Introduced Version






HOUSE BILL No. 1276

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-3.1-16; IC 6-4.1-5-1.7.

Synopsis: Historic rehabilitation tax credit. Provides that if a taxpayer dies before using all of a historic rehabilitation tax credit to which the taxpayer is entitled, the unused credit may be used against inheritance tax due with respect to transfers of property interests by the taxpayer. Specifies that the historic rehabilitation tax credit is a credit against state income taxes. Provides that if the amount of historic rehabilitation tax credits claimed in a state fiscal year exceeds the allowable amount, a taxpayer may request that the legislative body of the county, city, or town in which the preservation or rehabilitation of the property occurs approve a refund to the taxpayer of the unused credit. Provides that a county, city, or town that pays a refund is entitled to reimbursement from the state general fund before the end of the state fiscal year that begins ten years after the refund is paid.

Effective: July 1, 2004.





Bottorff




    January 15, 2004, read first time and referred to Committee on Agriculture, Natural Resources and Rural Development.







Introduced

Second Regular Session 113th General Assembly (2004)


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 this style type.
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HOUSE BILL No. 1276



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation and to make an appropriation.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 6-3.1-16-2.5; (04)IN1276.1.1. -->     SECTION 1. IC 6-3.1-16-2.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 2.5. As used in this chapter, "legislative body" refers to the following:
        (1) The legislative body of a municipality (as defined in IC 36-1-2-11), in the case of property:
            (A) on which preservation or rehabilitation occurs; and
            (B) that is located in the municipality.
        (2) The legislative body of a county in which property is located, in the case of property:
            (A) on which preservation or rehabilitation occurs; and
            (B) that is not located in a municipality.

SOURCE: IC 6-3.1-16-6; (04)IN1276.1.2. -->     SECTION 2. IC 6-3.1-16-6, AS AMENDED BY P.L.192-2002(ss), SECTION 108, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 6. As used in this chapter, "state income tax liability" means a taxpayer's total tax liability incurred under IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax), as

computed after the application of all credits that under IC 6-3.1-1-2 are to be applied before the credit provided by this chapter.

SOURCE: IC 6-3.1-16-6.1; (04)IN1276.1.3. -->     SECTION 3. IC 6-3.1-16-6.1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 6.1. As used in this chapter, "taxpayer" means an individual, a resident decedent (as defined in IC 6-4.1-1-11), a non-resident decedent (as defined in IC 6-4.1-1-7), a corporation, an S corporation, a partnership, a limited liability company, a limited liability partnership, a nonprofit organization, or a joint venture.
SOURCE: IC 6-3.1-16-7; (04)IN1276.1.4. -->     SECTION 4. IC 6-3.1-16-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 7. (a) Subject to section 14 sections 13(c) and 14 of this chapter, a taxpayer is entitled to a credit against the taxpayer's state income tax liability in the taxable year in which the taxpayer completes the preservation or rehabilitation of historic property and obtains the certifications required under section 8 of this chapter.
    (b) The amount of the credit is equal to twenty percent (20%) of the qualified expenditures that:
        (1) the taxpayer makes for the preservation or rehabilitation of historic property; and
        (2) are approved by the division.
    (c) In the case of a husband and wife who:
        (1) own and rehabilitate a historic property jointly; and
        (2) file separate tax returns;
the husband and wife may take the credit in equal shares or one (1) spouse may take the whole credit.
SOURCE: IC 6-3.1-16-7.5; (04)IN1276.1.5. -->     SECTION 5. IC 6-3.1-16-7.5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 7.5. (a) If a pass through entity is entitled to a credit under section 7 of this chapter but does not have state income 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.
    (b) The credit provided under subsection (a) 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 a shareholder, partner, or member of the pass through entity may not claim more than one (1) credit for the same qualified expenditure.
SOURCE: IC 6-3.1-16-12; (04)IN1276.1.6. -->     SECTION 6. IC 6-3.1-16-12 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 12. (a) A credit claimed under this chapter shall be recaptured from the taxpayer if:
        (1) the property is transferred less than five (5) years after completion of the certified preservation or rehabilitation work; or
        (2) less than five (5) years after completion of the certified preservation or rehabilitation, additional modifications to the property are undertaken that do not meet the standards of the division.
    (b) If the recapture of a credit is required under this section, an amount equal to the credit recaptured shall be added to the state income tax liability of the taxpayer for the taxable year during which the credit is recaptured.
SOURCE: IC 6-3.1-16-13; (04)IN1276.1.7. -->     SECTION 7. IC 6-3.1-16-13, AS AMENDED BY P.L.192-2002(ss), SECTION 109, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 13. (a) If the credit provided by this chapter exceeds a taxpayer's state income tax liability for the taxable year for which the credit is first claimed, the excess may be carried over to succeeding taxable years and used as a credit against the tax otherwise due and payable by the taxpayer under IC 6-3 during those taxable years. Each time that the credit is carried over to a succeeding taxable year, the credit is to be reduced by the amount that was used as a credit during the immediately preceding taxable year. The credit provided by this chapter may be carried forward and applied to succeeding taxable years for fifteen (15) taxable years following the unused credit year.
    (b) A credit earned by a taxpayer in a particular taxable year shall be applied against the taxpayer's state income tax liability for that taxable year before any credit carryover is applied against that liability under subsection (a).
    (c) Except as provided in section 14 of this chapter, a taxpayer is not entitled to any carryback or refund of any unused credit. However, if the taxpayer is a resident or a non-resident who:
        (1) dies before applying the credit under this chapter against the taxpayer's state income tax liability; or
        (2) has at the time of the taxpayer's death unused credit under this chapter that was carried forward under subsection (a);
the credit may be carried over and applied to an inheritance tax imposed under IC 6-4.1 with respect to the transfers of property interests by the taxpayer.

SOURCE: IC 6-3.1-16-14; (04)IN1276.1.8. -->     SECTION 8. IC 6-3.1-16-14 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 14. (a) The amount of

tax credits allowed under this chapter may not exceed
        (1) seven hundred fifty thousand dollars ($750,000) in the state fiscal year beginning July 1, 1997, and the state fiscal year beginning July 1, 1998; and
        (2) four hundred fifty thousand dollars ($450,000) in a state fiscal year. that begins July 1, 1999 or thereafter.
     (b) If the amount of tax credits claimed under this chapter in a state fiscal year exceeds the amount that may be allowed under subsection (a), a taxpayer may submit to the legislative body a request that the legislative body approve a refund to the taxpayer of the unused credit to which the taxpayer is otherwise entitled under this chapter. A legislative body may approve and pay a refund under this subsection only if the legislative body approves the request by resolution. A refund under this subsection is subject to the reasonable conditions imposed by the legislative body and may be paid only from money under the control of the legislative body.
    (c) If a legislative body approves the payment of a refund under subsection (b), the county, city, or town that pays the refund is entitled to reimbursement from the state general fund equal to the amount paid by the county, city, or town. The reimbursement must be paid by the treasurer of state on warrant of the auditor of state before the end of the state fiscal year that begins ten (10) years after the refund is paid by the county, city, or town. Amounts necessary to make the reimbursements required by this subsection are appropriated from the state general fund.

SOURCE: IC 6-4.1-5-1.7; (04)IN1276.1.9. -->     SECTION 9. IC 6-4.1-5-1.7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 1.7. A person is entitled to claim the amount of a tax credit carried over under IC 6-3.1-16-13(c) as a credit against inheritance tax imposed under this article. A credit allowed under this section shall be applied as follows:
        (1) Proportionally against the inheritance tax liability of all Class A transferees.
        (2) Proportionally against the inheritance tax liability of all Class B transferees, if unused credit remains after the credit is applied under subdivision (1).
        (3) Proportionally against the inheritance tax liability of all Class C transferees, if unused credit remains after the credit is applied under subdivisions (1) and (2).

SOURCE: ; (04)IN1276.1.10. -->     SECTION 10. [EFFECTIVE JULY 1, 2004] (a) IC 6-1.1-16-13, as amended by this act, and IC 6-4.1-5-1.7, as added by this act, apply

to an individual who dies after June 30, 2004.
    (b) IC 6-3.1-16-14, as amended by this act, applies to state fiscal years beginning after June 30, 2004.