Version b
"Qualified area" defined; tax rate in qualified area
Note: This version of section effective 1-1-2006. See also
preceding version of this section, effective until 1-1-2006.
Sec. 1.5. (a) As used in this section, "qualified area" means:
(1) a military base (as defined in IC 36-7-30-1(c));
(2) a military base reuse area established under IC 36-7-30;
(3) the part of an economic development area established under
IC 36-7-14.5-12.5 that is or formerly was a military base (as
defined in IC 36-7-30-1(c));
(4) a military base recovery site designated under IC 6-3.1-11.5;
or
(5) a qualified military base enhancement area established
under IC 36-7-34.
(b) Except as provided in subsection (c), a tax at the rate of five
percent (5%) of adjusted gross income is imposed on that part of the
adjusted gross income of a corporation that is derived from sources
within a qualified area if the corporation locates all or part of its
operations in a qualified area during the taxable year, as determined
under subsection (e). The tax rate under this section applies to the
taxable year in which the corporation locates its operations in the
qualified area and to the next succeeding four (4) taxable years. In
the case of a corporation that locates all or part of its operations in a
qualified military base enhancement area, the tax rate imposed under
this section applies to the corporation only if the corporation meets
at least one (1) of the following criteria:
(1) The corporation is a participant in the technology transfer
program conducted by the qualified military base (as defined in
IC 36-7-34-3).
(2) The corporation is a United States Department of Defense
contractor.
(3) The corporation and the qualified military base have a
mutually beneficial relationship evidenced by a memorandum
of understanding between the corporation and the United States
Department of Defense.
(c) A taxpayer is not entitled to the tax rate described in
subsection (b) to the extent that the taxpayer substantially reduces or
ceases its operations at another location in Indiana in order to
relocate its operations within the qualified area, unless:
(1) the taxpayer had existing operations in the qualified area;
and
(2) the operations relocated to the qualified area are an
expansion of the taxpayer's operations in the qualified area.
(d) A determination under subsection (c) that a taxpayer is not
entitled to the tax rate provided by this section as a result of a
substantial reduction or cessation of operations applies to the taxable
year in which the substantial reduction or cessation occurs and in all
subsequent years. Determinations under this section shall be made by
the department of state revenue.
(e) The department of state revenue:
(1) shall adopt rules under IC 4-22-2 to establish a procedure
for determining the part of a corporation's adjusted gross
income that was derived from sources within a qualified area;
and
(2) may adopt other rules that the department considers
necessary for the implementation of this chapter.
As added by P.L.81-2004, SEC.21. Amended by P.L.190-2005,
SEC.2; P.L.203-2005, SEC.4.
Last modified: May 28, 2006