Indiana Revises Corporate Income Tax Rate Calculation and Credit

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

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CCHTaxGroup

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