Citations Affected: IC 6-3.1-34.
Synopsis: Transportation and logistics income tax credit. Provides an
income tax credit for new expenditures made before January 1, 2019,
by a taxpayer for one or more of the following purposes: (1)
Implementing homeland security measures to comply with federal
homeland security requirements, as certified by the department of
homeland security. (2) Making improvements to real property located
in Indiana that are related to constructing a new or modernizing an
existing transportation or logistical distribution facility. (3) Improving
the transportation of goods by highway, rail, water, or air. (4) Making
warehouse upgrades or improving logistical distribution. Requires the
department of homeland security, in consultation with the department
of state revenue, to adopt rules to implement a certification process for
homeland security expenditures. Provides that the amount of the credit
for a taxable year is equal to: (1) 25%; multiplied by (2) the amount of
the qualified expenditures made by the taxpayer during the taxable year
minus the average annual qualified expenditures made by the taxpayer
during the immediately preceding two years. Limits the credit that may
be claimed for a taxable year to the taxpayer's state tax liability for that
taxable year. Allows the taxpayer to carry over any unused credit for
nine years. Provides that the credit may not be refunded, carried back,
or transferred to another taxpayer. Limits the credit to $25,000,000 for
each state fiscal year, subject to the state budget committee reviewing
an increase in the limit as proposed by the director of the office of
management and budget. Requires the department of state revenue to
annually report to the state budget committee concerning the use of the
credit, including summary information and the name and address of
each taxpayer claiming the credit and the credit amount claimed by
Effective: January 1, 2013.
January 11, 2012, read first time and referred to Committee on Ways and Means.
A BILL FOR AN ACT to amend the Indiana Code concerning
homeland security (IC 10-19-2-1) that an expenditure under
this subdivision is a qualified expenditure for purposes of this
chapter before claiming the tax credit. The department of
homeland security, in consultation with the department, shall
adopt rules under IC 4-22-2, including emergency rules under
IC 4-22-2-37.1, to implement a certification process for
purposes of this subdivision.
(2) Making an improvement to real property located in Indiana that is related to constructing a new, or modernizing an existing, transportation or logistical distribution facility.
(3) Improving the transportation of goods on Indiana highways, limited to the following:
(A) Upgrading to terminal facilities that serve tractors (as defined in IC 9-13-2-180) and semitrailers (as defined in IC 9-13-2-164).
(B) Improving paved access to terminal facilities.
(C) Adding maintenance areas.
(D) Purchasing new shop equipment having a useful life of at least five (5) years, such as diagnostic equipment, oil delivery systems, air compressors, and truck lifts.
(4) Improving the transportation of goods by rail, limited to the following:
(A) Upgrading or building mainline, secondary, yard, and spur trackage.
(B) Upgrading or replacing bridges to obtain higher load bearing capability.
(C) Upgrading or replacing grade crossings to increase visibility for motorists, including improvements to roadway surfaces, signage and traffic signals, and signal system upgrades and replacements to meet Federal Railroad Administration Positive Train Control regulations.
(D) Upgrading fueling facilities, including upgrading fueling and sanding locomotives or tanks, pumps, piping, containment areas, track pans, lighting, and security.
(E) Upgrading team track facilities, including railroad owned warehouses, loading docks, and transfer stations for loading and unloading freight.
(F) Upgrading shop facilities, including upgrading structures, inspection pits, drop pits, cranes, employee fall protection, lighting, climate control, and break rooms.
(5) Improving the transportation of goods by water, limited to
(A) Upgrading or replacing a permanent waterside dock.
(B) Upgrading or building a new terminal facility that serves waterborne transportation.
(C) Improving paved access to a waterborne terminal facility.
(D) Purchasing new equipment having a useful life of at least five (5) years, including diagnostic equipment, an oil delivery system, an air compressor, or a barge lift.
(6) Improving the transportation of goods by air, limited to the following:
(A) Upgrading or building a new cargo building, apron, hangar, warehouse facility, freight forwarding facility, cross-dock distribution facility, or aircraft maintenance facility.
(B) Improving paved access to a terminal or cargo facility.
(C) Upgrading a fueling facility.
(7) Improving warehousing and logistical capabilities, limited to the following:
(A) Upgrading warehousing facilities, including upgrading loading dock doors and loading dock plates, fueling equipment, fueling installations, or dolly drop pads for trailers.
(B) Improving logistical distribution by purchasing new equipment, limited to the following:
(i) Picking modules (systems of racks, conveyors, and controllers).
(ii) Racking equipment.
(iii) Warehouse management systems, including scanning or coding equipment.
(iv) Security equipment.
(v) Temperature control and monitoring equipment.
(vi) Dock levelers and pallet levelers and inverters.
(vii) Conveyors and related controllers, scales, and like equipment.
(viii) Packaging equipment.
(ix) Moving, separating, sorting, and picking equipment.
Sec. 7. (a) If the amount of the credit under this chapter for a taxpayer in a taxable year exceeds the taxpayer's state tax liability for that taxable year, the taxpayer may carry the excess over to the following taxable years. However, the carryover period may not exceed nine (9) consecutive taxable years, beginning with the
taxable year after the taxable year in which the taxpayer is first
granted the credit. The amount of the credit carryover from a
taxable year shall be reduced to the extent that the carryover is
used by the taxpayer to obtain a credit under this chapter for any
subsequent taxable year.
(b) A taxpayer is not entitled to a refund or carryback of any unused credit.
(c) A taxpayer may not assign, convey, sell, or otherwise transfer the credit to any other taxpayer.
Sec. 8. If a pass through entity does not have state tax liability against which the tax credit may be applied, a shareholder or partner 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 or partner is entitled.
Sec. 9. (a) The total amount of credits allowed under this chapter may not exceed in the aggregate twenty-five million dollars ($25,000,000) for all taxpayers per state fiscal year. However, the director of the office of management and budget (IC 4-3-22) may increase the credit for a state fiscal year by the specific amount proposed by the director, if the specific amount receives the review of the state budget committee before June 1 of that state fiscal year.
(b) Any person that desires to claim a tax credit provided in this chapter shall file with the department, in the form that the department may prescribe, an application:
(1) stating the amount of the new qualified expenditures that the person proposes to make that would qualify for a tax credit;
(2) stating the amount sought to be claimed as a credit; and
(3) identifying whether the credit will be claimed during the state fiscal year in which the application is filed or the immediately succeeding state fiscal year.
(c) The department shall record the time of filing of each application for a credit under this chapter and shall, except as provided in subsection (d), grant the credit to the taxpayer in the chronological order in which the application is filed in the state fiscal year, if the taxpayer's proposed new qualified expenditures and the taxpayer otherwise qualify for a credit under this chapter. The department shall promptly notify an applicant whether, or the
extent to which, the tax credit is allowable in the state fiscal year
proposed by the taxpayer.
(d) If the total credits approved under this section, including carryover credits approved for a previous state fiscal year, equal the maximum amount allowable in the state fiscal year, an application for the credit that is filed later for that same state fiscal year may not be approved. However, if an applicant for which a credit has been approved fails to claim the credit applied for, an amount equal to the credit previously applied for but not claimed may be allowed to the next eligible applicant or applicants until the total amount has been allowed.
(e) To receive the credit provided by this chapter, a taxpayer must have an approved application and claim the credit in the manner prescribed by the department. The taxpayer shall submit to the department all information that the department determines is necessary for the calculation of the credit, for the determination of whether an expenditure is a new qualified expenditure, and for the department to fulfill the reporting requirements of this chapter.
Sec. 10. The department shall report, not later than December 15 each year, to the budget committee concerning the use of the credit under this chapter. The report must include the following with regard to the previous state fiscal year:
(1) Summary information regarding the taxpayers and the use of the credit, including the amount of credits approved, the number of taxpayers applying for the credit and claiming the credit, the number of employees who are employed in Indiana by the taxpayers claiming the credit, the amount and type of new qualified expenditures for which the credit was granted, the total dollar amount of new credits claimed and the average amount of the credit claimed per taxpayer, the amount of credits to be carried forward to a subsequent taxable year, and the percentage of the total credits claimed as compared to the total adjusted gross income of all the taxpayers claiming the credit.
(2) The name and address of each taxpayer claiming the credit and the amount of the credit applied for by and granted to each taxpayer.