Introduced Version, Senate Bill 0388

January 11, 2006, read first time and referred to Committee on Tax and Fiscal Policy.

Introduced

Second Regular Session 114th General Assembly (2006)

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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SENATE BILL No. 388

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 6-3.1-25; (06)IN0388.1.1. -->     SECTION 1. IC 6-3.1-25 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2007]:
    Chapter 25. Employer Child Care Expenditure Credits
    Sec. 1. As used in this chapter, "pass through entity" means the following:
        (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.
        (4) A limited liability partnership.
    Sec. 2. As used in this chapter, "qualified child care expenditure" has the meaning set forth in Section 45F(c)(1) of the Internal Revenue Code.
    Sec. 3. As used in this chapter, "qualified child care facility" has the meaning set forth in Section 45F(c)(2) of the Internal Revenue Code.
    Sec. 4. As used in this chapter, "qualified child care planning expenditure" means any amount paid or incurred to determine the feasibility or practicability of providing child care in a qualified child care facility that meets the requirements of section 8(a) of this chapter. The term includes expenditures, made by the taxpayer or by the taxpayer jointly with one (1) or more other individuals or entities, for any of the following:
        (1) Plans, specifications, studies, surveys, and estimates of cost.
        (2) Professional fees.
        (3) Costs paid or incurred in connection with financing the construction, acquisition, rehabilitation, or expansion of a qualified child care facility that meets the requirements of section 8(a) of this chapter.
        (4) Any other expenses necessary or incident to planning or determining the need for the provision of child care at a qualified child care facility that meets the requirements of section 8(a) of this chapter.
    Sec. 5. As used in this chapter, "qualified child care resource and referral expenditure" has the meaning set forth in Section 45F(c)(3) of the Internal Revenue Code.
    Sec. 6. 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. 7. As used in this chapter, "taxpayer" means an individual or entity that has state tax liability.
    Sec. 8. (a) A taxpayer that is eligible for an employer provided child care credit under Section 45F of the Internal Revenue Code is eligible for a credit under this chapter for qualified child care expenditures and qualified child care resource and referral expenditures that are made during a taxable year for child care provided in a qualified child care facility that is:
        (1) located in Indiana;
        (2) licensed by the division of family and children under IC 12-17.2; and
        (3) operated:
            (A) by the taxpayer;
            (B) by the taxpayer jointly with one (1) or more other individuals or entities; or
            (C) under a contract described in Section 45F(c)(1)(A)(iii) of the Internal Revenue Code as in effect on January 1, 2005.
    (b) Except as provided in section 9 of this chapter, a taxpayer that makes a qualified child care expenditure, qualified child care resource and referral expenditure, or qualified child care planning expenditure during a taxable year is entitled to a credit against the taxpayer's state tax liability for the taxable year in an amount equal to the lesser of:
        (1) twenty thousand dollars ($20,000) or, if the taxpayer shares in one (1) or more qualifying expenditures with one (1) or more individuals or entities, twenty thousand dollars ($20,000) multiplied by the taxpayer's percentage share of the total qualified expenditures; or
        (2) forty percent (40%) of the taxpayer's total qualified expenditures made during the taxable year or, if the taxpayer shares in one (1) or more qualifying expenditures with one (1) or more individuals or entities, forty percent (40%) of the taxpayer's percentage share of the total qualified expenditures.
    Sec. 9. (a) A taxpayer's credit for a taxable year may not exceed the taxpayer's state tax liability for the taxable year.
    (b) If the amount determined under section 8 of this chapter for a taxpayer for a taxable year exceeds the taxpayer's state tax liability for the taxable year, the taxpayer may carry the excess over to the immediately following taxable year. The credit provided by this chapter may be carried forward and applied to succeeding taxable years for three (3) taxable years following the unused credit year.
    (c) The amount of a credit carryover under this section shall be reduced to the extent that the carryover is used as a credit during the immediately preceding taxable year.
    (d) A taxpayer is not entitled to a carryback or refund of any unused credit.
     Sec. 10. (a) If a pass through entity does not have state tax liability against which the credit granted by this chapter may be applied, a shareholder or partner of the pass through entity is entitled to a credit equal to:
        (1) the 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.
    (b) The credit provided under subsection (a) is in addition to a credit to which a shareholder or partner of a pass through entity is otherwise entitled under this chapter. However, a pass through entity and a shareholder or partner of the pass through entity may not claim a credit under this chapter for the same qualified child care expenditure.
    Sec. 11. To obtain a credit under this chapter, a taxpayer must 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 to calculate the credit provided by this chapter.
    Sec. 12. A credit to which a taxpayer is entitled under this chapter shall be applied against the taxpayer's state tax liability in the order of the taxes listed in section 6 of this chapter.