Citations Affected:
IC 6-3.1-4
.
Synopsis: Income tax credits for research and development. Makes the
research expense tax credit permanent by eliminating its expiration
date. Modifies the research expense tax credit by repealing the
apportionment limit. (For a taxpayer with income apportioned to
Indiana, this provision currently limits the credit to the lesser of the
taxpayer's Indiana qualified research expenses or its apportioned
research expenses for the year. This bill would provide that a taxpayer's
credit is based solely on the taxpayer's Indiana qualified research
expenses.) (The introduced version of this bill was prepared by the
interim study committee on economic development issues.)
Effective: January 1, 2000 (retroactive).
January 10, 2000, read first time and referred to Committee on Finance.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
SECTION 1.
IC 6-3.1-4-2
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2000 (RETROACTIVE)]:
Sec. 2. (a) A taxpayer who incurs Indiana qualified research expense
in a particular taxable year is entitled to a research expense tax credit
for the taxable year (b) A taxpayer who does not have income
apportioned to this state for a taxable year under
IC 6-3-2-2
is entitled
to a research expense tax credit for the taxable year in the amount of
the product of:
(1) five percent (5%); multiplied by
(2) the remainder of the taxpayer's Indiana qualified research
expenses for the taxable year, minus:
(A) the taxpayer's base period Indiana qualified research
expenses, for taxable years beginning before January 1, 1990;
or
(B) the taxpayer's base amount, for taxable years beginning
after December 31, 1989.
(c) A taxpayer who has income apportioned to this state for a
taxable year under
IC 6-3-2-2
is entitled to a research expense tax
credit for the taxable year in the amount of the lesser of:
(1) the amount determined under subsection (b); or
(2) five percent (5%) multiplied by the remainder of the taxpayer's
total qualified research expenses for the taxable year, minus:
(A) the taxpayer's base period research expenses, for taxable
years beginning before January 1, 1990; or
(B) the taxpayer's base amount, for taxable years beginning
after December 31, 1989;
further multiplied by the percentage determined under
IC 6-3-2-2
for the apportionment of the taxpayer's income for the taxable
year to this state.
SECTION 2. IC 6-3.1-4-6, AS AMENDED BY P.L.4-2000,
SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2000 (RETROACTIVE)]: 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, 2002.
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.
SECTION 3. [EFFECTIVE JANUARY 1, 2000 (RETROACTIVE)]
IC 6-3.1-4-2
, as amended by this act, applies to taxable years
beginning after December 31, 1999.
SECTION 4. An emergency is declared for this act.