) brought into Indiana for distribution;
(2) manufactured in Indiana for distribution; or
(3) transported to a retail dealer in Indiana for resale by the retail dealer;
by a distributor after December 31, 2011.
(b) This SECTION expires January 1, 2012.
