§ 6-3.1-19-5 — Ineligibility for credit to extent of reduction or cessation of operations in Indiana; eligibility determinations; criteria; appeals

Indiana § 6-3.1-19-5

• Jurisdiction: Indiana
• Art. 3.1: STATE TAX LIABILITY CREDITS
• Ch. 19: Community Revitalization Enhancement District Tax

Text

(a) A taxpayer is not entitled to claim the
credit provided by this chapter to the extent that the taxpayer
substantially reduces or ceases its operations in Indiana in order to
relocate them within the district. Determinations under this section
shall be made by the department. The department shall adopt a
proposed order concerning a taxpayer's eligibility for the credit based
on subsection (b) and the following criteria:
(1) A site-specific economic activity, including sales, leasing,
service, manufacturing, production, storage of inventory, or any
activity involving permanent full-time or part-time employees,
shall be considered a business operation.
(2) With respect to an operation located outside the district
(referred to in this section as a "nondistrict operation"), any of the
following that occurs during the twelve (12) months before the
completion of the physical relocation of all or part of the activity
described in subdivision (1) from the nondistrict operation to the
district as compared with the twelve (12) months before that
twelve (12) months shall be considered a substantial reduction:
(A) A reduction in the average number of full-time or part-time
employees of the lesser of one hundred (100) employees or
twenty-five percent (25%) of all employees.
(B) A twenty-five percent (25%) reduction in the average
number of goods manufactured or produced.
(C) A twenty-five percent (25%) reduction in the average value
of services provided.
(D) A ten percent (10%) reduction in the average value of
stored inventory.
(E) A twenty-five percent (25%) reduction in the average
amount of gross income.
(b) Notwithstanding subsection (a), a taxpayer that would otherwise
be disqualified under subsection (a) is eligible for the credit provided
by this chapter if the taxpayer meets at least one (1) of the following
conditions:
(1) The taxpayer relocates all or part of its nondistrict operation
for any of the following reasons:
(A) The lease on property necessary for the nondistrict
operation has been involuntarily lost through no fault of the
taxpayer.
(B) The space available at the location of the nondistrict
operation cannot accommodate planned expansion needed by
the taxpayer.
(C) The building for the nondistrict operation has been certified
as uninhabitable by a state or local building authority.
(D) The building for the nondistrict operation has been totally
destroyed through no fault of the taxpayer.
(E) The renovation and construction costs at the location of the
nondistrict operation are more than one and one-half (1 1/2)
times the costs of purchase, renovation, and construction of a
facility in the district, as certified by three (3) independent
estimates.
(F) The taxpayer had existing operations in the district and the
nondistrict operations relocated to the district are an expansion
of the taxpayer's operations in the district.
A taxpayer is eligible for benefits and incentives under clause (C)
or (D) only if renovation and construction costs at the location of
the nondistrict operation are more than one and one-half (1 1/2)
times the cost of purchase, renovation, and construction of a
facility in the district. These costs must be certified by three (3)
independent estimates.
(2) The taxpayer has not terminated or reduced the pension or
health insurance obligations payable to employees or former
employees of the nondistrict operation without the consent of the
employees.
(c) The department shall cause to be delivered to the taxpayer and
to any person who testified before the department in favor of
disqualification of the taxpayer a copy of the department's proposed
order. The taxpayer and these persons shall be considered parties for
purposes of this section.
(d) A party who wishes to appeal the proposed order of the
department shall, within ten (10) days after the party's receipt of the
proposed order, file written objections with the department. The
department shall immediately forward copies of the objections to the
director of the budget agency and the board of the Indiana economic
development corporation. A hearing panel composed of the
commissioner of the department or the commissioner's designee, the
director of the budget agency or the director's designee, and the
president of the Indiana economic development corporation or the
president's designee shall set the objections for oral argument and give
notice to the parties. A party at its own expense may cause to be filed
with the hearing panel a transcript of the oral testimony or any other
part of the record of the proceedings. The oral argument shall be on the
record filed with the hearing panel. The hearing panel may hear
additional evidence or remand the action to the department with
instructions appropriate to the expeditious and proper disposition of the
action. The hearing panel may adopt the proposed order of the
department, may amend or modify the proposed order, or may make
such order or determination as is proper on the record. The affirmative
votes of at least two (2) members of the hearing panel are required for
the hearing panel to take action on any measure. The taxpayer may
appeal the decision of the hearing panel to the tax court in the same
manner that a final determination of the department may be appealed
under IC 33-26.
(e) If no objections are filed, the department may adopt the proposed
order without oral argument.
(f) A determination that a taxpayer is not entitled to the credit
provided by this chapter as a result of a substantial reduction or
cessation of operations applies to credits that would otherwise arise in
the taxable year in which the substantial reduction or cessation occurs
and in all subsequent years.

Legislative History

As added by P.L.125-1998, SEC.3. Amended by P.L.81-2004, SEC.30 and P.L.90-2004, SEC.2; P.L.4-2005, SEC.95.