2023 Indiana Code › Title 6. Taxation › Article 3. State Income Taxes › Chapter 5. Reciprocity › 6-3-5-5. Election to Receive Payment in Lieu of Economic Development for a Growing Economy Tax Credit; Requirements

Sec. 5. (a) If the Indiana economic development corporation established by IC 5-28-3-1 enters into an agreement with a taxpayer for an economic development for a growing economy tax credit under IC 6-3.1-13, and the taxpayer elects to forgo claiming the credit against any state tax liability for that taxable year and requests the department to remit to the taxpayer an amount equal to the credit for the taxable year as set forth under IC 6-3.1-13-20(b), the provisions of this section shall apply.
(b) Before making a payment to a taxpayer under this section, the taxpayer shall provide to the department:
(1) a copy of the taxpayer's agreement with the Indiana economic development corporation;
(2) the credit awarded to the taxpayer for that taxable year; and
(3) any other information required by the department.
(c) A payment by the department cannot exceed the actual incremental income tax withholdings collected by the department as a result of the employment of new employees subject to an agreement entered into under IC 6-3.1-13.
(d) In the case of a credit awarded under IC 6-3.1-13 to a taxpayer that is a pass through entity, the:
(1) pass through entity has the authority to make the election with regard to the credit;
(2) shareholders, partners, members, and beneficiaries of the pass through entity may not make an election separate from the pass through entity with regard to the credit;
(3) pass through entity is entitled to the payment allowable under this section; and
(4) pass through entity may not pass through any portion of the credit for which the pass through entity requests payment as a tax credit to the shareholders, partners, members, or beneficiaries of the pass through entity.
(e) If a payment under this section is included in the federal adjusted gross income of an individual or the federal taxable income of any other entity, the payment must be treated as:
(1) adjusted gross income from Indiana sources under this article and IC 6-5.5;
(2) business income for purposes of this article; and
(3) a receipt from Indiana sources for apportionment purposes under IC 6-3-2 and IC 6-5.5-4.
(f) For purposes of offsetting refunds and overpayments, a payment under this section is treated as an overpayment of tax under this article and IC 6-5.5 for purposes of IC 6-8.1-9-2, IC 6-8.1-9.5, and IC 6-8.1-9.7.
(g) A payment under this section is subject to IC 6-3.1-13-22 in the same manner as if the payment had been claimed as a credit.
(h) If all or a portion of a payment under this section is determined to have been made in error or is subject to assessment under IC 6-3.1-13-22, the department may issue an assessment for repayment of such amount before the later of:
(1) ten (10) years from the date of the payment; or
(2) three (3) years from the date the Indiana economic development corporation notifies the department of the taxpayer's noncompliance pursuant to IC 6-3.1-13-22.
(i) An assessment for repayment shall be treated as a proposed assessment for purposes of administrative review and judicial appeal under IC 6-8.1-5. However, review of the Indiana economic development corporation's determination of noncompliance shall be limited to an abuse of discretion by the Indiana economic development corporation.
(j) For purposes of this section, an election for payment in lieu of claiming the credit under IC 6-3.1-13 for a taxable year is not allowed if:
(1) the taxpayer has claimed all or part of the credit for the taxable year;
(2) in the case of a taxpayer who is a pass through entity, the taxpayer passes through all or part of the credit as a tax credit, regardless of whether the pass through entity subsequently provides information to the department, the Indiana economic development corporation, or any other affected person or entity, that the credit should not be passed through as a tax credit or whether the credit otherwise has been claimed as a tax credit; or
(3) the taxpayer makes the election after the due date of the taxpayer's return under IC 6-3, IC 6-5.5, IC 6-8-15, or IC 27-1-18-2, determined without regard to extensions, on which it would have claimed the credit for which the taxpayer is requesting payment under this section.
(k) The amount needed to make a payment under this section shall be paid from funds appropriated to the Indiana economic development corporation for business promotion and innovation or from the statewide innovation development district fund established by IC 36-7-32.5-20. Payments made under this section are subject to available funding.
As added by P.L.135-2022, SEC.6.