Credit for nonresident taxpayer
Sec. 6. (a) A nonresident taxpayer is entitled to a credit against the
tax due under this article for the amount of net income tax, franchise
tax, or other tax measured by net income that is due to the
nonresident taxpayer's domiciliary state for a taxable year if:
(1) the receipt of interest or other income from a loan or loan
transaction is attributed both to the taxpayer's domiciliary state
under that state's laws and also to Indiana under IC 6-5.5-4; and
(2) the principal amount of the loan is at least two million
dollars ($2,000,000).
(b) The amount of the credit for each taxable year is the lesser of:
(1) the portion of the net income tax, franchise tax, or other tax
measured by net income actually paid by the nonresident
taxpayer to its domiciliary state that is attributable to the loan
or loan transaction; or
(2) the portion of the franchise tax due to Indiana under this
article that is attributable to the loan or loan transaction.
The amount determined under subdivisions (1) and (2) shall be
reduced by the amount of any credit for the tax due from the
nonresident taxpayer under this article (calculated without the
allowance for the credit provided under this section) and that may be
used by the nonresident taxpayer in calculating the income tax due
under the laws of the nonresident taxpayer's domiciliary state.
(c) As used in this section:
(1) "loan" or "loan transaction" refers to an obligation created
in a single transaction to pay or repay a sum of money attributed
as provided in subsection (a)(1);
(2) the "principal amount" of a loan is limited to the principal
amount specified in the loan documents at the time of making
the loan and reasonably expected to be advanced during the
term of the loan, even though there is more than one (1)
advancement. If the loan is a participation loan (as defined in
IC 6-5.5-4-13), the principal amount must be calculated
separately for each participant and is equal to that portion of the
loan committed by each participant; and
(3) a "taxpayer's domiciliary state" is the taxing jurisdiction in
which its commercial domicile is located.
(d) The amount of tax attributable to a loan or loan transaction,
under the laws of the taxpayer's domiciliary state or under this
article, is the portion of the total tax due to each state in an amount
equal to the same proportion as the receipts from the loan or loan
transaction bear to the total of the taxpayer's receipts.
As added by P.L.347-1989(ss), SEC.1. Amended by P.L.21-1990,
SEC.24; P.L.68-1991, SEC.7.
Last modified: May 28, 2006