§ 6-3.1-4-2.5 — Amount of credit; alternative computation

Indiana § 6-3.1-4-2.5

• Jurisdiction: Indiana
• Art. 3.1: STATE TAX LIABILITY CREDITS
• Ch. 4: Research Expense Credits

Text

5. (a) The general assembly makes the
following findings pertaining to this section:
(1) The aerospace industry is adversely affected by the calculation
of qualified research expense credits under this chapter, based on
the Internal Revenue Code's treatment of federal defense spending
trends in the 1980s.
(2) This adverse impact creates a disincentive for making
qualified research expenditures in Indiana.
(3) Manufacturers of aerospace and jet propulsion equipment
have been a major in-state employer of science and engineering
graduates from Indiana universities.
(4) The presence of a strong aerospace manufacturing base
furthers the state's interest in maintaining the viability of a United
States government military installation that is used for the design,
construction, maintenance, and testing of electronic devices and
ordnance.
(5) The creation of an alternative qualified research expense
credit promotes vital state interests.
(b) This section applies only to a taxpayer that:
(1) is primarily engaged in the production of civil and military jet
propulsion systems;
(2) is certified by the Indiana economic development corporation
as an aerospace advanced manufacturer;
(3) is a United States Department of Defense contractor; and
(4) maintains one (1) or more manufacturing facilities in Indiana
employing at least three thousand (3,000) employees in full-time
employment positions that pay on average more than four hundred
percent (400%) of the hourly minimum wage under IC 22-2-2-4
or its equivalent.
(c) A taxpayer that incurs Indiana qualified research expense in a
particular taxable year may elect to calculate the research expense tax
credit under this section instead of under section 2 of this chapter.
(d) An election under this section applies to the taxable year for
which the election is made and all succeeding taxable years unless the
election is revoked with the consent of the department. An election
must be made in the manner and on the form prescribed by the
department.
(e) A credit may be authorized by the Indiana economic
development corporation and, if authorized, shall be equal to a
percentage determined by the Indiana economic development
corporation, not to exceed ten percent (10%), multiplied by:
(1) the taxpayer's Indiana qualified research expenses for the
taxable year; minus
(2) fifty percent (50%) of the taxpayer's average Indiana qualified
research expenses for the three (3) taxable years preceding the
taxable year for which the credit is being determined.
(f) The credit amount determined in subsection (e) applies to the
taxable year for which the determination is made and all succeeding
taxable years unless the determination is changed by the Indiana
economic development corporation. The duration of a determination
made by the Indiana economic development corporation under
subsection (e) shall be specified by the Indiana economic development
corporation at the time of the determination.

Legislative History

As added by P.L.197-2005, SEC.1.