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