Indiana enacted legislation amending the corporate income rate calculation and the industrial recovery tax credit. The law:
- allows corporate taxpayers to calculate the rate they pay based on days instead of months;
- amends the industrial recovery tax credit.
In addition, it specifies that the reduced tax rate for a corporation operating in a qualified military enhancement area applies only if business operations begin before January 1, 2019.
Corporate Rate Calculation
The corporate rate is being phased down every year on July 1 until 2021. The corporate tax rate calculation will now be calculated in number of days, instead of months. The change is retroactive to January 1, 2018.
Industrial Recovery Tax Credit
A pass through entity can now allocate an industrial recovery tax credit among its partners, beneficiaries, or members according to a written agreement. The project must be located in:
- a redevelopment project area;
- an economic development area; or
- an urban renewal project area.
In addition, the project must reuse two or more buildings and structures that are:
- at least 75 years old; and
- located at a site where manufacturing previously occurred for at least 75 years.
H.B. 1242a, Laws 2018, effective July 1, 2018 and as noted above