Introduced Version






SENATE BILL No. 348

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-3.1-31.

Synopsis: Tax credits for high growth small businesses. Provides a state tax credit for a business that has been actively engaged in business in Indiana for at least two years, has annual revenue between $1 million and $10 million per year for at least two years, has revenue growth of at least 25% for at least two consecutive years, and employs or contracts with at least ten individuals. Provides that the credit equals 20% of the taxpayer's state tax liability in the taxable year.

Effective: January 1, 2007.





Waltz




    January 10, 2006, read first time and referred to Committee on Tax and Fiscal Policy.







Introduced

Second Regular Session 114th General Assembly (2006)


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SENATE BILL No. 348



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

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

SOURCE: IC 6-3.1-31; (06)IN0348.1.1. -->     SECTION 1. IC 6-3.1-31 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2007]:
     Chapter 31. Tax Credit for High Growth Small Businesses
    Sec. 1. As used in this chapter, "eligible business" means, with respect to a particular taxable year, a business that:
        (1) has been actively engaged in business in Indiana for at least two (2) taxable years;
        (2) has revenue of more than one million dollars ($1,000,000) and less than ten million dollars ($10,000,000) in the taxable year and in the preceding taxable year;
        (3) had at least a twenty-five percent (25%) annual growth in revenue during the taxable year and during the preceding taxable year; and
        (4) employs or issues a Form 1099 under the Internal Revenue Code for at least ten (10) individuals.
    Sec. 2. As used in this chapter, "pass through entity" means:
        (1) a corporation that is exempt from the adjusted gross income tax under IC 6-3-2-2.8(2);
        (2) a partnership;
        (3) a limited liability company; or
        (4) a limited liability partnership.
    Sec. 3. As used in this chapter, "state tax liability" means a taxpayer's total tax liability that is incurred under:
        (1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
        (2) IC 6-5.5 (the financial institutions tax); and
        (3) IC 27-1-18-2 (the insurance premiums 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 chapter.
    Sec. 4. As used in this chapter, "taxpayer" means an individual or entity that:
        (1) is an eligible business; and
        (2) has any state tax liability.
    Sec. 5. A taxpayer is entitled to a credit against the taxpayer's state tax liability for the taxable year equal to twenty percent (20%) of the taxpayer's state tax liability for the taxable year. The tax credit provided under this chapter may not be carried back. A taxpayer is not entitled to a refund of any unused credit.
    Sec. 6. If a pass through entity is entitled to a credit under this chapter but does not have state 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.
    Sec. 7. 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 all information that the department determines is necessary for the proper administration of the credit provided by this chapter.

SOURCE: ; (06)IN0348.1.2. -->     SECTION 2. [EFFECTIVE JANUARY 1, 2007] IC 6-3.1-31, as added by this act, applies to taxable years beginning after December 31, 2006.