Amount of credit; alternative computation
Effective 1-1-2006.
Sec 2.5. (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.
As added by P.L.197-2005, SEC.1.
Last modified: May 28, 2006