Bill Text: IN SB0244 | 2013 | Regular Session | Amended
Bill Title: Hoosier business investment income tax credit.
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2013-03-19 - Representative Davisson added as cosponsor [SB0244 Detail]
Download: Indiana-2013-SB0244-Amended.html
Citations Affected: IC 6-3.1; noncode.
Synopsis: Hoosier business investment income tax credit. Adds
logistics investments as a specific type of qualified investment under
the Hoosier business investment tax credit. Specifies in detail the
expenditures that qualify as a logistics investment. Requires the Indiana
economic development corporation to find that an applicant's logistics
investment project will enhance the logistics industry by creating new
jobs, preserving existing jobs that otherwise would be lost, increasing
wages in Indiana, or improving the overall Indiana economy in order
to approve the applicant's project for a tax credit. Makes conforming
changes to the credit application and agreement provisions. Provides
that the percentage credit maximum is 25% (instead of 10%) if a
qualified investment is a logistics investment. Provides that for
logistics investments, the qualified investments used to determine the
credit are based on growth in qualified investments by the taxpayer
using 105% of the investments made by the taxpayer during the
immediately preceding two years. Adds a $50,000,000 state fiscal year
ceiling for tax credits that are not based on logistics investments.
Provides a $10,000,000 state fiscal year ceiling for tax credits that are
based on logistics investments. Requires the department of state
revenue to annually report to the budget committee on the use of the
tax credit for logistics investments.
Effective: January 1, 2014.
Skinner, Landske
January 7, 2013, read first time and referred to Committee on Tax and Fiscal Policy.
January 29, 2013, amended, reported favorably _ Do Pass.
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A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
(1) the purchase of new telecommunications, production, manufacturing, fabrication, assembly, extraction, mining, processing, refining, finishing, distribution, transportation, or logistical distribution equipment;
(2) the purchase of new computers and related equipment;
(3) costs associated with the modernization of existing telecommunications, production, manufacturing, fabrication, assembly, extraction, mining, processing, refining, finishing, distribution, transportation, or logistical distribution facilities;
(4) onsite infrastructure improvements;
(5) the construction of new telecommunications, production, manufacturing, fabrication, assembly, extraction, mining,
processing, refining, finishing, distribution, transportation, or
logistical distribution facilities;
(6) costs associated with retooling existing machinery and
equipment;
(7) costs associated with the construction of special purpose
buildings and foundations for use in the computer, software,
biological sciences, or telecommunications industry; and
(8) costs associated with the purchase of machinery, equipment,
or special purpose buildings used to make motion pictures or
audio productions; and
(9) a logistics investment, as described in section 8.5 of this
chapter;
that are certified by the corporation under this chapter as being eligible
for the credit under this chapter.
(b) The term does not include property that can be readily moved
outside Indiana.
(1) Making an improvement to real property located in Indiana that is related to constructing a new, or modernizing an existing, transportation or logistical distribution facility.
(2) Improving the transportation of goods on Indiana highways, limited to the following:
(A) Upgrading terminal facilities that serve tractors (as defined in IC 9-13-2-180) and semitrailers (as defined in IC 9-13-2-164).
(B) Improving paved access to terminal facilities.
(C) Adding new maintenance areas.
(D) Purchasing new shop equipment having a useful life of at least five (5) years, such as diagnostic equipment, oil delivery systems, air compressors, and truck lifts.
(3) Improving the transportation of goods by rail, limited to the following:
(A) Upgrading or building mainline, secondary, yard, and spur trackage.
(B) Upgrading or replacing bridges to obtain higher load bearing capability.
(C) Upgrading or replacing grade crossings to increase visibility for motorists, including improvements to
roadway surfaces, signage and traffic signals, and signal
system upgrades and replacements to meet Federal
Railroad Administration Positive Train Control
regulations.
(D) Upgrading fueling facilities, including upgrading
fueling and sanding locomotives or tanks, pumps, piping,
containment areas, track pans, lighting, and security.
(E) Upgrading team track facilities, including railroad
owned warehouses, loading docks, and transfer stations for
loading and unloading freight.
(F) Upgrading shop facilities, including upgrading
structures, inspection pits, drop pits, cranes, employee fall
protection, lighting, climate control, and break rooms.
(4) Improving the transportation of goods by water, limited to
the following:
(A) Upgrading or replacing a permanent waterside dock.
(B) Upgrading or building a new terminal facility that
serves waterborne transportation.
(C) Improving paved access to a waterborne terminal
facility.
(D) Purchasing new equipment having a useful life of at
least five (5) years, including diagnostic equipment, an oil
delivery system, an air compressor, or a barge lift.
(5) Improving the transportation of goods by air, limited to
the following:
(A) Upgrading or building a new cargo building, apron,
hangar, warehouse facility, freight forwarding facility,
cross-dock distribution facility, or aircraft maintenance
facility.
(B) Improving paved access to a terminal or cargo facility.
(C) Upgrading a fueling facility.
(6) Improving warehousing and logistical capabilities, limited
to the following:
(A) Upgrading warehousing facilities, including upgrading
loading dock doors and loading dock plates, fueling
equipment, fueling installations, or dolly drop pads for
trailers.
(B) Improving logistical distribution by purchasing new
equipment, limited to the following:
(i) Picking modules (systems of racks, conveyors, and
controllers).
(ii) Racking equipment.
(iii) Warehouse management systems, including scanning or coding equipment.
(iv) Security equipment.
(v) Temperature control and monitoring equipment.
(vi) Dock levelers and pallet levelers and inverters.
(vii) Conveyors and related controllers, scales, and like equipment.
(viii) Packaging equipment.
(ix) Moving, separating, sorting, and picking equipment.
A logistics investment does not include an expenditure for maintenance expenses.
(1) ten percent (10%), of the amount of a qualified investment made by the taxpayer in Indiana during that taxable year, if the qualified investment is not a logistics investment; and
(2) twenty-five percent (25%) of the amount of a qualified investment made by the taxpayer in Indiana during that taxable year, if the qualified investment is a logistics investment. For purposes of this subdivision, the amount of a qualified investment that is used to determine the credit is limited to the difference of:
(A) the qualified investments made by the taxpayer during the taxable year; minus
(B) one hundred five percent (105%) of the average annual qualified investments made by the taxpayer during the two (2) taxable years immediately preceding the taxable year for which the credit is being claimed. However, if the qualified investments for the earlier year of the two (2) year average is zero (0) and the taxpayer has not claimed the credit for a year that precedes that year, the taxpayer shall subtract only one hundred five percent (105%) of the amount of the qualified investments made during the taxable year immediately preceding the taxable year for which the credit is being claimed.
The taxpayer may carry forward any unused credit as provided in section 15 of this chapter.
JANUARY 1, 2014]: Sec. 15. (a) A taxpayer may carry forward an
unused credit for the number of years determined by the corporation,
not to exceed nine (9) consecutive taxable years, beginning with the
taxable year after the taxable year in which the taxpayer makes the
qualified investment.
(b) The amount that a taxpayer may carry forward to a particular
taxable year under this section equals the unused part of a credit
allowed under this chapter.
(c) A taxpayer may:
(1) claim a tax credit under this chapter for a qualified
investment; and
(2) carry forward a remainder for one (1) or more different
qualified investments;
in the same taxable year.
(d) The total amount of each tax credit claimed under this chapter
may not exceed ten percent (10%) of the qualified investment for
which the tax credit is claimed.
(1) create new jobs or increase wage levels in Indiana; or
(2) substantially enhance the logistics industry by creating new jobs, preserving existing jobs that otherwise would be lost, increasing wages in Indiana, or improving the overall Indiana economy, in the case of a logistics investment being claimed by the applicant;
may apply to the corporation before the taxpayer makes the qualified investment to enter into an agreement for a tax credit under this chapter. The director shall prescribe the form of the application.
(1) The applicant's project will:
(A) raise the total earnings of employees of the applicant in Indiana; or
(B) substantially enhance the logistics industry by creating new jobs, preserving existing jobs that otherwise would be lost, increasing wages in Indiana, or improving the overall
Indiana economy, in the case of a logistics investment being
claimed by the applicant.
(2) The applicant's project is economically sound and will benefit
the people of Indiana by increasing opportunities for employment
and strengthening the economy of Indiana.
(3) Receiving the tax credit is a major factor in the applicant's
decision to go forward with the project and not receiving the tax
credit will result in the applicant not raising the total earnings of
the applicant's employees in Indiana, or other employees in
Indiana in the case of a logistics investment being claimed by
the applicant.
(4) Awarding the tax credit will result in an overall positive fiscal
impact to the state, as certified by the budget agency using the
best available data.
(5) The credit is not prohibited by section 19 of this chapter.
(6) In the case of a qualified investment that is not being
claimed as a logistics investment by the applicant, the average
wage that will be paid by the taxpayer to its employees (excluding
highly compensated employees) at the location after the credit is
given will be at least equal to one hundred fifty percent (150%)
of the hourly minimum wage under IC 22-2-2-4 or its equivalent.
(1) expanding the workforce in Indiana; or
(2) substantially enhancing the logistics industry and improving the overall Indiana economy.
(b) The total amount of credits that the corporation may approve under this chapter for a state fiscal year for all taxpayers for all qualified investments is:
(1) fifty million dollars ($50,000,000) for credits based on a qualified investment that is not being claimed as a logistics investment; and
(2) ten million dollars ($10,000,000) for credits based on a qualified investment that is being claimed as a logistics investment.
(c) A person that desires to claim a tax credit for a qualified investment shall file with the department, in the form that the
department may prescribe, an application:
(1) stating separately the amount of the credit awards for
qualified investments that have been granted to the taxpayer
by the corporation that will be claimed as a credit that is
covered by:
(A) subsection (b)(1); and
(B) subsection (b)(2);
(2) stating separately the amount sought to be claimed as a
credit that is covered by:
(A) subsection (b)(1); and
(B) subsection (b)(2); and
(3) identifying whether the credit will be claimed during the
state fiscal year in which the application is filed or the
immediately succeeding state fiscal year.
(d) The department shall separately record the time of filing of
each application for a credit award for a qualified investment
covered by subsection (b)(1) and for a qualified investment covered
by subsection (b)(2) and shall, except as provided in subsection (e),
approve the credit to the taxpayer in the chronological order in
which the application is filed in the state fiscal year. The
department shall promptly notify an applicant whether, or the
extent to which, the tax credit is allowable in the state fiscal year
proposed by the taxpayer.
(e) If the total credit awards for qualified investments that are
covered by:
(1) subsection (b)(1); and
(2) subsection (b)(2);
including carryover credit awards covered by each subsection for
a previous state fiscal year, equal the maximum amount allowable
in the state fiscal year, an application for such a credit award that
is filed later for that same state fiscal year may not be granted by
the department. However, if an applicant for which a credit has
been awarded and applied for with the department fails to claim
the credit, an amount equal to the credit previously applied for but
not claimed may be allowed to the next eligible applicant or
applicants until the total amount has been allowed.
SECTION 8. IC 6-3.1-26-21, AS AMENDED BY P.L.4-2005,
SECTION 110, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2014]: Sec. 21. The corporation shall
enter into an agreement with an applicant that is awarded a credit under
this chapter. The agreement must include all the following:
(1) A detailed description of the project that is the subject of the
agreement.
(2) The first taxable year for which the credit may be claimed.
(3) The amount of the taxpayer's state tax liability for each tax in
the taxable year of the taxpayer that immediately preceded the
first taxable year in which the credit may be claimed.
(4) The maximum tax credit amount that will be allowed for each
taxable year.
(5) A requirement that the taxpayer shall maintain operations at
the project location for at least ten (10) years during the term that
the tax credit is available.
(6) A specific method for determining the number of new
employees employed during a taxable year who are performing
jobs not previously performed by an employee.
(7) A requirement that the taxpayer shall annually report to the
corporation the number of new employees who are performing
jobs not previously performed by an employee, the average wage
of the new employees, the average wage of all employees at the
location where the qualified investment is made, if the qualified
investment is not being claimed as a logistics investment by
the applicant, and any other information the director needs to
perform the director's duties under this chapter.
(8) A requirement that the director is authorized to verify with the
appropriate state agencies the amounts reported under subdivision
(7), and that after doing so shall issue a certificate to the taxpayer
stating that the amounts have been verified.
(9) This subdivision applies only to a qualified investment that
is not being claimed as a logistics investment by the applicant.
A requirement that the taxpayer shall pay an average wage to all
its employees other than highly compensated employees in each
taxable year that a tax credit is available that equals at least one
hundred fifty percent (150%) of the hourly minimum wage under
IC 22-2-2-4 or its equivalent.
(10) A requirement that the taxpayer will keep the qualified
investment property that is the basis for the tax credit in Indiana
for at least the lesser of its useful life for federal income tax
purposes or ten (10) years.
(11) This subdivision applies only to a qualified investment
that is not being claimed as a logistics investment by the
applicant. A requirement that the taxpayer will maintain at the
location where the qualified investment is made during the term
of the tax credit a total payroll that is at least equal to the payroll
level that existed before the qualified investment was made.
(12) A requirement that the taxpayer shall provide written notification to the director and the corporation not more than thirty (30) days after the taxpayer makes or receives a proposal that would transfer the taxpayer's state tax liability obligations to a successor taxpayer.
(13) Any other performance conditions that the corporation determines are appropriate.
(b) The department shall report, not later than December 15 each year, to the budget committee concerning the use of the credit for logistic investments under this chapter. The report must include the following with regard to the previous state fiscal year for logistics investments:
(1) Summary information regarding the taxpayers and the use of the credit, including the amount of credits approved, the number of taxpayers applying for the credit and claiming the credit, the number of employees who are employed in Indiana by the taxpayers claiming the credit, the amount and type of new qualified expenditures for which the credit was granted, the total dollar amount of new credits claimed and the average amount of the credit claimed per taxpayer, the amount of credits to be carried forward to a subsequent taxable year, and the percentage of the total credits claimed as compared to the total adjusted gross income of all the taxpayers claiming the credit.
(2) The name and address of each taxpayer claiming the credit and the amount of the credit applied for by and granted to each taxpayer.
IC 6-3.1-26-8.5, IC 6-3.1-26-14, IC 6-3.1-26-17, IC 6-3.1-26-18,
IC 6-3.1-26-20, IC 6-3.1-26-21, and IC 6-3.1-26-25, all as amended
by this act, apply to taxable years beginning after December 31,
2013.
(b) This SECTION expires January 1, 2017.
