Qualifying for credit; request for determination; findings;
certification of credit percentage; application of credit on transfer
of ownership
Sec. 8. (a) To be entitled to a credit, a taxpayer must request the
Indiana economic development corporation to determine:
(1) whether a purchase of an ownership interest in a business
located in an enterprise zone is a qualified investment; and
(2) the percentage credit to be allowed.
The request must be made before a purchase is made.
(b) The Indiana economic development corporation shall find that
a purchase is a qualified investment if:
(1) the business is viable;
(2) the business has not been disqualified from enterprise zone
incentives or benefits under IC 5-28-15;
(3) the taxpayer has a legitimate purpose for purchase of the
ownership interest;
(4) the purchase would not be made unless a credit is allowed
under this chapter; and
(5) the purchase is critical to the commencement, enhancement,
or expansion of business operations in the zone and will not
merely transfer ownership, and the purchase proceeds will be
used only in business operations in the enterprise zone.
The Indiana economic development corporation may delay making
a finding under this subsection if, at the time the request is filed
under subsection (a), an urban enterprise zone association has made
a recommendation that the business be disqualified from enterprise
zone incentives or benefits under IC 5-28-15 and the board of the
Indiana economic development corporation has not acted on that
request. The delay by the Indiana economic development corporation
may not last for more than sixty (60) days.
(c) If the Indiana economic development corporation finds that a
purchase is a qualified investment, the department shall certify the
percentage credit to be allowed under this chapter based upon the
following:
(1) A percentage credit of ten percent (10%) may be allowed
based upon the need of the business for equity financing, as
demonstrated by the inability of the business to obtain debt
financing.
(2) A percentage credit of two percent (2%) may be allowed for
business operations in the retail, professional, or
warehouse/distribution codes of the SIC Manual.
(3) A percentage credit of five percent (5%) may be allowed for
business operations in the manufacturing codes of the SIC
Manual.
(4) A percentage credit of five percent (5%) may be allowed for
high technology business operations (as defined in
IC 5-28-15-1).
(5) A percentage credit may be allowed for jobs created during
the twelve (12) month period following the purchase of an
ownership interest in the zone business, as determined under the
following table:
JOBS CREATED PERCENTAGE
Less than 11 jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . 1%
11 to 25 jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2%
26 to 40 jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3%
41 to 75 jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4%
More than 75 jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . 5%
(6) A percentage credit of five percent (5%) may be allowed if
fifty percent (50%) or more of the jobs created in the twelve
(12) month period following the purchase of an ownership
interest in the zone business will be reserved for zone residents.
(7) A percentage credit may be allowed for investments made
in real or depreciable personal property, as determined under
the following table:
AMOUNT OF INVESTMENT PERCENTAGE
Less than $25,001 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1%
$25,001 to $50,000 . . . . . . . . . . . . . . . . . . . . . . . . . . 2%
$50,001 to $100,000 . . . . . . . . . . . . . . . . . . . . . . . . . 3%
$100,001 to $200,000 . . . . . . . . . . . . . . . . . . . . . . . . 4%
More than $200,000 . . . . . . . . . . . . . . . . . . . . . . . . . 5%
The total percentage credit may not exceed thirty percent (30%).
(d) If all or a part of a purchaser's intent is to transfer ownership,
the tax credit shall be applied only to that part of the investment that
relates directly to the enhancement or expansion of business
operations at the zone location.
As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),
SEC.10; P.L.289-2001, SEC.13; P.L.4-2005, SEC.58.
Last modified: May 28, 2006