HB 1365-14_ Filed 02/04/2004, 07:06 Borror


Text Box


    PREVAILED      Roll Call No. _______
    FAILED        Ayes _______
    WITHDRAWN        Noes _______
    RULED OUT OF ORDER


[

HOUSE MOTION ____

]

MR. SPEAKER:

    I move that House Bill 1365 be amended to read as follows:

SOURCE: Page 3, line 6; (04)MO136519.3. -->     Page 3, between lines 6 and 7, begin a new paragraph and insert:
SOURCE: IC 6-2.5-5-39; (04)MO136519.4. -->     "SECTION 4. IC 6-2.5-5-39 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 39. (a) As used in this section, "product" includes the following:
        (1) A pilot model, a process, a formula, an invention, a technique, a patent, or a similar property.
        (2) Property to be used in a taxpayer's trade or business.
        (3) Property to be held for sale, lease, or license, regardless of whether the property is ultimately placed in service, sold, leased, or licensed.
    (b) As used in this section, "research and development" means laboratory or experimental activity to develop or improve a product or to discover information that would eliminate uncertainty concerning the development or improvement of a product.
    (c) The term "research and development" does not include any of the following:
        (1) The ordinary testing or inspection of materials or products for quality control. The quality control testing to which this subdivision applies includes testing or inspection to determine whether particular units of materials or products conform to specified parameters. Quality control

testing does not include testing to determine if the design of a product is appropriate.
        (2) Efficiency surveys.
        (3) Management studies.
        (4) Consumer surveys.
        (5) Advertising or promotions.
        (6) The acquisition of another's patent, model, production, process, or other product.
        (7) Research in connection with literary, historical, or similar projects.
        (8) Activities to ascertain the existence, location, extent, or quality of any deposit of oil, gas, ore, or other mineral.
        (9) Assembly, construction, or installation of property that is placed in service or held for sale, lease, or license.
    (d) As used in this section, "uncertainty" means the unavailability to the taxpayer of information necessary to establish the capability or method for developing or improving the product or the appropriate design of the product.
    (e) Transactions involving tangible personal property are exempt from the state gross retail tax if the person acquiring the property acquires it for direct use in research and development.
".

SOURCE: Page 14, line 1; (04)MO136519.14. -->     Page 14, between lines 1 and 2, begin a new paragraph and insert:
SOURCE: IC 6-3-1-24; (04)MO136519.9. -->     "SECTION 9. IC 6-3-1-24 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2005]: Sec. 24. The term "sales" means all gross receipts of the taxpayer not allocated under IC 6-3-2-2(g) IC 6-3-2-2(e) through IC 6-3-2-2(k), IC 6-3-2-2(i), other than compensation (as defined in section 23 of this chapter).".
SOURCE: Page 22, line 16; (04)MO136519.22. -->     Page 22, between lines 16 and 17, begin a new paragraph and insert:
    " (s) This section expires January 1, 2005.
SOURCE: IC 6-3-2-2.1; (04)MO136519.16. -->     SECTION 16. IC 6-3-2-2.1 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2005]: Sec. 2.1. (a) With regard to corporations and nonresident persons, "adjusted gross income derived from sources within Indiana", for the purposes of this article, means and includes:
        (1) income from real or tangible personal property located in Indiana;
        (2) income from doing business in Indiana;
        (3) income from a trade or profession conducted in Indiana;
        (4) compensation for labor or services rendered within Indiana;
        (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; and
        (6) any business income, regardless of whether it is described in this subsection.
In the case of nonbusiness income described in subsection (e), only so much of such income as is allocated to Indiana under subsections (f) through (i) shall be considered to be derived from sources within Indiana. In the case of business income, only so much of such income as is apportioned to Indiana under subsection (b) shall be considered to be derived from sources within Indiana. In the case of compensation of a team member (as defined in section 2.7 of this chapter), only the part 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 (p) is considered derived from sources within Indiana.
    (b) Except as provided in subsection (j) and subject to subsection (m), if business income of a corporation or a nonresident person is derived from sources within Indiana and from sources outside Indiana, then the business income derived from sources within Indiana shall be determined by multiplying the business income derived from sources both within and outside Indiana by the sales factor.
    (c) The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in Indiana 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. Sales of tangible personal property are in Indiana if:
        (1) the property is delivered or shipped to a purchaser, other than the United States government, within Indiana, regardless of the f.o.b. point or other conditions of the sale;

or
        (2) the property is shipped from an office, a store, a warehouse, a factory, or other place of storage in Indiana 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.
    (d) Sales, other than receipts from intangible property covered by subsection (c) and sales of tangible personal property, are in Indiana if:
        (1) the income-producing activity is performed in Indiana; or
        (2) the income-producing activity is performed both within and outside Indiana and a greater proportion of the income-producing activity is performed in Indiana than in any other state, based on costs of performance.
    (e) 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 (f) through (i).
    (f)(1) Net rents and royalties from real property located in Indiana are allocable to Indiana.
    (2) Net rents and royalties from tangible personal property are allocated to Indiana:
        (i) if and to the extent that the property is utilized in Indiana; or
        (ii) in their entirety if the taxpayer's commercial domicile is in Indiana and the taxpayer is not organized under the laws of or taxable in the state in which the property is used.
    (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 used in the state in which the property was located at the time the rental or royalty payer obtained possession.


    (g)(1) Capital gains and losses from sales of real property located in Indiana are allocable to Indiana.
    (2) Capital gains and losses from sales of tangible personal property are allocable to Indiana if:
        (A) the property had a situs in Indiana at the time of the sale; or
        (B) the taxpayer's commercial domicile is in Indiana 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 Indiana if the taxpayer's commercial domicile is in Indiana.
    (h) Interest and dividends are allocable to Indiana if the taxpayer's commercial domicile is in Indiana.
    (i)(1) Patent and copyright royalties are allocable to Indiana:
            (A) if and to the extent that the patent or copyright is utilized by the taxpayer in Indiana; or
            (B) if and to the extent that the patent or copyright is used by the taxpayer in a state in which the taxpayer is not taxable and the taxpayer's commercial domicile is in Indiana.
        (2) A patent is used 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 used in the state in which the taxpayer's commercial domicile is located.
        (3) A copyright is used 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 use, the copyright is used in the state in which the taxpayer's commercial domicile is located.
    (j) 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) the inclusion of one (1) or more additional factors that will fairly represent the taxpayer's income derived from

sources within Indiana; or
        (3) the employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
    (k) 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 Indiana between and among those organizations, trades, or businesses in order to fairly reflect and report the income derived from sources within Indiana by various taxpayers.
    (l) 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.
    (m) Notwithstanding subsections (j) and (k), 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.
    (n) Notwithstanding subsections (j) and (k), the department may not require that income, deductions, and credits attributable to a taxpayer and another entity not described in subsection (m)(1) or (m)(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 (j) and (k).
    (o) Notwithstanding subsections (m) and (n), one (1) or more taxpayers may petition the department under subsection (j) 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.
    (p) 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.

SOURCE: IC 6-3-2-2.4; (04)MO136519.17. -->     SECTION 17. IC 6-3-2-2.4 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2005]: Sec. 2.4. (a) For purposes of section 2(o) 2(m) of this chapter, a corporation is a foreign operating corporation for a particular taxable year if it has eighty percent (80%) or more of its total business activity occurring outside the United States during the taxable year.
    (b) For purposes of determining the amount of a corporation's business activity that occurs within the United States, the department shall determine the sum of that corporation's United States property factor and its United States payroll factor and divide that sum by two (2). If the quotient exceeds two-tenths (0.2), then less than eighty percent (80%) of the corporation's business shall be considered to have occurred outside the United States. If the quotient equals or is less than two-tenths (0.2), then eighty percent (80%) or more of the corporation's business shall be considered to have occurred outside the United States. If a corporation's United States property factor or its United States payroll factor has a denominator of zero (0), then the sum of the two (2) factors shall be divided by one (1) and not by two (2).
    (c) The United States property factor of a corporation is a fraction. The numerator of the fraction is the average value of the corporation's real and tangible personal property owned or rented and used in the United States during the taxable year, and the denominator of the fraction is the average value of all the corporation's real and tangible personal property owned or rented and used anywhere in the world during the taxable year. Property owned by the corporation shall be valued at its original cost. Property rented by the corporation shall be valued at eight (8) times the net annual rental rate. The corporation's net annual rental rate is the annual rental rate paid by the corporation less any annual rental rate received by the corporation from subrentals. The

average value 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 corporation's property.
    (d) The United States payroll factor of a corporation is a fraction. The numerator of the fraction is the total compensation to individuals paid in the United States during the taxable year by the corporation, and the denominator of the fraction is the total compensation to individuals paid anywhere in the world during the taxable year by the corporation. Compensation to an individual is paid in the United States if:
        (1) the individual's service is performed entirely within the United States;
        (2) the individual's service is performed both within and outside the United States, but the service performed outside the United States is incidental to the individual's service within the United States; or
        (3) the individual is a resident of the United States, some of the service is performed in the United States, 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 the United States; or
            (B) the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is not in a jurisdiction that is outside the United States and that is where some part of the service is performed.

SOURCE: IC 6-3-2-2.6; (04)MO136519.18. -->     SECTION 18. IC 6-3-2-2.6, AS AMENDED BY P.L.192-2002(ss), SECTION 73, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2005]: Sec. 2.6. (a) This section applies to a corporation or a nonresident person, for a particular taxable year, if the taxpayer's adjusted gross income for that taxable year is reduced because of a deduction allowed under Section 172 of the Internal Revenue Code for a net operating loss. For purposes of section 1 of this chapter, the taxpayer's adjusted gross income, for the particular taxable year, derived from sources within Indiana is the remainder determined under STEP FOUR of the following formula:
        STEP ONE: Determine, in the manner prescribed in section 2 or 2.1 of this chapter, the taxpayer's adjusted gross income, for the taxable year, derived from sources within Indiana, as calculated without the deduction for net operating losses provided by Section 172 of the Internal Revenue Code.
        STEP TWO: Determine, in the manner prescribed in subsection (b), the amount of the taxpayer's net operating losses that are deductible for the taxable year under Section 172 of the Internal Revenue Code, as adjusted to reflect the modifications required by IC 6-3-1-3.5, and that are derived from sources within Indiana.
        STEP THREE: Enter the larger of zero (0) or the amount determined under STEP TWO.
        STEP FOUR: Subtract the amount entered under STEP THREE from the amount determined under STEP ONE.
    (b) For purposes of STEP TWO of subsection (a), the modifications that are to be applied are those modifications required under IC 6-3-1-3.5 for the same taxable year during which each net operating loss was incurred. In addition, for purposes of STEP TWO of subsection (a), the amount of a taxpayer's net operating losses that are derived from sources within Indiana shall be determined in the same manner that the amount of the taxpayer's income derived from sources within Indiana is determined, under section 2 or 2.1 of this chapter, for the same taxable year during which each loss was incurred. Also, for purposes of STEP TWO of subsection (a), the following procedures apply:
        (1) The taxpayer's net operating loss for a particular taxable year shall be treated as a positive number.
        (2) A modification that is to be added to federal adjusted gross income or federal taxable income under IC 6-3-1-3.5 shall be treated as a negative number.
        (3) A modification that is to be subtracted from federal adjusted gross income or federal taxable income under IC 6-3-1-3.5 shall be treated as a positive number.
        (4) A net operating loss under this section shall be considered even though in the year the taxpayer incurred the loss the taxpayer was not subject to the tax imposed under section 1 of this chapter because the taxpayer was:
            (A) a life insurance company (as defined in Section 816(a) of the Internal Revenue Code); or
            (B) an insurance company subject to tax under Section 831 of the Internal Revenue Code.".
SOURCE: Page 25, line 26; (04)MO136519.25. -->     Page 25, between lines 26 and 27, begin a new paragraph and insert:
SOURCE: IC 6-3-3-10; (04)MO136519.21. -->     "SECTION 21. IC 6-3-3-10, AS AMENDED BY P.L.269-2003, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1 ,2005]: Sec. 10. (a) As used in this section:
    "Base period wages" means the following:
        (1) In the case of a taxpayer other than a pass through entity, wages paid or payable by a taxpayer to its employees during the year that ends on the last day of the month that immediately precedes the month in which an enterprise zone is established, to the extent that the wages would have been qualified wages if the enterprise zone had been in effect for that year. If the taxpayer did not engage in an active trade or business during that year in the area that is later designated as an enterprise zone, then the base period wages equal zero (0). If the taxpayer engaged in an active trade or business during only part of that year in an area that is

later designated as an enterprise zone, then the department shall determine the amount of base period wages.
        (2) In the case of a taxpayer that is a pass through entity, base period wages equal zero (0).
    "Enterprise zone" means an enterprise zone created under IC 4-4-6.1.
    "Enterprise zone adjusted gross income" means adjusted gross income of a taxpayer that is derived from sources within an enterprise zone. Sources of adjusted gross income shall be determined with respect to an enterprise zone, to the extent possible, in the same manner that sources of adjusted gross income are determined with respect to the state of Indiana under IC 6-3-2-2. IC 6-3-2-2.1.
    "Enterprise zone gross income" means gross income of a taxpayer that is derived from sources within an enterprise zone.
    "Enterprise zone insurance premiums" means insurance premiums derived from sources within an enterprise zone.
    "Monthly base period wages" means base period wages divided by twelve (12).
    "Pass through entity" means a:
        (1) corporation that is exempt from the adjusted gross income tax under IC 6-3-2-2.8(2);
        (2) partnership;
        (3) trust;
        (4) limited liability company; or
        (5) limited liability partnership.
    "Qualified employee" means an individual who is employed by a taxpayer and who:
        (1) has his principal place of residence in the enterprise zone in which he is employed;
        (2) performs services for the taxpayer, ninety percent (90%) of which are directly related to the conduct of the taxpayer's trade or business that is located in an enterprise zone;
        (3) performs at least fifty percent (50%) of his services for the taxpayer during the taxable year in the enterprise zone; and
        (4) in the case of an individual who is employed by a taxpayer that is a pass through entity, was first employed by the taxpayer after December 31, 1998.
    "Qualified increased employment expenditures" means the following:
        (1) For a taxpayer's taxable year other than his taxable year in which the enterprise zone is established, the amount by which qualified wages paid or payable by the taxpayer during the taxable year to qualified employees exceeds the taxpayer's base period wages.
        (2) For the taxpayer's taxable year in which the enterprise zone is established, the amount by which qualified wages paid or payable by the taxpayer during all of the full calendar months in the

taxpayer's taxable year that succeed the date on which the enterprise zone was established exceed the taxpayer's monthly base period wages multiplied by that same number of full calendar months.
    "Qualified state tax liability" means a taxpayer's total income tax liability incurred under:
        (1) IC 6-3-1 through IC 6-3-7 (adjusted gross income tax) with respect to enterprise zone adjusted gross income;
        (2) IC 27-1-18-2 (insurance premiums tax) with respect to enterprise zone insurance premiums; and
        (3) IC 6-5.5 (the financial institutions tax);
as computed after the application of the credits that, under IC 6-3.1-1-2, are to be applied before the credit provided by this section.
    "Qualified wages" means the wages paid or payable to qualified employees during a taxable year.
    "Taxpayer" includes a pass through entity.
    (b) A taxpayer is entitled to a credit against the taxpayer's qualified state tax liability for a taxable year in the amount of the lesser of:
        (1) the product of ten percent (10%) multiplied by the qualified increased employment expenditures of the taxpayer for the taxable year; or
        (2) one thousand five hundred dollars ($1,500) multiplied by the number of qualified employees employed by the taxpayer during the taxable year.
    (c) The amount of the credit provided by this section that a taxpayer uses during a particular taxable year may not exceed the taxpayer's qualified state tax liability for the taxable year. If the credit provided by this section exceeds the amount of that tax liability for the taxable year it is first claimed, then the excess may be carried back to preceding taxable years or carried over to succeeding taxable years and used as a credit against the taxpayer's qualified state tax liability for those taxable years. Each time that the credit is carried back to a preceding taxable year or carried over to a succeeding taxable year, the amount of the carryover is reduced by the amount used as a credit for that taxable year. Except as provided in subsection (e), the credit provided by this section may be carried forward and applied in the ten (10) taxable years that succeed the taxable year in which the credit accrues. The credit provided by this section may be carried back and applied in the three (3) taxable years that precede the taxable year in which the credit accrues.
    (d) A credit earned by a taxpayer in a particular taxable year shall be applied against the taxpayer's qualified state tax liability for that taxable year before any credit carryover or carryback is applied against that liability under subsection (c).
    (e) Notwithstanding subsection (c), if a credit under this section results from wages paid in a particular enterprise zone, and if that

enterprise zone terminates in a taxable year that succeeds the last taxable year in which a taxpayer is entitled to use the credit carryover that results from those wages under subsection (c), then the taxpayer may use the credit carryover for any taxable year up to and including the taxable year in which the enterprise zone terminates.
    (f) A taxpayer is not entitled to a refund of any unused credit.
    (g) A taxpayer that:
        (1) does not own, rent, or lease real property outside of an enterprise zone that is an integral part of its trade or business; and
        (2) is not owned or controlled directly or indirectly by a taxpayer that owns, rents, or leases real property outside of an enterprise zone;
is exempt from the allocation and apportionment provisions of this section.
    (h) If a pass through entity is entitled to a credit under subsection (b) but does not have state tax liability against which the tax credit may be applied, an individual who is a shareholder, partner, beneficiary, 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, beneficiary, or member is entitled.
The credit provided under this subsection is in addition to a tax credit to which a shareholder, partner, beneficiary, or member of a pass through entity is entitled. However, a pass through entity and an individual who is a shareholder, partner, beneficiary, or member of a pass through entity may not claim more than one (1) credit for the qualified expenditure.

SOURCE: IC 6-3.1-4-6; (04)MO136519.22. -->     SECTION 22. IC 6-3.1-4-6, AS AMENDED BY P.L.224-2003, SECTION 191, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 6. Notwithstanding the other provisions of this chapter, a taxpayer is not entitled to a credit for Indiana qualified research expense incurred after December 31, 2013. Notwithstanding Section 41 of the Internal Revenue Code, the termination date in Section 41(h) of the Internal Revenue Code does not apply to a taxpayer who is eligible for the credit under this chapter for the taxable year in which the Indiana qualified research expense is incurred.".
SOURCE: Page 31, line 6; (04)MO136519.31. -->     Page 31, between lines 6 and 7, begin a new paragraph and insert:
SOURCE: IC 6-8.1-6-5; (04)MO136519.28. -->     "SECTION 28. IC 6-8.1-6-5, AS AMENDED BY P.L.254-2003, SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2005]: Sec. 5. The department shall request from each taxpayer the amount of the taxpayer's gross income (as defined in Section 61 of the Internal Revenue Code) derived from sources within or outside Indiana using the provisions applicable to determining the source of adjusted gross income that are set forth in IC 6-3-2-2.

IC 6-3-2-2.1. The taxpayer shall itemize the amount of gross income derived from each source.

SOURCE: IC 9-13-2-78; (04)MO136519.29. -->     SECTION 29. IC 9-13-2-78 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2005]: Sec. 78. "Indiana resident" refers to a person who is one (1) of the following:
        (1) A person who has been living in Indiana for at least one hundred eighty-three (183) days during a calendar year and who has a legal residence in another state. However, the term does not include a person who has been living in Indiana for any of the following purposes:
            (A) Attending an institution of higher education.
            (B) Serving on active duty in the armed forces of the United States.
        (2) A person who is living in Indiana if the person has no other legal residence.
        (3) A person who is registered to vote in Indiana.
        (4) A person who has a child enrolled in an elementary or a secondary school located in Indiana.
        (5) A person who has more than one-half (1/2) of the person's gross income (as defined in Section 61 of the Internal Revenue Code) derived from sources in Indiana using the provisions applicable to determining the source of adjusted gross income that are set forth in IC 6-3-2-2. IC 6-3-2-2.1. However, a person who is considered a resident under this subdivision is not a resident if the person proves by a preponderance of the evidence that the person is not a resident under subdivisions (1) through (4).".
SOURCE: Page 32, line 3; (04)MO136519.32. -->     Page 32, between lines 3 and 4, begin a new paragraph and insert:
SOURCE: ; (04)MO136519.32. -->     "SECTION 32. [EFFECTIVE JANUARY 1, 2005] IC 6-3-1-24 and IC 6-3-2-2.4, both as amended by this act, and IC 6-3-2-2.1, as added by this act, apply only to taxable years beginning after December 31, 2004.
SOURCE: ; (04)MO136519.33. -->     SECTION 33. [EFFECTIVE JULY 1, 2004] For purposes of IC 6-2.5-5-39, as added by this act, all transactions shall be considered as having occurred after June 30, 2004, to the extent that delivery of the property or services constituting selling at retail is made after that date to the purchaser or to the place of delivery designated by the purchaser. However, a transaction shall be considered as having occurred before July 1, 2004, to the extent that the agreement of the parties to the transaction was entered into before July 1, 2004, and payment for the property or services furnished in the transaction is made before July 1, 2004, notwithstanding the delivery of the property or services after June 30, 2004.".
    Renumber all SECTIONS consecutively.
    (Reference is to HB 1365 as printed January 27, 2004.)

________________________________________

Representative Borror


MO136519/DI 44     2004