Citations Affected: IC 6-3.1; noncode.
Synopsis: Venture capital investment tax credit. Specifies that a pass
through entity is eligible for the venture capital investment tax credit
for investments made in qualified Indiana businesses. Eliminates
certain requirements that a business must meet in order to be certified
as a qualified Indiana business. Sets forth procedures for the
department of commerce to certify that a taxpayer is entitled to a
venture capital investment tax credit. Provides that if a taxpayer
carries over any credit amount to the succeeding year, the amount
carried over does not count toward the $10,000,000 in maximum
allowable credits for the succeeding year.
Effective: January 1, 2003 (retroactive).
January 16, 2003, read first time and referred to Committee on Economic Development
and Technology.
February 4, 2003, amended, reported favorably _ Do Pass.
February 20, 2003, read second time, amended, ordered engrossed.
February 21, 2003, engrossed.
February 24, 2003, read third time, passed. Yeas 49, nays 0.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
SECTION 1. IC 6-3.1-24-5, AS ADDED BY P.L.192-2002(ss),
SECTION 119, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2003 (RETROACTIVE)]: Sec. 5. As used
in this chapter, "taxpayer" means an individual or entity, including a
pass through entity, that has any state tax liability.
SECTION 2. IC 6-3.1-24-6, AS ADDED BY P.L.192-2002(ss),
SECTION 119, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2003 (RETROACTIVE)]: Sec. 6. A
taxpayer that:
(1) provides qualified investment capital to a qualified Indiana
business; and
(2) fulfills the requirements of the department of commerce
under section 12.5 of this chapter;
is entitled to a credit against the person's state tax liability in a taxable
year equal to the amount specified in section 10 of this chapter.
SECTION 3. IC 6-3.1-24-7, AS ADDED BY P.L.192-2002(ss),
SECTION 119, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2003 (RETROACTIVE)]: Sec. 7. (a) The
department of commerce shall certify that a business is a qualified
Indiana business if the department determines that the business:
(1) is a high growth company that:
(A) is entering a new product or process area;
(B) has a substantial number of employees in jobs:
(i) requiring postsecondary education or its equivalent; or
(ii) that are in occupational codes classified as high skill by
the Bureau of Labor Statistics, United States Department of
Labor; and
(C) has a substantial number of employees that earn at least
one hundred fifty percent (150%) of Indiana per capita
personal income;
(2) has its headquarters in Indiana;
(3) (2) is primarily focused on commercialization of research
and development, technology transfers, or the application of new
technology, or is determined by the department of commerce to
have significant potential to:
(A) bring substantial capital into Indiana;
(B) create jobs;
(C) diversify the business base of Indiana; or
(D) significantly promote the purposes of this chapter in any
other way;
(4) (3) has had average annual revenues of less than ten million
dollars ($10,000,000) in the two (2) years preceding the year in
which the business received qualified investment capital from a
taxpayer claiming a credit under this chapter;
(5) (4) has:
(A) at least fifty percent (50%) of its employees residing in
Indiana; and or
(B) at least seventy-five percent (75%) of its assets located in
Indiana; and
(6) (5) is not engaged in a business involving:
(A) real estate;
(B) real estate development;
(C) insurance;
(D) professional services provided by an accountant, a lawyer,
or a physician;
(E) retail sales, except when the primary purpose of the
business is the development or support of electronic commerce
using the Internet; or
(F) oil and gas exploration.
[EFFECTIVE JANUARY 1, 2003 (RETROACTIVE)]: Sec. 12.5. (a)
A taxpayer wishing to obtain a credit under this chapter must
apply to the department of commerce for a certification that the
taxpayer's proposed investment plan would qualify for a credit
under this chapter.
(b) The application required under subsection (a) must include:
(1) the name and address of the taxpayer;
(2) the name and address of each proposed recipient of the
taxpayer's proposed investment;
(3) the amount of the proposed investment;
(4) a copy of the certification issued under section 7 of this
chapter that the proposed recipient is a qualified Indiana
business; and
(5) any other information required by the department of
commerce.
(c) If the department of commerce determines that:
(1) the proposed investment would qualify the taxpayer for a
credit under this chapter; and
(2) the amount of the proposed investment would not result in
the total amount of tax credits certified for the calendar year
exceeding ten million dollars ($10,000,000);
the department of commerce shall certify the taxpayer's proposed
investment plan.
(d) To receive a credit under this chapter, the taxpayer must
provide qualified investment capital to a qualified Indiana business
according to the taxpayer's certified investment plan within two (2)
years after the date on which the department of commerce certifies
the investment plan.
(e) Upon making the investment required under subsection (d),
the taxpayer shall provide proof of the investment to the
department of commerce.
(f) Upon receiving proof of a taxpayer's investment under
subsection (e), the department of commerce shall issue the
taxpayer a certificate indicating that the taxpayer has fulfilled the
requirements of the department of commerce and that the
taxpayer is entitled to a credit under this chapter.
(g) A taxpayer forfeits the right to a tax credit attributable to an
investment certified under subsection (c) if the taxpayer fails to
make the proposed investment within the period required under
subsection (d).
SECTION 7. IC 6-3.1-24-13, AS ADDED BY P.L.192-2002(ss),
SECTION 119, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2003 (RETROACTIVE)]: Sec. 13. (a) To
receive the credit provided by this chapter, a taxpayer must claim the
credit on the taxpayer's state tax return or returns in the manner
prescribed by the department. The taxpayer shall submit to the
department, along with the taxpayer's state tax return or returns,
proof that the taxpayer provided qualified investment capital to a
qualified Indiana business a copy of the certificate issued by the
department of commerce to the taxpayer under section 12.5(f) of
this chapter and all information that the department determines is
necessary for the calculation of the credit provided by this chapter.
(b) The department shall record the time of filing of each return
claiming a credit under section 6 of this chapter and shall, except as
provided in subsection (c), grant the credit to the taxpayer, if the
taxpayer otherwise qualifies for a tax credit under this chapter, in the
chronological order in which the return is filed in the calendar year.
(c) If the total credits approved under this section equal the
maximum amount allowable in a calendar year, a return claiming the
credit filed later in that calendar year may not be approved.
SECTION 8. [EFFECTIVE JANUARY 1, 2003 (RETROACTIVE)]
P.L.192-2002(ss), SECTION 207 applies to this act.
SECTION 9. An emergency is declared for this act.