IN
Indiana Senate Bill SB0002

Indiana 2023 Regular Session

Indiana Senate Bill SB0002 Compare Versions

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1+*ES0002.1*
2+February 14, 2023
3+ENGROSSED
4+SENATE BILL No. 2
5+_____
6+DIGEST OF SB 2 (Updated February 13, 2023 5:22 pm - DI 140)
7+Citations Affected: IC 6-3; IC 6-5.5; IC 6-8.1; noncode.
8+Synopsis: Taxation of pass through entities. Authorizes certain pass
9+through entities to make an election to pay tax at the entity level based
10+on each owner's aggregate share of adjusted gross income. Provides a
11+refundable tax credit equal to the amount of tax paid by the electing
12+entity with regard to the owner's share. Allows a credit for pass through
13+entity taxes that are imposed by and paid to another state. Makes
14+certain changes to provisions that apply to taxpayers who file a
15+combined return for the financial institutions tax. Makes conforming
16+changes for purposes of partnership audit and administrative
17+adjustments.
18+Effective: January 1, 2019 (retroactive); January 1, 2022 (retroactive);
19+January 1, 2023 (retroactive).
20+Baldwin, Garten, Ford Jon, Rogers,
21+Walker K, Qaddoura,
22+Randolph Lonnie M, Buchanan
23+(HOUSE SPONSORS — SNOW, THOMPSON)
24+January 9, 2023, read first time and referred to Committee on Tax and Fiscal Policy.
25+January 31, 2023, amended, reported favorably — Do Pass.
26+February 2, 2023, read second time, ordered engrossed. Engrossed.
27+February 6, 2023, read third time, passed. Yeas 48, nays 0.
28+HOUSE ACTION
29+February 7, 2023, read first time and referred to Committee on Ways and Means.
30+February 14, 2023, reported — Do Pass.
31+ES 2—LS 7135/DI 125 February 14, 2023
132 First Regular Session of the 123rd General Assembly (2023)
233 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
334 Constitution) is being amended, the text of the existing provision will appear in this style type,
435 additions will appear in this style type, and deletions will appear in this style type.
536 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
637 provision adopted), the text of the new provision will appear in this style type. Also, the
738 word NEW will appear in that style type in the introductory clause of each SECTION that adds
839 a new provision to the Indiana Code or the Indiana Constitution.
940 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
1041 between statutes enacted by the 2022 Regular Session of the General Assembly.
11-SENATE ENROLLED ACT No. 2
12-AN ACT to amend the Indiana Code concerning taxation.
42+ENGROSSED
43+SENATE BILL No. 2
44+A BILL FOR AN ACT to amend the Indiana Code concerning
45+taxation.
1346 Be it enacted by the General Assembly of the State of Indiana:
14-SECTION 1. IC 6-3-1-3.5, AS AMENDED BY P.L.180-2022(ss),
47+1 SECTION 1. IC 6-3-1-3.5, AS AMENDED BY P.L.180-2022(ss),
48+2 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
49+3 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3.5. When used in this
50+4 article, the term "adjusted gross income" shall mean the following:
51+5 (a) In the case of all individuals, "adjusted gross income" (as
52+6 defined in Section 62 of the Internal Revenue Code), modified as
53+7 follows:
54+8 (1) Subtract income that is exempt from taxation under this article
55+9 by the Constitution and statutes of the United States.
56+10 (2) Except as provided in subsection (c), add an amount equal to
57+11 any deduction or deductions allowed or allowable pursuant to
58+12 Section 62 of the Internal Revenue Code for taxes based on or
59+13 measured by income and levied at the state level by any state of
60+14 the United States.
61+15 (3) Subtract one thousand dollars ($1,000), or in the case of a
62+16 joint return filed by a husband and wife, subtract for each spouse
63+17 one thousand dollars ($1,000).
64+ES 2—LS 7135/DI 125 2
65+1 (4) Subtract one thousand dollars ($1,000) for:
66+2 (A) each of the exemptions provided by Section 151(c) of the
67+3 Internal Revenue Code (as effective January 1, 2017);
68+4 (B) each additional amount allowable under Section 63(f) of
69+5 the Internal Revenue Code; and
70+6 (C) the spouse of the taxpayer if a separate return is made by
71+7 the taxpayer and if the spouse, for the calendar year in which
72+8 the taxable year of the taxpayer begins, has no gross income
73+9 and is not the dependent of another taxpayer.
74+10 (5) Subtract:
75+11 (A) One thousand five hundred dollars ($1,500) for each of the
76+12 exemptions allowed under Section 151(c)(1)(B) of the Internal
77+13 Revenue Code (as effective January 1, 2004).
78+14 (B) One thousand five hundred dollars ($1,500) for each
79+15 exemption allowed under Section 151(c) of the Internal
80+16 Revenue Code (as effective January 1, 2017) for an individual:
81+17 (i) who is less than nineteen (19) years of age or is a
82+18 full-time student who is less than twenty-four (24) years of
83+19 age;
84+20 (ii) for whom the taxpayer is the legal guardian; and
85+21 (iii) for whom the taxpayer does not claim an exemption
86+22 under clause (A).
87+23 (C) Five hundred dollars ($500) for each additional amount
88+24 allowable under Section 63(f)(1) of the Internal Revenue Code
89+25 if the federal adjusted gross income of the taxpayer, or the
90+26 taxpayer and the taxpayer's spouse in the case of a joint return,
91+27 is less than forty thousand dollars ($40,000). In the case of a
92+28 married individual filing a separate return, the qualifying
93+29 income amount in this clause is equal to twenty thousand
94+30 dollars ($20,000).
95+31 (D) Three thousand dollars ($3,000) for each exemption
96+32 allowed under Section 151(c) of the Internal Revenue Code (as
97+33 effective January 1, 2017) for an individual who is:
98+34 (i) an adopted child of the taxpayer; and
99+35 (ii) less than nineteen (19) years of age or is a full-time
100+36 student who is less than twenty-four (24) years of age.
101+37 This amount is in addition to any amount subtracted under
102+38 clause (A) or (B).
103+39 This amount is in addition to the amount subtracted under
104+40 subdivision (4).
105+41 (6) Subtract any amounts included in federal adjusted gross
106+42 income under Section 111 of the Internal Revenue Code as a
107+ES 2—LS 7135/DI 125 3
108+1 recovery of items previously deducted as an itemized deduction
109+2 from adjusted gross income.
110+3 (7) Subtract any amounts included in federal adjusted gross
111+4 income under the Internal Revenue Code which amounts were
112+5 received by the individual as supplemental railroad retirement
113+6 annuities under 45 U.S.C. 231 and which are not deductible under
114+7 subdivision (1).
115+8 (8) Subtract an amount equal to the amount of federal Social
116+9 Security and Railroad Retirement benefits included in a taxpayer's
117+10 federal gross income by Section 86 of the Internal Revenue Code.
118+11 (9) In the case of a nonresident taxpayer or a resident taxpayer
119+12 residing in Indiana for a period of less than the taxpayer's entire
120+13 taxable year, the total amount of the deductions allowed pursuant
121+14 to subdivisions (3), (4), and (5) shall be reduced to an amount
122+15 which bears the same ratio to the total as the taxpayer's income
123+16 taxable in Indiana bears to the taxpayer's total income.
124+17 (10) In the case of an individual who is a recipient of assistance
125+18 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
126+19 subtract an amount equal to that portion of the individual's
127+20 adjusted gross income with respect to which the individual is not
128+21 allowed under federal law to retain an amount to pay state and
129+22 local income taxes.
130+23 (11) In the case of an eligible individual, subtract the amount of
131+24 a Holocaust victim's settlement payment included in the
132+25 individual's federal adjusted gross income.
133+26 (12) Subtract an amount equal to the portion of any premiums
134+27 paid during the taxable year by the taxpayer for a qualified long
135+28 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
136+29 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
137+30 file a joint income tax return or the taxpayer is otherwise entitled
138+31 to a deduction under this subdivision for the taxpayer's spouse, or
139+32 both.
140+33 (13) Subtract an amount equal to the lesser of:
141+34 (A) two thousand five hundred dollars ($2,500), or one
142+35 thousand two hundred fifty dollars ($1,250) in the case of a
143+36 married individual filing a separate return; or
144+37 (B) the amount of property taxes that are paid during the
145+38 taxable year in Indiana by the individual on the individual's
146+39 principal place of residence.
147+40 (14) Subtract an amount equal to the amount of a September 11
148+41 terrorist attack settlement payment included in the individual's
149+42 federal adjusted gross income.
150+ES 2—LS 7135/DI 125 4
151+1 (15) Add or subtract the amount necessary to make the adjusted
152+2 gross income of any taxpayer that owns property for which bonus
153+3 depreciation was allowed in the current taxable year or in an
154+4 earlier taxable year equal to the amount of adjusted gross income
155+5 that would have been computed had an election not been made
156+6 under Section 168(k) of the Internal Revenue Code to apply bonus
157+7 depreciation to the property in the year that it was placed in
158+8 service.
159+9 (16) Add an amount equal to any deduction allowed under
160+10 Section 172 of the Internal Revenue Code (concerning net
161+11 operating losses).
162+12 (17) Add or subtract the amount necessary to make the adjusted
163+13 gross income of any taxpayer that placed Section 179 property (as
164+14 defined in Section 179 of the Internal Revenue Code) in service
165+15 in the current taxable year or in an earlier taxable year equal to
166+16 the amount of adjusted gross income that would have been
167+17 computed had an election for federal income tax purposes not
168+18 been made for the year in which the property was placed in
169+19 service to take deductions under Section 179 of the Internal
170+20 Revenue Code in a total amount exceeding the sum of:
171+21 (A) twenty-five thousand dollars ($25,000) to the extent
172+22 deductions under Section 179 of the Internal Revenue Code
173+23 were not elected as provided in clause (B); and
174+24 (B) for taxable years beginning after December 31, 2017, the
175+25 deductions elected under Section 179 of the Internal Revenue
176+26 Code on property acquired in an exchange if:
177+27 (i) the exchange would have been eligible for
178+28 nonrecognition of gain or loss under Section 1031 of the
179+29 Internal Revenue Code in effect on January 1, 2017;
180+30 (ii) the exchange is not eligible for nonrecognition of gain or
181+31 loss under Section 1031 of the Internal Revenue Code; and
182+32 (iii) the taxpayer made an election to take deductions under
183+33 Section 179 of the Internal Revenue Code with regard to the
184+34 acquired property in the year that the property was placed
185+35 into service.
186+36 The amount of deductions allowable for an item of property
187+37 under this clause may not exceed the amount of adjusted gross
188+38 income realized on the property that would have been deferred
189+39 under the Internal Revenue Code in effect on January 1, 2017.
190+40 (18) Subtract an amount equal to the amount of the taxpayer's
191+41 qualified military income that was not excluded from the
192+42 taxpayer's gross income for federal income tax purposes under
193+ES 2—LS 7135/DI 125 5
194+1 Section 112 of the Internal Revenue Code.
195+2 (19) Subtract income that is:
196+3 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
197+4 derived from patents); and
198+5 (B) included in the individual's federal adjusted gross income
199+6 under the Internal Revenue Code.
200+7 (20) Add an amount equal to any income not included in gross
201+8 income as a result of the deferral of income arising from business
202+9 indebtedness discharged in connection with the reacquisition after
203+10 December 31, 2008, and before January 1, 2011, of an applicable
204+11 debt instrument, as provided in Section 108(i) of the Internal
205+12 Revenue Code. Subtract the amount necessary from the adjusted
206+13 gross income of any taxpayer that added an amount to adjusted
207+14 gross income in a previous year to offset the amount included in
208+15 federal gross income as a result of the deferral of income arising
209+16 from business indebtedness discharged in connection with the
210+17 reacquisition after December 31, 2008, and before January 1,
211+18 2011, of an applicable debt instrument, as provided in Section
212+19 108(i) of the Internal Revenue Code.
213+20 (21) Add the amount excluded from federal gross income under
214+21 Section 103 of the Internal Revenue Code for interest received on
215+22 an obligation of a state other than Indiana, or a political
216+23 subdivision of such a state, that is acquired by the taxpayer after
217+24 December 31, 2011.
218+25 (22) Subtract an amount as described in Section 1341(a)(2) of the
219+26 Internal Revenue Code to the extent, if any, that the amount was
220+27 previously included in the taxpayer's adjusted gross income for a
221+28 prior taxable year.
222+29 (23) For taxable years beginning after December 25, 2016, add an
223+30 amount equal to the deduction for deferred foreign income that
224+31 was claimed by the taxpayer for the taxable year under Section
225+32 965(c) of the Internal Revenue Code.
226+33 (24) Subtract any interest expense paid or accrued in the current
227+34 taxable year but not deducted as a result of the limitation imposed
228+35 under Section 163(j)(1) of the Internal Revenue Code. Add any
229+36 interest expense paid or accrued in a previous taxable year but
230+37 allowed as a deduction under Section 163 of the Internal Revenue
231+38 Code in the current taxable year. For purposes of this subdivision,
232+39 an interest expense is considered paid or accrued only in the first
233+40 taxable year the deduction would have been allowable under
234+41 Section 163 of the Internal Revenue Code if the limitation under
235+42 Section 163(j)(1) of the Internal Revenue Code did not exist.
236+ES 2—LS 7135/DI 125 6
237+1 (25) Subtract the amount that would have been excluded from
238+2 gross income but for the enactment of Section 118(b)(2) of the
239+3 Internal Revenue Code for taxable years ending after December
240+4 22, 2017.
241+5 (26) For taxable years beginning after December 31, 2019, and
242+6 before January 1, 2021, add an amount of the deduction claimed
243+7 under Section 62(a)(22) of the Internal Revenue Code.
244+8 (27) For taxable years beginning after December 31, 2019, for
245+9 payments made by an employer under an education assistance
246+10 program after March 27, 2020:
247+11 (A) add the amount of payments by an employer that are
248+12 excluded from the taxpayer's federal gross income under
249+13 Section 127(c)(1)(B) of the Internal Revenue Code; and
250+14 (B) deduct the interest allowable under Section 221 of the
251+15 Internal Revenue Code, if the disallowance under Section
252+16 221(e)(1) of the Internal Revenue Code did not apply to the
253+17 payments described in clause (A). For purposes of applying
254+18 Section 221(b) of the Internal Revenue Code to the amount
255+19 allowable under this clause, the amount under clause (A) shall
256+20 not be added to adjusted gross income.
257+21 (28) Add an amount equal to the remainder of:
258+22 (A) the amount allowable as a deduction under Section 274(n)
259+23 of the Internal Revenue Code; minus
260+24 (B) the amount otherwise allowable as a deduction under
261+25 Section 274(n) of the Internal Revenue Code, if Section
262+26 274(n)(2)(D) of the Internal Revenue Code was not in effect
263+27 for amounts paid or incurred after December 31, 2020.
264+28 (29) For taxable years beginning after December 31, 2017, and
265+29 before January 1, 2021, add an amount equal to the excess
266+30 business loss of the taxpayer as defined in Section 461(l)(3) of the
267+31 Internal Revenue Code. In addition:
268+32 (A) If a taxpayer has an excess business loss under this
269+33 subdivision and also has modifications under subdivisions (15)
270+34 and (17) for property placed in service during the taxable year,
271+35 the taxpayer shall treat a portion of the taxable year
272+36 modifications for that property as occurring in the taxable year
273+37 the property is placed in service and a portion of the
274+38 modifications as occurring in the immediately following
275+39 taxable year.
276+40 (B) The portion of the modifications under subdivisions (15)
277+41 and (17) for property placed in service during the taxable year
278+42 treated as occurring in the taxable year in which the property
279+ES 2—LS 7135/DI 125 7
280+1 is placed in service equals:
281+2 (i) the modification for the property otherwise determined
282+3 under this section; minus
283+4 (ii) the excess business loss disallowed under this
284+5 subdivision;
285+6 but not less than zero (0).
286+7 (C) The portion of the modifications under subdivisions (15)
287+8 and (17) for property placed in service during the taxable year
288+9 treated as occurring in the taxable year immediately following
289+10 the taxable year in which the property is placed in service
290+11 equals the modification for the property otherwise determined
291+12 under this section minus the amount in clause (B).
292+13 (D) Any reallocation of modifications between taxable years
293+14 under clauses (B) and (C) shall be first allocated to the
294+15 modification under subdivision (15), then to the modification
295+16 under subdivision (17).
296+17 (30) Add an amount equal to the amount excluded from federal
297+18 gross income under Section 108(f)(5) of the Internal Revenue
298+19 Code. For purposes of this subdivision:
299+20 (A) if an amount excluded under Section 108(f)(5) of the
300+21 Internal Revenue Code would be excludible under Section
301+22 108(a)(1)(B) of the Internal Revenue Code, the exclusion
302+23 under Section 108(a)(1)(B) of the Internal Revenue Code shall
303+24 take precedence; and
304+25 (B) if an amount would have been excludible under Section
305+26 108(f)(5) of the Internal Revenue Code as in effect on January
306+27 1, 2020, the amount is not required to be added back under this
307+28 subdivision.
308+29 (31) For taxable years ending after March 12, 2020, subtract an
309+30 amount equal to the deduction disallowed pursuant to:
310+31 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
311+32 as modified by Sections 206 and 207 of the Taxpayer Certainty
312+33 and Disaster Relief Tax Act (Division EE of Public Law
313+34 116-260); and
314+35 (B) Section 3134(e) of the Internal Revenue Code.
315+36 (32) Subtract the amount of an annual grant amount distributed to
316+37 a taxpayer's Indiana education scholarship account under
317+38 IC 20-51.4-4-2 that is used for a qualified expense (as defined in
318+39 IC 20-51.4-2-9) or to an Indiana enrichment scholarship account
319+40 under IC 20-52 that is used for qualified expenses (as defined in
320+41 IC 20-52-2-6), to the extent the distribution used for the qualified
321+42 expense is included in the taxpayer's federal adjusted gross
322+ES 2—LS 7135/DI 125 8
323+1 income under the Internal Revenue Code.
324+2 (33) For taxable years beginning after December 31, 2019, and
325+3 before January 1, 2021, add an amount equal to the amount of
326+4 unemployment compensation excluded from federal gross income
327+5 under Section 85(c) of the Internal Revenue Code.
328+6 (34) For taxable years beginning after December 31, 2022,
329+7 subtract an amount equal to the deduction disallowed under
330+8 Section 280C(h) of the Internal Revenue Code.
331+9 (35) Subtract any other amounts the taxpayer is entitled to deduct
332+10 under IC 6-3-2.
333+11 (b) In the case of corporations, the same as "taxable income" (as
334+12 defined in Section 63 of the Internal Revenue Code) adjusted as
335+13 follows:
336+14 (1) Subtract income that is exempt from taxation under this article
337+15 by the Constitution and statutes of the United States.
338+16 (2) Add an amount equal to any deduction or deductions allowed
339+17 or allowable pursuant to Section 170 of the Internal Revenue
340+18 Code (concerning charitable contributions).
341+19 (3) Except as provided in subsection (c), add an amount equal to
342+20 any deduction or deductions allowed or allowable pursuant to
343+21 Section 63 of the Internal Revenue Code for taxes based on or
344+22 measured by income and levied at the state level by any state of
345+23 the United States.
346+24 (4) Subtract an amount equal to the amount included in the
347+25 corporation's taxable income under Section 78 of the Internal
348+26 Revenue Code (concerning foreign tax credits).
349+27 (5) Add or subtract the amount necessary to make the adjusted
350+28 gross income of any taxpayer that owns property for which bonus
351+29 depreciation was allowed in the current taxable year or in an
352+30 earlier taxable year equal to the amount of adjusted gross income
353+31 that would have been computed had an election not been made
354+32 under Section 168(k) of the Internal Revenue Code to apply bonus
355+33 depreciation to the property in the year that it was placed in
356+34 service.
357+35 (6) Add an amount equal to any deduction allowed under Section
358+36 172 of the Internal Revenue Code (concerning net operating
359+37 losses).
360+38 (7) Add or subtract the amount necessary to make the adjusted
361+39 gross income of any taxpayer that placed Section 179 property (as
362+40 defined in Section 179 of the Internal Revenue Code) in service
363+41 in the current taxable year or in an earlier taxable year equal to
364+42 the amount of adjusted gross income that would have been
365+ES 2—LS 7135/DI 125 9
366+1 computed had an election for federal income tax purposes not
367+2 been made for the year in which the property was placed in
368+3 service to take deductions under Section 179 of the Internal
369+4 Revenue Code in a total amount exceeding the sum of:
370+5 (A) twenty-five thousand dollars ($25,000) to the extent
371+6 deductions under Section 179 of the Internal Revenue Code
372+7 were not elected as provided in clause (B); and
373+8 (B) for taxable years beginning after December 31, 2017, the
374+9 deductions elected under Section 179 of the Internal Revenue
375+10 Code on property acquired in an exchange if:
376+11 (i) the exchange would have been eligible for
377+12 nonrecognition of gain or loss under Section 1031 of the
378+13 Internal Revenue Code in effect on January 1, 2017;
379+14 (ii) the exchange is not eligible for nonrecognition of gain or
380+15 loss under Section 1031 of the Internal Revenue Code; and
381+16 (iii) the taxpayer made an election to take deductions under
382+17 Section 179 of the Internal Revenue Code with regard to the
383+18 acquired property in the year that the property was placed
384+19 into service.
385+20 The amount of deductions allowable for an item of property
386+21 under this clause may not exceed the amount of adjusted gross
387+22 income realized on the property that would have been deferred
388+23 under the Internal Revenue Code in effect on January 1, 2017.
389+24 (8) Add to the extent required by IC 6-3-2-20:
390+25 (A) the amount of intangible expenses (as defined in
391+26 IC 6-3-2-20) for the taxable year that reduced the corporation's
392+27 taxable income (as defined in Section 63 of the Internal
393+28 Revenue Code) for federal income tax purposes; and
394+29 (B) any directly related interest expenses (as defined in
395+30 IC 6-3-2-20) that reduced the corporation's adjusted gross
396+31 income (determined without regard to this subdivision). For
397+32 purposes of this clause, any directly related interest expense
398+33 that constitutes business interest within the meaning of Section
399+34 163(j) of the Internal Revenue Code shall be considered to
400+35 have reduced the taxpayer's federal taxable income only in the
401+36 first taxable year in which the deduction otherwise would have
402+37 been allowable under Section 163 of the Internal Revenue
403+38 Code if the limitation under Section 163(j)(1) of the Internal
404+39 Revenue Code did not exist.
405+40 (9) Add an amount equal to any deduction for dividends paid (as
406+41 defined in Section 561 of the Internal Revenue Code) to
407+42 shareholders of a captive real estate investment trust (as defined
408+ES 2—LS 7135/DI 125 10
409+1 in section 34.5 of this chapter).
410+2 (10) Subtract income that is:
411+3 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
412+4 derived from patents); and
413+5 (B) included in the corporation's taxable income under the
414+6 Internal Revenue Code.
415+7 (11) Add an amount equal to any income not included in gross
416+8 income as a result of the deferral of income arising from business
417+9 indebtedness discharged in connection with the reacquisition after
418+10 December 31, 2008, and before January 1, 2011, of an applicable
419+11 debt instrument, as provided in Section 108(i) of the Internal
420+12 Revenue Code. Subtract from the adjusted gross income of any
421+13 taxpayer that added an amount to adjusted gross income in a
422+14 previous year the amount necessary to offset the amount included
423+15 in federal gross income as a result of the deferral of income
424+16 arising from business indebtedness discharged in connection with
425+17 the reacquisition after December 31, 2008, and before January 1,
426+18 2011, of an applicable debt instrument, as provided in Section
427+19 108(i) of the Internal Revenue Code.
428+20 (12) Add the amount excluded from federal gross income under
429+21 Section 103 of the Internal Revenue Code for interest received on
430+22 an obligation of a state other than Indiana, or a political
431+23 subdivision of such a state, that is acquired by the taxpayer after
432+24 December 31, 2011.
433+25 (13) For taxable years beginning after December 25, 2016:
434+26 (A) for a corporation other than a real estate investment trust,
435+27 add:
436+28 (i) an amount equal to the amount reported by the taxpayer
437+29 on IRC 965 Transition Tax Statement, line 1; or
438+30 (ii) if the taxpayer deducted an amount under Section 965(c)
439+31 of the Internal Revenue Code in determining the taxpayer's
440+32 taxable income for purposes of the federal income tax, the
441+33 amount deducted under Section 965(c) of the Internal
442+34 Revenue Code; and
443+35 (B) for a real estate investment trust, add an amount equal to
444+36 the deduction for deferred foreign income that was claimed by
445+37 the taxpayer for the taxable year under Section 965(c) of the
446+38 Internal Revenue Code, but only to the extent that the taxpayer
447+39 included income pursuant to Section 965 of the Internal
448+40 Revenue Code in its taxable income for federal income tax
449+41 purposes or is required to add back dividends paid under
450+42 subdivision (9).
451+ES 2—LS 7135/DI 125 11
452+1 (14) Add an amount equal to the deduction that was claimed by
453+2 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
454+3 Internal Revenue Code (attributable to global intangible
455+4 low-taxed income). The taxpayer shall separately specify the
456+5 amount of the reduction under Section 250(a)(1)(B)(i) of the
457+6 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
458+7 Internal Revenue Code.
459+8 (15) Subtract any interest expense paid or accrued in the current
460+9 taxable year but not deducted as a result of the limitation imposed
461+10 under Section 163(j)(1) of the Internal Revenue Code. Add any
462+11 interest expense paid or accrued in a previous taxable year but
463+12 allowed as a deduction under Section 163 of the Internal Revenue
464+13 Code in the current taxable year. For purposes of this subdivision,
465+14 an interest expense is considered paid or accrued only in the first
466+15 taxable year the deduction would have been allowable under
467+16 Section 163 of the Internal Revenue Code if the limitation under
468+17 Section 163(j)(1) of the Internal Revenue Code did not exist.
469+18 (16) Subtract the amount that would have been excluded from
470+19 gross income but for the enactment of Section 118(b)(2) of the
471+20 Internal Revenue Code for taxable years ending after December
472+21 22, 2017.
473+22 (17) Add an amount equal to the remainder of:
474+23 (A) the amount allowable as a deduction under Section 274(n)
475+24 of the Internal Revenue Code; minus
476+25 (B) the amount otherwise allowable as a deduction under
477+26 Section 274(n) of the Internal Revenue Code, if Section
478+27 274(n)(2)(D) of the Internal Revenue Code was not in effect
479+28 for amounts paid or incurred after December 31, 2020.
480+29 (18) For taxable years ending after March 12, 2020, subtract an
481+30 amount equal to the deduction disallowed pursuant to:
482+31 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
483+32 as modified by Sections 206 and 207 of the Taxpayer Certainty
484+33 and Disaster Relief Tax Act (Division EE of Public Law
485+34 116-260); and
486+35 (B) Section 3134(e) of the Internal Revenue Code.
487+36 (19) For taxable years beginning after December 31, 2022,
488+37 subtract an amount equal to the deduction disallowed under
489+38 Section 280C(h) of the Internal Revenue Code.
490+39 (20) Add or subtract any other amounts the taxpayer is:
491+40 (A) required to add or subtract; or
492+41 (B) entitled to deduct;
493+42 under IC 6-3-2.
494+ES 2—LS 7135/DI 125 12
495+1 (c) The following apply to taxable years beginning after December
496+2 31, 2018, for purposes of the add back of any deduction allowed on the
497+3 taxpayer's federal income tax return for wagering taxes, as provided in
498+4 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
499+5 the taxpayer is a corporation:
500+6 (1) For taxable years beginning after December 31, 2018, and
501+7 before January 1, 2020, a taxpayer is required to add back under
502+8 this section eighty-seven and five-tenths percent (87.5%) of any
503+9 deduction allowed on the taxpayer's federal income tax return for
504+10 wagering taxes.
505+11 (2) For taxable years beginning after December 31, 2019, and
506+12 before January 1, 2021, a taxpayer is required to add back under
507+13 this section seventy-five percent (75%) of any deduction allowed
508+14 on the taxpayer's federal income tax return for wagering taxes.
509+15 (3) For taxable years beginning after December 31, 2020, and
510+16 before January 1, 2022, a taxpayer is required to add back under
511+17 this section sixty-two and five-tenths percent (62.5%) of any
512+18 deduction allowed on the taxpayer's federal income tax return for
513+19 wagering taxes.
514+20 (4) For taxable years beginning after December 31, 2021, and
515+21 before January 1, 2023, a taxpayer is required to add back under
516+22 this section fifty percent (50%) of any deduction allowed on the
517+23 taxpayer's federal income tax return for wagering taxes.
518+24 (5) For taxable years beginning after December 31, 2022, and
519+25 before January 1, 2024, a taxpayer is required to add back under
520+26 this section thirty-seven and five-tenths percent (37.5%) of any
521+27 deduction allowed on the taxpayer's federal income tax return for
522+28 wagering taxes.
523+29 (6) For taxable years beginning after December 31, 2023, and
524+30 before January 1, 2025, a taxpayer is required to add back under
525+31 this section twenty-five percent (25%) of any deduction allowed
526+32 on the taxpayer's federal income tax return for wagering taxes.
527+33 (7) For taxable years beginning after December 31, 2024, and
528+34 before January 1, 2026, a taxpayer is required to add back under
529+35 this section twelve and five-tenths percent (12.5%) of any
530+36 deduction allowed on the taxpayer's federal income tax return for
531+37 wagering taxes.
532+38 (8) For taxable years beginning after December 31, 2025, a
533+39 taxpayer is not required to add back under this section any amount
534+40 of a deduction allowed on the taxpayer's federal income tax return
535+41 for wagering taxes.
536+42 (d) In the case of life insurance companies (as defined in Section
537+ES 2—LS 7135/DI 125 13
538+1 816(a) of the Internal Revenue Code) that are organized under Indiana
539+2 law, the same as "life insurance company taxable income" (as defined
540+3 in Section 801 of the Internal Revenue Code), adjusted as follows:
541+4 (1) Subtract income that is exempt from taxation under this article
542+5 by the Constitution and statutes of the United States.
543+6 (2) Add an amount equal to any deduction allowed or allowable
544+7 under Section 170 of the Internal Revenue Code (concerning
545+8 charitable contributions).
546+9 (3) Add an amount equal to a deduction allowed or allowable
547+10 under Section 805 or Section 832(c) of the Internal Revenue Code
548+11 for taxes based on or measured by income and levied at the state
549+12 level by any state.
550+13 (4) Subtract an amount equal to the amount included in the
551+14 company's taxable income under Section 78 of the Internal
552+15 Revenue Code (concerning foreign tax credits).
553+16 (5) Add or subtract the amount necessary to make the adjusted
554+17 gross income of any taxpayer that owns property for which bonus
555+18 depreciation was allowed in the current taxable year or in an
556+19 earlier taxable year equal to the amount of adjusted gross income
557+20 that would have been computed had an election not been made
558+21 under Section 168(k) of the Internal Revenue Code to apply bonus
559+22 depreciation to the property in the year that it was placed in
560+23 service.
561+24 (6) Add an amount equal to any deduction allowed under Section
562+25 172 of the Internal Revenue Code (concerning net operating
563+26 losses).
564+27 (7) Add or subtract the amount necessary to make the adjusted
565+28 gross income of any taxpayer that placed Section 179 property (as
566+29 defined in Section 179 of the Internal Revenue Code) in service
567+30 in the current taxable year or in an earlier taxable year equal to
568+31 the amount of adjusted gross income that would have been
569+32 computed had an election for federal income tax purposes not
570+33 been made for the year in which the property was placed in
571+34 service to take deductions under Section 179 of the Internal
572+35 Revenue Code in a total amount exceeding the sum of:
573+36 (A) twenty-five thousand dollars ($25,000) to the extent
574+37 deductions under Section 179 of the Internal Revenue Code
575+38 were not elected as provided in clause (B); and
576+39 (B) for taxable years beginning after December 31, 2017, the
577+40 deductions elected under Section 179 of the Internal Revenue
578+41 Code on property acquired in an exchange if:
579+42 (i) the exchange would have been eligible for
580+ES 2—LS 7135/DI 125 14
581+1 nonrecognition of gain or loss under Section 1031 of the
582+2 Internal Revenue Code in effect on January 1, 2017;
583+3 (ii) the exchange is not eligible for nonrecognition of gain or
584+4 loss under Section 1031 of the Internal Revenue Code; and
585+5 (iii) the taxpayer made an election to take deductions under
586+6 Section 179 of the Internal Revenue Code with regard to the
587+7 acquired property in the year that the property was placed
588+8 into service.
589+9 The amount of deductions allowable for an item of property
590+10 under this clause may not exceed the amount of adjusted gross
591+11 income realized on the property that would have been deferred
592+12 under the Internal Revenue Code in effect on January 1, 2017.
593+13 (8) Subtract income that is:
594+14 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
595+15 derived from patents); and
596+16 (B) included in the insurance company's taxable income under
597+17 the Internal Revenue Code.
598+18 (9) Add an amount equal to any income not included in gross
599+19 income as a result of the deferral of income arising from business
600+20 indebtedness discharged in connection with the reacquisition after
601+21 December 31, 2008, and before January 1, 2011, of an applicable
602+22 debt instrument, as provided in Section 108(i) of the Internal
603+23 Revenue Code. Subtract from the adjusted gross income of any
604+24 taxpayer that added an amount to adjusted gross income in a
605+25 previous year the amount necessary to offset the amount included
606+26 in federal gross income as a result of the deferral of income
607+27 arising from business indebtedness discharged in connection with
608+28 the reacquisition after December 31, 2008, and before January 1,
609+29 2011, of an applicable debt instrument, as provided in Section
610+30 108(i) of the Internal Revenue Code.
611+31 (10) Add an amount equal to any exempt insurance income under
612+32 Section 953(e) of the Internal Revenue Code that is active
613+33 financing income under Subpart F of Subtitle A, Chapter 1,
614+34 Subchapter N of the Internal Revenue Code.
615+35 (11) Add the amount excluded from federal gross income under
616+36 Section 103 of the Internal Revenue Code for interest received on
617+37 an obligation of a state other than Indiana, or a political
618+38 subdivision of such a state, that is acquired by the taxpayer after
619+39 December 31, 2011.
620+40 (12) For taxable years beginning after December 25, 2016, add:
621+41 (A) an amount equal to the amount reported by the taxpayer on
622+42 IRC 965 Transition Tax Statement, line 1; or
623+ES 2—LS 7135/DI 125 15
624+1 (B) if the taxpayer deducted an amount under Section 965(c)
625+2 of the Internal Revenue Code in determining the taxpayer's
626+3 taxable income for purposes of the federal income tax, the
627+4 amount deducted under Section 965(c) of the Internal Revenue
628+5 Code.
629+6 (13) Add an amount equal to the deduction that was claimed by
630+7 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
631+8 Internal Revenue Code (attributable to global intangible
632+9 low-taxed income). The taxpayer shall separately specify the
633+10 amount of the reduction under Section 250(a)(1)(B)(i) of the
634+11 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
635+12 Internal Revenue Code.
636+13 (14) Subtract any interest expense paid or accrued in the current
637+14 taxable year but not deducted as a result of the limitation imposed
638+15 under Section 163(j)(1) of the Internal Revenue Code. Add any
639+16 interest expense paid or accrued in a previous taxable year but
640+17 allowed as a deduction under Section 163 of the Internal Revenue
641+18 Code in the current taxable year. For purposes of this subdivision,
642+19 an interest expense is considered paid or accrued only in the first
643+20 taxable year the deduction would have been allowable under
644+21 Section 163 of the Internal Revenue Code if the limitation under
645+22 Section 163(j)(1) of the Internal Revenue Code did not exist.
646+23 (15) Subtract the amount that would have been excluded from
647+24 gross income but for the enactment of Section 118(b)(2) of the
648+25 Internal Revenue Code for taxable years ending after December
649+26 22, 2017.
650+27 (16) Add an amount equal to the remainder of:
651+28 (A) the amount allowable as a deduction under Section 274(n)
652+29 of the Internal Revenue Code; minus
653+30 (B) the amount otherwise allowable as a deduction under
654+31 Section 274(n) of the Internal Revenue Code, if Section
655+32 274(n)(2)(D) of the Internal Revenue Code was not in effect
656+33 for amounts paid or incurred after December 31, 2020.
657+34 (17) For taxable years ending after March 12, 2020, subtract an
658+35 amount equal to the deduction disallowed pursuant to:
659+36 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
660+37 as modified by Sections 206 and 207 of the Taxpayer Certainty
661+38 and Disaster Relief Tax Act (Division EE of Public Law
662+39 116-260); and
663+40 (B) Section 3134(e) of the Internal Revenue Code.
664+41 (18) For taxable years beginning after December 31, 2022,
665+42 subtract an amount equal to the deduction disallowed under
666+ES 2—LS 7135/DI 125 16
667+1 Section 280C(h) of the Internal Revenue Code.
668+2 (19) Add or subtract any other amounts the taxpayer is:
669+3 (A) required to add or subtract; or
670+4 (B) entitled to deduct;
671+5 under IC 6-3-2.
672+6 (e) In the case of insurance companies subject to tax under Section
673+7 831 of the Internal Revenue Code and organized under Indiana law, the
674+8 same as "taxable income" (as defined in Section 832 of the Internal
675+9 Revenue Code), adjusted as follows:
676+10 (1) Subtract income that is exempt from taxation under this article
677+11 by the Constitution and statutes of the United States.
678+12 (2) Add an amount equal to any deduction allowed or allowable
679+13 under Section 170 of the Internal Revenue Code (concerning
680+14 charitable contributions).
681+15 (3) Add an amount equal to a deduction allowed or allowable
682+16 under Section 805 or Section 832(c) of the Internal Revenue Code
683+17 for taxes based on or measured by income and levied at the state
684+18 level by any state.
685+19 (4) Subtract an amount equal to the amount included in the
686+20 company's taxable income under Section 78 of the Internal
687+21 Revenue Code (concerning foreign tax credits).
688+22 (5) Add or subtract the amount necessary to make the adjusted
689+23 gross income of any taxpayer that owns property for which bonus
690+24 depreciation was allowed in the current taxable year or in an
691+25 earlier taxable year equal to the amount of adjusted gross income
692+26 that would have been computed had an election not been made
693+27 under Section 168(k) of the Internal Revenue Code to apply bonus
694+28 depreciation to the property in the year that it was placed in
695+29 service.
696+30 (6) Add an amount equal to any deduction allowed under Section
697+31 172 of the Internal Revenue Code (concerning net operating
698+32 losses).
699+33 (7) Add or subtract the amount necessary to make the adjusted
700+34 gross income of any taxpayer that placed Section 179 property (as
701+35 defined in Section 179 of the Internal Revenue Code) in service
702+36 in the current taxable year or in an earlier taxable year equal to
703+37 the amount of adjusted gross income that would have been
704+38 computed had an election for federal income tax purposes not
705+39 been made for the year in which the property was placed in
706+40 service to take deductions under Section 179 of the Internal
707+41 Revenue Code in a total amount exceeding the sum of:
708+42 (A) twenty-five thousand dollars ($25,000) to the extent
709+ES 2—LS 7135/DI 125 17
710+1 deductions under Section 179 of the Internal Revenue Code
711+2 were not elected as provided in clause (B); and
712+3 (B) for taxable years beginning after December 31, 2017, the
713+4 deductions elected under Section 179 of the Internal Revenue
714+5 Code on property acquired in an exchange if:
715+6 (i) the exchange would have been eligible for
716+7 nonrecognition of gain or loss under Section 1031 of the
717+8 Internal Revenue Code in effect on January 1, 2017;
718+9 (ii) the exchange is not eligible for nonrecognition of gain or
719+10 loss under Section 1031 of the Internal Revenue Code; and
720+11 (iii) the taxpayer made an election to take deductions under
721+12 Section 179 of the Internal Revenue Code with regard to the
722+13 acquired property in the year that the property was placed
723+14 into service.
724+15 The amount of deductions allowable for an item of property
725+16 under this clause may not exceed the amount of adjusted gross
726+17 income realized on the property that would have been deferred
727+18 under the Internal Revenue Code in effect on January 1, 2017.
728+19 (8) Subtract income that is:
729+20 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
730+21 derived from patents); and
731+22 (B) included in the insurance company's taxable income under
732+23 the Internal Revenue Code.
733+24 (9) Add an amount equal to any income not included in gross
734+25 income as a result of the deferral of income arising from business
735+26 indebtedness discharged in connection with the reacquisition after
736+27 December 31, 2008, and before January 1, 2011, of an applicable
737+28 debt instrument, as provided in Section 108(i) of the Internal
738+29 Revenue Code. Subtract from the adjusted gross income of any
739+30 taxpayer that added an amount to adjusted gross income in a
740+31 previous year the amount necessary to offset the amount included
741+32 in federal gross income as a result of the deferral of income
742+33 arising from business indebtedness discharged in connection with
743+34 the reacquisition after December 31, 2008, and before January 1,
744+35 2011, of an applicable debt instrument, as provided in Section
745+36 108(i) of the Internal Revenue Code.
746+37 (10) Add an amount equal to any exempt insurance income under
747+38 Section 953(e) of the Internal Revenue Code that is active
748+39 financing income under Subpart F of Subtitle A, Chapter 1,
749+40 Subchapter N of the Internal Revenue Code.
750+41 (11) Add the amount excluded from federal gross income under
751+42 Section 103 of the Internal Revenue Code for interest received on
752+ES 2—LS 7135/DI 125 18
753+1 an obligation of a state other than Indiana, or a political
754+2 subdivision of such a state, that is acquired by the taxpayer after
755+3 December 31, 2011.
756+4 (12) For taxable years beginning after December 25, 2016, add:
757+5 (A) an amount equal to the amount reported by the taxpayer on
758+6 IRC 965 Transition Tax Statement, line 1; or
759+7 (B) if the taxpayer deducted an amount under Section 965(c)
760+8 of the Internal Revenue Code in determining the taxpayer's
761+9 taxable income for purposes of the federal income tax, the
762+10 amount deducted under Section 965(c) of the Internal Revenue
763+11 Code.
764+12 (13) Add an amount equal to the deduction that was claimed by
765+13 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
766+14 Internal Revenue Code (attributable to global intangible
767+15 low-taxed income). The taxpayer shall separately specify the
768+16 amount of the reduction under Section 250(a)(1)(B)(i) of the
769+17 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
770+18 Internal Revenue Code.
771+19 (14) Subtract any interest expense paid or accrued in the current
772+20 taxable year but not deducted as a result of the limitation imposed
773+21 under Section 163(j)(1) of the Internal Revenue Code. Add any
774+22 interest expense paid or accrued in a previous taxable year but
775+23 allowed as a deduction under Section 163 of the Internal Revenue
776+24 Code in the current taxable year. For purposes of this subdivision,
777+25 an interest expense is considered paid or accrued only in the first
778+26 taxable year the deduction would have been allowable under
779+27 Section 163 of the Internal Revenue Code if the limitation under
780+28 Section 163(j)(1) of the Internal Revenue Code did not exist.
781+29 (15) Subtract the amount that would have been excluded from
782+30 gross income but for the enactment of Section 118(b)(2) of the
783+31 Internal Revenue Code for taxable years ending after December
784+32 22, 2017.
785+33 (16) Add an amount equal to the remainder of:
786+34 (A) the amount allowable as a deduction under Section 274(n)
787+35 of the Internal Revenue Code; minus
788+36 (B) the amount otherwise allowable as a deduction under
789+37 Section 274(n) of the Internal Revenue Code, if Section
790+38 274(n)(2)(D) of the Internal Revenue Code was not in effect
791+39 for amounts paid or incurred after December 31, 2020.
792+40 (17) For taxable years ending after March 12, 2020, subtract an
793+41 amount equal to the deduction disallowed pursuant to:
794+42 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
795+ES 2—LS 7135/DI 125 19
796+1 as modified by Sections 206 and 207 of the Taxpayer Certainty
797+2 and Disaster Relief Tax Act (Division EE of Public Law
798+3 116-260); and
799+4 (B) Section 3134(e) of the Internal Revenue Code.
800+5 (18) For taxable years beginning after December 31, 2022,
801+6 subtract an amount equal to the deduction disallowed under
802+7 Section 280C(h) of the Internal Revenue Code.
803+8 (19) Add or subtract any other amounts the taxpayer is:
804+9 (A) required to add or subtract; or
805+10 (B) entitled to deduct;
806+11 under IC 6-3-2.
807+12 (f) In the case of trusts and estates, "taxable income" (as defined for
808+13 trusts and estates in Section 641(b) of the Internal Revenue Code)
809+14 adjusted as follows:
810+15 (1) Subtract income that is exempt from taxation under this article
811+16 by the Constitution and statutes of the United States.
812+17 (2) Subtract an amount equal to the amount of a September 11
813+18 terrorist attack settlement payment included in the federal
814+19 adjusted gross income of the estate of a victim of the September
815+20 11 terrorist attack or a trust to the extent the trust benefits a victim
816+21 of the September 11 terrorist attack.
817+22 (3) Add or subtract the amount necessary to make the adjusted
818+23 gross income of any taxpayer that owns property for which bonus
819+24 depreciation was allowed in the current taxable year or in an
820+25 earlier taxable year equal to the amount of adjusted gross income
821+26 that would have been computed had an election not been made
822+27 under Section 168(k) of the Internal Revenue Code to apply bonus
823+28 depreciation to the property in the year that it was placed in
824+29 service.
825+30 (4) Add an amount equal to any deduction allowed under Section
826+31 172 of the Internal Revenue Code (concerning net operating
827+32 losses).
828+33 (5) Add or subtract the amount necessary to make the adjusted
829+34 gross income of any taxpayer that placed Section 179 property (as
830+35 defined in Section 179 of the Internal Revenue Code) in service
831+36 in the current taxable year or in an earlier taxable year equal to
832+37 the amount of adjusted gross income that would have been
833+38 computed had an election for federal income tax purposes not
834+39 been made for the year in which the property was placed in
835+40 service to take deductions under Section 179 of the Internal
836+41 Revenue Code in a total amount exceeding the sum of:
837+42 (A) twenty-five thousand dollars ($25,000) to the extent
838+ES 2—LS 7135/DI 125 20
839+1 deductions under Section 179 of the Internal Revenue Code
840+2 were not elected as provided in clause (B); and
841+3 (B) for taxable years beginning after December 31, 2017, the
842+4 deductions elected under Section 179 of the Internal Revenue
843+5 Code on property acquired in an exchange if:
844+6 (i) the exchange would have been eligible for
845+7 nonrecognition of gain or loss under Section 1031 of the
846+8 Internal Revenue Code in effect on January 1, 2017;
847+9 (ii) the exchange is not eligible for nonrecognition of gain or
848+10 loss under Section 1031 of the Internal Revenue Code; and
849+11 (iii) the taxpayer made an election to take deductions under
850+12 Section 179 of the Internal Revenue Code with regard to the
851+13 acquired property in the year that the property was placed
852+14 into service.
853+15 The amount of deductions allowable for an item of property
854+16 under this clause may not exceed the amount of adjusted gross
855+17 income realized on the property that would have been deferred
856+18 under the Internal Revenue Code in effect on January 1, 2017.
857+19 (6) Subtract income that is:
858+20 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
859+21 derived from patents); and
860+22 (B) included in the taxpayer's taxable income under the
861+23 Internal Revenue Code.
862+24 (7) Add an amount equal to any income not included in gross
863+25 income as a result of the deferral of income arising from business
864+26 indebtedness discharged in connection with the reacquisition after
865+27 December 31, 2008, and before January 1, 2011, of an applicable
866+28 debt instrument, as provided in Section 108(i) of the Internal
867+29 Revenue Code. Subtract from the adjusted gross income of any
868+30 taxpayer that added an amount to adjusted gross income in a
869+31 previous year the amount necessary to offset the amount included
870+32 in federal gross income as a result of the deferral of income
871+33 arising from business indebtedness discharged in connection with
872+34 the reacquisition after December 31, 2008, and before January 1,
873+35 2011, of an applicable debt instrument, as provided in Section
874+36 108(i) of the Internal Revenue Code.
875+37 (8) Add the amount excluded from federal gross income under
876+38 Section 103 of the Internal Revenue Code for interest received on
877+39 an obligation of a state other than Indiana, or a political
878+40 subdivision of such a state, that is acquired by the taxpayer after
879+41 December 31, 2011.
880+42 (9) For taxable years beginning after December 25, 2016, add an
881+ES 2—LS 7135/DI 125 21
882+1 amount equal to:
883+2 (A) the amount reported by the taxpayer on IRC 965
884+3 Transition Tax Statement, line 1;
885+4 (B) if the taxpayer deducted an amount under Section 965(c)
886+5 of the Internal Revenue Code in determining the taxpayer's
887+6 taxable income for purposes of the federal income tax, the
888+7 amount deducted under Section 965(c) of the Internal Revenue
889+8 Code; and
890+9 (C) with regard to any amounts of income under Section 965
891+10 of the Internal Revenue Code distributed by the taxpayer, the
892+11 deduction under Section 965(c) of the Internal Revenue Code
893+12 attributable to such distributed amounts and not reported to the
894+13 beneficiary.
895+14 For purposes of this article, the amount required to be added back
896+15 under clause (B) is not considered to be distributed or
897+16 distributable to a beneficiary of the estate or trust for purposes of
898+17 Sections 651 and 661 of the Internal Revenue Code.
899+18 (10) Subtract any interest expense paid or accrued in the current
900+19 taxable year but not deducted as a result of the limitation imposed
901+20 under Section 163(j)(1) of the Internal Revenue Code. Add any
902+21 interest expense paid or accrued in a previous taxable year but
903+22 allowed as a deduction under Section 163 of the Internal Revenue
904+23 Code in the current taxable year. For purposes of this subdivision,
905+24 an interest expense is considered paid or accrued only in the first
906+25 taxable year the deduction would have been allowable under
907+26 Section 163 of the Internal Revenue Code if the limitation under
908+27 Section 163(j)(1) of the Internal Revenue Code did not exist.
909+28 (11) Add an amount equal to the deduction for qualified business
910+29 income that was claimed by the taxpayer for the taxable year
911+30 under Section 199A of the Internal Revenue Code.
912+31 (12) Subtract the amount that would have been excluded from
913+32 gross income but for the enactment of Section 118(b)(2) of the
914+33 Internal Revenue Code for taxable years ending after December
915+34 22, 2017.
916+35 (13) Add an amount equal to the remainder of:
917+36 (A) the amount allowable as a deduction under Section 274(n)
918+37 of the Internal Revenue Code; minus
919+38 (B) the amount otherwise allowable as a deduction under
920+39 Section 274(n) of the Internal Revenue Code, if Section
921+40 274(n)(2)(D) of the Internal Revenue Code was not in effect
922+41 for amounts paid or incurred after December 31, 2020.
923+42 (14) For taxable years beginning after December 31, 2017, and
924+ES 2—LS 7135/DI 125 22
925+1 before January 1, 2021, add an amount equal to the excess
926+2 business loss of the taxpayer as defined in Section 461(l)(3) of the
927+3 Internal Revenue Code. In addition:
928+4 (A) If a taxpayer has an excess business loss under this
929+5 subdivision and also has modifications under subdivisions (3)
930+6 and (5) for property placed in service during the taxable year,
931+7 the taxpayer shall treat a portion of the taxable year
932+8 modifications for that property as occurring in the taxable year
933+9 the property is placed in service and a portion of the
934+10 modifications as occurring in the immediately following
935+11 taxable year.
936+12 (B) The portion of the modifications under subdivisions (3)
937+13 and (5) for property placed in service during the taxable year
938+14 treated as occurring in the taxable year in which the property
939+15 is placed in service equals:
940+16 (i) the modification for the property otherwise determined
941+17 under this section; minus
942+18 (ii) the excess business loss disallowed under this
943+19 subdivision;
944+20 but not less than zero (0).
945+21 (C) The portion of the modifications under subdivisions (3)
946+22 and (5) for property placed in service during the taxable year
947+23 treated as occurring in the taxable year immediately following
948+24 the taxable year in which the property is placed in service
949+25 equals the modification for the property otherwise determined
950+26 under this section minus the amount in clause (B).
951+27 (D) Any reallocation of modifications between taxable years
952+28 under clauses (B) and (C) shall be first allocated to the
953+29 modification under subdivision (3), then to the modification
954+30 under subdivision (5).
955+31 (15) For taxable years ending after March 12, 2020, subtract an
956+32 amount equal to the deduction disallowed pursuant to:
957+33 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
958+34 as modified by Sections 206 and 207 of the Taxpayer Certainty
959+35 and Disaster Relief Tax Act (Division EE of Public Law
960+36 116-260); and
961+37 (B) Section 3134(e) of the Internal Revenue Code.
962+38 (16) For taxable years beginning after December 31, 2022,
963+39 subtract an amount equal to the deduction disallowed under
964+40 Section 280C(h) of the Internal Revenue Code.
965+41 (17) Except as provided in subsection (c), for taxable years
966+42 beginning after December 31, 2022, add an amount equal to
967+ES 2—LS 7135/DI 125 23
968+1 any deduction or deductions allowed or allowable in
969+2 determining taxable income under Section 641(b) of the
970+3 Internal Revenue Code for taxes based on or measured by
971+4 income and levied at the state level by any state of the United
972+5 States.
973+6 (17) (18) Add or subtract any other amounts the taxpayer is:
974+7 (A) required to add or subtract; or
975+8 (B) entitled to deduct;
976+9 under IC 6-3-2.
977+10 (g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
978+11 IC 6-3-4-15 for taxable years beginning after December 31, 2022,
979+12 "adjusted gross income" of a pass through entity means the
980+13 aggregate of items of ordinary income and loss in the case of a
981+14 partnership or a corporation described in IC 6-3-2-2.8(2), or
982+15 aggregate distributable net income of a trust or estate as defined in
983+16 Section 643 of the Internal Revenue Code, whichever is applicable,
984+17 for the taxable year modified as follows:
985+18 (1) Add the separately stated items of income and gains, or the
986+19 equivalent items that must be considered separately by a
987+20 beneficiary, as determined for federal purposes, attributed to
988+21 the partners, shareholders, or beneficiaries of the pass
989+22 through entity, determined without regard to whether the
990+23 owner is permitted to exclude all or part of the income or gain
991+24 or deduct any amount against the income or gain.
992+25 (2) Subtract the separately stated items of deductions or losses
993+26 or items that must be considered separately by beneficiaries,
994+27 as determined for federal purposes, attributed to partners,
995+28 shareholders, or beneficiaries of the pass through entity and
996+29 that are deductible by an individual in determining adjusted
997+30 gross income as defined under Section 62 of the Internal
998+31 Revenue Code:
999+32 (A) limited as if the partners, shareholders, and
1000+33 beneficiaries deducted the maximum allowable loss or
1001+34 deduction allowable for the taxable year prior to any
1002+35 amount deductible from the pass through entity; but
1003+36 (B) not considering any disallowance of deductions
1004+37 resulting from federal basis limitations for the partner,
1005+38 shareholder, or beneficiary.
1006+39 (3) Add or subtract any modifications to adjusted gross
1007+40 income that would be required both for individuals under
1008+41 subsection (a) and corporations under subsection (b) to the
1009+42 extent otherwise provided in those subsections, including
1010+ES 2—LS 7135/DI 125 24
1011+1 amounts that are allowable for which such modifications are
1012+2 necessary to account for separately stated items in subdivision
1013+3 (1) or (2).
1014+4 (g) (h) Subsections (a)(35), (b)(20), (d)(19), (e)(19), or (f)(17)
1015+5 (f)(18) may not be construed to require an add back or allow a
1016+6 deduction or exemption more than once for a particular add back,
1017+7 deduction, or exemption.
1018+8 (h) (i) For taxable years beginning after December 25, 2016, if:
1019+9 (1) a taxpayer is a shareholder, either directly or indirectly, in a
1020+10 corporation that is an E&P deficit foreign corporation as defined
1021+11 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
1022+12 earnings and profit deficit, or a portion of the earnings and profit
1023+13 deficit, of the E&P deficit foreign corporation is permitted to
1024+14 reduce the federal adjusted gross income or federal taxable
1025+15 income of the taxpayer, the deficit, or the portion of the deficit,
1026+16 shall also reduce the amount taxable under this section to the
1027+17 extent permitted under the Internal Revenue Code, however, in no
1028+18 case shall this permit a reduction in the amount taxable under
1029+19 Section 965 of the Internal Revenue Code for purposes of this
1030+20 section to be less than zero (0); and
1031+21 (2) the Internal Revenue Service issues guidance that such an
1032+22 income or deduction is not reported directly on a federal tax
1033+23 return or is to be reported in a manner different than specified in
1034+24 this section, this section shall be construed as if federal adjusted
1035+25 gross income or federal taxable income included the income or
1036+26 deduction.
1037+27 (i) (j) If a partner is required to include an item of income, a
1038+28 deduction, or another tax attribute in the partner's adjusted gross
1039+29 income tax return pursuant to IC 6-3-4.5, such item shall be considered
1040+30 to be includible in the partner's federal adjusted gross income or federal
1041+31 taxable income, regardless of whether such item is actually required to
1042+32 be reported by the partner for federal income tax purposes. For
1043+33 purposes of this subsection:
1044+34 (1) items for which a valid election is made under IC 6-3-4.5-6,
1045+35 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
1046+36 in the partner's adjusted gross income or taxable income; and
1047+37 (2) items for which the partnership did not make an election under
1048+38 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
1049+39 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
1050+40 shall be included in the partner's adjusted gross income or taxable
1051+41 income.
1052+42 SECTION 2. IC 6-3-2-2.5, AS AMENDED BY P.L.137-2022,
1053+ES 2—LS 7135/DI 125 25
1054+1 SECTION 35, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1055+2 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.5. (a) This section
1056+3 applies to a resident person.
1057+4 (b) Resident persons are entitled to a net operating loss deduction.
1058+5 The amount of the deduction taken in a taxable year may not exceed
1059+6 the taxpayer's unused Indiana net operating losses carried over to that
1060+7 year. A taxpayer is not entitled to carryback any net operating losses
1061+8 after December 31, 2011.
1062+9 (c) An Indiana net operating loss equals the sum of:
1063+10 (1) the taxpayer's federal net operating loss for a taxable year as
1064+11 calculated under Section 172 of the Internal Revenue Code,
1065+12 adjusted for certain modifications required by IC 6-3-1-3.5 as set
1066+13 forth in subsection (d)(1) and, in the case of an individual,
1067+14 reduced by any deductions allowable in determining the federal
1068+15 net operating loss for the taxable year, but not allowable in
1069+16 determining federal adjusted gross income;
1070+17 (2) the excess business loss deduction disallowed under
1071+18 IC 6-3-1-3.5(a)(29) and IC 6-3-1-3.5(f)(14); and
1072+19 (3) for taxable years beginning after December 31, 2020, a loss
1073+20 for a taxable year disallowed because of Section 461(l) of the
1074+21 Internal Revenue Code, without any modifications under
1075+22 subsection (d).
1076+23 (d) The following provisions apply for purposes of subsection (c):
1077+24 (1) The modifications that are to be applied are those
1078+25 modifications required under IC 6-3-1-3.5 for the same taxable
1079+26 year in which each net operating loss was incurred, except that the
1080+27 modifications do not include the modifications required under:
1081+28 (A) IC 6-3-1-3.5(a)(3);
1082+29 (B) IC 6-3-1-3.5(a)(4);
1083+30 (C) IC 6-3-1-3.5(a)(5);
1084+31 (D) IC 6-3-1-3.5(a)(35);
1085+32 (E) IC 6-3-1-3.5(f)(11); and
1086+33 (F) IC 6-3-1-3.5(f)(17). IC 6-3-1-3.5(f)(18).
1087+34 (2) An Indiana net operating loss includes a net operating loss that
1088+35 arises when the applicable modifications required by IC 6-3-1-3.5
1089+36 as set forth in subdivision (1) exceed the sum of the taxpayer's
1090+37 federal adjusted gross income (as defined in Section 62 of the
1091+38 Internal Revenue Code) if the taxpayer is an individual, or federal
1092+39 taxable income (as defined in Section 63 of the Internal Revenue
1093+40 Code) if the taxpayer is a trust or an estate for the taxable year in
1094+41 which the Indiana net operating loss is determined and the
1095+42 modifications otherwise required for federal net operating losses
1096+ES 2—LS 7135/DI 125 26
1097+1 for the taxable year by Section 172(d) of the Internal Revenue
1098+2 Code. A modification that reduces a federal net operating loss
1099+3 shall be treated as a positive number for purposes of this
1100+4 subdivision, and a modification that increases a federal net
1101+5 operating loss shall be treated as a negative number for purposes
1102+6 of this subdivision.
1103+7 (e) Subject to the limitations contained in subsection (g), an Indiana
1104+8 net operating loss carryover shall be available as a deduction from the
1105+9 taxpayer's adjusted gross income (as defined in IC 6-3-1-3.5) in the
1106+10 carryover year provided in subsection (f), but not in excess of the
1107+11 taxpayer's adjusted gross income (as defined in IC 6-3-1-3.5) in the
1108+12 carryover year determined without regard to this section.
1109+13 (f) Carryovers shall be determined under this subsection as follows:
1110+14 (1) An Indiana net operating loss shall be an Indiana net operating
1111+15 loss carryover to each of the carryover years following the taxable
1112+16 year of the loss.
1113+17 (2) An Indiana net operating loss may not be carried over for
1114+18 more than twenty (20) taxable years after the taxable year of the
1115+19 loss.
1116+20 (g) The entire amount of the Indiana net operating loss for any
1117+21 taxable year shall be carried to the earliest of the taxable years to which
1118+22 (as determined under subsection (f)) the loss may be carried. The
1119+23 amount of the Indiana net operating loss remaining after the deduction
1120+24 is taken under this section in a taxable year may be carried over as
1121+25 provided in subsection (f). The amount of the Indiana net operating loss
1122+26 carried over from year to year shall be reduced to the extent that the
1123+27 Indiana net operating loss carryover is used by the taxpayer to obtain
1124+28 a deduction in a taxable year until the occurrence of the earlier of the
1125+29 following:
1126+30 (1) The entire amount of the Indiana net operating loss has been
1127+31 used as a deduction.
1128+32 (2) The Indiana net operating loss has been carried over to each
1129+33 of the carryover years provided by subsection (f).
1130+34 SECTION 3. IC 6-3-2-2.6, AS AMENDED BY P.L.137-2022,
1131+35 SECTION 36, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1132+36 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.6. (a) This section
1133+37 applies to a corporation or a nonresident person.
1134+38 (b) Corporations and nonresident persons are entitled to a net
1135+39 operating loss deduction. The amount of the deduction taken in a
1136+40 taxable year may not exceed the taxpayer's unused Indiana net
1137+41 operating losses carried over to that year. A taxpayer is not entitled to
1138+42 carryback any net operating losses after December 31, 2011.
1139+ES 2—LS 7135/DI 125 27
1140+1 (c) An Indiana net operating loss equals the sum of:
1141+2 (1) the taxpayer's federal net operating loss for a taxable year as
1142+3 calculated under Section 172 of the Internal Revenue Code,
1143+4 derived from sources within Indiana and adjusted for certain
1144+5 modifications required by IC 6-3-1-3.5 as set forth in subsection
1145+6 (d)(1) and, for a nonresident individual, reduced by any
1146+7 deductions from Indiana sources allowable in determining the
1147+8 federal net operating loss for the taxable year, but not allowable
1148+9 in determining federal adjusted gross income;
1149+10 (2) the excess business loss deduction disallowed under
1150+11 IC 6-3-1-3.5(a)(29) and IC 6-3-1-3.5(f)(14) and incurred from
1151+12 Indiana sources; and
1152+13 (3) for taxable years beginning after December 31, 2020, the
1153+14 portion of the loss for a taxable year disallowed because of
1154+15 Section 461(l) of the Internal Revenue Code and incurred from
1155+16 Indiana sources, without any modifications under subsection (d).
1156+17 Any net operating loss under this subdivision shall be computed
1157+18 in a manner consistent with the computation of adjusted gross
1158+19 income under IC 6-3.
1159+20 (d) The following provisions apply for purposes of subsection (c):
1160+21 (1) The modifications that are to be applied are those
1161+22 modifications required under IC 6-3-1-3.5 for the same taxable
1162+23 year in which each net operating loss was incurred, except that the
1163+24 modifications do not include the modifications required under:
1164+25 (A) IC 6-3-1-3.5(a)(3);
1165+26 (B) IC 6-3-1-3.5(a)(4);
1166+27 (C) IC 6-3-1-3.5(a)(5);
1167+28 (D) IC 6-3-1-3.5(a)(35);
1168+29 (E) IC 6-3-1-3.5(b)(14);
1169+30 (F) IC 6-3-1-3.5(b)(20);
1170+31 (G) IC 6-3-1-3.5(d)(13);
1171+32 (H) IC 6-3-1-3.5(d)(19);
1172+33 (I) IC 6-3-1-3.5(e)(13);
1173+34 (J) IC 6-3-1-3.5(e)(19);
1174+35 (K) IC 6-3-1-3.5(f)(11); and
1175+36 (L) IC 6-3-1-3.5(f)(17). IC 6-3-1-3.5(f)(18).
1176+37 (2) The amount of the taxpayer's net operating loss that is derived
1177+38 from sources within Indiana shall be determined in the same
1178+39 manner that the amount of the taxpayer's adjusted gross income
1179+40 derived from sources within Indiana is determined under section
1180+41 2 of this chapter for the same taxable year during which each loss
1181+42 was incurred.
1182+ES 2—LS 7135/DI 125 28
1183+1 (3) An Indiana net operating loss includes a net operating loss that
1184+2 arises when the applicable modifications required by IC 6-3-1-3.5
1185+3 as set forth in subdivision (1) exceed the sum of:
1186+4 (A) either:
1187+5 (i) the taxpayer's federal taxable income (as defined in
1188+6 Section 63 of the Internal Revenue Code), if the taxpayer is
1189+7 a corporation, nonresident estate, or nonresident trust; or
1190+8 (ii) the taxpayer's federal adjusted gross income (as defined
1191+9 by Section 62 of the Internal Revenue Code), if the taxpayer
1192+10 is a nonresident individual;
1193+11 for the taxable year in which the Indiana net operating loss is
1194+12 determined; and
1195+13 (B) the modifications otherwise required for federal net
1196+14 operating losses for the taxable year of the Indiana net
1197+15 operating loss under Section 172(d) of the Internal Revenue
1198+16 Code or Section 512(b) of the Internal Revenue Code. A
1199+17 modification that reduces a federal net operating loss shall be
1200+18 treated as a positive number for purposes of this subdivision,
1201+19 and a modification that increases a federal net operating loss
1202+20 shall be treated as a negative number for purposes of this
1203+21 subdivision.
1204+22 (e) Subject to the limitations contained in subsection (g), an Indiana
1205+23 net operating loss carryover shall be available as a deduction from the
1206+24 taxpayer's adjusted gross income derived from sources within Indiana
1207+25 (as defined in section 2 of this chapter) in the carryover year provided
1208+26 in subsection (f), but not in excess of the taxpayer's adjusted gross
1209+27 income (as defined in IC 6-3-1-3.5) in the carryover year determined
1210+28 without regard to the deduction allowable under this section.
1211+29 (f) Carryovers shall be determined under this subsection as follows:
1212+30 (1) An Indiana net operating loss shall be an Indiana net operating
1213+31 loss carryover to each of the carryover years following the taxable
1214+32 year of the loss.
1215+33 (2) An Indiana net operating loss may not be carried over for
1216+34 more than twenty (20) taxable years after the taxable year of the
1217+35 loss.
1218+36 (g) The entire amount of the Indiana net operating loss for any
1219+37 taxable year shall be carried to the earliest of the taxable years to which
1220+38 (as determined under subsection (f)) the loss may be carried. The
1221+39 amount of the Indiana net operating loss remaining after the deduction
1222+40 is taken under this section in a taxable year may be carried over as
1223+41 provided in subsection (f). The amount of the Indiana net operating loss
1224+42 carried over from year to year shall be reduced to the extent that the
1225+ES 2—LS 7135/DI 125 29
1226+1 Indiana net operating loss carryover is used by the taxpayer to obtain
1227+2 a deduction in a taxable year until the occurrence of the earlier of the
1228+3 following:
1229+4 (1) The entire amount of the Indiana net operating loss has been
1230+5 used as a deduction.
1231+6 (2) The Indiana net operating loss has been carried over to each
1232+7 of the carryover years provided by subsection (f).
1233+8 (h) An Indiana net operating loss deduction determined under this
1234+9 section shall be allowed notwithstanding the fact that in the year the
1235+10 taxpayer incurred the net operating loss the taxpayer was not subject to
1236+11 the tax imposed under section 1 of this chapter because the taxpayer
1237+12 was:
1238+13 (1) a life insurance company (as defined in Section 816(a) of the
1239+14 Internal Revenue Code); or
1240+15 (2) an insurance company subject to tax under Section 831 of the
1241+16 Internal Revenue Code.
1242+17 (i) In the case of a life insurance company, this section shall be
1243+18 applied by substituting life insurance company taxable income (as
1244+19 defined in Section 801 the Internal Revenue Code) in place of
1245+20 references to taxable income (as defined in Section 63 of the Internal
1246+21 Revenue Code).
1247+22 SECTION 4. IC 6-3-2-2.8, AS AMENDED BY P.L.129-2014,
1248+23 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1249+24 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.8. Notwithstanding any
1250+25 provision of IC 6-3-1 through IC 6-3-7, there shall be no tax on the
1251+26 adjusted gross income of the following:
1252+27 (1) Any organization described in Section 501(a) of the Internal
1253+28 Revenue Code, except that any income of such organization
1254+29 which is subject to income tax under the Internal Revenue Code
1255+30 shall be subject to the tax under IC 6-3-1 through IC 6-3-7.
1256+31 (2) Any corporation which is exempt from income tax under
1257+32 Section 1363 of the Internal Revenue Code and which complies
1258+33 with the requirements of IC 6-3-4-13. However, income of a
1259+34 corporation described under this subdivision that is subject to
1260+35 income tax under the Internal Revenue Code is subject to the tax
1261+36 under IC 6-3-1 through IC 6-3-7. A corporation will not lose its
1262+37 exemption under this section because it fails to comply with
1263+38 IC 6-3-4-13 but it will be subject to the penalties provided by
1264+39 IC 6-8.1-10. Any corporation that is exempt from income tax
1265+40 under Section 1363 of the Internal Revenue Code and that
1266+41 makes an election under IC 6-3-2.1 for a taxable year shall be
1267+42 subject to tax as provided in IC 6-3-2.1 for the taxable year of
1268+ES 2—LS 7135/DI 125 30
1269+1 the election.
1270+2 (3) Banks and trust companies, national banking associations,
1271+3 savings banks, building and loan associations, and savings and
1272+4 loan associations.
1273+5 (4) Insurance companies subject to tax under any of the following:
1274+6 (A) IC 27-1-18-2, including a domestic insurance company
1275+7 that elects to be taxed under IC 27-1-18-2.
1276+8 (B) IC 27-1-2-2.3.
1277+9 (5) International banking facilities (as defined in Regulation D of
1278+10 the Board of Governors of the Federal Reserve System (12 CFR
1279+11 204)).
1280+12 SECTION 5. IC 6-3-2.1 IS ADDED TO THE INDIANA CODE AS
1281+13 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
1282+14 JANUARY 1, 2022 (RETROACTIVE)]:
1283+15 Chapter 2.1. Pass Through Entity Tax
1284+16 Sec. 1. This chapter applies to taxable years beginning after
1285+17 December 31, 2021.
1286+18 Sec. 2. The following definitions apply throughout this chapter:
1287+19 (1) "Electing entity" means a pass through entity described in
1288+20 IC 6-3-1-35 that is subject to Subchapter K or Subchapter S
1289+21 of the Internal Revenue Code and makes the election under
1290+22 this chapter.
1291+23 (2) "Entity owner" means the direct or indirect owners of an
1292+24 electing entity that are ultimately taxable on the entity's
1293+25 income under Subchapter K or Subchapter S of the Internal
1294+26 Revenue Code, except an owner described in subdivision
1295+27 (4)(A) through (4)(C).
1296+28 (3) "Nonresident" means a nonresident partner as defined by
1297+29 IC 6-3-4-12(n), a nonresident shareholder as defined by
1298+30 IC 6-3-4-13(n), or a nonresident beneficiary as defined by
1299+31 IC 6-3-4-15(i), whichever is applicable.
1300+32 (4) "Owner" means a direct or indirect owner of an electing
1301+33 entity and includes a beneficiary of an estate or trust.
1302+34 However an owner shall not include:
1303+35 (A) an entity described in IC 6-3-2-2.8(3);
1304+36 (B) an entity described in IC 6-3-2-2.8(5); or
1305+37 (C) any other entity as determined by the department and
1306+38 listed in instructions or guidance issued by the department.
1307+39 Sec. 3. (a) For purposes of this section, "authorized person"
1308+40 means any individual with the authority from the electing entity to
1309+41 bind the electing entity or sign returns on its behalf.
1310+42 (b) Each taxable year, an authorized person may elect, on behalf
1311+ES 2—LS 7135/DI 125 31
1312+1 of the electing entity, to have the adjusted gross income tax under
1313+2 IC 6-3-1 through IC 6-3-7 imposed upon the electing entity. The
1314+3 entity owners shall remain liable for adjusted gross income tax
1315+4 under IC 6-3-1 through IC 6-3-7 on their share of the electing
1316+5 entity's adjusted gross income but with the credit provided to the
1317+6 entity owners as set forth in section 5 of this chapter.
1318+7 (c) The election is applicable for the taxable year of the return.
1319+8 (d) The following apply to an election under this section:
1320+9 (1) For taxable years beginning after December 31, 2022, the
1321+10 election may be made at any time during the taxable year or
1322+11 after the end of the taxable year, but not later than the earlier
1323+12 of:
1324+13 (A) the due date of the electing entity's return for the
1325+14 taxable year, including any extensions; or
1326+15 (B) the date the electing entity files its return for the
1327+16 taxable year.
1328+17 (2) For taxable years beginning after December 31, 2021, and
1329+18 before January 1, 2023, the election must be made after
1330+19 March 31, 2023, and before August 31, 2024.
1331+20 (3) The election shall be made in the form and manner
1332+21 prescribed by the department.
1333+22 (4) The election, once made for a taxable year, is irrevocable,
1334+23 provided that an election under subdivision (2) may be made
1335+24 on an amended return if the electing entity filed a return on
1336+25 or before April 18, 2023.
1337+26 Sec. 4. (a) A tax shall be imposed on the adjusted gross income
1338+27 of an electing entity for the taxable year of the election. The
1339+28 adjusted gross income of the electing entity shall be the aggregate
1340+29 of the direct owners' share of the electing entity's adjusted gross
1341+30 income. For purposes of this section:
1342+31 (1) the electing entity shall determine each nonresident direct
1343+32 owner's share after allocation and apportionment pursuant to
1344+33 IC 6-3-2-2; and
1345+34 (2) the electing entity shall determine the resident direct
1346+35 owner's share either before allocation and apportionment
1347+36 pursuant to IC 6-3-2-2 or after allocation and apportionment
1348+37 pursuant to IC 6-3-2-2. The electing entity must use the same
1349+38 method for all resident direct owners.
1350+39 (b) The tax rate shall be the tax rate specified in IC 6-3-2-1(b)
1351+40 as of the last day of the electing entity's taxable year, and the tax
1352+41 shall be due on the same date as the entity return for the taxable
1353+42 year is due under this article, without regard to extensions.
1354+ES 2—LS 7135/DI 125 32
1355+1 (c) On its return for the taxable year, the electing entity shall
1356+2 attach a schedule showing the calculation of the tax and the credit
1357+3 for each entity owner, and remit the tax with the return, taking
1358+4 into account prior estimated tax payments and other tax payments
1359+5 by the electing entity, along with other payments that are credited
1360+6 to the electing entity as tax paid under this chapter or as tax
1361+7 withheld under IC 6-3-4 or IC 6-5.5-2-8. The department may
1362+8 prescribe the form for providing the information required by this
1363+9 section.
1364+10 (d) If a pass through entity makes estimated tax payments,
1365+11 makes other tax payments, or has other payments that are credited
1366+12 to the electing entity as tax paid under this chapter or a tax
1367+13 withheld under IC 6-3-4 or IC 6-5.5-2-8, and the pass through
1368+14 entity does not make the election under section 3 of this chapter,
1369+15 the pass through entity:
1370+16 (1) may treat pass through entity tax remitted on its behalf
1371+17 under this chapter as pass through entity tax to its direct
1372+18 owners, provided that:
1373+19 (A) the tax is designated on a schedule similar to the
1374+20 schedule required under subsection (c) and is reported to
1375+21 the direct owners in the manner provided in section 5 of
1376+22 this chapter; and
1377+23 (B) the pass through entity credits an amount to a direct
1378+24 owner no greater than the tax that otherwise would be due
1379+25 under this chapter on their share of the adjusted gross
1380+26 income from the pass through entity or the direct owner's
1381+27 portion (as determined under subsection (a)) of the pass
1382+28 through entity tax passed through to the pass through
1383+29 entity, whichever is greater (for purposes of this clause, a
1384+30 trust or estate shall compute the tax in the same manner as
1385+31 an electing entity);
1386+32 (2) shall treat any payment other than a payment designated
1387+33 under subdivision (1) as a withholding tax payment under
1388+34 IC 6-3-4-12, IC 6-3-4-13, IC 6-3-4-15, or IC 6-5.5-2-8 to the
1389+35 extent the pass through entity otherwise has not remitted or
1390+36 been credited with such withholding; and
1391+37 (3) may request a refund of any payment in excess of the
1392+38 amounts credited or designated under subdivision (1) or (2).
1393+39 Sec. 5. (a) Each electing entity shall compute each direct owner's
1394+40 share of the tax imposed by section 4 of this chapter and reflect
1395+41 that amount in the form and manner prescribed by the
1396+42 department.
1397+ES 2—LS 7135/DI 125 33
1398+1 (b) Each entity owner shall be entitled to a refundable credit in
1399+2 an amount equal to the amount of tax under this chapter credited
1400+3 to the entity owner.
1401+4 (c) All other credits arising from the operations of the electing
1402+5 entity, or which are passed through to or assigned to the electing
1403+6 entity, shall pass through to the entity owners as provided in this
1404+7 article or IC 6-3.1 and shall not apply to the tax imposed in section
1405+8 4 of this chapter. All such other credits shall apply before the
1406+9 application of the pass through entity tax credit. This subsection
1407+10 also applies to pass through entities that pass the tax under this
1408+11 chapter through to their owners. However, this subsection shall not
1409+12 limit the ability of an electing entity or pass through entity to claim
1410+13 credit for taxes withheld or paid on the entity's behalf.
1411+14 Sec. 6. (a) Except as otherwise provided in this section, an
1412+15 electing entity shall be subject to the obligation to make estimated
1413+16 tax payments under this article for the tax imposed under section
1414+17 4 of this chapter in the same manner as applicable to corporations
1415+18 under IC 6-3-4-4.1(c).
1416+19 (b) For taxable years ending on or before June 30, 2023, an
1417+20 electing entity is not required to make estimated tax payments.
1418+21 (c) For taxable years ending after June 30, 2023, and on or
1419+22 before December 31, 2024, an electing entity shall make an
1420+23 estimated tax payment for the taxable years on or before the end
1421+24 of the taxable year. There shall be no penalty for underpayment of
1422+25 estimated tax, except to the extent the underpayment fails to equal
1423+26 or exceed fifty percent (50%) of the tax imposed by section 4 of this
1424+27 chapter for the taxable year.
1425+28 (d) For taxable years ending after December 31, 2024, there
1426+29 shall be no penalty for underpayment of estimated tax, except to
1427+30 the extent the payments during the taxable year fail to equal or
1428+31 exceed the lesser of eighty percent (80%) of the tax imposed under
1429+32 this chapter for the taxable year or one hundred percent (100%)
1430+33 of the tax imposed under this chapter for the preceding taxable
1431+34 year.
1432+35 (e) In the event of an underpayment under subsection (c) or (d),
1433+36 the electing entity shall be subject to a penalty in the amount
1434+37 prescribed under IC 6-8.1-10-2.1(b) on the amount of the
1435+38 underpayment.
1436+39 Sec. 7. (a) This section applies if:
1437+40 (1) the department determines that an electing entity
1438+41 underreported its tax under this chapter;
1439+42 (2) an electing entity files an amended return reporting an
1440+ES 2—LS 7135/DI 125 34
1441+1 underpayment of tax under this chapter; or
1442+2 (3) the Internal Revenue Service adjusts the adjusted gross
1443+3 income of an electing entity.
1444+4 (b) If a partnership is an electing entity, the partnership shall be
1445+5 subject to IC 6-3-4.5 on any assessment and reporting of changes.
1446+6 (c) If a corporation described in IC 6-3-2-2.8(2) is an electing
1447+7 entity, the corporation and its shareholders shall be subject to the
1448+8 provisions of IC 6-3-4.5 in the same manner as a partnership and
1449+9 its partners with regard to the tax imposed under this chapter,
1450+10 except that any change in attributes is treated as occurring in the
1451+11 year to which the change relates unless required by the Internal
1452+12 Revenue Code.
1453+13 SECTION 6. IC 6-3-3-3, AS AMENDED BY P.L.159-2021,
1454+14 SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1455+15 JANUARY 1, 2019 (RETROACTIVE)]: Sec. 3. (a) Whenever a
1456+16 resident person has become liable for tax to another state upon all or
1457+17 any part of the person's income for a taxable year derived from sources
1458+18 without this state and subject to taxation under IC 6-3-2, the amount of
1459+19 tax paid by the person to the other state shall be credited against the
1460+20 amount of the tax payable by the person. Such credit shall be allowed
1461+21 upon the production to the department of satisfactory evidence of the
1462+22 fact of such payment, except that such application for credit shall not
1463+23 operate to reduce the tax payable under IC 6-3-2 to an amount less than
1464+24 would have been payable were the income from the other state ignored.
1465+25 The credit provided for by this subsection shall not be granted to a
1466+26 taxpayer when the laws of the other state, under which the adjusted
1467+27 gross income in question is subject to taxation, provides for a credit to
1468+28 the taxpayer substantially similar to that granted by subsection (b).
1469+29 (b) Whenever a nonresident person has become liable for tax to the
1470+30 state where the person resides upon the person's income for the taxable
1471+31 year derived from sources within this state and subject to taxation
1472+32 under IC 6-3-2, the proportion of tax paid by the person to the state
1473+33 where the person resides that the person's income subject to taxation
1474+34 under IC 6-3-2 bears to the person's income upon which the tax so
1475+35 payable to the other state was imposed shall be credited against the tax
1476+36 payable by the person under IC 6-3-2, but only if the laws of the other
1477+37 state grant a substantially similar credit to residents of this state subject
1478+38 to income tax under the laws of such other state, or impose a tax upon
1479+39 the income of its residents derived from sources in this state and
1480+40 exempt from taxation the income of residents of this state. No credit
1481+41 shall be allowed against the amount of the tax on any adjusted gross
1482+42 income taxable under IC 6-3-2 that is exempt from taxation under the
1483+ES 2—LS 7135/DI 125 35
1484+1 laws of the other state.
1485+2 (c) Notwithstanding subsection (a), if a resident person will be liable
1486+3 for income tax to a foreign country upon the person's income included
1487+4 under the Internal Revenue Code, the income is considered from
1488+5 sources outside the United States under the Internal Revenue Code, and
1489+6 the income is included in the person's Indiana adjusted gross income
1490+7 due solely to an acceleration of the income inclusion for federal income
1491+8 tax purposes, the person may claim the credit allowable under this
1492+9 section by providing evidence to the department of the following:
1493+10 (1) The foreign country in which the income is subject to tax.
1494+11 (2) The amount of income included in Indiana adjusted gross
1495+12 income that is derived from the foreign country.
1496+13 (3) The amount of tax that will be imposed in the foreign country
1497+14 upon the individual's realization of the income under the laws of
1498+15 the foreign country, including any withholding tax or composite
1499+16 tax.
1500+17 (4) Any other information required by the department.
1501+18 The department may impose limitations and conditions on the claim
1502+19 under this subsection, including reporting requirements on the part of
1503+20 the person and extensions of statutes of limitations under IC 6-8.1-5-2.
1504+21 (d) As used in this subsection, "pass through entity tax" means
1505+22 a state net income tax imposed by another state on a pass through
1506+23 entity enacted by the state after 2017 that is substantially similar
1507+24 to that imposed under IC 6-3-2.1. Solely for purposes of this
1508+25 section, an owner of a pass through entity shall be considered liable
1509+26 for tax paid to another state by the pass through entity pursuant to
1510+27 a pass through entity tax imposed by the state (whether elected or
1511+28 otherwise) in an amount equal to that portion of the pass through
1512+29 entity tax representing the pass through entity tax credited to or
1513+30 otherwise attributed to the owner by the pass through entity, and
1514+31 the owner shall be considered to have paid that portion of the tax
1515+32 paid by the pass through entity. The owner of a pass through entity
1516+33 shall also be considered liable for and to have paid state income
1517+34 taxes to another state paid by the pass through entity on behalf of
1518+35 an owner through withholding, a composite return, or otherwise.
1519+36 SECTION 7. IC 6-3-4-11 IS AMENDED TO READ AS FOLLOWS
1520+37 [EFFECTIVE JANUARY 1, 2022 (RETROACTIVE)]: Sec. 11. (a) A
1521+38 partnership as such shall not be subject to the adjusted gross income
1522+39 tax imposed by IC 6-3-1 through IC 6-3-7, except to the extent the
1523+40 partnership is an electing entity (as defined in IC 6-3-2.1-2) or the
1524+41 partnership has made an election to be taxed at the partnership
1525+42 level under IC 6-3-4.5. Persons or corporations carrying on business
1526+ES 2—LS 7135/DI 125 36
1527+1 as partners shall be liable for the adjusted gross income tax only in
1528+2 their separate or individual capacities. In determining each partner's
1529+3 adjusted gross income, such partner shall take into account his or its
1530+4 distributive share of the adjustments provided for in IC 6-3-1-3.5.
1531+5 (b) The adjustments provided for in IC 6-3-1-3.5 shall be allowed
1532+6 for the taxable year of the partner within or with which the partnership's
1533+7 taxable year ends.
1534+8 SECTION 8. IC 6-3-4-12, AS AMENDED BY P.L.137-2022,
1535+9 SECTION 38, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1536+10 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 12. (a) Every partnership
1537+11 shall, at the time that the partnership pays or credits amounts to any of
1538+12 its nonresident partners on account of their distributive shares of
1539+13 partnership income, for a taxable year of the partnership, deduct and
1540+14 retain therefrom the amount prescribed in the withholding instructions
1541+15 referred to in section 8 of this chapter. Such partnership so paying or
1542+16 crediting any nonresident partner:
1543+17 (1) shall be liable to the state of Indiana for the payment of the tax
1544+18 required to be deducted and retained under this section and shall
1545+19 not be liable to such partner for the amount deducted from such
1546+20 payment or credit and paid over in compliance or intended
1547+21 compliance with this section; and
1548+22 (2) shall make return of and payment to the department monthly
1549+23 whenever the amount of tax due under IC 6-3 and IC 6-3.6
1550+24 exceeds an aggregate amount of fifty dollars ($50) per month with
1551+25 such payment due on the thirtieth day of the following month,
1552+26 unless an earlier date is specified by section 8.1 of this chapter.
1553+27 Where the aggregate amount due under IC 6-3 and IC 6-3.6 does not
1554+28 exceed fifty dollars ($50) per month, then such partnership shall make
1555+29 return and payment to the department quarterly, on such dates and in
1556+30 such manner as the department shall prescribe, of the amount of tax
1557+31 which, under IC 6-3 and IC 6-3.6, it is required to withhold. If a
1558+32 partnership credits a partner with pass through entity tax imposed
1559+33 under IC 6-3-2.1, the withholding required for that partner under
1560+34 this section shall be reduced by the tax credited to the partner
1561+35 under IC 6-3-2.1, but in no event shall the tax required to be
1562+36 withheld be reduced to less than zero dollars ($0).
1563+37 (b) Every partnership shall, at the time of each payment made by it
1564+38 to the department pursuant to this section, deliver to the department a
1565+39 return upon such form as shall be prescribed by the department
1566+40 showing the total amounts paid or credited to its nonresident partners,
1567+41 the amount deducted therefrom in accordance with the provisions of
1568+42 this section, and such other information as the department may require.
1569+ES 2—LS 7135/DI 125 37
1570+1 Every partnership making the deduction and retention provided in this
1571+2 section shall furnish to its nonresident partners annually, but not later
1572+3 than the fifteenth day of the third month after the end of its taxable
1573+4 year, a record of the amount of tax deducted and retained from such
1574+5 partners on forms to be prescribed by the department.
1575+6 (c) All money deducted and retained by the partnership, as provided
1576+7 in this section, shall immediately upon such deduction be the money of
1577+8 the state of Indiana and every partnership which deducts and retains
1578+9 any amount of money under the provisions of IC 6-3 shall hold the
1579+10 same in trust for the state of Indiana and for payment thereof to the
1580+11 department in the manner and at the times provided in IC 6-3. Any
1581+12 partnership may be required to post a surety bond in such sum as the
1582+13 department shall determine to be appropriate to protect the state of
1583+14 Indiana with respect to money deducted and retained pursuant to this
1584+15 section.
1585+16 (d) The provisions of IC 6-8.1 relating to additions to tax in case of
1586+17 delinquency and penalties shall apply to partnerships subject to the
1587+18 provisions of this section, and for these purposes any amount deducted,
1588+19 or required to be deducted and remitted to the department under this
1589+20 section, shall be considered to be the tax of the partnership, and with
1590+21 respect to such amount it shall be considered the taxpayer.
1591+22 (e) Amounts deducted from payments or credits to a nonresident
1592+23 partner during any taxable year of the partnership in accordance with
1593+24 the provisions of this section shall be considered to be in part payment
1594+25 of the tax imposed on such nonresident partner for the nonresident
1595+26 partner's taxable year within or with which the partnership's taxable
1596+27 year ends. A return made by the partnership under subsection (b) shall
1597+28 be accepted by the department as evidence in favor of the nonresident
1598+29 partner of the amount so deducted for the nonresident partner's
1599+30 distributive share.
1600+31 (f) This section shall in no way relieve any nonresident partner from
1601+32 the nonresident partner's obligations of filing a return or returns at the
1602+33 time required under IC 6-3 or IC 6-3.6, and any unpaid tax shall be paid
1603+34 at the time prescribed by section 5 of this chapter.
1604+35 (g) Instead of the reporting periods required under subsection (a),
1605+36 the department may permit a partnership to file one (1) return and
1606+37 payment each year if the partnership pays or credits amounts to its
1607+38 nonresident partners only one (1) time each year. The return and
1608+39 payment are due on or before the fifteenth day of the fourth month after
1609+40 the end of the year. However, if a partnership is permitted an extension
1610+41 to file its income tax return under IC 6-8.1-6-1, the return and payment
1611+42 due under this subsection shall be allowed the same treatment as an
1612+ES 2—LS 7135/DI 125 38
1613+1 extended income tax return with respect to due dates, interest, and
1614+2 penalties under IC 6-8.1-6-1.
1615+3 (h) If a partnership fails to withhold and pay any amount of tax
1616+4 required to be withheld under this section and thereafter the tax is paid
1617+5 by the partners, the amounts of tax as paid by the partners shall not be
1618+6 collected from the partnership but it may not be relieved from liability
1619+7 for interest or penalty otherwise due in respect to the failure to
1620+8 withhold under IC 6-8.1-10.
1621+9 (i) A partnership shall file a composite adjusted gross income tax
1622+10 return on behalf of all nonresident partners. The composite return must
1623+11 include each nonresident partner regardless of whether or not the
1624+12 nonresident partner has other Indiana source income.
1625+13 (j) If a partnership does not include all nonresident partners in the
1626+14 composite return, the partnership is subject to the penalty imposed
1627+15 under IC 6-8.1-10-2.1(j).
1628+16 (k) For taxable years beginning after December 31, 2013, the
1629+17 department may not impose a late payment penalty on a partnership for
1630+18 the failure to file a return, pay the full amount of the tax shown on the
1631+19 partnership's return, or pay the deficiency of the withholding taxes due
1632+20 under this section if the partnership pays the department before the
1633+21 fifteenth day of the fourth month after the end of the partnership's
1634+22 taxable year at least:
1635+23 (1) eighty percent (80%) of the withholding tax due for the
1636+24 current year; or
1637+25 (2) one hundred percent (100%) of the withholding tax due for the
1638+26 preceding year.
1639+27 (l) Notwithstanding subsection (a) or (i), a partnership is not
1640+28 required to withhold tax or file a composite adjusted gross income tax
1641+29 return for a nonresident partner if the partnership:
1642+30 (1) is a publicly traded partnership as defined by Section 7704(b)
1643+31 of the Internal Revenue Code;
1644+32 (2) meets the exception for partnerships under Section 7704(c) of
1645+33 the Internal Revenue Code; and
1646+34 (3) has agreed to file an annual information return reporting the
1647+35 name, address, taxpayer identification number, and other
1648+36 information requested by the department of each unit holder.
1649+37 The department may issue written guidance explaining circumstances
1650+38 under which limited partnerships or limited liability companies owned
1651+39 by a publicly traded partnership may be excluded from the withholding
1652+40 requirements of this section.
1653+41 (m) Notwithstanding subsection (k), a partnership is subject to a late
1654+42 payment penalty for the failure to file a return, pay the full amount of
1655+ES 2—LS 7135/DI 125 39
1656+1 the tax shown on the partnership's return, or pay the deficiency of the
1657+2 withholding taxes due under this section for any amounts of
1658+3 withholding tax, including any interest under IC 6-8.1-10-1, reported
1659+4 or paid after the due date of the return, as adjusted by any extension
1660+5 under IC 6-8.1-6-1.
1661+6 (n) For purposes of this section, a "nonresident partner" is:
1662+7 (1) an individual who does not reside in Indiana;
1663+8 (2) a trust that does not reside in Indiana;
1664+9 (3) an estate that does not reside in Indiana;
1665+10 (4) a partnership not domiciled in Indiana;
1666+11 (5) a C corporation not domiciled in Indiana; or
1667+12 (6) an S corporation not domiciled in Indiana.
1668+13 SECTION 9. IC 6-3-4-13, AS AMENDED BY P.L.197-2016,
1669+14 SECTION 27, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1670+15 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 13. (a) Every corporation
1671+16 which is exempt from tax under IC 6-3 pursuant to IC 6-3-2-2.8(2)
1672+17 shall, at the time that it pays or credits amounts to any of its
1673+18 nonresident shareholders as dividends or as their share of the
1674+19 corporation's undistributed taxable income, withhold the amount
1675+20 prescribed by the department. Such corporation so paying or crediting
1676+21 any nonresident shareholder:
1677+22 (1) shall be liable to the state of Indiana for the payment of the tax
1678+23 required to be withheld under this section and shall not be liable
1679+24 to such shareholder for the amount withheld and paid over in
1680+25 compliance or intended compliance with this section; and
1681+26 (2) when the aggregate amount due under IC 6-3 and IC 6-3.6
1682+27 exceeds one hundred fifty dollars ($150) per quarter, then such
1683+28 corporation shall make return and payment to the department
1684+29 quarterly, on such dates and in such manner as the department
1685+30 shall prescribe, of the amount of tax which, under IC 6-3 and
1686+31 IC 6-3.6, it is required to withhold.
1687+32 If a corporation credits a shareholder with pass through entity tax
1688+33 imposed under IC 6-3-2.1, the withholding required for that
1689+34 shareholder under this section shall be reduced by the tax credited
1690+35 to the shareholder under IC 6-3-2.1, but in no event shall the tax
1691+36 required to be withheld be reduced to less than zero dollars ($0).
1692+37 (b) Every corporation shall, at the time of each payment made by it
1693+38 to the department pursuant to this section, deliver to the department a
1694+39 return upon such form as shall be prescribed by the department
1695+40 showing the total amounts paid or credited to its nonresident
1696+41 shareholders, the amount withheld in accordance with the provisions
1697+42 of this section, and such other information as the department may
1698+ES 2—LS 7135/DI 125 40
1699+1 require. Every corporation withholding as provided in this section shall
1700+2 furnish to its nonresident shareholders annually, but not later than the
1701+3 fifteenth day of the third month after the end of its taxable year, a
1702+4 record of the amount of tax withheld on behalf of such shareholders on
1703+5 forms to be prescribed by the department.
1704+6 (c) All money withheld by a corporation, pursuant to this section,
1705+7 shall immediately upon being withheld be the money of the state of
1706+8 Indiana and every corporation which withholds any amount of money
1707+9 under the provisions of this section shall hold the same in trust for the
1708+10 state of Indiana and for payment thereof to the department in the
1709+11 manner and at the times provided in IC 6-3. Any corporation may be
1710+12 required to post a surety bond in such sum as the department shall
1711+13 determine to be appropriate to protect the state of Indiana with respect
1712+14 to money withheld pursuant to this section.
1713+15 (d) The provisions of IC 6-8.1 relating to additions to tax in case of
1714+16 delinquency and penalties shall apply to corporations subject to the
1715+17 provisions of this section, and for these purposes any amount withheld,
1716+18 or required to be withheld and remitted to the department under this
1717+19 section, shall be considered to be the tax of the corporation, and with
1718+20 respect to such amount it shall be considered the taxpayer.
1719+21 (e) Amounts withheld from payments or credits to a nonresident
1720+22 shareholder during any taxable year of the corporation in accordance
1721+23 with the provisions of this section shall be considered to be a part
1722+24 payment of the tax imposed on such nonresident shareholder for the
1723+25 shareholder's taxable year within or with which the corporation's
1724+26 taxable year ends. A return made by the corporation under subsection
1725+27 (b) shall be accepted by the department as evidence in favor of the
1726+28 nonresident shareholder of the amount so withheld from the
1727+29 shareholder's distributive share.
1728+30 (f) This section shall in no way relieve any nonresident shareholder
1729+31 from the shareholder's obligation of filing a return or returns at the time
1730+32 required under IC 6-3 or IC 6-3.6, and any unpaid tax shall be paid at
1731+33 the time prescribed by section 5 of this chapter.
1732+34 (g) Instead of the reporting periods required under subsection (a),
1733+35 the department may permit a corporation to file one (1) return and
1734+36 payment each year if the corporation pays or credits amounts to its
1735+37 nonresident shareholders only one (1) time each year. The withholding
1736+38 return and payment are due on or before the fifteenth day of the fourth
1737+39 month after the end of the taxable year of the corporation. However, if
1738+40 a corporation is permitted an extension to file its income tax return
1739+41 under IC 6-8.1-6-1, the return and payment due under this subsection
1740+42 shall be allowed the same treatment as the extended income tax return
1741+ES 2—LS 7135/DI 125 41
1742+1 with respect to the due dates, interest, and penalties under IC 6-8.1-6-1.
1743+2 (h) If a distribution will be made with property other than money or
1744+3 a gain is realized without the payment of money, the corporation shall
1745+4 not release the property or credit the gain until it has funds sufficient
1746+5 to enable it to pay the tax required to be withheld under this section. If
1747+6 necessary, the corporation shall obtain such funds from the
1748+7 shareholders.
1749+8 (i) If a corporation fails to withhold and pay any amount of tax
1750+9 required to be withheld under this section and thereafter the tax is paid
1751+10 by the shareholders, such amount of tax as paid by the shareholders
1752+11 shall not be collected from the corporation but it shall not be relieved
1753+12 from liability for interest or penalty otherwise due in respect to such
1754+13 failure to withhold under IC 6-8.1-10.
1755+14 (j) A corporation described in subsection (a) shall file a composite
1756+15 adjusted gross income tax return on behalf of all nonresident
1757+16 shareholders. The composite return must include each nonresident
1758+17 shareholder regardless of whether or not the nonresident shareholder
1759+18 has other Indiana source income.
1760+19 (k) If a corporation described in subsection (a) does not include all
1761+20 nonresident shareholders in the composite return, the corporation is
1762+21 subject to the penalty imposed under IC 6-8.1-10-2.1(j).
1763+22 (l) For taxable years beginning after December 31, 2013, the
1764+23 department may not impose a late payment penalty on a corporation for
1765+24 the failure to file a return, pay the full amount of the tax shown on the
1766+25 corporation's return, or pay the deficiency of the withholding taxes due
1767+26 under this section if the corporation pays the department before the
1768+27 fifteenth day of the fourth month after the end of the partnership's
1769+28 taxable year at least:
1770+29 (1) eighty percent (80%) of the withholding tax due for the
1771+30 current year; or
1772+31 (2) one hundred percent (100%) of the withholding tax due for the
1773+32 preceding year.
1774+33 (m) Notwithstanding subsection (l), a corporation is subject to a late
1775+34 payment penalty for the failure to file a return, pay the full amount of
1776+35 the tax shown on the corporation's return, or pay the deficiency of the
1777+36 withholding taxes due under this section for any amounts of
1778+37 withholding tax, including any interest under IC 6-8.1-10-1, reported
1779+38 or paid after the due date of the return, as adjusted by any extension
1780+39 under IC 6-8.1-6-1.
1781+40 (n) For purposes of this section, a "nonresident shareholder" is:
1782+41 (1) an individual who does not reside in Indiana;
1783+42 (2) a trust that does not reside in Indiana; or
1784+ES 2—LS 7135/DI 125 42
1785+1 (3) an estate that does not reside in Indiana.
1786+2 SECTION 10. IC 6-3-4-15, AS AMENDED BY P.L.181-2016,
1787+3 SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1788+4 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 15. (a) A trust or estate
1789+5 shall, at the time that it distributes income (except income attributable
1790+6 to interest or dividends) to a nonresident beneficiary, deduct and retain
1791+7 therefrom the amount prescribed in the withholding instructions
1792+8 referred to in section 8 of this chapter. The trust or estate so
1793+9 distributing income to a nonresident beneficiary:
1794+10 (1) is liable to this state for the tax which it is required to deduct
1795+11 and retain under this section and is not liable to the beneficiary for
1796+12 the amount deducted from the distribution and paid to the
1797+13 department in compliance, or intended compliance, with this
1798+14 section; and
1799+15 (2) shall pay the amount deducted to the department before the
1800+16 thirtieth day of the month following the distribution, unless an
1801+17 earlier date is specified by section 8.1 of this chapter.
1802+18 If a trust or estate credits a beneficiary with pass through entity
1803+19 tax imposed under IC 6-3-2.1, the withholding required for that
1804+20 beneficiary under this section shall be reduced by the tax credited
1805+21 to the beneficiary under IC 6-3-2.1, but in no event shall the tax
1806+22 required to be withheld be reduced to less than zero dollars ($0).
1807+23 (b) A trust or estate shall, at the time that it makes a payment to the
1808+24 department under this section, deliver to the department a return which
1809+25 shows the total amounts distributed to the trust's or estate's nonresident
1810+26 beneficiaries, the amount deducted from the distributions under this
1811+27 section, and any other information required by the department. The
1812+28 trust or estate shall file the return on the form prescribed by the
1813+29 department. A trust or estate which makes the deduction and retention
1814+30 required by this section shall furnish to its nonresident beneficiaries
1815+31 annually, but not later than thirty (30) days after the end of the trust's
1816+32 or estate's taxable year, a record of the amount of tax deducted and
1817+33 retained from the beneficiaries. The trust or estate shall furnish the
1818+34 information on the form prescribed by the department.
1819+35 (c) The money deducted and retained by a trust or estate under this
1820+36 section is money of this state. Every trust or estate which deducts and
1821+37 retains any money under this section shall hold the money in trust for
1822+38 this state until it pays the money to the department in the manner and
1823+39 at the time provided in this section. The department may require a trust
1824+40 or estate to post a surety bond to protect this state with respect to
1825+41 money deducted and retained by the trust or estate under this section.
1826+42 The department shall determine the amount of the surety bond.
1827+ES 2—LS 7135/DI 125 43
1828+1 (d) The provisions of IC 6-8.1 relating to penalties or to additions to
1829+2 tax in case of a delinquency apply to trusts and estates which are
1830+3 subject to this section. For purposes of this subsection, any amount
1831+4 deducted, or required to be deducted and remitted to the department,
1832+5 under this section is considered the tax of the trust or estate, and with
1833+6 respect to that amount, it is considered the taxpayer.
1834+7 (e) Amounts deducted from distributions to nonresident
1835+8 beneficiaries under this section during a taxable year of the trust or
1836+9 estate are considered a partial payment of the tax imposed on the
1837+10 nonresident beneficiary for his taxable year within or with which the
1838+11 trust's or estate's taxable year ends. The department shall accept a
1839+12 return made by the trust or estate under subsection (b) as evidence of
1840+13 the amount of tax deducted from the income distributed to a
1841+14 nonresident beneficiary.
1842+15 (f) This section does not relieve a nonresident beneficiary of his
1843+16 duty to file a return at the time required under IC 6-3. The nonresident
1844+17 beneficiary shall pay any unpaid tax at the time prescribed by section
1845+18 5 of this chapter.
1846+19 (g) If a trust or estate fails to withhold and pay any amount of tax
1847+20 required to be withheld under this section and thereafter the tax is paid
1848+21 by the beneficiaries, the amount of tax paid by the beneficiaries may
1849+22 not be collected from the trust or estate but it may not be relieved from
1850+23 liability for interest or penalty otherwise due in respect to the failure to
1851+24 withhold under IC 6-8.1-10.
1852+25 (h) A trust or estate shall file a composite adjusted gross income tax
1853+26 return on behalf of all nonresident beneficiaries. The composite return
1854+27 must include each nonresident beneficiary regardless of whether the
1855+28 nonresident beneficiary has other Indiana source income.
1856+29 (i) For purposes of this section, a "nonresident beneficiary" is:
1857+30 (1) an individual who does not reside in Indiana;
1858+31 (2) a trust that does not reside in Indiana;
1859+32 (3) an estate that does not reside in Indiana;
1860+33 (4) a partnership that is not domiciled in Indiana;
1861+34 (5) a C corporation that is not domiciled in Indiana; or
1862+35 (6) an S corporation that is not domiciled in Indiana.
1863+36 (j) If a trust or estate is permitted an extension to file its income tax
1864+37 return under IC 6-8.1-6-1, then the return and payment due under this
1865+38 subsection shall be allowed the same treatment as the extended income
1866+39 tax return with respect to due dates, interest, and penalties under
1867+40 IC 6-8.1-6-1.
1868+41 SECTION 11. IC 6-3-4.5-1, AS AMENDED BY P.L.178-2022(ts),
1869+42 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1870+ES 2—LS 7135/DI 125 44
1871+1 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 1. The following
1872+2 definitions apply throughout this chapter:
1873+3 (1) "Adjustment year" means the partnership taxable year
1874+4 described in Section 6225(d)(2) of the Internal Revenue Code.
1875+5 (2) "Administrative adjustment request" means an administrative
1876+6 adjustment request filed by a partnership under Section 6227 of
1877+7 the Internal Revenue Code.
1878+8 (3) "Affected year" means any taxable year for a taxpayer that is
1879+9 affected by an adjustment under this chapter, regardless of
1880+10 whether the partnership has received an adjustment for that
1881+11 taxable year.
1882+12 (4) "Audited partnership" means a partnership subject to a
1883+13 partnership level audit resulting in a federal adjustment.
1884+14 (5) "Corporate partner" means a partner that is subject to the state
1885+15 adjusted gross income tax under IC 6-3-2-1(c) or the financial
1886+16 institutions tax under IC 6-5.5-2-1. In the case of a partner that is
1887+17 a corporation described in IC 6-3-2-2.8(2) that also is subject to
1888+18 tax under IC 6-3-2-1(c), the corporation is a corporate partner
1889+19 only to the extent that its income is subject to tax under
1890+20 IC 6-3-2-1(c).
1891+21 (6) "Direct partner" means a partner that holds an interest directly
1892+22 in a partnership or pass through entity.
1893+23 (7) "Exempt partner" means a partner that is exempt from the
1894+24 adjusted gross income tax under IC 6-3-2-2.8(1) or the financial
1895+25 institutions tax under IC 6-5.5-2-7(4), except to the extent of
1896+26 unrelated business taxable income.
1897+27 (8) "Federal adjustment" means a change to an item or amount
1898+28 determined under the Internal Revenue Code or a change to any
1899+29 other tax attribute that is used by a taxpayer to compute state
1900+30 adjusted gross income taxes or financial institutions tax owed,
1901+31 whether that change results from action by the Internal Revenue
1902+32 Service, including a partnership level audit, or the filing of an
1903+33 amended federal return, a federal refund claim, or an
1904+34 administrative adjustment request by the taxpayer. A federal
1905+35 adjustment is positive to the extent that it increases state adjusted
1906+36 gross income as determined under IC 6-3 or IC 6-5.5 and is
1907+37 negative to the extent that it decreases state adjusted gross income
1908+38 as determined under IC 6-3 or IC 6-5.5.
1909+39 (9) "Federal adjustment reports" includes methods or forms
1910+40 required by the department for use by a taxpayer to report final
1911+41 federal adjustments for purposes of this chapter, including an
1912+42 amended Indiana tax return, information return, or uniform
1913+ES 2—LS 7135/DI 125 45
1914+1 multistate report.
1915+2 (10) "Federal partnership representative" means a person the
1916+3 partnership designates for the taxable year as the partnership's
1917+4 representative, or the person the Internal Revenue Service has
1918+5 appointed to act as the federal partnership representative,
1919+6 pursuant to Section 6223(a) of the Internal Revenue Code.
1920+7 (11) "Final determination date" means the following:
1921+8 (A) Except as provided in clause (B) or (C), if the federal
1922+9 adjustment arises from an Internal Revenue Service audit or
1923+10 other action by the Internal Revenue Service, the final
1924+11 determination date is the date on which the federal adjustment
1925+12 is a final determination under IC 6-3-4-6(d).
1926+13 (B) For federal adjustments arising from an Internal Revenue
1927+14 Service audit or other action by the Internal Revenue Service,
1928+15 if the taxpayer filed as a member of a consolidated tax return
1929+16 filed under IC 6-3-4-14, a combined return filed under
1930+17 IC 6-3-2-2 or IC 6-5.5-5-1, or a return combined by the
1931+18 department under IC 6-3-2-2(p), the final determination date
1932+19 means the first date on which no related federal adjustments
1933+20 arising from that audit remain to be finally determined, as
1934+21 described in clause (A), for the entire group.
1935+22 (C) If the federal adjustment results from filing an amended
1936+23 federal return, a federal refund claim, or an administrative
1937+24 adjustment request, the final determination date means the day
1938+25 on which the amended return, refund claim, administrative
1939+26 adjustment request, or other similar report was filed.
1940+27 (12) "Final federal adjustment" means a federal adjustment after
1941+28 the final determination date for that federal adjustment has
1942+29 passed.
1943+30 (13) "Indirect partner" means a partner in a partnership or pass
1944+31 through entity that itself holds an interest directly, or through
1945+32 another indirect partner, in a partnership or pass through entity.
1946+33 (14) "Internal Revenue Code" has the meaning set forth in
1947+34 IC 6-3-1-11.
1948+35 (15) "Nonresident partner" has the meaning provided in
1949+36 IC 6-3-4-12(n).
1950+37 (16) "Partner" means a person or entity that holds an interest
1951+38 directly or indirectly in a partnership or other pass through entity.
1952+39 (17) "Partner level adjustments report" means a report provided
1953+40 by a partnership to its partners as a result of a department action
1954+41 with regard to the partnership. A partner level adjustments report
1955+42 does not include an amended statement provided by a partnership
1956+ES 2—LS 7135/DI 125 46
1957+1 or other entity as a result of an adjustment reported by the
1958+2 partnership.
1959+3 (18) "Partnership" has the meaning set forth in IC 6-3-1-19.
1960+4 (19) "Partnership level audit" means an examination by the
1961+5 Internal Revenue Service at the partnership level under Sections
1962+6 6221 through 6241 of the Internal Revenue Code, as enacted by
1963+7 the Bipartisan Budget Act of 2015, Public Law 114-74, which
1964+8 results in federal adjustments.
1965+9 (20) "Partnership return" means a return required to be filed by a
1966+10 partnership pursuant to IC 6-3-4-10. In the case of a partnership
1967+11 that is required to withhold tax or file a composite return pursuant
1968+12 to IC 6-3-4-12 or IC 6-5.5-2-8, the term also includes the returns
1969+13 or schedules required for tax withholding or composite filing. In
1970+14 the case of a partnership that is an electing entity under
1971+15 IC 6-3-2.1, the term also includes the returns or schedules
1972+16 required for the pass through entity tax under IC 6-3-2.1.
1973+17 (21) "Pass through entity" means an entity defined in IC 6-3-1-35,
1974+18 other than a partnership, that: is not subject to tax under IC 6-3.
1975+19 (A) is not subject to tax except as provided in
1976+20 IC 6-3-2-2.8(2), in the case of a corporation described in
1977+21 IC 6-3-2-2.8(2); or
1978+22 (B) is not subject to tax except on its undistributed taxable
1979+23 income, in the case of an estate or a trust.
1980+24 (22) "Reallocation adjustment" means a federal adjustment
1981+25 resulting from a partnership level audit or an administrative
1982+26 adjustment request that changes the shares of one (1) or more
1983+27 items of partnership income, gain, loss, expense, or credit
1984+28 allocated to direct partners. A positive reallocation adjustment
1985+29 means the portion of a reallocation adjustment that would
1986+30 increase federal adjusted gross income or federal taxable income
1987+31 for one (1) or more direct partners, and a negative reallocation
1988+32 adjustment means the portion of a reallocation adjustment that
1989+33 would decrease federal adjusted gross income or federal taxable
1990+34 income for one (1) or more direct partners, according to Section
1991+35 6225 of the Internal Revenue Code and the regulations under that
1992+36 section.
1993+37 (23) "Resident partner" means a partner that is not a nonresident
1994+38 partner.
1995+39 (24) "Review year" means the taxable year of a partnership that
1996+40 is subject to a partnership level audit, an administrative
1997+41 adjustment request, or an amended federal return that results in
1998+42 federal adjustments, regardless of whether any federal tax
1999+ES 2—LS 7135/DI 125 47
2000+1 determined to be due is the responsibility of the partnership or
2001+2 partners.
2002+3 (25) "Statement" means a form or schedule prescribed by the
2003+4 department through which a partnership or pass through entity
2004+5 reports tax attributes to its owners or beneficiaries.
2005+6 (26) "Tax attribute" means any item of income, deduction, credit,
2006+7 receipts for apportionment, or other amount or status that
2007+8 determines a partner's liability under IC 6-3, IC 6-3.6, or IC 6-5.5.
2008+9 (27) "Taxable year" means, in the case of a partnership, the year
2009+10 or partial year for which a partnership files a return for state and
2010+11 federal purposes and, in the case of a partner, the taxable year in
2011+12 which the partner reports tax attributes from the partnership.
2012+13 (28) "Taxpayer" has the meaning set forth in IC 6-3-1-15 (in the
2013+14 case of the adjusted gross income tax) and IC 6-5.5-1-17 (in the
2014+15 case of the financial institutions tax) and, unless the context
2015+16 clearly indicates otherwise, includes a partnership subject to a
2016+17 partnership level audit or a partnership that has made an
2017+18 administrative adjustment request, as well as a tiered partner of
2018+19 that partnership.
2019+20 (29) "Tiered partner" means any partner that is a partnership or
2020+21 pass through entity.
2021+22 (30) "Unrelated business taxable income" has the meaning set
2022+23 forth in Section 512 of the Internal Revenue Code.
2023+24 SECTION 12. IC 6-3-4.5-3, AS AMENDED BY P.L.137-2022,
2024+25 SECTION 43, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2025+26 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3. (a) If the department
2026+27 conducts an audit or investigation of a partnership, and the department
2027+28 determines that the partnership:
2028+29 (1) did not correctly report any tax attribute for a taxable year; or
2029+30 (2) did not correctly allocate any tax attribute for a taxable year;
2030+31 the department may adjust or reallocate the tax attribute. If the
2031+32 department makes an adjustment or reallocation to one (1) or more tax
2032+33 attributes, the department shall provide a report of proposed
2033+34 partnership adjustments for the taxable year to the partnership.
2034+35 (b) The report of proposed partnership adjustments shall list:
2035+36 (1) the department's adjustments to tax attributes; and
2036+37 (2) the allocation of the department's adjustments to all affected
2037+38 direct partners. if the report of proposed partnership
2038+39 adjustments is not attributed to one (1) or more affected
2039+40 direct partners in proportion to their share of income from
2040+41 the partnership, the allocation of the department's
2041+42 adjustments to such affected direct partners. The portion of
2042+ES 2—LS 7135/DI 125 48
2043+1 adjustments not specifically allocated to partners in the report
2044+2 of proposed partnership adjustments shall be considered to be
2045+3 allocated in proportion to their share of income from the
2046+4 partnership and adjusted to account for the partners whose
2047+5 adjustments are specifically allocated to them.
2048+6 (c) If the report of proposed partnership adjustments for a taxable
2049+7 year results in either:
2050+8 (1) a potential increase in tax to one (1) or more direct partners;
2051+9 or
2052+10 (2) if the partnership reported tax attributes that would result in a
2053+11 refund of tax to one (1) or more partners, a reduction in that
2054+12 refund;
2055+13 such report shall be treated as a proposed assessment under IC 6-8.1-5
2056+14 to the partnership.
2057+15 (d) If the result for partnership adjustments for a taxable year results
2058+16 in:
2059+17 (1) no direct increase in tax to any direct partner; and
2060+18 (2) a change in tax attributes to one (1) or more direct partners
2061+19 that would result in a refund in excess of any refund claimed;
2062+20 the department shall issue a report of proposed partnership adjustments
2063+21 to the partnership reflecting such adjustments. Any refund arising from
2064+22 a report of proposed partnership adjustments shall be issued to the
2065+23 partners, subject to the partner claiming the refund and any statute of
2066+24 limitations on such refunds. In the case of partnership adjustments
2067+25 otherwise described in this subsection that result from a partnership
2068+26 adjustment described in subsection (c), all such partnership
2069+27 adjustments shall be treated as adjustments to which subsection (c)
2070+28 applies.
2071+29 SECTION 13. IC 6-3-4.5-3.5 IS ADDED TO THE INDIANA
2072+30 CODE AS A NEW SECTION TO READ AS FOLLOWS
2073+31 [EFFECTIVE JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3.5. If a
2074+32 partnership is assessed tax due pursuant to IC 6-3-2.1, IC 6-3-4-12,
2075+33 IC 6-5.5-2-8, or this chapter as a result of underreporting the tax
2076+34 due for one (1) or more partners, the provisions of this chapter for
2077+35 timeliness of assessments, reporting, and rights to appeal apply in
2078+36 the same manner as a report of proposed partnership adjustments,
2079+37 except as specifically provided in this chapter.
2080+38 SECTION 14. IC 6-3-4.5-6, AS ADDED BY P.L.159-2021,
2081+39 SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2082+40 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 6. (a) Once a report of
2083+41 partnership adjustments is considered final, the partnership shall, not
2084+42 later than the applicable deadline:
2085+ES 2—LS 7135/DI 125 49
2086+1 (1) supply to its direct partners and the department a partner level
2087+2 adjustments report attributable to each partner in the form and
2088+3 manner prescribed by the department; and
2089+4 (2) remit any composite tax or withholding tax due under
2090+5 IC 6-3-4-12 or IC 6-5.5-2-8; and
2091+6 (3) remit any pass through entity tax due under IC 6-3-2.1.
2092+7 (b) If the partner is a tiered partner, the tiered partner shall, not later
2093+8 than the applicable deadline for the tiered partner:
2094+9 (1) file an amended return for the taxable year and for any other
2095+10 affected year reporting its share of the adjustments;
2096+11 (2) supply its owners or beneficiaries and the department
2097+12 amended statements reflecting the adjustments attributable to the
2098+13 owner or beneficiary, or a report, in the form and manner
2099+14 prescribed by the department; and
2100+15 (3) remit any tax due under IC 6-3, IC 6-3.6, or IC 6-5.5,
2101+16 including any pass through entity tax, composite tax or
2102+17 withholding tax due under IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13,
2103+18 IC 6-3-4-15, and IC 6-5.5-2-8.
2104+19 (c) Upon receipt of a partner level adjustments report or any
2105+20 statement from tiered partners arising from a partner level adjustments
2106+21 report, the taxpayer receiving the report or statement shall file an
2107+22 amended return for the taxable year reporting the adjustments along
2108+23 with any other affected year and remit any tax due not later than the
2109+24 applicable deadline for the partner.
2110+25 (d) Notwithstanding any other provision of this chapter or
2111+26 IC 6-3-4-11:
2112+27 (1) A partnership that has been issued a report of proposed
2113+28 partnership adjustments, or a tiered partner that is a partnership
2114+29 that has received a partner level adjustment report or statement
2115+30 arising from a report of final partnership adjustments, may elect
2116+31 to pay any tax due arising from a report of final partnership
2117+32 adjustments.
2118+33 (2) Such election must be filed with the department not later than
2119+34 sixty (60) days after the department issues the report of proposed
2120+35 partnership adjustments or, in the case of an election by a tiered
2121+36 partner, not later than the date by which the tiered partner is
2122+37 required to file an amended return under this section.
2123+38 (3) The computation of tax and other provisions governing this
2124+39 election shall be in a manner consistent with an election under
2125+40 section 9(c) of this chapter.
2126+41 (4) If a partnership has made an election under this chapter to
2127+42 report and remit any tax due at the partnership level for a taxable
2128+ES 2—LS 7135/DI 125 50
2129+1 year, the partnership shall be considered to have made a timely
2130+2 election under this subsection with regard to any adjustments in
2131+3 the report of partnership adjustments for that taxable year.
2132+4 (5) No election may be made under this subsection after April
2133+5 30, 2023.
2134+6 SECTION 15. IC 6-3-4.5-8, AS AMENDED BY P.L.137-2022,
2135+7 SECTION 45, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2136+8 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 8. (a) If a partnership:
2137+9 (1) determines that it did not correctly report any tax attribute for
2138+10 a taxable year;
2139+11 (2) determines that it did not correctly allocate any tax attribute
2140+12 for a taxable year; or
2141+13 (3) receives final federal adjustments as a result of a federal
2142+14 partnership audit or administrative adjustment request for a
2143+15 taxable year;
2144+16 the partnership shall file an amended partnership return with the
2145+17 department and provide its direct partners with amended statements or
2146+18 a report in the form and manner prescribed by the department reflecting
2147+19 the correctly reported and allocated tax attributes for any applicable
2148+20 year.
2149+21 (b) If the partnership files an amended partnership return under this
2150+22 section for a taxable year:
2151+23 (1) the partnership shall remit any composite tax or withholding
2152+24 tax due under IC 6-3-4-12 or IC 6-5.5-2-8 and any pass through
2153+25 entity tax due under IC 6-3-2.1 on its direct partners resulting
2154+26 from the amended return at the time of filing;
2155+27 (2) any tiered partners shall, not later than the applicable deadline
2156+28 for the tiered partner:
2157+29 (A) file an amended return and, if applicable, remit any tax
2158+30 due under IC 6-3, IC 6-3.6, or IC 6-5.5, including any amounts
2159+31 due under IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, IC 6-3-4-15,
2160+32 or IC 6-5.5-2-8; and
2161+33 (B) report any adjustments to the tiered partner's owners or
2162+34 beneficiaries by providing amended statements to the tiered
2163+35 partner's owners or beneficiaries, or a report in the form and
2164+36 manner prescribed by the department; and
2165+37 (3) any direct or indirect partners who are not tiered partners and
2166+38 who are required to file a return under IC 6-3 or IC 6-5.5 or who
2167+39 have filed a return under IC 6-3 or IC 6-5.5 shall file amended
2168+40 returns with the department for any taxable year affected by the
2169+41 amended partnership return and remit any tax due not later than
2170+42 the applicable deadline for the partner.
2171+ES 2—LS 7135/DI 125 51
2172+1 (c) Notwithstanding any other provision of this chapter or
2173+2 IC 6-3-4-11:
2174+3 (1) A partnership that has filed an amended partnership return
2175+4 under this section, or a tiered partner that is a partnership and that
2176+5 is a partner of a partnership that has filed an amended partnership
2177+6 return under this section, may elect to pay any tax due arising
2178+7 from an amended partnership return.
2179+8 (2) Such election must be filed with the department not later than
2180+9 the date on which the amended partnership return is filed with the
2181+10 department or, in the case of an election by a tiered partner that is
2182+11 a partnership, not later than the date by which the tiered partner
2183+12 is required to file an amended return under this section.
2184+13 (3) The computation and payment of tax and other provisions
2185+14 governing this election shall be in a manner consistent with an
2186+15 election under section 9(c) of this chapter.
2187+16 (4) If a partnership has made an election under this chapter to
2188+17 report and remit all tax otherwise due at the partnership level for
2189+18 a taxable year, the partnership shall be considered to have made
2190+19 a timely election under this subsection with regard to any changes
2191+20 arising from an amended return under this section for that taxable
2192+21 year.
2193+22 (5) No election may be made under this subsection for an
2194+23 amended return filed after April 30, 2023.
2195+24 (d) If the department determines that a partnership:
2196+25 (1) did not correctly report any tax attributes for a taxable year; or
2197+26 (2) did not correctly allocate any tax attributes for a taxable year;
2198+27 or
2199+28 (3) did not report the proper amount of tax under IC 6-3-2.1,
2200+29 IC 6-3-4-12, or IC 6-5.5-2-8;
2201+30 the department may proceed against the partnership in the manner
2202+31 provided under sections 3 through 6 of this chapter.
2203+32 SECTION 16. IC 6-3-4.5-9, AS AMENDED BY P.L.178-2022(ts),
2204+33 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2205+34 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 9. (a) Partnerships and
2206+35 partners shall report final federal adjustments arising from a
2207+36 partnership level audit or an administrative adjustment request and
2208+37 make payments as required under this section.
2209+38 (b) Final federal adjustments subject to the requirements of this
2210+39 section, except those subject to a properly made election under
2211+40 subsection (c), shall be reported as follows:
2212+41 (1) Not later than the applicable deadline, the partnership shall:
2213+42 (A) file an amended partnership return for the review year and
2214+ES 2—LS 7135/DI 125 52
2215+1 any other taxable year affected by the final federal adjustments
2216+2 with the department as provided in section 8 of this chapter
2217+3 and provide any other information required by the department;
2218+4 (B) notify each of its direct partners of their distributive share
2219+5 of the final federal adjustments as provided in section 8 of this
2220+6 chapter for all affected taxable years for which the partnership
2221+7 filed an amended partnership return by an amended statement
2222+8 or a report in the form and manner prescribed by the
2223+9 department; and
2224+10 (C) file an amended composite return for direct partners and
2225+11 an amended withholding return for direct partners for the
2226+12 review year and any affected taxable years as otherwise
2227+13 required by IC 6-3-4-12 or IC 6-5.5-2-8 and pay any tax due
2228+14 for the taxable years; and
2229+15 (D) if the partnership is an electing entity, file an amended
2230+16 return under IC 6-3-2.1 for the review year and any
2231+17 affected taxable year and pay any tax due for the taxable
2232+18 year.
2233+19 (2) Each direct partner that is subject to tax under IC 6-3,
2234+20 IC 6-3.6, or IC 6-5.5 shall, on or before the applicable deadline:
2235+21 (A) file an amended return as provided in section 8 of this
2236+22 chapter reporting their distributive share of the adjustments
2237+23 reported to them under subdivision (1)(B) for the taxable year
2238+24 in which affected taxable year attributes would be reported by
2239+25 the direct partner as provided in section 8 of this chapter; and
2240+26 (B) pay any additional amount of tax due as if final federal
2241+27 partnership adjustments had been properly reported, less any
2242+28 credit for related amounts paid or withheld and remitted on
2243+29 behalf of the direct partner.
2244+30 (3) Each tiered partner shall treat any final federal partnership
2245+31 adjustments under this section in a manner consistent with the
2246+32 treatment of tiered partners under section 8 of this chapter.
2247+33 (c) Except as provided in subsection (d), an audited partnership
2248+34 making an election under this subsection shall:
2249+35 (1) not later than the applicable deadline, file an amended
2250+36 partnership return for the review year and for any other affected
2251+37 taxable year elected by the audited partnership, including
2252+38 information as required by the department, and notify the
2253+39 department that it is making the election under this subsection;
2254+40 and
2255+41 (2) not later than ninety (90) days after the applicable deadline,
2256+42 pay an amount, determined as follows, in lieu of taxes owed by its
2257+ES 2—LS 7135/DI 125 53
2258+1 direct or indirect partners:
2259+2 (A) Exclude from final federal adjustments the distributive
2260+3 share of these adjustments reported to a direct exempt partner
2261+4 that is not unrelated business income.
2262+5 (B) For the total distributive shares of the remaining final
2263+6 federal adjustments reported to direct corporate partners and
2264+7 to direct exempt partners, apportion and allocate such
2265+8 adjustments as provided under IC 6-3-2-2 or IC 6-3-2-2.2 (in
2266+9 the case of the adjusted gross income tax) or IC 6-5.5-4 (in the
2267+10 case of the financial institutions tax), and multiply the
2268+11 resulting amount by the tax rate for the taxable year under
2269+12 IC 6-3-2-1(c), IC 6-3-2-1.5, or IC 6-5.5-2-1, as applicable.
2270+13 (C) For the total distributive shares of the remaining final
2271+14 federal adjustments reported to nonresident direct partners
2272+15 other than tiered partners or corporate partners, determine the
2273+16 amount of such adjustments which is Indiana source income
2274+17 under IC 6-3-2-2 or IC 6-3-2-2.2, and multiply the resulting
2275+18 amount by the tax rate under IC 6-3-2-1(b), and if applicable
2276+19 IC 6-3.6. If a partnership is unable to determine whether a
2277+20 nonresident is subject to tax under IC 6-3.6, or to determine in
2278+21 what county the nonresident is subject to tax under IC 6-3.6,
2279+22 tax shall also be imposed at the highest rate for which a county
2280+23 imposes a tax under IC 6-3.6 for the taxable year.
2281+24 (D) For the total distributive shares of the remaining final
2282+25 federal adjustments reported to tiered partners:
2283+26 (i) determine the amount of any adjustment that is of a type
2284+27 that it would be subject to sourcing in Indiana under
2285+28 IC 6-3-2-2, IC 6-3-2-2.2, or IC 6-5.5-4, as applicable, and
2286+29 determine the portion of this amount that would be sourced
2287+30 to Indiana;
2288+31 (ii) determine the amount of any adjustment that is of a type
2289+32 that it would not be subject to sourcing to Indiana by a
2290+33 nonresident partner under IC 6-3-2-2, IC 6-3-2-2.2, or
2291+34 IC 6-5.5-4, as applicable;
2292+35 (iii) determine the portion of the amount determined under
2293+36 item (ii) that can be established, as prescribed by the
2294+37 department by rule under IC 4-22-2, to be properly allocable
2295+38 to nonresident indirect partners or other partners not subject
2296+39 to tax on the adjustments; and
2297+40 (iv) multiply the sum of the amounts determined in items (i)
2298+41 and (ii) reduced by the amount determined in item (iii) by
2299+42 the highest combined rate for the taxable year under
2300+ES 2—LS 7135/DI 125 54
2301+1 IC 6-3-2-1(b) and IC 6-3.6 for any county, the rate under
2302+2 IC 6-3-2-1(c), or the rate under 6-5.5-2-1 for the taxable
2303+3 year, whichever is highest.
2304+4 (E) For the total distributive shares of the remaining final
2305+5 federal adjustments reported to resident individual, estate, or
2306+6 trust direct partners, multiply that amount by the tax rate under
2307+7 IC 6-3-2-1(b) and IC 6-3.6. If a partnership does not
2308+8 reasonably ascertain the county of residence for an individual
2309+9 direct partner, the rate under IC 6-3.6 for that partner shall be
2310+10 treated as the highest rate imposed in any county under
2311+11 IC 6-3.6 for the taxable year.
2312+12 (F) Add an amount equal to any credit reduction under
2313+13 IC 6-3-3, IC 6-3.1, and IC 6-5.5 attributable as a result of final
2314+14 federal adjustments.
2315+15 (G) Add the amounts determined in clauses (B), (C), (D)(iv),
2316+16 (E), and (F). For purposes of determining interest and
2317+17 penalties, the due date of payment shall be the due date of the
2318+18 partnership's return under IC 6-3-4-10 for the taxable year,
2319+19 determined without regard to any extensions.
2320+20 (d) Final federal adjustments subject to an election under subsection
2321+21 (c) shall not include:
2322+22 (1) the distributive share of final federal adjustments that would
2323+23 constitute income derived from a partnership to any direct or
2324+24 indirect partner that is a corporation taxable under IC 6-3-2-1(c),
2325+25 IC 6-3-2-1.5, or IC 6-5.5-2-1 and is considered unitary to the
2326+26 partnership; or
2327+27 (2) any final federal adjustments resulting from an administrative
2328+28 adjustment request; or
2329+29 (3) (2) any other circumstances that the department determines
2330+30 would result in avoidance or evasion of any tax otherwise due
2331+31 from one (1) or more partners under IC 6-3 or IC 6-5.5.
2332+32 (e) No election under subsection (c) may be made for federal
2333+33 audit adjustments received by the department after April 30, 2023.
2334+34 (e) (f) Notwithstanding IC 6-3-4-11, an audited partnership not
2335+35 otherwise subject to any reporting or payment obligations to Indiana
2336+36 that makes an election under subsection (c) consents to be subject to
2337+37 Indiana law related to reporting, assessment, payment, and collection
2338+38 of Indiana tax calculated under the election.
2339+39 SECTION 17. IC 6-5.5-5-1 IS AMENDED TO READ AS
2340+40 FOLLOWS [EFFECTIVE JANUARY 1, 2023 (RETROACTIVE)]:
2341+41 Sec. 1. (a) Except as provided in this section, a unitary group consisting
2342+42 of at least two (2) taxpayers shall file a combined return covering all
2343+ES 2—LS 7135/DI 125 55
2344+1 the operations of the unitary business and including all of the members
2345+2 of the unitary business. However, only one (1) combined return needs
2346+3 to be filed, as provided in IC 6-5.5-6-1.
2347+4 (b) If the department or taxpayer determines that the result of
2348+5 applying this section or article do not fairly represent the taxpayer's
2349+6 income within Indiana or the taxpayer's income within Indiana may be
2350+7 more fairly represented by a separate return, the taxpayer may petition
2351+8 for and the department may allow, or the department may require, in
2352+9 respect to all or a part of the taxpayer's business activity any of the
2353+10 following:
2354+11 (1) Separate accounting.
2355+12 (2) The filing of a separate return for the taxpayer.
2356+13 (3) A reallocation of tax items between a taxpayer and a member
2357+14 of the taxpayer's unitary group or an entity that would be a
2358+15 member of a taxpayer's unitary group if it were transacting
2359+16 business in Indiana.
2360+17 For purposes of this subsection, "tax items" means gross income,
2361+18 deductions, gains, losses, and credits used in computing the tax
2362+19 under this article, except the term shall exclude dividends or other
2363+20 distributions regardless of whether the amounts are deductible or
2364+21 taxable in computing taxable income under the Internal Revenue
2365+22 Code.
2366+23 (c) Income apportioned under this article must reflect a change in
2367+24 adjusted gross income that is required to comply with a department
2368+25 order under this section.
2369+26 SECTION 18. IC 6-5.5-5-2 IS AMENDED TO READ AS
2370+27 FOLLOWS [EFFECTIVE JANUARY 1, 2023 (RETROACTIVE)]:
2371+28 Sec. 2. A combined return must include the adjusted gross income of
2372+29 all members of the unitary group, even if some of the members would
2373+30 not otherwise be subject to taxation under this article. The department
2374+31 may require a member of a unitary group to provide any information
2375+32 that is needed by the department to determine the unitary group's
2376+33 apportioned income under this article. However, income of
2377+34 corporations or other entities organized in foreign countries, except a
2378+35 foreign bank (or its subsidiary) that transacts business in the United
2379+36 States, shall not be included in the combined return. In addition, the
2380+37 taxpayer shall eliminate, in calculating adjusted gross income, the
2381+38 taxpayer shall eliminate all income and deductions from transactions
2382+39 between entities that are included in the unitary group. combined
2383+40 return. In addition, in computing receipts for the apportionment
2384+41 factor under IC 6-5.5-2-4(2), the taxpayer shall eliminate receipts
2385+42 between unitary group members included in the combined return.
2386+ES 2—LS 7135/DI 125 56
2387+1 SECTION 19. IC 6-8.1-1-1, AS AMENDED BY P.L.138-2022,
2388+2 SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2389+3 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 1. "Listed taxes" or
2390+4 "taxes" includes only the pari-mutuel taxes (IC 4-31-9-3 through
2391+5 IC 4-31-9-5); the supplemental wagering tax (IC 4-33-12); the
2392+6 riverboat wagering tax (IC 4-33-13); the slot machine wagering tax
2393+7 (IC 4-35-8); the type II gambling game excise tax (IC 4-36-9); the gross
2394+8 income tax (IC 6-2.1) (repealed); the utility receipts and utility services
2395+9 use taxes (IC 6-2.3) (repealed); the state gross retail and use taxes
2396+10 (IC 6-2.5); the adjusted gross income tax (IC 6-3); the pass through
2397+11 entity tax (IC 6-3-2.1); the supplemental net income tax (IC 6-3-8)
2398+12 (repealed); the county adjusted gross income tax (IC 6-3.5-1.1)
2399+13 (repealed); the county option income tax (IC 6-3.5-6) (repealed); the
2400+14 county economic development income tax (IC 6-3.5-7) (repealed); the
2401+15 local income tax (IC 6-3.6); the auto rental excise tax (IC 6-6-9); the
2402+16 financial institutions tax (IC 6-5.5); the gasoline tax (IC 6-6-1.1); the
2403+17 special fuel tax (IC 6-6-2.5); the motor carrier fuel tax (IC 6-6-4.1); a
2404+18 motor fuel tax collected under a reciprocal agreement under IC 6-8.1-3;
2405+19 the vehicle excise tax (IC 6-6-5); the aviation fuel excise tax
2406+20 (IC 6-6-13); the commercial vehicle excise tax (IC 6-6-5.5); the excise
2407+21 tax imposed on recreational vehicles and truck campers (IC 6-6-5.1);
2408+22 the hazardous waste disposal tax (IC 6-6-6.6) (repealed); the heavy
2409+23 equipment rental excise tax (IC 6-6-15); the vehicle sharing excise tax
2410+24 (IC 6-6-16); the cigarette tax (IC 6-7-1); the closed system cartridge tax
2411+25 (IC 6-7-2-7.5); the electronic cigarette tax (IC 6-7-4); the beer excise
2412+26 tax (IC 7.1-4-2); the liquor excise tax (IC 7.1-4-3); the wine excise tax
2413+27 (IC 7.1-4-4); the hard cider excise tax (IC 7.1-4-4.5); the petroleum
2414+28 severance tax (IC 6-8-1); the various innkeeper's taxes (IC 6-9); the
2415+29 various food and beverage taxes (IC 6-9); the county admissions tax
2416+30 (IC 6-9-13 and IC 6-9-28); the oil inspection fee (IC 16-44-2); the
2417+31 penalties assessed for oversize vehicles (IC 9-20-3 and IC 9-20-18); the
2418+32 fees and penalties assessed for overweight vehicles (IC 9-20-4 and
2419+33 IC 9-20-18); and any other tax or fee that the department is required to
2420+34 collect or administer.
2421+35 SECTION 20. IC 6-8.1-5-2, AS AMENDED BY P.L.138-2022,
2422+36 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2423+37 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2. (a) Except as
2424+38 otherwise provided in this section and section 2.5 of this chapter, the
2425+39 department may not issue a proposed assessment under section 1 of this
2426+40 chapter more than three (3) years after the latest of the date the return
2427+41 is filed, or the following:
2428+42 (1) The due date of the return.
2429+ES 2—LS 7135/DI 125 57
2430+1 (2) In the case of a return filed for the state gross retail or use tax,
2431+2 the gasoline use tax, the gasoline tax (including the inventory
2432+3 tax), the special fuel tax (including the inventory tax), the motor
2433+4 carrier fuel tax (including the inventory tax), the oil inspection
2434+5 fee, the cigarette tax, the tobacco products tax, any county
2435+6 innkeeper's taxes imposed under IC 6-9, any food and beverage
2436+7 taxes imposed under IC 6-9, any county or local admissions taxes
2437+8 imposed under IC 6-9, or the petroleum severance tax, the end of
2438+9 the calendar year which contains the taxable period for which the
2439+10 return is filed.
2440+11 (3) In the case of the use tax, three (3) years from the end of the
2441+12 calendar year in which the first taxable use, other than an
2442+13 incidental nonexempt use, of the property occurred.
2443+14 (b) If a person files a return for the utility receipts tax (IC 6-2.3)
2444+15 (repealed), adjusted gross income tax (IC 6-3), pass through entity tax
2445+16 (IC 6-3-2.1), supplemental net income tax (IC 6-3-8) (repealed),
2446+17 county adjusted gross income tax (IC 6-3.5-1.1) (repealed), county
2447+18 option income tax (IC 6-3.5-6) (repealed), local income tax (IC 6-3.6),
2448+19 or financial institutions tax (IC 6-5.5) that understates the person's
2449+20 income, as that term is defined in the particular income tax law, by at
2450+21 least twenty-five percent (25%), the proposed assessment limitation is
2451+22 six (6) years instead of the three (3) years provided in subsection (a).
2452+23 (c) In the case of the vehicle excise tax (IC 6-6-5), the tax shall be
2453+24 assessed as provided in IC 6-6-5 and shall include the penalties and
2454+25 interest due on all listed taxes not paid by the due date. A person that
2455+26 fails to properly register a vehicle as required by IC 9-18 (before its
2456+27 expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5 is
2457+28 considered to have failed to file a return for purposes of this article.
2458+29 (d) In the case of the commercial vehicle excise tax imposed under
2459+30 IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5 and shall
2460+31 include the penalties and interest due on all listed taxes not paid by the
2461+32 due date. A person that fails to properly register a commercial vehicle
2462+33 as required by IC 9-18 (before its expiration) or IC 9-18.1 and pay the
2463+34 tax due under IC 6-6-5.5 is considered to have failed to file a return for
2464+35 purposes of this article.
2465+36 (e) In the case of the excise tax imposed on recreational vehicles
2466+37 and truck campers under IC 6-6-5.1, the tax shall be assessed as
2467+38 provided in IC 6-6-5.1 and must include the penalties and interest due
2468+39 on all listed taxes not paid by the due date. A person that fails to
2469+40 properly register a recreational vehicle as required by IC 9-18 (before
2470+41 its expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5.1 is
2471+42 considered to have failed to file a return for purposes of this article. A
2472+ES 2—LS 7135/DI 125 58
2473+1 person that fails to pay the tax due under IC 6-6-5.1 on a truck camper
2474+2 is considered to have failed to file a return for purposes of this article.
2475+3 (f) In the case of a credit against a listed tax based on payments of
2476+4 taxes to a state or local jurisdiction outside Indiana or payments of
2477+5 amounts that are subsequently refunded or returned, a proposed
2478+6 assessment for the refunded or returned credit must be issued by the
2479+7 later of:
2480+8 (1) the date by which a proposed assessment must be issued under
2481+9 this section; or
2482+10 (2) one hundred eighty (180) days from the date the taxpayer
2483+11 notifies the department of the refund or return of payment.
2484+12 For purposes of this subsection, if a taxpayer receives a refund of an
2485+13 amount paid by or on behalf of the taxpayer for a listed tax, that refund
2486+14 shall not be considered the payment of an amount that is subsequently
2487+15 refunded or returned.
2488+16 (g) If a person files a fraudulent, unsigned, or substantially blank
2489+17 return, or if a person does not file a return, there is no time limit within
2490+18 which the department must issue its proposed assessment, except as
2491+19 provided in subsection (l).
2492+20 (h) If any part of a listed tax has been erroneously refunded by the
2493+21 department, the erroneous refund may be recovered through the
2494+22 assessment procedures established in this chapter. An assessment
2495+23 issued for an erroneous refund must be issued within the later of:
2496+24 (1) the period for which an assessment could otherwise be issued
2497+25 under this section; or
2498+26 (2) whichever is applicable:
2499+27 (A) within two (2) years after making the refund; or
2500+28 (B) within five (5) years after making the refund if the refund
2501+29 was induced by fraud or misrepresentation.
2502+30 (i) If, before the end of the time within which the department may
2503+31 make an assessment, the department and the person agree to extend
2504+32 that assessment period, the period may be extended according to the
2505+33 terms of a written agreement signed by both the department and the
2506+34 person. The agreement must contain:
2507+35 (1) the date to which the extension is made; and
2508+36 (2) a statement that the person agrees to preserve the person's
2509+37 records until the extension terminates.
2510+38 The department and a person may agree to more than one (1) extension
2511+39 under this subsection.
2512+40 (j) Except as otherwise provided in subsection (k), if a taxpayer's
2513+41 federal taxable income, federal adjusted gross income, or federal
2514+42 income tax liability for a taxable year is modified due to a modification
2515+ES 2—LS 7135/DI 125 59
2516+1 as provided under IC 6-3-4-6(c) and IC 6-3-4-6(d) (for the adjusted
2517+2 gross income tax), or a modification or alteration as provided under
2518+3 IC 6-5.5-6-6(c) and IC 6-5.5-6-6(e) (for the financial institutions tax),
2519+4 then the date by which the department must issue a proposed
2520+5 assessment under section 1 of this chapter for tax imposed under IC 6-3
2521+6 is extended to six (6) months after the date on which the notice of
2522+7 modification is filed with the department by the taxpayer.
2523+8 (k) The following apply:
2524+9 (1) This subsection applies to partnerships whose taxable year:
2525+10 (A) begins after December 31, 2017;
2526+11 (B) ends after August 12, 2018; or
2527+12 (C) begins after November 2, 2015, and before January 1,
2528+13 2018, and for which a valid election under United States
2529+14 Treasury Regulation 301.9100-22 is in effect;
2530+15 and to the partners of such partnerships, including any partners,
2531+16 shareholders, or beneficiaries of a pass through entity that is a
2532+17 partner in such partnership.
2533+18 (2) Notwithstanding any other provision of this article, if a
2534+19 partnership is subject to federal income tax liability or a federal
2535+20 tax adjustment at the partnership level as the result of a
2536+21 modification under Sections 6221 through 6241 of the Internal
2537+22 Revenue Code, the date on which the department must issue a
2538+23 proposed assessment to either the partners or the partnership shall
2539+24 be the later of:
2540+25 (A) the date on which a proposed assessment must otherwise
2541+26 be issued to the partner or the partnership under this section or
2542+27 IC 6-3-4.5 with regard to the taxable year of the partnership to
2543+28 which the modification is taxed at the partnership level; or
2544+29 (B) December 31, 2021.
2545+30 (3) For purposes of this section and IC 6-8.1-9-1, a modification
2546+31 under this subsection shall be considered a modification to the
2547+32 federal taxable income, federal adjusted gross income, or federal
2548+33 income tax liability of both the partners and the partnership within
2549+34 the meaning of IC 6-3-4-6 and IC 6-5.5-6-6, and shall be
2550+35 considered to be included in the federal taxable income or federal
2551+36 adjusted gross income of both the partners and partnerships for
2552+37 purposes of this article and IC 6-5.5.
2553+38 (4) If a modification made to a partnership for federal income tax
2554+39 purposes is reported to the partners to determine the partners'
2555+40 respective federal taxable income, federal adjusted gross income,
2556+41 or federal income tax liability, including reporting to partners as
2557+42 the result of an election made under Section 6226 of the Internal
2558+ES 2—LS 7135/DI 125 60
2559+1 Revenue Code, subdivision (2) shall not apply, and those
2560+2 modifications shall be treated as modifications to the partners'
2561+3 federal taxable income, federal adjusted gross income, or federal
2562+4 income tax liability for purposes of the following:
2563+5 (A) This section.
2564+6 (B) IC 6-3-4-6.
2565+7 (C) IC 6-5.5-6-6.
2566+8 (D) IC 6-8.1-9-1.
2567+9 (l) Notwithstanding any other provision, a nonresident
2568+10 individual is considered to have filed a return for purposes of this
2569+11 section for a taxable year if the individual does not file a return
2570+12 otherwise required under IC 6-3-4-1 for a taxable year and all of
2571+13 the following apply:
2572+14 (1) the:
2573+15 (A) individual did not have income from sources within
2574+16 Indiana; or
2575+17 (B) only income derived from sources within Indiana and
2576+18 includible in the individual's adjusted gross income is
2577+19 distributive share income from one (1) or more pass
2578+20 through entities (as defined by IC 6-3-1-35);
2579+21 (2) the individual is not a resident of Indiana for any portion
2580+22 of the taxable year;
2581+23 (3) the individual does not request a reduction in tax
2582+24 withholding for a pass through entity under IC 6-3-4-12,
2583+25 IC 6-3-4-13, or IC 6-3-4-15 for the taxable year; and
2584+26 (4) all pass through entities from which the individual derives
2585+27 income from Indiana sources:
2586+28 (A) file a composite return required under IC 6-3-4-12,
2587+29 IC 6-3-4-13, or IC 6-3-4-15; and
2588+30 (B) include the individual on the composite return.
2589+31 (m) The following provisions apply to subsection (l):
2590+32 (1) If an individual is married and files a joint federal tax
2591+33 return with the individual's spouse, the individual is
2592+34 considered to have filed a return for purposes of this section
2593+35 only if both the individual and the individual's spouse meet
2594+36 the conditions under subsection (l)(1) through (l)(4).
2595+37 (2) If an individual does not file a return, the last date for
2596+38 assessment with regard to the individual's share of income
2597+39 from a pass through entity shall be determined at the pass
2598+40 through entity and shall be determined separately for each
2599+41 pass through entity.
2600+42 (3) In the event the individual files a return, the period for
2601+ES 2—LS 7135/DI 125 61
2602+1 assessment shall be determined based on the individual's filing
2603+2 unless a different period for assessment is prescribed under
2604+3 this title.
2605+4 (4) The individual is required to file a return to request a
2606+5 refund or carryforward of an overpayment for a taxable year.
2607+6 (5) If the individual has a net operating loss deduction under
2608+7 IC 6-3-2-2.5 or IC 6-3-2-2.6, or a credit carryforward
2609+8 allowable under IC 6-3-3 or IC 6-3.1 for the taxable year, the
2610+9 amount of net operating loss or credit carryforward shall be
2611+10 reduced to reflect the amount of net operating loss or credit
2612+11 carryforward that otherwise would have been allowable for
2613+12 the taxable year.
2614+13 SECTION 21. [EFFECTIVE JANUARY 1, 2022
2615+14 (RETROACTIVE)] (a) This SECTION applies to the election and
2616+15 imposition of the pass through entity tax pursuant to IC 6-3-2.1, as
2617+16 added by this act, for tax years ending before January 1, 2023.
2618+17 (b) For the applicable period, the tax shall be paid and filed in
2619+18 conjunction with and consistent with the filing of a composite tax
2620+19 return pursuant to IC 6-3-4-12 or IC 6-3-4-13.
2621+20 (c) Notwithstanding any other provision, no estimated payments
2622+21 shall be due for the applicable period other than any such payment
2623+22 that is currently required for purposes of withholding tax pursuant
2624+23 to IC 6-3-4-12 or IC 6-3-4-13.
2625+24 (d) All provisions of IC 6-3-2.1, as added by this act, shall apply
2626+25 to the applicable period unless any such provision is inconsistent
2627+26 with the provisions and procedures applicable to the filing of
2628+27 composite returns pursuant to IC 6-3-4-12 or IC 6-3-4-13.
2629+28 (e) A pass through entity that elects to pay the tax imposed by
2630+29 IC 6-3-2.1, as added by this act, for the applicable period will not
2631+30 be subject to an underpayment penalty pursuant to
2632+31 IC 6-8.1-10-2.1(a)(2) for failure to pay any tax due pursuant to
2633+32 IC 6-3-2.1, as added by this act, for any such tax not remitted as of
2634+33 the due date of the return, including extensions. This provision
2635+34 does not waive any interest due on such amounts pursuant to
2636+35 IC 6-8.1-10-1.
2637+36 (f) Notwithstanding any provision to the contrary in
2638+37 IC 6-8.1-10-1 or IC 6-8.1-10-2.1, if the tax under IC 6-3-2.1, as
2639+38 added by this act, is due before August 31, 2024, interest and
2640+39 penalty for late payment of the tax shall be waived for the period
2641+40 from the due date to August 30, 2024. Interest and penalty shall be
2642+41 due on any amounts unpaid after August 30, 2024, in the manner
2643+42 otherwise provided by law.
2644+ES 2—LS 7135/DI 125 62
2645+1 SECTION 22. An emergency is declared for this act.
2646+ES 2—LS 7135/DI 125 63
2647+COMMITTEE REPORT
2648+Madam President: The Senate Committee on Tax and Fiscal Policy,
2649+to which was referred Senate Bill No. 2, has had the same under
2650+consideration and begs leave to report the same back to the Senate with
2651+the recommendation that said bill be AMENDED as follows:
2652+Replace the effective date in SECTION 3 with "[EFFECTIVE
2653+JANUARY 1, 2019 (RETROACTIVE)]:".
2654+Page 1, between the enacting clause and line 1, begin a new
2655+paragraph and insert:
2656+"SECTION 1. IC 6-3-1-3.5, AS AMENDED BY P.L.180-2022(ss),
152657 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
162658 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3.5. When used in this
172659 article, the term "adjusted gross income" shall mean the following:
182660 (a) In the case of all individuals, "adjusted gross income" (as
192661 defined in Section 62 of the Internal Revenue Code), modified as
202662 follows:
212663 (1) Subtract income that is exempt from taxation under this article
222664 by the Constitution and statutes of the United States.
232665 (2) Except as provided in subsection (c), add an amount equal to
242666 any deduction or deductions allowed or allowable pursuant to
252667 Section 62 of the Internal Revenue Code for taxes based on or
262668 measured by income and levied at the state level by any state of
272669 the United States.
282670 (3) Subtract one thousand dollars ($1,000), or in the case of a
292671 joint return filed by a husband and wife, subtract for each spouse
302672 one thousand dollars ($1,000).
312673 (4) Subtract one thousand dollars ($1,000) for:
322674 (A) each of the exemptions provided by Section 151(c) of the
332675 Internal Revenue Code (as effective January 1, 2017);
342676 (B) each additional amount allowable under Section 63(f) of
352677 the Internal Revenue Code; and
36-SEA 2 2
372678 (C) the spouse of the taxpayer if a separate return is made by
382679 the taxpayer and if the spouse, for the calendar year in which
392680 the taxable year of the taxpayer begins, has no gross income
402681 and is not the dependent of another taxpayer.
412682 (5) Subtract:
422683 (A) One thousand five hundred dollars ($1,500) for each of the
432684 exemptions allowed under Section 151(c)(1)(B) of the Internal
442685 Revenue Code (as effective January 1, 2004).
452686 (B) One thousand five hundred dollars ($1,500) for each
462687 exemption allowed under Section 151(c) of the Internal
2688+ES 2—LS 7135/DI 125 64
472689 Revenue Code (as effective January 1, 2017) for an individual:
482690 (i) who is less than nineteen (19) years of age or is a
492691 full-time student who is less than twenty-four (24) years of
502692 age;
512693 (ii) for whom the taxpayer is the legal guardian; and
522694 (iii) for whom the taxpayer does not claim an exemption
532695 under clause (A).
542696 (C) Five hundred dollars ($500) for each additional amount
552697 allowable under Section 63(f)(1) of the Internal Revenue Code
562698 if the federal adjusted gross income of the taxpayer, or the
572699 taxpayer and the taxpayer's spouse in the case of a joint return,
582700 is less than forty thousand dollars ($40,000). In the case of a
592701 married individual filing a separate return, the qualifying
602702 income amount in this clause is equal to twenty thousand
612703 dollars ($20,000).
622704 (D) Three thousand dollars ($3,000) for each exemption
632705 allowed under Section 151(c) of the Internal Revenue Code (as
642706 effective January 1, 2017) for an individual who is:
652707 (i) an adopted child of the taxpayer; and
662708 (ii) less than nineteen (19) years of age or is a full-time
672709 student who is less than twenty-four (24) years of age.
682710 This amount is in addition to any amount subtracted under
692711 clause (A) or (B).
702712 This amount is in addition to the amount subtracted under
712713 subdivision (4).
722714 (6) Subtract any amounts included in federal adjusted gross
732715 income under Section 111 of the Internal Revenue Code as a
742716 recovery of items previously deducted as an itemized deduction
752717 from adjusted gross income.
762718 (7) Subtract any amounts included in federal adjusted gross
772719 income under the Internal Revenue Code which amounts were
782720 received by the individual as supplemental railroad retirement
79-SEA 2 3
802721 annuities under 45 U.S.C. 231 and which are not deductible under
812722 subdivision (1).
822723 (8) Subtract an amount equal to the amount of federal Social
832724 Security and Railroad Retirement benefits included in a taxpayer's
842725 federal gross income by Section 86 of the Internal Revenue Code.
852726 (9) In the case of a nonresident taxpayer or a resident taxpayer
862727 residing in Indiana for a period of less than the taxpayer's entire
872728 taxable year, the total amount of the deductions allowed pursuant
882729 to subdivisions (3), (4), and (5) shall be reduced to an amount
892730 which bears the same ratio to the total as the taxpayer's income
2731+ES 2—LS 7135/DI 125 65
902732 taxable in Indiana bears to the taxpayer's total income.
912733 (10) In the case of an individual who is a recipient of assistance
922734 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
932735 subtract an amount equal to that portion of the individual's
942736 adjusted gross income with respect to which the individual is not
952737 allowed under federal law to retain an amount to pay state and
962738 local income taxes.
972739 (11) In the case of an eligible individual, subtract the amount of
982740 a Holocaust victim's settlement payment included in the
992741 individual's federal adjusted gross income.
1002742 (12) Subtract an amount equal to the portion of any premiums
1012743 paid during the taxable year by the taxpayer for a qualified long
1022744 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
1032745 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
1042746 file a joint income tax return or the taxpayer is otherwise entitled
1052747 to a deduction under this subdivision for the taxpayer's spouse, or
1062748 both.
1072749 (13) Subtract an amount equal to the lesser of:
1082750 (A) two thousand five hundred dollars ($2,500), or one
1092751 thousand two hundred fifty dollars ($1,250) in the case of a
1102752 married individual filing a separate return; or
1112753 (B) the amount of property taxes that are paid during the
1122754 taxable year in Indiana by the individual on the individual's
1132755 principal place of residence.
1142756 (14) Subtract an amount equal to the amount of a September 11
1152757 terrorist attack settlement payment included in the individual's
1162758 federal adjusted gross income.
1172759 (15) Add or subtract the amount necessary to make the adjusted
1182760 gross income of any taxpayer that owns property for which bonus
1192761 depreciation was allowed in the current taxable year or in an
1202762 earlier taxable year equal to the amount of adjusted gross income
1212763 that would have been computed had an election not been made
122-SEA 2 4
1232764 under Section 168(k) of the Internal Revenue Code to apply bonus
1242765 depreciation to the property in the year that it was placed in
1252766 service.
1262767 (16) Add an amount equal to any deduction allowed under
1272768 Section 172 of the Internal Revenue Code (concerning net
1282769 operating losses).
1292770 (17) Add or subtract the amount necessary to make the adjusted
1302771 gross income of any taxpayer that placed Section 179 property (as
1312772 defined in Section 179 of the Internal Revenue Code) in service
1322773 in the current taxable year or in an earlier taxable year equal to
2774+ES 2—LS 7135/DI 125 66
1332775 the amount of adjusted gross income that would have been
1342776 computed had an election for federal income tax purposes not
1352777 been made for the year in which the property was placed in
1362778 service to take deductions under Section 179 of the Internal
1372779 Revenue Code in a total amount exceeding the sum of:
1382780 (A) twenty-five thousand dollars ($25,000) to the extent
1392781 deductions under Section 179 of the Internal Revenue Code
1402782 were not elected as provided in clause (B); and
1412783 (B) for taxable years beginning after December 31, 2017, the
1422784 deductions elected under Section 179 of the Internal Revenue
1432785 Code on property acquired in an exchange if:
1442786 (i) the exchange would have been eligible for
1452787 nonrecognition of gain or loss under Section 1031 of the
1462788 Internal Revenue Code in effect on January 1, 2017;
1472789 (ii) the exchange is not eligible for nonrecognition of gain or
1482790 loss under Section 1031 of the Internal Revenue Code; and
1492791 (iii) the taxpayer made an election to take deductions under
1502792 Section 179 of the Internal Revenue Code with regard to the
1512793 acquired property in the year that the property was placed
1522794 into service.
1532795 The amount of deductions allowable for an item of property
1542796 under this clause may not exceed the amount of adjusted gross
1552797 income realized on the property that would have been deferred
1562798 under the Internal Revenue Code in effect on January 1, 2017.
1572799 (18) Subtract an amount equal to the amount of the taxpayer's
1582800 qualified military income that was not excluded from the
1592801 taxpayer's gross income for federal income tax purposes under
1602802 Section 112 of the Internal Revenue Code.
1612803 (19) Subtract income that is:
1622804 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
1632805 derived from patents); and
1642806 (B) included in the individual's federal adjusted gross income
165-SEA 2 5
1662807 under the Internal Revenue Code.
1672808 (20) Add an amount equal to any income not included in gross
1682809 income as a result of the deferral of income arising from business
1692810 indebtedness discharged in connection with the reacquisition after
1702811 December 31, 2008, and before January 1, 2011, of an applicable
1712812 debt instrument, as provided in Section 108(i) of the Internal
1722813 Revenue Code. Subtract the amount necessary from the adjusted
1732814 gross income of any taxpayer that added an amount to adjusted
1742815 gross income in a previous year to offset the amount included in
1752816 federal gross income as a result of the deferral of income arising
2817+ES 2—LS 7135/DI 125 67
1762818 from business indebtedness discharged in connection with the
1772819 reacquisition after December 31, 2008, and before January 1,
1782820 2011, of an applicable debt instrument, as provided in Section
1792821 108(i) of the Internal Revenue Code.
1802822 (21) Add the amount excluded from federal gross income under
1812823 Section 103 of the Internal Revenue Code for interest received on
1822824 an obligation of a state other than Indiana, or a political
1832825 subdivision of such a state, that is acquired by the taxpayer after
1842826 December 31, 2011.
1852827 (22) Subtract an amount as described in Section 1341(a)(2) of the
1862828 Internal Revenue Code to the extent, if any, that the amount was
1872829 previously included in the taxpayer's adjusted gross income for a
1882830 prior taxable year.
1892831 (23) For taxable years beginning after December 25, 2016, add an
1902832 amount equal to the deduction for deferred foreign income that
1912833 was claimed by the taxpayer for the taxable year under Section
1922834 965(c) of the Internal Revenue Code.
1932835 (24) Subtract any interest expense paid or accrued in the current
1942836 taxable year but not deducted as a result of the limitation imposed
1952837 under Section 163(j)(1) of the Internal Revenue Code. Add any
1962838 interest expense paid or accrued in a previous taxable year but
1972839 allowed as a deduction under Section 163 of the Internal Revenue
1982840 Code in the current taxable year. For purposes of this subdivision,
1992841 an interest expense is considered paid or accrued only in the first
2002842 taxable year the deduction would have been allowable under
2012843 Section 163 of the Internal Revenue Code if the limitation under
2022844 Section 163(j)(1) of the Internal Revenue Code did not exist.
2032845 (25) Subtract the amount that would have been excluded from
2042846 gross income but for the enactment of Section 118(b)(2) of the
2052847 Internal Revenue Code for taxable years ending after December
2062848 22, 2017.
2072849 (26) For taxable years beginning after December 31, 2019, and
208-SEA 2 6
2092850 before January 1, 2021, add an amount of the deduction claimed
2102851 under Section 62(a)(22) of the Internal Revenue Code.
2112852 (27) For taxable years beginning after December 31, 2019, for
2122853 payments made by an employer under an education assistance
2132854 program after March 27, 2020:
2142855 (A) add the amount of payments by an employer that are
2152856 excluded from the taxpayer's federal gross income under
2162857 Section 127(c)(1)(B) of the Internal Revenue Code; and
2172858 (B) deduct the interest allowable under Section 221 of the
2182859 Internal Revenue Code, if the disallowance under Section
2860+ES 2—LS 7135/DI 125 68
2192861 221(e)(1) of the Internal Revenue Code did not apply to the
2202862 payments described in clause (A). For purposes of applying
2212863 Section 221(b) of the Internal Revenue Code to the amount
2222864 allowable under this clause, the amount under clause (A) shall
2232865 not be added to adjusted gross income.
2242866 (28) Add an amount equal to the remainder of:
2252867 (A) the amount allowable as a deduction under Section 274(n)
2262868 of the Internal Revenue Code; minus
2272869 (B) the amount otherwise allowable as a deduction under
2282870 Section 274(n) of the Internal Revenue Code, if Section
2292871 274(n)(2)(D) of the Internal Revenue Code was not in effect
2302872 for amounts paid or incurred after December 31, 2020.
2312873 (29) For taxable years beginning after December 31, 2017, and
2322874 before January 1, 2021, add an amount equal to the excess
2332875 business loss of the taxpayer as defined in Section 461(l)(3) of the
2342876 Internal Revenue Code. In addition:
2352877 (A) If a taxpayer has an excess business loss under this
2362878 subdivision and also has modifications under subdivisions (15)
2372879 and (17) for property placed in service during the taxable year,
2382880 the taxpayer shall treat a portion of the taxable year
2392881 modifications for that property as occurring in the taxable year
2402882 the property is placed in service and a portion of the
2412883 modifications as occurring in the immediately following
2422884 taxable year.
2432885 (B) The portion of the modifications under subdivisions (15)
2442886 and (17) for property placed in service during the taxable year
2452887 treated as occurring in the taxable year in which the property
2462888 is placed in service equals:
2472889 (i) the modification for the property otherwise determined
2482890 under this section; minus
2492891 (ii) the excess business loss disallowed under this
2502892 subdivision;
251-SEA 2 7
2522893 but not less than zero (0).
2532894 (C) The portion of the modifications under subdivisions (15)
2542895 and (17) for property placed in service during the taxable year
2552896 treated as occurring in the taxable year immediately following
2562897 the taxable year in which the property is placed in service
2572898 equals the modification for the property otherwise determined
2582899 under this section minus the amount in clause (B).
2592900 (D) Any reallocation of modifications between taxable years
2602901 under clauses (B) and (C) shall be first allocated to the
2612902 modification under subdivision (15), then to the modification
2903+ES 2—LS 7135/DI 125 69
2622904 under subdivision (17).
2632905 (30) Add an amount equal to the amount excluded from federal
2642906 gross income under Section 108(f)(5) of the Internal Revenue
2652907 Code. For purposes of this subdivision:
2662908 (A) if an amount excluded under Section 108(f)(5) of the
2672909 Internal Revenue Code would be excludible under Section
2682910 108(a)(1)(B) of the Internal Revenue Code, the exclusion
2692911 under Section 108(a)(1)(B) of the Internal Revenue Code shall
2702912 take precedence; and
2712913 (B) if an amount would have been excludible under Section
2722914 108(f)(5) of the Internal Revenue Code as in effect on January
2732915 1, 2020, the amount is not required to be added back under this
2742916 subdivision.
2752917 (31) For taxable years ending after March 12, 2020, subtract an
2762918 amount equal to the deduction disallowed pursuant to:
2772919 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
2782920 as modified by Sections 206 and 207 of the Taxpayer Certainty
2792921 and Disaster Relief Tax Act (Division EE of Public Law
2802922 116-260); and
2812923 (B) Section 3134(e) of the Internal Revenue Code.
2822924 (32) Subtract the amount of an annual grant amount distributed to
2832925 a taxpayer's Indiana education scholarship account under
2842926 IC 20-51.4-4-2 that is used for a qualified expense (as defined in
2852927 IC 20-51.4-2-9) or to an Indiana enrichment scholarship account
2862928 under IC 20-52 that is used for qualified expenses (as defined in
2872929 IC 20-52-2-6), to the extent the distribution used for the qualified
2882930 expense is included in the taxpayer's federal adjusted gross
2892931 income under the Internal Revenue Code.
2902932 (33) For taxable years beginning after December 31, 2019, and
2912933 before January 1, 2021, add an amount equal to the amount of
2922934 unemployment compensation excluded from federal gross income
2932935 under Section 85(c) of the Internal Revenue Code.
294-SEA 2 8
2952936 (34) For taxable years beginning after December 31, 2022,
2962937 subtract an amount equal to the deduction disallowed under
2972938 Section 280C(h) of the Internal Revenue Code.
2982939 (35) Subtract any other amounts the taxpayer is entitled to deduct
2992940 under IC 6-3-2.
3002941 (b) In the case of corporations, the same as "taxable income" (as
3012942 defined in Section 63 of the Internal Revenue Code) adjusted as
3022943 follows:
3032944 (1) Subtract income that is exempt from taxation under this article
3042945 by the Constitution and statutes of the United States.
2946+ES 2—LS 7135/DI 125 70
3052947 (2) Add an amount equal to any deduction or deductions allowed
3062948 or allowable pursuant to Section 170 of the Internal Revenue
3072949 Code (concerning charitable contributions).
3082950 (3) Except as provided in subsection (c), add an amount equal to
3092951 any deduction or deductions allowed or allowable pursuant to
3102952 Section 63 of the Internal Revenue Code for taxes based on or
3112953 measured by income and levied at the state level by any state of
3122954 the United States.
3132955 (4) Subtract an amount equal to the amount included in the
3142956 corporation's taxable income under Section 78 of the Internal
3152957 Revenue Code (concerning foreign tax credits).
3162958 (5) Add or subtract the amount necessary to make the adjusted
3172959 gross income of any taxpayer that owns property for which bonus
3182960 depreciation was allowed in the current taxable year or in an
3192961 earlier taxable year equal to the amount of adjusted gross income
3202962 that would have been computed had an election not been made
3212963 under Section 168(k) of the Internal Revenue Code to apply bonus
3222964 depreciation to the property in the year that it was placed in
3232965 service.
3242966 (6) Add an amount equal to any deduction allowed under Section
3252967 172 of the Internal Revenue Code (concerning net operating
3262968 losses).
3272969 (7) Add or subtract the amount necessary to make the adjusted
3282970 gross income of any taxpayer that placed Section 179 property (as
3292971 defined in Section 179 of the Internal Revenue Code) in service
3302972 in the current taxable year or in an earlier taxable year equal to
3312973 the amount of adjusted gross income that would have been
3322974 computed had an election for federal income tax purposes not
3332975 been made for the year in which the property was placed in
3342976 service to take deductions under Section 179 of the Internal
3352977 Revenue Code in a total amount exceeding the sum of:
3362978 (A) twenty-five thousand dollars ($25,000) to the extent
337-SEA 2 9
3382979 deductions under Section 179 of the Internal Revenue Code
3392980 were not elected as provided in clause (B); and
3402981 (B) for taxable years beginning after December 31, 2017, the
3412982 deductions elected under Section 179 of the Internal Revenue
3422983 Code on property acquired in an exchange if:
3432984 (i) the exchange would have been eligible for
3442985 nonrecognition of gain or loss under Section 1031 of the
3452986 Internal Revenue Code in effect on January 1, 2017;
3462987 (ii) the exchange is not eligible for nonrecognition of gain or
3472988 loss under Section 1031 of the Internal Revenue Code; and
2989+ES 2—LS 7135/DI 125 71
3482990 (iii) the taxpayer made an election to take deductions under
3492991 Section 179 of the Internal Revenue Code with regard to the
3502992 acquired property in the year that the property was placed
3512993 into service.
3522994 The amount of deductions allowable for an item of property
3532995 under this clause may not exceed the amount of adjusted gross
3542996 income realized on the property that would have been deferred
3552997 under the Internal Revenue Code in effect on January 1, 2017.
3562998 (8) Add to the extent required by IC 6-3-2-20:
3572999 (A) the amount of intangible expenses (as defined in
3583000 IC 6-3-2-20) for the taxable year that reduced the corporation's
3593001 taxable income (as defined in Section 63 of the Internal
3603002 Revenue Code) for federal income tax purposes; and
3613003 (B) any directly related interest expenses (as defined in
3623004 IC 6-3-2-20) that reduced the corporation's adjusted gross
3633005 income (determined without regard to this subdivision). For
3643006 purposes of this clause, any directly related interest expense
3653007 that constitutes business interest within the meaning of Section
3663008 163(j) of the Internal Revenue Code shall be considered to
3673009 have reduced the taxpayer's federal taxable income only in the
3683010 first taxable year in which the deduction otherwise would have
3693011 been allowable under Section 163 of the Internal Revenue
3703012 Code if the limitation under Section 163(j)(1) of the Internal
3713013 Revenue Code did not exist.
3723014 (9) Add an amount equal to any deduction for dividends paid (as
3733015 defined in Section 561 of the Internal Revenue Code) to
3743016 shareholders of a captive real estate investment trust (as defined
3753017 in section 34.5 of this chapter).
3763018 (10) Subtract income that is:
3773019 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
3783020 derived from patents); and
3793021 (B) included in the corporation's taxable income under the
380-SEA 2 10
3813022 Internal Revenue Code.
3823023 (11) Add an amount equal to any income not included in gross
3833024 income as a result of the deferral of income arising from business
3843025 indebtedness discharged in connection with the reacquisition after
3853026 December 31, 2008, and before January 1, 2011, of an applicable
3863027 debt instrument, as provided in Section 108(i) of the Internal
3873028 Revenue Code. Subtract from the adjusted gross income of any
3883029 taxpayer that added an amount to adjusted gross income in a
3893030 previous year the amount necessary to offset the amount included
3903031 in federal gross income as a result of the deferral of income
3032+ES 2—LS 7135/DI 125 72
3913033 arising from business indebtedness discharged in connection with
3923034 the reacquisition after December 31, 2008, and before January 1,
3933035 2011, of an applicable debt instrument, as provided in Section
3943036 108(i) of the Internal Revenue Code.
3953037 (12) Add the amount excluded from federal gross income under
3963038 Section 103 of the Internal Revenue Code for interest received on
3973039 an obligation of a state other than Indiana, or a political
3983040 subdivision of such a state, that is acquired by the taxpayer after
3993041 December 31, 2011.
4003042 (13) For taxable years beginning after December 25, 2016:
4013043 (A) for a corporation other than a real estate investment trust,
4023044 add:
4033045 (i) an amount equal to the amount reported by the taxpayer
4043046 on IRC 965 Transition Tax Statement, line 1; or
4053047 (ii) if the taxpayer deducted an amount under Section 965(c)
4063048 of the Internal Revenue Code in determining the taxpayer's
4073049 taxable income for purposes of the federal income tax, the
4083050 amount deducted under Section 965(c) of the Internal
4093051 Revenue Code; and
4103052 (B) for a real estate investment trust, add an amount equal to
4113053 the deduction for deferred foreign income that was claimed by
4123054 the taxpayer for the taxable year under Section 965(c) of the
4133055 Internal Revenue Code, but only to the extent that the taxpayer
4143056 included income pursuant to Section 965 of the Internal
4153057 Revenue Code in its taxable income for federal income tax
4163058 purposes or is required to add back dividends paid under
4173059 subdivision (9).
4183060 (14) Add an amount equal to the deduction that was claimed by
4193061 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
4203062 Internal Revenue Code (attributable to global intangible
4213063 low-taxed income). The taxpayer shall separately specify the
4223064 amount of the reduction under Section 250(a)(1)(B)(i) of the
423-SEA 2 11
4243065 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
4253066 Internal Revenue Code.
4263067 (15) Subtract any interest expense paid or accrued in the current
4273068 taxable year but not deducted as a result of the limitation imposed
4283069 under Section 163(j)(1) of the Internal Revenue Code. Add any
4293070 interest expense paid or accrued in a previous taxable year but
4303071 allowed as a deduction under Section 163 of the Internal Revenue
4313072 Code in the current taxable year. For purposes of this subdivision,
4323073 an interest expense is considered paid or accrued only in the first
4333074 taxable year the deduction would have been allowable under
3075+ES 2—LS 7135/DI 125 73
4343076 Section 163 of the Internal Revenue Code if the limitation under
4353077 Section 163(j)(1) of the Internal Revenue Code did not exist.
4363078 (16) Subtract the amount that would have been excluded from
4373079 gross income but for the enactment of Section 118(b)(2) of the
4383080 Internal Revenue Code for taxable years ending after December
4393081 22, 2017.
4403082 (17) Add an amount equal to the remainder of:
4413083 (A) the amount allowable as a deduction under Section 274(n)
4423084 of the Internal Revenue Code; minus
4433085 (B) the amount otherwise allowable as a deduction under
4443086 Section 274(n) of the Internal Revenue Code, if Section
4453087 274(n)(2)(D) of the Internal Revenue Code was not in effect
4463088 for amounts paid or incurred after December 31, 2020.
4473089 (18) For taxable years ending after March 12, 2020, subtract an
4483090 amount equal to the deduction disallowed pursuant to:
4493091 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
4503092 as modified by Sections 206 and 207 of the Taxpayer Certainty
4513093 and Disaster Relief Tax Act (Division EE of Public Law
4523094 116-260); and
4533095 (B) Section 3134(e) of the Internal Revenue Code.
4543096 (19) For taxable years beginning after December 31, 2022,
4553097 subtract an amount equal to the deduction disallowed under
4563098 Section 280C(h) of the Internal Revenue Code.
4573099 (20) Add or subtract any other amounts the taxpayer is:
4583100 (A) required to add or subtract; or
4593101 (B) entitled to deduct;
4603102 under IC 6-3-2.
4613103 (c) The following apply to taxable years beginning after December
4623104 31, 2018, for purposes of the add back of any deduction allowed on the
4633105 taxpayer's federal income tax return for wagering taxes, as provided in
4643106 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
4653107 the taxpayer is a corporation:
466-SEA 2 12
4673108 (1) For taxable years beginning after December 31, 2018, and
4683109 before January 1, 2020, a taxpayer is required to add back under
4693110 this section eighty-seven and five-tenths percent (87.5%) of any
4703111 deduction allowed on the taxpayer's federal income tax return for
4713112 wagering taxes.
4723113 (2) For taxable years beginning after December 31, 2019, and
4733114 before January 1, 2021, a taxpayer is required to add back under
4743115 this section seventy-five percent (75%) of any deduction allowed
4753116 on the taxpayer's federal income tax return for wagering taxes.
4763117 (3) For taxable years beginning after December 31, 2020, and
3118+ES 2—LS 7135/DI 125 74
4773119 before January 1, 2022, a taxpayer is required to add back under
4783120 this section sixty-two and five-tenths percent (62.5%) of any
4793121 deduction allowed on the taxpayer's federal income tax return for
4803122 wagering taxes.
4813123 (4) For taxable years beginning after December 31, 2021, and
4823124 before January 1, 2023, a taxpayer is required to add back under
4833125 this section fifty percent (50%) of any deduction allowed on the
4843126 taxpayer's federal income tax return for wagering taxes.
4853127 (5) For taxable years beginning after December 31, 2022, and
4863128 before January 1, 2024, a taxpayer is required to add back under
4873129 this section thirty-seven and five-tenths percent (37.5%) of any
4883130 deduction allowed on the taxpayer's federal income tax return for
4893131 wagering taxes.
4903132 (6) For taxable years beginning after December 31, 2023, and
4913133 before January 1, 2025, a taxpayer is required to add back under
4923134 this section twenty-five percent (25%) of any deduction allowed
4933135 on the taxpayer's federal income tax return for wagering taxes.
4943136 (7) For taxable years beginning after December 31, 2024, and
4953137 before January 1, 2026, a taxpayer is required to add back under
4963138 this section twelve and five-tenths percent (12.5%) of any
4973139 deduction allowed on the taxpayer's federal income tax return for
4983140 wagering taxes.
4993141 (8) For taxable years beginning after December 31, 2025, a
5003142 taxpayer is not required to add back under this section any amount
5013143 of a deduction allowed on the taxpayer's federal income tax return
5023144 for wagering taxes.
5033145 (d) In the case of life insurance companies (as defined in Section
5043146 816(a) of the Internal Revenue Code) that are organized under Indiana
5053147 law, the same as "life insurance company taxable income" (as defined
5063148 in Section 801 of the Internal Revenue Code), adjusted as follows:
5073149 (1) Subtract income that is exempt from taxation under this article
5083150 by the Constitution and statutes of the United States.
509-SEA 2 13
5103151 (2) Add an amount equal to any deduction allowed or allowable
5113152 under Section 170 of the Internal Revenue Code (concerning
5123153 charitable contributions).
5133154 (3) Add an amount equal to a deduction allowed or allowable
3155+under Section 805 or Section 832(c) of the Internal Revenue Code
3156+for taxes based on or measured by income and levied at the state
3157+level by any state.
3158+(4) Subtract an amount equal to the amount included in the
3159+company's taxable income under Section 78 of the Internal
3160+Revenue Code (concerning foreign tax credits).
3161+ES 2—LS 7135/DI 125 75
3162+(5) Add or subtract the amount necessary to make the adjusted
3163+gross income of any taxpayer that owns property for which bonus
3164+depreciation was allowed in the current taxable year or in an
3165+earlier taxable year equal to the amount of adjusted gross income
3166+that would have been computed had an election not been made
3167+under Section 168(k) of the Internal Revenue Code to apply bonus
3168+depreciation to the property in the year that it was placed in
3169+service.
3170+(6) Add an amount equal to any deduction allowed under Section
3171+172 of the Internal Revenue Code (concerning net operating
3172+losses).
3173+(7) Add or subtract the amount necessary to make the adjusted
3174+gross income of any taxpayer that placed Section 179 property (as
3175+defined in Section 179 of the Internal Revenue Code) in service
3176+in the current taxable year or in an earlier taxable year equal to
3177+the amount of adjusted gross income that would have been
3178+computed had an election for federal income tax purposes not
3179+been made for the year in which the property was placed in
3180+service to take deductions under Section 179 of the Internal
3181+Revenue Code in a total amount exceeding the sum of:
3182+(A) twenty-five thousand dollars ($25,000) to the extent
3183+deductions under Section 179 of the Internal Revenue Code
3184+were not elected as provided in clause (B); and
3185+(B) for taxable years beginning after December 31, 2017, the
3186+deductions elected under Section 179 of the Internal Revenue
3187+Code on property acquired in an exchange if:
3188+(i) the exchange would have been eligible for
3189+nonrecognition of gain or loss under Section 1031 of the
3190+Internal Revenue Code in effect on January 1, 2017;
3191+(ii) the exchange is not eligible for nonrecognition of gain or
3192+loss under Section 1031 of the Internal Revenue Code; and
3193+(iii) the taxpayer made an election to take deductions under
3194+Section 179 of the Internal Revenue Code with regard to the
3195+acquired property in the year that the property was placed
3196+into service.
3197+The amount of deductions allowable for an item of property
3198+under this clause may not exceed the amount of adjusted gross
3199+income realized on the property that would have been deferred
3200+under the Internal Revenue Code in effect on January 1, 2017.
3201+(8) Subtract income that is:
3202+(A) exempt from taxation under IC 6-3-2-21.7 (certain income
3203+derived from patents); and
3204+ES 2—LS 7135/DI 125 76
3205+(B) included in the insurance company's taxable income under
3206+the Internal Revenue Code.
3207+(9) Add an amount equal to any income not included in gross
3208+income as a result of the deferral of income arising from business
3209+indebtedness discharged in connection with the reacquisition after
3210+December 31, 2008, and before January 1, 2011, of an applicable
3211+debt instrument, as provided in Section 108(i) of the Internal
3212+Revenue Code. Subtract from the adjusted gross income of any
3213+taxpayer that added an amount to adjusted gross income in a
3214+previous year the amount necessary to offset the amount included
3215+in federal gross income as a result of the deferral of income
3216+arising from business indebtedness discharged in connection with
3217+the reacquisition after December 31, 2008, and before January 1,
3218+2011, of an applicable debt instrument, as provided in Section
3219+108(i) of the Internal Revenue Code.
3220+(10) Add an amount equal to any exempt insurance income under
3221+Section 953(e) of the Internal Revenue Code that is active
3222+financing income under Subpart F of Subtitle A, Chapter 1,
3223+Subchapter N of the Internal Revenue Code.
3224+(11) Add the amount excluded from federal gross income under
3225+Section 103 of the Internal Revenue Code for interest received on
3226+an obligation of a state other than Indiana, or a political
3227+subdivision of such a state, that is acquired by the taxpayer after
3228+December 31, 2011.
3229+(12) For taxable years beginning after December 25, 2016, add:
3230+(A) an amount equal to the amount reported by the taxpayer on
3231+IRC 965 Transition Tax Statement, line 1; or
3232+(B) if the taxpayer deducted an amount under Section 965(c)
3233+of the Internal Revenue Code in determining the taxpayer's
3234+taxable income for purposes of the federal income tax, the
3235+amount deducted under Section 965(c) of the Internal Revenue
3236+Code.
3237+(13) Add an amount equal to the deduction that was claimed by
3238+the taxpayer for the taxable year under Section 250(a)(1)(B) of the
3239+Internal Revenue Code (attributable to global intangible
3240+low-taxed income). The taxpayer shall separately specify the
3241+amount of the reduction under Section 250(a)(1)(B)(i) of the
3242+Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
3243+Internal Revenue Code.
3244+(14) Subtract any interest expense paid or accrued in the current
3245+taxable year but not deducted as a result of the limitation imposed
3246+under Section 163(j)(1) of the Internal Revenue Code. Add any
3247+ES 2—LS 7135/DI 125 77
3248+interest expense paid or accrued in a previous taxable year but
3249+allowed as a deduction under Section 163 of the Internal Revenue
3250+Code in the current taxable year. For purposes of this subdivision,
3251+an interest expense is considered paid or accrued only in the first
3252+taxable year the deduction would have been allowable under
3253+Section 163 of the Internal Revenue Code if the limitation under
3254+Section 163(j)(1) of the Internal Revenue Code did not exist.
3255+(15) Subtract the amount that would have been excluded from
3256+gross income but for the enactment of Section 118(b)(2) of the
3257+Internal Revenue Code for taxable years ending after December
3258+22, 2017.
3259+(16) Add an amount equal to the remainder of:
3260+(A) the amount allowable as a deduction under Section 274(n)
3261+of the Internal Revenue Code; minus
3262+(B) the amount otherwise allowable as a deduction under
3263+Section 274(n) of the Internal Revenue Code, if Section
3264+274(n)(2)(D) of the Internal Revenue Code was not in effect
3265+for amounts paid or incurred after December 31, 2020.
3266+(17) For taxable years ending after March 12, 2020, subtract an
3267+amount equal to the deduction disallowed pursuant to:
3268+(A) Section 2301(e) of the CARES Act (Public Law 116-136),
3269+as modified by Sections 206 and 207 of the Taxpayer Certainty
3270+and Disaster Relief Tax Act (Division EE of Public Law
3271+116-260); and
3272+(B) Section 3134(e) of the Internal Revenue Code.
3273+(18) For taxable years beginning after December 31, 2022,
3274+subtract an amount equal to the deduction disallowed under
3275+Section 280C(h) of the Internal Revenue Code.
3276+(19) Add or subtract any other amounts the taxpayer is:
3277+(A) required to add or subtract; or
3278+(B) entitled to deduct;
3279+under IC 6-3-2.
3280+(e) In the case of insurance companies subject to tax under Section
3281+831 of the Internal Revenue Code and organized under Indiana law, the
3282+same as "taxable income" (as defined in Section 832 of the Internal
3283+Revenue Code), adjusted as follows:
3284+(1) Subtract income that is exempt from taxation under this article
3285+by the Constitution and statutes of the United States.
3286+(2) Add an amount equal to any deduction allowed or allowable
3287+under Section 170 of the Internal Revenue Code (concerning
3288+charitable contributions).
3289+(3) Add an amount equal to a deduction allowed or allowable
3290+ES 2—LS 7135/DI 125 78
5143291 under Section 805 or Section 832(c) of the Internal Revenue Code
5153292 for taxes based on or measured by income and levied at the state
5163293 level by any state.
5173294 (4) Subtract an amount equal to the amount included in the
5183295 company's taxable income under Section 78 of the Internal
5193296 Revenue Code (concerning foreign tax credits).
5203297 (5) Add or subtract the amount necessary to make the adjusted
5213298 gross income of any taxpayer that owns property for which bonus
5223299 depreciation was allowed in the current taxable year or in an
5233300 earlier taxable year equal to the amount of adjusted gross income
5243301 that would have been computed had an election not been made
5253302 under Section 168(k) of the Internal Revenue Code to apply bonus
5263303 depreciation to the property in the year that it was placed in
5273304 service.
5283305 (6) Add an amount equal to any deduction allowed under Section
5293306 172 of the Internal Revenue Code (concerning net operating
5303307 losses).
5313308 (7) Add or subtract the amount necessary to make the adjusted
5323309 gross income of any taxpayer that placed Section 179 property (as
5333310 defined in Section 179 of the Internal Revenue Code) in service
5343311 in the current taxable year or in an earlier taxable year equal to
5353312 the amount of adjusted gross income that would have been
5363313 computed had an election for federal income tax purposes not
5373314 been made for the year in which the property was placed in
5383315 service to take deductions under Section 179 of the Internal
5393316 Revenue Code in a total amount exceeding the sum of:
5403317 (A) twenty-five thousand dollars ($25,000) to the extent
5413318 deductions under Section 179 of the Internal Revenue Code
5423319 were not elected as provided in clause (B); and
5433320 (B) for taxable years beginning after December 31, 2017, the
5443321 deductions elected under Section 179 of the Internal Revenue
5453322 Code on property acquired in an exchange if:
5463323 (i) the exchange would have been eligible for
5473324 nonrecognition of gain or loss under Section 1031 of the
5483325 Internal Revenue Code in effect on January 1, 2017;
5493326 (ii) the exchange is not eligible for nonrecognition of gain or
5503327 loss under Section 1031 of the Internal Revenue Code; and
5513328 (iii) the taxpayer made an election to take deductions under
552-SEA 2 14
5533329 Section 179 of the Internal Revenue Code with regard to the
5543330 acquired property in the year that the property was placed
5553331 into service.
5563332 The amount of deductions allowable for an item of property
3333+ES 2—LS 7135/DI 125 79
5573334 under this clause may not exceed the amount of adjusted gross
5583335 income realized on the property that would have been deferred
5593336 under the Internal Revenue Code in effect on January 1, 2017.
5603337 (8) Subtract income that is:
5613338 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
5623339 derived from patents); and
5633340 (B) included in the insurance company's taxable income under
5643341 the Internal Revenue Code.
5653342 (9) Add an amount equal to any income not included in gross
5663343 income as a result of the deferral of income arising from business
5673344 indebtedness discharged in connection with the reacquisition after
5683345 December 31, 2008, and before January 1, 2011, of an applicable
5693346 debt instrument, as provided in Section 108(i) of the Internal
5703347 Revenue Code. Subtract from the adjusted gross income of any
5713348 taxpayer that added an amount to adjusted gross income in a
5723349 previous year the amount necessary to offset the amount included
5733350 in federal gross income as a result of the deferral of income
5743351 arising from business indebtedness discharged in connection with
5753352 the reacquisition after December 31, 2008, and before January 1,
5763353 2011, of an applicable debt instrument, as provided in Section
5773354 108(i) of the Internal Revenue Code.
5783355 (10) Add an amount equal to any exempt insurance income under
5793356 Section 953(e) of the Internal Revenue Code that is active
5803357 financing income under Subpart F of Subtitle A, Chapter 1,
5813358 Subchapter N of the Internal Revenue Code.
5823359 (11) Add the amount excluded from federal gross income under
5833360 Section 103 of the Internal Revenue Code for interest received on
5843361 an obligation of a state other than Indiana, or a political
5853362 subdivision of such a state, that is acquired by the taxpayer after
5863363 December 31, 2011.
5873364 (12) For taxable years beginning after December 25, 2016, add:
5883365 (A) an amount equal to the amount reported by the taxpayer on
5893366 IRC 965 Transition Tax Statement, line 1; or
5903367 (B) if the taxpayer deducted an amount under Section 965(c)
5913368 of the Internal Revenue Code in determining the taxpayer's
5923369 taxable income for purposes of the federal income tax, the
5933370 amount deducted under Section 965(c) of the Internal Revenue
5943371 Code.
595-SEA 2 15
5963372 (13) Add an amount equal to the deduction that was claimed by
5973373 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
5983374 Internal Revenue Code (attributable to global intangible
5993375 low-taxed income). The taxpayer shall separately specify the
3376+ES 2—LS 7135/DI 125 80
6003377 amount of the reduction under Section 250(a)(1)(B)(i) of the
6013378 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
6023379 Internal Revenue Code.
6033380 (14) Subtract any interest expense paid or accrued in the current
6043381 taxable year but not deducted as a result of the limitation imposed
6053382 under Section 163(j)(1) of the Internal Revenue Code. Add any
6063383 interest expense paid or accrued in a previous taxable year but
6073384 allowed as a deduction under Section 163 of the Internal Revenue
6083385 Code in the current taxable year. For purposes of this subdivision,
6093386 an interest expense is considered paid or accrued only in the first
6103387 taxable year the deduction would have been allowable under
6113388 Section 163 of the Internal Revenue Code if the limitation under
6123389 Section 163(j)(1) of the Internal Revenue Code did not exist.
6133390 (15) Subtract the amount that would have been excluded from
6143391 gross income but for the enactment of Section 118(b)(2) of the
6153392 Internal Revenue Code for taxable years ending after December
6163393 22, 2017.
6173394 (16) Add an amount equal to the remainder of:
6183395 (A) the amount allowable as a deduction under Section 274(n)
6193396 of the Internal Revenue Code; minus
6203397 (B) the amount otherwise allowable as a deduction under
6213398 Section 274(n) of the Internal Revenue Code, if Section
6223399 274(n)(2)(D) of the Internal Revenue Code was not in effect
6233400 for amounts paid or incurred after December 31, 2020.
6243401 (17) For taxable years ending after March 12, 2020, subtract an
6253402 amount equal to the deduction disallowed pursuant to:
6263403 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
6273404 as modified by Sections 206 and 207 of the Taxpayer Certainty
6283405 and Disaster Relief Tax Act (Division EE of Public Law
6293406 116-260); and
6303407 (B) Section 3134(e) of the Internal Revenue Code.
6313408 (18) For taxable years beginning after December 31, 2022,
6323409 subtract an amount equal to the deduction disallowed under
6333410 Section 280C(h) of the Internal Revenue Code.
6343411 (19) Add or subtract any other amounts the taxpayer is:
6353412 (A) required to add or subtract; or
6363413 (B) entitled to deduct;
6373414 under IC 6-3-2.
638-SEA 2 16
639-(e) In the case of insurance companies subject to tax under Section
640-831 of the Internal Revenue Code and organized under Indiana law, the
641-same as "taxable income" (as defined in Section 832 of the Internal
642-Revenue Code), adjusted as follows:
643-(1) Subtract income that is exempt from taxation under this article
644-by the Constitution and statutes of the United States.
645-(2) Add an amount equal to any deduction allowed or allowable
646-under Section 170 of the Internal Revenue Code (concerning
647-charitable contributions).
648-(3) Add an amount equal to a deduction allowed or allowable
649-under Section 805 or Section 832(c) of the Internal Revenue Code
650-for taxes based on or measured by income and levied at the state
651-level by any state.
652-(4) Subtract an amount equal to the amount included in the
653-company's taxable income under Section 78 of the Internal
654-Revenue Code (concerning foreign tax credits).
655-(5) Add or subtract the amount necessary to make the adjusted
656-gross income of any taxpayer that owns property for which bonus
657-depreciation was allowed in the current taxable year or in an
658-earlier taxable year equal to the amount of adjusted gross income
659-that would have been computed had an election not been made
660-under Section 168(k) of the Internal Revenue Code to apply bonus
661-depreciation to the property in the year that it was placed in
662-service.
663-(6) Add an amount equal to any deduction allowed under Section
664-172 of the Internal Revenue Code (concerning net operating
665-losses).
666-(7) Add or subtract the amount necessary to make the adjusted
667-gross income of any taxpayer that placed Section 179 property (as
668-defined in Section 179 of the Internal Revenue Code) in service
669-in the current taxable year or in an earlier taxable year equal to
670-the amount of adjusted gross income that would have been
671-computed had an election for federal income tax purposes not
672-been made for the year in which the property was placed in
673-service to take deductions under Section 179 of the Internal
674-Revenue Code in a total amount exceeding the sum of:
675-(A) twenty-five thousand dollars ($25,000) to the extent
676-deductions under Section 179 of the Internal Revenue Code
677-were not elected as provided in clause (B); and
678-(B) for taxable years beginning after December 31, 2017, the
679-deductions elected under Section 179 of the Internal Revenue
680-Code on property acquired in an exchange if:
681-SEA 2 17
682-(i) the exchange would have been eligible for
683-nonrecognition of gain or loss under Section 1031 of the
684-Internal Revenue Code in effect on January 1, 2017;
685-(ii) the exchange is not eligible for nonrecognition of gain or
686-loss under Section 1031 of the Internal Revenue Code; and
687-(iii) the taxpayer made an election to take deductions under
688-Section 179 of the Internal Revenue Code with regard to the
689-acquired property in the year that the property was placed
690-into service.
691-The amount of deductions allowable for an item of property
692-under this clause may not exceed the amount of adjusted gross
693-income realized on the property that would have been deferred
694-under the Internal Revenue Code in effect on January 1, 2017.
695-(8) Subtract income that is:
696-(A) exempt from taxation under IC 6-3-2-21.7 (certain income
697-derived from patents); and
698-(B) included in the insurance company's taxable income under
699-the Internal Revenue Code.
700-(9) Add an amount equal to any income not included in gross
701-income as a result of the deferral of income arising from business
702-indebtedness discharged in connection with the reacquisition after
703-December 31, 2008, and before January 1, 2011, of an applicable
704-debt instrument, as provided in Section 108(i) of the Internal
705-Revenue Code. Subtract from the adjusted gross income of any
706-taxpayer that added an amount to adjusted gross income in a
707-previous year the amount necessary to offset the amount included
708-in federal gross income as a result of the deferral of income
709-arising from business indebtedness discharged in connection with
710-the reacquisition after December 31, 2008, and before January 1,
711-2011, of an applicable debt instrument, as provided in Section
712-108(i) of the Internal Revenue Code.
713-(10) Add an amount equal to any exempt insurance income under
714-Section 953(e) of the Internal Revenue Code that is active
715-financing income under Subpart F of Subtitle A, Chapter 1,
716-Subchapter N of the Internal Revenue Code.
717-(11) Add the amount excluded from federal gross income under
718-Section 103 of the Internal Revenue Code for interest received on
719-an obligation of a state other than Indiana, or a political
720-subdivision of such a state, that is acquired by the taxpayer after
721-December 31, 2011.
722-(12) For taxable years beginning after December 25, 2016, add:
723-(A) an amount equal to the amount reported by the taxpayer on
724-SEA 2 18
725-IRC 965 Transition Tax Statement, line 1; or
726-(B) if the taxpayer deducted an amount under Section 965(c)
727-of the Internal Revenue Code in determining the taxpayer's
728-taxable income for purposes of the federal income tax, the
729-amount deducted under Section 965(c) of the Internal Revenue
730-Code.
731-(13) Add an amount equal to the deduction that was claimed by
732-the taxpayer for the taxable year under Section 250(a)(1)(B) of the
733-Internal Revenue Code (attributable to global intangible
734-low-taxed income). The taxpayer shall separately specify the
735-amount of the reduction under Section 250(a)(1)(B)(i) of the
736-Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
737-Internal Revenue Code.
738-(14) Subtract any interest expense paid or accrued in the current
739-taxable year but not deducted as a result of the limitation imposed
740-under Section 163(j)(1) of the Internal Revenue Code. Add any
741-interest expense paid or accrued in a previous taxable year but
742-allowed as a deduction under Section 163 of the Internal Revenue
743-Code in the current taxable year. For purposes of this subdivision,
744-an interest expense is considered paid or accrued only in the first
745-taxable year the deduction would have been allowable under
746-Section 163 of the Internal Revenue Code if the limitation under
747-Section 163(j)(1) of the Internal Revenue Code did not exist.
748-(15) Subtract the amount that would have been excluded from
749-gross income but for the enactment of Section 118(b)(2) of the
750-Internal Revenue Code for taxable years ending after December
751-22, 2017.
752-(16) Add an amount equal to the remainder of:
753-(A) the amount allowable as a deduction under Section 274(n)
754-of the Internal Revenue Code; minus
755-(B) the amount otherwise allowable as a deduction under
756-Section 274(n) of the Internal Revenue Code, if Section
757-274(n)(2)(D) of the Internal Revenue Code was not in effect
758-for amounts paid or incurred after December 31, 2020.
759-(17) For taxable years ending after March 12, 2020, subtract an
760-amount equal to the deduction disallowed pursuant to:
761-(A) Section 2301(e) of the CARES Act (Public Law 116-136),
762-as modified by Sections 206 and 207 of the Taxpayer Certainty
763-and Disaster Relief Tax Act (Division EE of Public Law
764-116-260); and
765-(B) Section 3134(e) of the Internal Revenue Code.
766-(18) For taxable years beginning after December 31, 2022,
767-SEA 2 19
768-subtract an amount equal to the deduction disallowed under
769-Section 280C(h) of the Internal Revenue Code.
770-(19) Add or subtract any other amounts the taxpayer is:
771-(A) required to add or subtract; or
772-(B) entitled to deduct;
773-under IC 6-3-2.
7743415 (f) In the case of trusts and estates, "taxable income" (as defined for
7753416 trusts and estates in Section 641(b) of the Internal Revenue Code)
7763417 adjusted as follows:
7773418 (1) Subtract income that is exempt from taxation under this article
3419+ES 2—LS 7135/DI 125 81
7783420 by the Constitution and statutes of the United States.
7793421 (2) Subtract an amount equal to the amount of a September 11
7803422 terrorist attack settlement payment included in the federal
7813423 adjusted gross income of the estate of a victim of the September
7823424 11 terrorist attack or a trust to the extent the trust benefits a victim
7833425 of the September 11 terrorist attack.
7843426 (3) Add or subtract the amount necessary to make the adjusted
7853427 gross income of any taxpayer that owns property for which bonus
7863428 depreciation was allowed in the current taxable year or in an
7873429 earlier taxable year equal to the amount of adjusted gross income
7883430 that would have been computed had an election not been made
7893431 under Section 168(k) of the Internal Revenue Code to apply bonus
7903432 depreciation to the property in the year that it was placed in
7913433 service.
7923434 (4) Add an amount equal to any deduction allowed under Section
7933435 172 of the Internal Revenue Code (concerning net operating
7943436 losses).
7953437 (5) Add or subtract the amount necessary to make the adjusted
7963438 gross income of any taxpayer that placed Section 179 property (as
7973439 defined in Section 179 of the Internal Revenue Code) in service
7983440 in the current taxable year or in an earlier taxable year equal to
7993441 the amount of adjusted gross income that would have been
8003442 computed had an election for federal income tax purposes not
8013443 been made for the year in which the property was placed in
8023444 service to take deductions under Section 179 of the Internal
8033445 Revenue Code in a total amount exceeding the sum of:
8043446 (A) twenty-five thousand dollars ($25,000) to the extent
8053447 deductions under Section 179 of the Internal Revenue Code
8063448 were not elected as provided in clause (B); and
8073449 (B) for taxable years beginning after December 31, 2017, the
8083450 deductions elected under Section 179 of the Internal Revenue
8093451 Code on property acquired in an exchange if:
810-SEA 2 20
8113452 (i) the exchange would have been eligible for
8123453 nonrecognition of gain or loss under Section 1031 of the
8133454 Internal Revenue Code in effect on January 1, 2017;
8143455 (ii) the exchange is not eligible for nonrecognition of gain or
8153456 loss under Section 1031 of the Internal Revenue Code; and
8163457 (iii) the taxpayer made an election to take deductions under
8173458 Section 179 of the Internal Revenue Code with regard to the
8183459 acquired property in the year that the property was placed
8193460 into service.
8203461 The amount of deductions allowable for an item of property
3462+ES 2—LS 7135/DI 125 82
8213463 under this clause may not exceed the amount of adjusted gross
8223464 income realized on the property that would have been deferred
8233465 under the Internal Revenue Code in effect on January 1, 2017.
8243466 (6) Subtract income that is:
8253467 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
8263468 derived from patents); and
8273469 (B) included in the taxpayer's taxable income under the
8283470 Internal Revenue Code.
8293471 (7) Add an amount equal to any income not included in gross
8303472 income as a result of the deferral of income arising from business
8313473 indebtedness discharged in connection with the reacquisition after
8323474 December 31, 2008, and before January 1, 2011, of an applicable
8333475 debt instrument, as provided in Section 108(i) of the Internal
8343476 Revenue Code. Subtract from the adjusted gross income of any
8353477 taxpayer that added an amount to adjusted gross income in a
8363478 previous year the amount necessary to offset the amount included
8373479 in federal gross income as a result of the deferral of income
8383480 arising from business indebtedness discharged in connection with
8393481 the reacquisition after December 31, 2008, and before January 1,
8403482 2011, of an applicable debt instrument, as provided in Section
8413483 108(i) of the Internal Revenue Code.
8423484 (8) Add the amount excluded from federal gross income under
8433485 Section 103 of the Internal Revenue Code for interest received on
8443486 an obligation of a state other than Indiana, or a political
8453487 subdivision of such a state, that is acquired by the taxpayer after
8463488 December 31, 2011.
8473489 (9) For taxable years beginning after December 25, 2016, add an
8483490 amount equal to:
8493491 (A) the amount reported by the taxpayer on IRC 965
8503492 Transition Tax Statement, line 1;
8513493 (B) if the taxpayer deducted an amount under Section 965(c)
8523494 of the Internal Revenue Code in determining the taxpayer's
853-SEA 2 21
8543495 taxable income for purposes of the federal income tax, the
8553496 amount deducted under Section 965(c) of the Internal Revenue
8563497 Code; and
8573498 (C) with regard to any amounts of income under Section 965
8583499 of the Internal Revenue Code distributed by the taxpayer, the
8593500 deduction under Section 965(c) of the Internal Revenue Code
8603501 attributable to such distributed amounts and not reported to the
8613502 beneficiary.
8623503 For purposes of this article, the amount required to be added back
8633504 under clause (B) is not considered to be distributed or
3505+ES 2—LS 7135/DI 125 83
8643506 distributable to a beneficiary of the estate or trust for purposes of
8653507 Sections 651 and 661 of the Internal Revenue Code.
8663508 (10) Subtract any interest expense paid or accrued in the current
8673509 taxable year but not deducted as a result of the limitation imposed
8683510 under Section 163(j)(1) of the Internal Revenue Code. Add any
8693511 interest expense paid or accrued in a previous taxable year but
8703512 allowed as a deduction under Section 163 of the Internal Revenue
8713513 Code in the current taxable year. For purposes of this subdivision,
8723514 an interest expense is considered paid or accrued only in the first
8733515 taxable year the deduction would have been allowable under
8743516 Section 163 of the Internal Revenue Code if the limitation under
8753517 Section 163(j)(1) of the Internal Revenue Code did not exist.
8763518 (11) Add an amount equal to the deduction for qualified business
8773519 income that was claimed by the taxpayer for the taxable year
8783520 under Section 199A of the Internal Revenue Code.
8793521 (12) Subtract the amount that would have been excluded from
8803522 gross income but for the enactment of Section 118(b)(2) of the
8813523 Internal Revenue Code for taxable years ending after December
8823524 22, 2017.
8833525 (13) Add an amount equal to the remainder of:
8843526 (A) the amount allowable as a deduction under Section 274(n)
8853527 of the Internal Revenue Code; minus
8863528 (B) the amount otherwise allowable as a deduction under
8873529 Section 274(n) of the Internal Revenue Code, if Section
8883530 274(n)(2)(D) of the Internal Revenue Code was not in effect
8893531 for amounts paid or incurred after December 31, 2020.
8903532 (14) For taxable years beginning after December 31, 2017, and
8913533 before January 1, 2021, add an amount equal to the excess
8923534 business loss of the taxpayer as defined in Section 461(l)(3) of the
8933535 Internal Revenue Code. In addition:
8943536 (A) If a taxpayer has an excess business loss under this
8953537 subdivision and also has modifications under subdivisions (3)
896-SEA 2 22
8973538 and (5) for property placed in service during the taxable year,
8983539 the taxpayer shall treat a portion of the taxable year
8993540 modifications for that property as occurring in the taxable year
9003541 the property is placed in service and a portion of the
9013542 modifications as occurring in the immediately following
9023543 taxable year.
9033544 (B) The portion of the modifications under subdivisions (3)
9043545 and (5) for property placed in service during the taxable year
9053546 treated as occurring in the taxable year in which the property
9063547 is placed in service equals:
3548+ES 2—LS 7135/DI 125 84
9073549 (i) the modification for the property otherwise determined
9083550 under this section; minus
9093551 (ii) the excess business loss disallowed under this
9103552 subdivision;
9113553 but not less than zero (0).
9123554 (C) The portion of the modifications under subdivisions (3)
9133555 and (5) for property placed in service during the taxable year
9143556 treated as occurring in the taxable year immediately following
9153557 the taxable year in which the property is placed in service
9163558 equals the modification for the property otherwise determined
9173559 under this section minus the amount in clause (B).
9183560 (D) Any reallocation of modifications between taxable years
9193561 under clauses (B) and (C) shall be first allocated to the
9203562 modification under subdivision (3), then to the modification
9213563 under subdivision (5).
9223564 (15) For taxable years ending after March 12, 2020, subtract an
9233565 amount equal to the deduction disallowed pursuant to:
9243566 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
9253567 as modified by Sections 206 and 207 of the Taxpayer Certainty
9263568 and Disaster Relief Tax Act (Division EE of Public Law
9273569 116-260); and
9283570 (B) Section 3134(e) of the Internal Revenue Code.
9293571 (16) For taxable years beginning after December 31, 2022,
9303572 subtract an amount equal to the deduction disallowed under
9313573 Section 280C(h) of the Internal Revenue Code.
9323574 (17) Except as provided in subsection (c), for taxable years
9333575 beginning after December 31, 2022, add an amount equal to
9343576 any deduction or deductions allowed or allowable in
9353577 determining taxable income under Section 641(b) of the
9363578 Internal Revenue Code for taxes based on or measured by
9373579 income and levied at the state level by any state of the United
9383580 States.
939-SEA 2 23
9403581 (17) (18) Add or subtract any other amounts the taxpayer is:
9413582 (A) required to add or subtract; or
9423583 (B) entitled to deduct;
9433584 under IC 6-3-2.
9443585 (g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
9453586 IC 6-3-4-15 for taxable years beginning after December 31, 2022,
9463587 "adjusted gross income" of a pass through entity means the
9473588 aggregate of items of ordinary income and loss in the case of a
9483589 partnership or a corporation described in IC 6-3-2-2.8(2), or
9493590 aggregate distributable net income of a trust or estate as defined in
3591+ES 2—LS 7135/DI 125 85
9503592 Section 643 of the Internal Revenue Code, whichever is applicable,
9513593 for the taxable year modified as follows:
9523594 (1) Add the separately stated items of income and gains, or the
9533595 equivalent items that must be considered separately by a
9543596 beneficiary, as determined for federal purposes, attributed to
9553597 the partners, shareholders, or beneficiaries of the pass
9563598 through entity, determined without regard to whether the
9573599 owner is permitted to exclude all or part of the income or gain
9583600 or deduct any amount against the income or gain.
9593601 (2) Subtract the separately stated items of deductions or losses
9603602 or items that must be considered separately by beneficiaries,
9613603 as determined for federal purposes, attributed to partners,
9623604 shareholders, or beneficiaries of the pass through entity and
9633605 that are deductible by an individual in determining adjusted
9643606 gross income as defined under Section 62 of the Internal
9653607 Revenue Code:
9663608 (A) limited as if the partners, shareholders, and
9673609 beneficiaries deducted the maximum allowable loss or
9683610 deduction allowable for the taxable year prior to any
9693611 amount deductible from the pass through entity; but
9703612 (B) not considering any disallowance of deductions
9713613 resulting from federal basis limitations for the partner,
9723614 shareholder, or beneficiary.
9733615 (3) Add or subtract any modifications to adjusted gross
9743616 income that would be required both for individuals under
9753617 subsection (a) and corporations under subsection (b) to the
9763618 extent otherwise provided in those subsections, including
9773619 amounts that are allowable for which such modifications are
9783620 necessary to account for separately stated items in subdivision
9793621 (1) or (2).
9803622 (g) (h) Subsections (a)(35), (b)(20), (d)(19), (e)(19), or (f)(17)
9813623 (f)(18) may not be construed to require an add back or allow a
982-SEA 2 24
9833624 deduction or exemption more than once for a particular add back,
9843625 deduction, or exemption.
9853626 (h) (i) For taxable years beginning after December 25, 2016, if:
9863627 (1) a taxpayer is a shareholder, either directly or indirectly, in a
9873628 corporation that is an E&P deficit foreign corporation as defined
9883629 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
9893630 earnings and profit deficit, or a portion of the earnings and profit
9903631 deficit, of the E&P deficit foreign corporation is permitted to
9913632 reduce the federal adjusted gross income or federal taxable
9923633 income of the taxpayer, the deficit, or the portion of the deficit,
3634+ES 2—LS 7135/DI 125 86
9933635 shall also reduce the amount taxable under this section to the
9943636 extent permitted under the Internal Revenue Code, however, in no
9953637 case shall this permit a reduction in the amount taxable under
9963638 Section 965 of the Internal Revenue Code for purposes of this
9973639 section to be less than zero (0); and
9983640 (2) the Internal Revenue Service issues guidance that such an
9993641 income or deduction is not reported directly on a federal tax
10003642 return or is to be reported in a manner different than specified in
10013643 this section, this section shall be construed as if federal adjusted
10023644 gross income or federal taxable income included the income or
10033645 deduction.
10043646 (i) (j) If a partner is required to include an item of income, a
10053647 deduction, or another tax attribute in the partner's adjusted gross
10063648 income tax return pursuant to IC 6-3-4.5, such item shall be considered
10073649 to be includible in the partner's federal adjusted gross income or federal
10083650 taxable income, regardless of whether such item is actually required to
10093651 be reported by the partner for federal income tax purposes. For
10103652 purposes of this subsection:
10113653 (1) items for which a valid election is made under IC 6-3-4.5-6,
10123654 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
10133655 in the partner's adjusted gross income or taxable income; and
10143656 (2) items for which the partnership did not make an election under
10153657 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
10163658 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
10173659 shall be included in the partner's adjusted gross income or taxable
10183660 income.
10193661 SECTION 2. IC 6-3-2-2.5, AS AMENDED BY P.L.137-2022,
10203662 SECTION 35, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
10213663 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.5. (a) This section
10223664 applies to a resident person.
10233665 (b) Resident persons are entitled to a net operating loss deduction.
10243666 The amount of the deduction taken in a taxable year may not exceed
1025-SEA 2 25
10263667 the taxpayer's unused Indiana net operating losses carried over to that
10273668 year. A taxpayer is not entitled to carryback any net operating losses
10283669 after December 31, 2011.
10293670 (c) An Indiana net operating loss equals the sum of:
10303671 (1) the taxpayer's federal net operating loss for a taxable year as
10313672 calculated under Section 172 of the Internal Revenue Code,
10323673 adjusted for certain modifications required by IC 6-3-1-3.5 as set
10333674 forth in subsection (d)(1) and, in the case of an individual,
10343675 reduced by any deductions allowable in determining the federal
10353676 net operating loss for the taxable year, but not allowable in
3677+ES 2—LS 7135/DI 125 87
10363678 determining federal adjusted gross income;
10373679 (2) the excess business loss deduction disallowed under
10383680 IC 6-3-1-3.5(a)(29) and IC 6-3-1-3.5(f)(14); and
10393681 (3) for taxable years beginning after December 31, 2020, a loss
10403682 for a taxable year disallowed because of Section 461(l) of the
10413683 Internal Revenue Code, without any modifications under
10423684 subsection (d).
10433685 (d) The following provisions apply for purposes of subsection (c):
10443686 (1) The modifications that are to be applied are those
10453687 modifications required under IC 6-3-1-3.5 for the same taxable
10463688 year in which each net operating loss was incurred, except that the
10473689 modifications do not include the modifications required under:
10483690 (A) IC 6-3-1-3.5(a)(3);
10493691 (B) IC 6-3-1-3.5(a)(4);
10503692 (C) IC 6-3-1-3.5(a)(5);
10513693 (D) IC 6-3-1-3.5(a)(35);
10523694 (E) IC 6-3-1-3.5(f)(11); and
10533695 (F) IC 6-3-1-3.5(f)(17). IC 6-3-1-3.5(f)(18).
10543696 (2) An Indiana net operating loss includes a net operating loss that
10553697 arises when the applicable modifications required by IC 6-3-1-3.5
10563698 as set forth in subdivision (1) exceed the sum of the taxpayer's
10573699 federal adjusted gross income (as defined in Section 62 of the
10583700 Internal Revenue Code) if the taxpayer is an individual, or federal
10593701 taxable income (as defined in Section 63 of the Internal Revenue
10603702 Code) if the taxpayer is a trust or an estate for the taxable year in
10613703 which the Indiana net operating loss is determined and the
10623704 modifications otherwise required for federal net operating losses
10633705 for the taxable year by Section 172(d) of the Internal Revenue
10643706 Code. A modification that reduces a federal net operating loss
10653707 shall be treated as a positive number for purposes of this
10663708 subdivision, and a modification that increases a federal net
10673709 operating loss shall be treated as a negative number for purposes
1068-SEA 2 26
10693710 of this subdivision.
10703711 (e) Subject to the limitations contained in subsection (g), an Indiana
10713712 net operating loss carryover shall be available as a deduction from the
10723713 taxpayer's adjusted gross income (as defined in IC 6-3-1-3.5) in the
10733714 carryover year provided in subsection (f), but not in excess of the
10743715 taxpayer's adjusted gross income (as defined in IC 6-3-1-3.5) in the
10753716 carryover year determined without regard to this section.
10763717 (f) Carryovers shall be determined under this subsection as follows:
10773718 (1) An Indiana net operating loss shall be an Indiana net operating
10783719 loss carryover to each of the carryover years following the taxable
3720+ES 2—LS 7135/DI 125 88
10793721 year of the loss.
10803722 (2) An Indiana net operating loss may not be carried over for
10813723 more than twenty (20) taxable years after the taxable year of the
10823724 loss.
10833725 (g) The entire amount of the Indiana net operating loss for any
10843726 taxable year shall be carried to the earliest of the taxable years to which
10853727 (as determined under subsection (f)) the loss may be carried. The
10863728 amount of the Indiana net operating loss remaining after the deduction
10873729 is taken under this section in a taxable year may be carried over as
10883730 provided in subsection (f). The amount of the Indiana net operating loss
10893731 carried over from year to year shall be reduced to the extent that the
10903732 Indiana net operating loss carryover is used by the taxpayer to obtain
10913733 a deduction in a taxable year until the occurrence of the earlier of the
10923734 following:
10933735 (1) The entire amount of the Indiana net operating loss has been
10943736 used as a deduction.
10953737 (2) The Indiana net operating loss has been carried over to each
10963738 of the carryover years provided by subsection (f).
10973739 SECTION 3. IC 6-3-2-2.6, AS AMENDED BY P.L.137-2022,
10983740 SECTION 36, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
10993741 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.6. (a) This section
11003742 applies to a corporation or a nonresident person.
11013743 (b) Corporations and nonresident persons are entitled to a net
11023744 operating loss deduction. The amount of the deduction taken in a
11033745 taxable year may not exceed the taxpayer's unused Indiana net
11043746 operating losses carried over to that year. A taxpayer is not entitled to
11053747 carryback any net operating losses after December 31, 2011.
11063748 (c) An Indiana net operating loss equals the sum of:
11073749 (1) the taxpayer's federal net operating loss for a taxable year as
11083750 calculated under Section 172 of the Internal Revenue Code,
11093751 derived from sources within Indiana and adjusted for certain
11103752 modifications required by IC 6-3-1-3.5 as set forth in subsection
1111-SEA 2 27
11123753 (d)(1) and, for a nonresident individual, reduced by any
11133754 deductions from Indiana sources allowable in determining the
11143755 federal net operating loss for the taxable year, but not allowable
11153756 in determining federal adjusted gross income;
11163757 (2) the excess business loss deduction disallowed under
11173758 IC 6-3-1-3.5(a)(29) and IC 6-3-1-3.5(f)(14) and incurred from
11183759 Indiana sources; and
11193760 (3) for taxable years beginning after December 31, 2020, the
11203761 portion of the loss for a taxable year disallowed because of
11213762 Section 461(l) of the Internal Revenue Code and incurred from
3763+ES 2—LS 7135/DI 125 89
11223764 Indiana sources, without any modifications under subsection (d).
11233765 Any net operating loss under this subdivision shall be computed
11243766 in a manner consistent with the computation of adjusted gross
11253767 income under IC 6-3.
11263768 (d) The following provisions apply for purposes of subsection (c):
11273769 (1) The modifications that are to be applied are those
11283770 modifications required under IC 6-3-1-3.5 for the same taxable
11293771 year in which each net operating loss was incurred, except that the
11303772 modifications do not include the modifications required under:
11313773 (A) IC 6-3-1-3.5(a)(3);
11323774 (B) IC 6-3-1-3.5(a)(4);
11333775 (C) IC 6-3-1-3.5(a)(5);
11343776 (D) IC 6-3-1-3.5(a)(35);
11353777 (E) IC 6-3-1-3.5(b)(14);
11363778 (F) IC 6-3-1-3.5(b)(20);
11373779 (G) IC 6-3-1-3.5(d)(13);
11383780 (H) IC 6-3-1-3.5(d)(19);
11393781 (I) IC 6-3-1-3.5(e)(13);
11403782 (J) IC 6-3-1-3.5(e)(19);
11413783 (K) IC 6-3-1-3.5(f)(11); and
11423784 (L) IC 6-3-1-3.5(f)(17). IC 6-3-1-3.5(f)(18).
11433785 (2) The amount of the taxpayer's net operating loss that is derived
11443786 from sources within Indiana shall be determined in the same
11453787 manner that the amount of the taxpayer's adjusted gross income
11463788 derived from sources within Indiana is determined under section
11473789 2 of this chapter for the same taxable year during which each loss
11483790 was incurred.
11493791 (3) An Indiana net operating loss includes a net operating loss that
11503792 arises when the applicable modifications required by IC 6-3-1-3.5
11513793 as set forth in subdivision (1) exceed the sum of:
11523794 (A) either:
11533795 (i) the taxpayer's federal taxable income (as defined in
1154-SEA 2 28
11553796 Section 63 of the Internal Revenue Code), if the taxpayer is
11563797 a corporation, nonresident estate, or nonresident trust; or
11573798 (ii) the taxpayer's federal adjusted gross income (as defined
11583799 by Section 62 of the Internal Revenue Code), if the taxpayer
11593800 is a nonresident individual;
11603801 for the taxable year in which the Indiana net operating loss is
11613802 determined; and
11623803 (B) the modifications otherwise required for federal net
11633804 operating losses for the taxable year of the Indiana net
11643805 operating loss under Section 172(d) of the Internal Revenue
3806+ES 2—LS 7135/DI 125 90
11653807 Code or Section 512(b) of the Internal Revenue Code. A
11663808 modification that reduces a federal net operating loss shall be
11673809 treated as a positive number for purposes of this subdivision,
11683810 and a modification that increases a federal net operating loss
11693811 shall be treated as a negative number for purposes of this
11703812 subdivision.
11713813 (e) Subject to the limitations contained in subsection (g), an Indiana
11723814 net operating loss carryover shall be available as a deduction from the
11733815 taxpayer's adjusted gross income derived from sources within Indiana
11743816 (as defined in section 2 of this chapter) in the carryover year provided
11753817 in subsection (f), but not in excess of the taxpayer's adjusted gross
11763818 income (as defined in IC 6-3-1-3.5) in the carryover year determined
11773819 without regard to the deduction allowable under this section.
11783820 (f) Carryovers shall be determined under this subsection as follows:
11793821 (1) An Indiana net operating loss shall be an Indiana net operating
11803822 loss carryover to each of the carryover years following the taxable
11813823 year of the loss.
11823824 (2) An Indiana net operating loss may not be carried over for
11833825 more than twenty (20) taxable years after the taxable year of the
11843826 loss.
11853827 (g) The entire amount of the Indiana net operating loss for any
11863828 taxable year shall be carried to the earliest of the taxable years to which
11873829 (as determined under subsection (f)) the loss may be carried. The
11883830 amount of the Indiana net operating loss remaining after the deduction
11893831 is taken under this section in a taxable year may be carried over as
11903832 provided in subsection (f). The amount of the Indiana net operating loss
11913833 carried over from year to year shall be reduced to the extent that the
11923834 Indiana net operating loss carryover is used by the taxpayer to obtain
11933835 a deduction in a taxable year until the occurrence of the earlier of the
11943836 following:
11953837 (1) The entire amount of the Indiana net operating loss has been
11963838 used as a deduction.
1197-SEA 2 29
11983839 (2) The Indiana net operating loss has been carried over to each
11993840 of the carryover years provided by subsection (f).
12003841 (h) An Indiana net operating loss deduction determined under this
12013842 section shall be allowed notwithstanding the fact that in the year the
12023843 taxpayer incurred the net operating loss the taxpayer was not subject to
12033844 the tax imposed under section 1 of this chapter because the taxpayer
12043845 was:
12053846 (1) a life insurance company (as defined in Section 816(a) of the
12063847 Internal Revenue Code); or
12073848 (2) an insurance company subject to tax under Section 831 of the
3849+ES 2—LS 7135/DI 125 91
12083850 Internal Revenue Code.
12093851 (i) In the case of a life insurance company, this section shall be
12103852 applied by substituting life insurance company taxable income (as
12113853 defined in Section 801 the Internal Revenue Code) in place of
12123854 references to taxable income (as defined in Section 63 of the Internal
1213-Revenue Code).
1214-SECTION 4. IC 6-3-2-2.8, AS AMENDED BY P.L.129-2014,
1215-SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1216-JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.8. Notwithstanding any
1217-provision of IC 6-3-1 through IC 6-3-7, there shall be no tax on the
1218-adjusted gross income of the following:
1219-(1) Any organization described in Section 501(a) of the Internal
1220-Revenue Code, except that any income of such organization
1221-which is subject to income tax under the Internal Revenue Code
1222-shall be subject to the tax under IC 6-3-1 through IC 6-3-7.
1223-(2) Any corporation which is exempt from income tax under
1224-Section 1363 of the Internal Revenue Code and which complies
1225-with the requirements of IC 6-3-4-13. However, income of a
1226-corporation described under this subdivision that is subject to
1227-income tax under the Internal Revenue Code is subject to the tax
1228-under IC 6-3-1 through IC 6-3-7. A corporation will not lose its
1229-exemption under this section because it fails to comply with
1230-IC 6-3-4-13 but it will be subject to the penalties provided by
1231-IC 6-8.1-10. Any corporation that is exempt from income tax
1232-under Section 1363 of the Internal Revenue Code and that
1233-makes an election under IC 6-3-2.1 for a taxable year shall be
1234-subject to tax as provided in IC 6-3-2.1 for the taxable year of
1235-the election.
1236-(3) Banks and trust companies, national banking associations,
1237-savings banks, building and loan associations, and savings and
1238-loan associations.
1239-(4) Insurance companies subject to tax under any of the following:
1240-SEA 2 30
1241-(A) IC 27-1-18-2, including a domestic insurance company
1242-that elects to be taxed under IC 27-1-18-2.
1243-(B) IC 27-1-2-2.3.
1244-(5) International banking facilities (as defined in Regulation D of
1245-the Board of Governors of the Federal Reserve System (12 CFR
1246-204)).
1247-SECTION 5. IC 6-3-2.1 IS ADDED TO THE INDIANA CODE AS
1248-A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
1249-JANUARY 1, 2022 (RETROACTIVE)]:
1250-Chapter 2.1. Pass Through Entity Tax
1251-Sec. 1. This chapter applies to taxable years beginning after
1252-December 31, 2021.
1253-Sec. 2. The following definitions apply throughout this chapter:
1254-(1) "Electing entity" means a pass through entity described in
1255-IC 6-3-1-35 that is subject to Subchapter K or Subchapter S
1256-of the Internal Revenue Code and makes the election under
1257-this chapter.
1258-(2) "Entity owner" means the direct or indirect owners of an
1259-electing entity that are ultimately taxable on the entity's
1260-income under Subchapter K or Subchapter S of the Internal
1261-Revenue Code, except an owner described in subdivision
1262-(4)(A) through (4)(C).
1263-(3) "Nonresident" means a nonresident partner as defined by
3855+Revenue Code).".
3856+Page 1, line 4, after "IC 6-3-7" insert ",".
3857+Page 1, line 4, delete "and except as provided in".
3858+Page 1, line 5, delete "subdivision (2),".
3859+Page 2, line 31, delete "." and insert ", except an owner described
3860+in subdivision (4)(A) through (4)(C).".
3861+Page 2, between lines 31 and 32, begin a new line block indented
3862+and insert:
3863+"(3) "Nonresident" means a nonresident partner as defined by
12643864 IC 6-3-4-12(n), a nonresident shareholder as defined by
12653865 IC 6-3-4-13(n), or a nonresident beneficiary as defined by
12663866 IC 6-3-4-15(i), whichever is applicable.
12673867 (4) "Owner" means a direct or indirect owner of an electing
12683868 entity and includes a beneficiary of an estate or trust.
12693869 However an owner shall not include:
12703870 (A) an entity described in IC 6-3-2-2.8(3);
12713871 (B) an entity described in IC 6-3-2-2.8(5); or
12723872 (C) any other entity as determined by the department and
1273-listed in instructions or guidance issued by the department.
1274-Sec. 3. (a) For purposes of this section, "authorized person"
1275-means any individual with the authority from the electing entity to
1276-bind the electing entity or sign returns on its behalf.
1277-(b) Each taxable year, an authorized person may elect, on behalf
1278-of the electing entity, to have the adjusted gross income tax under
1279-IC 6-3-1 through IC 6-3-7 imposed upon the electing entity. The
1280-entity owners shall remain liable for adjusted gross income tax
1281-under IC 6-3-1 through IC 6-3-7 on their share of the electing
1282-entity's adjusted gross income but with the credit provided to the
1283-SEA 2 31
1284-entity owners as set forth in section 5 of this chapter.
1285-(c) The election is applicable for the taxable year of the return.
1286-(d) The following apply to an election under this section:
3873+listed in instructions or guidance issued by the
3874+department.".
3875+Page 2, line 37, after "entity." delete "The".
3876+Page 2, delete lines 38 through 39.
3877+Page 2, line 40, delete "return under this article, including
3878+extensions.".
3879+Page 3, delete lines 4 through 8, begin a new paragraph and insert:
3880+"(d) The following apply to an election under this section:
12873881 (1) For taxable years beginning after December 31, 2022, the
12883882 election may be made at any time during the taxable year or
12893883 after the end of the taxable year, but not later than the earlier
12903884 of:
12913885 (A) the due date of the electing entity's return for the
12923886 taxable year, including any extensions; or
12933887 (B) the date the electing entity files its return for the
12943888 taxable year.
12953889 (2) For taxable years beginning after December 31, 2021, and
12963890 before January 1, 2023, the election must be made after
12973891 March 31, 2023, and before August 31, 2024.
3892+ES 2—LS 7135/DI 125 92
12983893 (3) The election shall be made in the form and manner
12993894 prescribed by the department.
13003895 (4) The election, once made for a taxable year, is irrevocable,
13013896 provided that an election under subdivision (2) may be made
13023897 on an amended return if the electing entity filed a return on
1303-or before April 18, 2023.
1304-Sec. 4. (a) A tax shall be imposed on the adjusted gross income
1305-of an electing entity for the taxable year of the election. The
1306-adjusted gross income of the electing entity shall be the aggregate
1307-of the direct owners' share of the electing entity's adjusted gross
3898+or before April 18, 2023.".
3899+Page 3, line 12, delete "of the entity" and insert "of the direct".
3900+Page 3, line 12, delete "income and" and insert "adjusted gross
13083901 income. For purposes of this section:
13093902 (1) the electing entity shall determine each nonresident direct
13103903 owner's share after allocation and apportionment pursuant to
13113904 IC 6-3-2-2; and
13123905 (2) the electing entity shall determine the resident direct
13133906 owner's share either before allocation and apportionment
13143907 pursuant to IC 6-3-2-2 or after allocation and apportionment
13153908 pursuant to IC 6-3-2-2. The electing entity must use the same
1316-method for all resident direct owners.
1317-(b) The tax rate shall be the tax rate specified in IC 6-3-2-1(b)
1318-as of the last day of the electing entity's taxable year, and the tax
1319-shall be due on the same date as the entity return for the taxable
1320-year is due under this article, without regard to extensions.
1321-(c) On its return for the taxable year, the electing entity shall
1322-attach a schedule showing the calculation of the tax and the credit
1323-for each entity owner, and remit the tax with the return, taking
1324-into account prior estimated tax payments and other tax payments
1325-by the electing entity, along with other payments that are credited
1326-SEA 2 32
1327-to the electing entity as tax paid under this chapter or as tax
1328-withheld under IC 6-3-4 or IC 6-5.5-2-8. The department may
1329-prescribe the form for providing the information required by this
1330-section.
1331-(d) If a pass through entity makes estimated tax payments,
3909+method for all resident direct owners.".
3910+Page 3, delete lines 13 through 17.
3911+Page 3, line 19, delete "for the" and insert "as of the last day of the
3912+electing entity's".
3913+Page 3, line 19, after "date as" insert "the entity return for the
3914+taxable year is due under this article, without regard to
3915+extensions.".
3916+Page 3, delete line 20.
3917+Page 3, line 25, delete "." and insert ", along with other payments
3918+that are credited to the electing entity as tax paid under this
3919+chapter or as tax withheld under IC 6-3-4 or IC 6-5.5-2-8.".
3920+Page 3, line 26, delete "If a pass".
3921+Page 3, delete lines 27 through 29, begin a new paragraph and
3922+insert:
3923+"(d) If a pass through entity makes estimated tax payments,
13323924 makes other tax payments, or has other payments that are credited
13333925 to the electing entity as tax paid under this chapter or a tax
13343926 withheld under IC 6-3-4 or IC 6-5.5-2-8, and the pass through
13353927 entity does not make the election under section 3 of this chapter,
13363928 the pass through entity:
13373929 (1) may treat pass through entity tax remitted on its behalf
13383930 under this chapter as pass through entity tax to its direct
13393931 owners, provided that:
13403932 (A) the tax is designated on a schedule similar to the
13413933 schedule required under subsection (c) and is reported to
13423934 the direct owners in the manner provided in section 5 of
3935+ES 2—LS 7135/DI 125 93
13433936 this chapter; and
13443937 (B) the pass through entity credits an amount to a direct
13453938 owner no greater than the tax that otherwise would be due
13463939 under this chapter on their share of the adjusted gross
13473940 income from the pass through entity or the direct owner's
13483941 portion (as determined under subsection (a)) of the pass
13493942 through entity tax passed through to the pass through
13503943 entity, whichever is greater (for purposes of this clause, a
13513944 trust or estate shall compute the tax in the same manner as
13523945 an electing entity);
13533946 (2) shall treat any payment other than a payment designated
13543947 under subdivision (1) as a withholding tax payment under
13553948 IC 6-3-4-12, IC 6-3-4-13, IC 6-3-4-15, or IC 6-5.5-2-8 to the
13563949 extent the pass through entity otherwise has not remitted or
13573950 been credited with such withholding; and
13583951 (3) may request a refund of any payment in excess of the
1359-amounts credited or designated under subdivision (1) or (2).
1360-Sec. 5. (a) Each electing entity shall compute each direct owner's
1361-share of the tax imposed by section 4 of this chapter and reflect
1362-that amount in the form and manner prescribed by the
1363-department.
1364-(b) Each entity owner shall be entitled to a refundable credit in
1365-an amount equal to the amount of tax under this chapter credited
1366-to the entity owner.
1367-(c) All other credits arising from the operations of the electing
1368-entity, or which are passed through to or assigned to the electing
1369-SEA 2 33
1370-entity, shall pass through to the entity owners as provided in this
1371-article or IC 6-3.1 and shall not apply to the tax imposed in section
1372-4 of this chapter. All such other credits shall apply before the
1373-application of the pass through entity tax credit. This subsection
1374-also applies to pass through entities that pass the tax under this
1375-chapter through to their owners. However, this subsection shall not
1376-limit the ability of an electing entity or pass through entity to claim
1377-credit for taxes withheld or paid on the entity's behalf.
1378-Sec. 6. (a) Except as otherwise provided in this section, an
1379-electing entity shall be subject to the obligation to make estimated
1380-tax payments under this article for the tax imposed under section
1381-4 of this chapter in the same manner as applicable to corporations
1382-under IC 6-3-4-4.1(c).
1383-(b) For taxable years ending on or before June 30, 2023, an
1384-electing entity is not required to make estimated tax payments.
1385-(c) For taxable years ending after June 30, 2023, and on or
1386-before December 31, 2024, an electing entity shall make an
1387-estimated tax payment for the taxable years on or before the end
1388-of the taxable year. There shall be no penalty for underpayment of
1389-estimated tax, except to the extent the underpayment fails to equal
1390-or exceed fifty percent (50%) of the tax imposed by section 4 of this
1391-chapter for the taxable year.
1392-(d) For taxable years ending after December 31, 2024, there
1393-shall be no penalty for underpayment of estimated tax, except to
1394-the extent the payments during the taxable year fail to equal or
1395-exceed the lesser of eighty percent (80%) of the tax imposed under
1396-this chapter for the taxable year or one hundred percent (100%)
1397-of the tax imposed under this chapter for the preceding taxable
1398-year.
1399-(e) In the event of an underpayment under subsection (c) or (d),
3952+amounts credited or designated under subdivision (1) or (2).".
3953+Page 3, line 30, after "compute each" delete "entity" and insert
3954+"direct".
3955+Page 3, line 32, delete "on the Schedule IN K-1 Form issued to the
3956+entity" and insert "in the form and manner prescribed by the
3957+department.".
3958+Page 3, delete line 33.
3959+Page 3, line 35, after "equal to" insert "the amount of tax under
3960+this chapter credited to the entity owner.".
3961+Page 3, line 35, delete "that portion of the tax paid by the electing".
3962+Page 3, delete lines 36 through 38.
3963+Page 3, line 40, delete "shall" and insert ", or which are passed
3964+through to or assigned to the electing entity, shall".
3965+Page 3, line 41, after "article" insert "or IC 6-3.1".
3966+Page 4, line 1, after "entity" insert "tax".
3967+Page 4, line 1, after "credit." insert "This subsection also applies
3968+to pass through entities that pass the tax under this chapter
3969+through to their owners. However, this subsection shall not limit
3970+the ability of an electing entity or pass through entity to claim
3971+credit for taxes withheld or paid on the entity's behalf.".
3972+Page 4, line 2, after "as" insert "otherwise".
3973+Page 4, line 2, delete "subsections (b) and (c)," and insert "this
3974+section,".
3975+Page 4, line 5, delete "on the same due dates as applicable to
3976+individuals" and insert "in the same manner as applicable to
3977+corporations under IC 6-3-4-4.1(c).".
3978+ES 2—LS 7135/DI 125 94
3979+Page 4, delete lines 6 through 7.
3980+Page 4, line 8, delete "December 31, 2023," and insert "June 30,
3981+2023,".
3982+Page 4, line 10, delete "December 31, 2023," and insert "June 30,
3983+2023,".
3984+Page 4, line 15, delete "eighty percent (80%)" and insert "fifty
3985+percent (50%)".
3986+Page 4, line 17, delete "an" and insert "there shall be no penalty
3987+for underpayment of estimated tax, except to the extent the
3988+payments during the taxable year fail to equal or exceed the lesser
3989+of eighty percent (80%) of the tax imposed under this chapter for
3990+the taxable year or one hundred percent (100%) of the tax imposed
3991+under this chapter for the preceding taxable year.".
3992+Page 4, delete lines 18 through 23, begin a new paragraph and
3993+insert:
3994+"(e) In the event of an underpayment under subsection (c) or (d),
14003995 the electing entity shall be subject to a penalty in the amount
14013996 prescribed under IC 6-8.1-10-2.1(b) on the amount of the
14023997 underpayment.
14033998 Sec. 7. (a) This section applies if:
14043999 (1) the department determines that an electing entity
14054000 underreported its tax under this chapter;
14064001 (2) an electing entity files an amended return reporting an
14074002 underpayment of tax under this chapter; or
14084003 (3) the Internal Revenue Service adjusts the adjusted gross
14094004 income of an electing entity.
14104005 (b) If a partnership is an electing entity, the partnership shall be
14114006 subject to IC 6-3-4.5 on any assessment and reporting of changes.
1412-SEA 2 34
14134007 (c) If a corporation described in IC 6-3-2-2.8(2) is an electing
14144008 entity, the corporation and its shareholders shall be subject to the
14154009 provisions of IC 6-3-4.5 in the same manner as a partnership and
14164010 its partners with regard to the tax imposed under this chapter,
14174011 except that any change in attributes is treated as occurring in the
14184012 year to which the change relates unless required by the Internal
1419-Revenue Code.
1420-SECTION 6. IC 6-3-3-3, AS AMENDED BY P.L.159-2021,
1421-SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1422-JANUARY 1, 2019 (RETROACTIVE)]: Sec. 3. (a) Whenever a
1423-resident person has become liable for tax to another state upon all or
1424-any part of the person's income for a taxable year derived from sources
1425-without this state and subject to taxation under IC 6-3-2, the amount of
1426-tax paid by the person to the other state shall be credited against the
1427-amount of the tax payable by the person. Such credit shall be allowed
1428-upon the production to the department of satisfactory evidence of the
1429-fact of such payment, except that such application for credit shall not
1430-operate to reduce the tax payable under IC 6-3-2 to an amount less than
1431-would have been payable were the income from the other state ignored.
1432-The credit provided for by this subsection shall not be granted to a
1433-taxpayer when the laws of the other state, under which the adjusted
1434-gross income in question is subject to taxation, provides for a credit to
1435-the taxpayer substantially similar to that granted by subsection (b).
1436-(b) Whenever a nonresident person has become liable for tax to the
1437-state where the person resides upon the person's income for the taxable
1438-year derived from sources within this state and subject to taxation
1439-under IC 6-3-2, the proportion of tax paid by the person to the state
1440-where the person resides that the person's income subject to taxation
1441-under IC 6-3-2 bears to the person's income upon which the tax so
1442-payable to the other state was imposed shall be credited against the tax
1443-payable by the person under IC 6-3-2, but only if the laws of the other
1444-state grant a substantially similar credit to residents of this state subject
1445-to income tax under the laws of such other state, or impose a tax upon
1446-the income of its residents derived from sources in this state and
1447-exempt from taxation the income of residents of this state. No credit
1448-shall be allowed against the amount of the tax on any adjusted gross
1449-income taxable under IC 6-3-2 that is exempt from taxation under the
1450-laws of the other state.
1451-(c) Notwithstanding subsection (a), if a resident person will be liable
1452-for income tax to a foreign country upon the person's income included
1453-under the Internal Revenue Code, the income is considered from
1454-sources outside the United States under the Internal Revenue Code, and
1455-SEA 2 35
1456-the income is included in the person's Indiana adjusted gross income
1457-due solely to an acceleration of the income inclusion for federal income
1458-tax purposes, the person may claim the credit allowable under this
1459-section by providing evidence to the department of the following:
1460-(1) The foreign country in which the income is subject to tax.
1461-(2) The amount of income included in Indiana adjusted gross
1462-income that is derived from the foreign country.
1463-(3) The amount of tax that will be imposed in the foreign country
1464-upon the individual's realization of the income under the laws of
1465-the foreign country, including any withholding tax or composite
1466-tax.
1467-(4) Any other information required by the department.
1468-The department may impose limitations and conditions on the claim
1469-under this subsection, including reporting requirements on the part of
1470-the person and extensions of statutes of limitations under IC 6-8.1-5-2.
1471-(d) As used in this subsection, "pass through entity tax" means
1472-a state net income tax imposed by another state on a pass through
1473-entity enacted by the state after 2017 that is substantially similar
1474-to that imposed under IC 6-3-2.1. Solely for purposes of this
1475-section, an owner of a pass through entity shall be considered liable
1476-for tax paid to another state by the pass through entity pursuant to
1477-a pass through entity tax imposed by the state (whether elected or
1478-otherwise) in an amount equal to that portion of the pass through
1479-entity tax representing the pass through entity tax credited to or
1480-otherwise attributed to the owner by the pass through entity, and
1481-the owner shall be considered to have paid that portion of the tax
1482-paid by the pass through entity. The owner of a pass through entity
1483-shall also be considered liable for and to have paid state income
1484-taxes to another state paid by the pass through entity on behalf of
1485-an owner through withholding, a composite return, or otherwise.
1486-SECTION 7. IC 6-3-4-11 IS AMENDED TO READ AS FOLLOWS
1487-[EFFECTIVE JANUARY 1, 2022 (RETROACTIVE)]: Sec. 11. (a) A
1488-partnership as such shall not be subject to the adjusted gross income
1489-tax imposed by IC 6-3-1 through IC 6-3-7, except to the extent the
1490-partnership is an electing entity (as defined in IC 6-3-2.1-2) or the
1491-partnership has made an election to be taxed at the partnership
1492-level under IC 6-3-4.5. Persons or corporations carrying on business
1493-as partners shall be liable for the adjusted gross income tax only in
1494-their separate or individual capacities. In determining each partner's
1495-adjusted gross income, such partner shall take into account his or its
1496-distributive share of the adjustments provided for in IC 6-3-1-3.5.
1497-(b) The adjustments provided for in IC 6-3-1-3.5 shall be allowed
1498-SEA 2 36
1499-for the taxable year of the partner within or with which the partnership's
1500-taxable year ends.
1501-SECTION 8. IC 6-3-4-12, AS AMENDED BY P.L.137-2022,
1502-SECTION 38, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1503-JANUARY 1, 2022 (RETROACTIVE)]: Sec. 12. (a) Every partnership
1504-shall, at the time that the partnership pays or credits amounts to any of
1505-its nonresident partners on account of their distributive shares of
1506-partnership income, for a taxable year of the partnership, deduct and
1507-retain therefrom the amount prescribed in the withholding instructions
1508-referred to in section 8 of this chapter. Such partnership so paying or
1509-crediting any nonresident partner:
1510-(1) shall be liable to the state of Indiana for the payment of the tax
1511-required to be deducted and retained under this section and shall
1512-not be liable to such partner for the amount deducted from such
1513-payment or credit and paid over in compliance or intended
1514-compliance with this section; and
1515-(2) shall make return of and payment to the department monthly
1516-whenever the amount of tax due under IC 6-3 and IC 6-3.6
1517-exceeds an aggregate amount of fifty dollars ($50) per month with
1518-such payment due on the thirtieth day of the following month,
1519-unless an earlier date is specified by section 8.1 of this chapter.
1520-Where the aggregate amount due under IC 6-3 and IC 6-3.6 does not
1521-exceed fifty dollars ($50) per month, then such partnership shall make
1522-return and payment to the department quarterly, on such dates and in
1523-such manner as the department shall prescribe, of the amount of tax
1524-which, under IC 6-3 and IC 6-3.6, it is required to withhold. If a
1525-partnership credits a partner with pass through entity tax imposed
1526-under IC 6-3-2.1, the withholding required for that partner under
1527-this section shall be reduced by the tax credited to the partner
1528-under IC 6-3-2.1, but in no event shall the tax required to be
1529-withheld be reduced to less than zero dollars ($0).
1530-(b) Every partnership shall, at the time of each payment made by it
1531-to the department pursuant to this section, deliver to the department a
1532-return upon such form as shall be prescribed by the department
1533-showing the total amounts paid or credited to its nonresident partners,
1534-the amount deducted therefrom in accordance with the provisions of
1535-this section, and such other information as the department may require.
1536-Every partnership making the deduction and retention provided in this
1537-section shall furnish to its nonresident partners annually, but not later
1538-than the fifteenth day of the third month after the end of its taxable
1539-year, a record of the amount of tax deducted and retained from such
1540-partners on forms to be prescribed by the department.
1541-SEA 2 37
1542-(c) All money deducted and retained by the partnership, as provided
1543-in this section, shall immediately upon such deduction be the money of
1544-the state of Indiana and every partnership which deducts and retains
1545-any amount of money under the provisions of IC 6-3 shall hold the
1546-same in trust for the state of Indiana and for payment thereof to the
1547-department in the manner and at the times provided in IC 6-3. Any
1548-partnership may be required to post a surety bond in such sum as the
1549-department shall determine to be appropriate to protect the state of
1550-Indiana with respect to money deducted and retained pursuant to this
1551-section.
1552-(d) The provisions of IC 6-8.1 relating to additions to tax in case of
1553-delinquency and penalties shall apply to partnerships subject to the
1554-provisions of this section, and for these purposes any amount deducted,
1555-or required to be deducted and remitted to the department under this
1556-section, shall be considered to be the tax of the partnership, and with
1557-respect to such amount it shall be considered the taxpayer.
1558-(e) Amounts deducted from payments or credits to a nonresident
1559-partner during any taxable year of the partnership in accordance with
1560-the provisions of this section shall be considered to be in part payment
1561-of the tax imposed on such nonresident partner for the nonresident
1562-partner's taxable year within or with which the partnership's taxable
1563-year ends. A return made by the partnership under subsection (b) shall
1564-be accepted by the department as evidence in favor of the nonresident
1565-partner of the amount so deducted for the nonresident partner's
1566-distributive share.
1567-(f) This section shall in no way relieve any nonresident partner from
1568-the nonresident partner's obligations of filing a return or returns at the
1569-time required under IC 6-3 or IC 6-3.6, and any unpaid tax shall be paid
1570-at the time prescribed by section 5 of this chapter.
1571-(g) Instead of the reporting periods required under subsection (a),
1572-the department may permit a partnership to file one (1) return and
1573-payment each year if the partnership pays or credits amounts to its
1574-nonresident partners only one (1) time each year. The return and
1575-payment are due on or before the fifteenth day of the fourth month after
1576-the end of the year. However, if a partnership is permitted an extension
1577-to file its income tax return under IC 6-8.1-6-1, the return and payment
1578-due under this subsection shall be allowed the same treatment as an
1579-extended income tax return with respect to due dates, interest, and
1580-penalties under IC 6-8.1-6-1.
1581-(h) If a partnership fails to withhold and pay any amount of tax
1582-required to be withheld under this section and thereafter the tax is paid
1583-by the partners, the amounts of tax as paid by the partners shall not be
1584-SEA 2 38
1585-collected from the partnership but it may not be relieved from liability
1586-for interest or penalty otherwise due in respect to the failure to
1587-withhold under IC 6-8.1-10.
1588-(i) A partnership shall file a composite adjusted gross income tax
1589-return on behalf of all nonresident partners. The composite return must
1590-include each nonresident partner regardless of whether or not the
1591-nonresident partner has other Indiana source income.
1592-(j) If a partnership does not include all nonresident partners in the
1593-composite return, the partnership is subject to the penalty imposed
1594-under IC 6-8.1-10-2.1(j).
1595-(k) For taxable years beginning after December 31, 2013, the
1596-department may not impose a late payment penalty on a partnership for
1597-the failure to file a return, pay the full amount of the tax shown on the
1598-partnership's return, or pay the deficiency of the withholding taxes due
1599-under this section if the partnership pays the department before the
1600-fifteenth day of the fourth month after the end of the partnership's
1601-taxable year at least:
1602-(1) eighty percent (80%) of the withholding tax due for the
1603-current year; or
1604-(2) one hundred percent (100%) of the withholding tax due for the
1605-preceding year.
1606-(l) Notwithstanding subsection (a) or (i), a partnership is not
1607-required to withhold tax or file a composite adjusted gross income tax
1608-return for a nonresident partner if the partnership:
1609-(1) is a publicly traded partnership as defined by Section 7704(b)
1610-of the Internal Revenue Code;
1611-(2) meets the exception for partnerships under Section 7704(c) of
1612-the Internal Revenue Code; and
1613-(3) has agreed to file an annual information return reporting the
1614-name, address, taxpayer identification number, and other
1615-information requested by the department of each unit holder.
1616-The department may issue written guidance explaining circumstances
1617-under which limited partnerships or limited liability companies owned
1618-by a publicly traded partnership may be excluded from the withholding
1619-requirements of this section.
1620-(m) Notwithstanding subsection (k), a partnership is subject to a late
1621-payment penalty for the failure to file a return, pay the full amount of
1622-the tax shown on the partnership's return, or pay the deficiency of the
1623-withholding taxes due under this section for any amounts of
1624-withholding tax, including any interest under IC 6-8.1-10-1, reported
1625-or paid after the due date of the return, as adjusted by any extension
1626-under IC 6-8.1-6-1.
1627-SEA 2 39
1628-(n) For purposes of this section, a "nonresident partner" is:
1629-(1) an individual who does not reside in Indiana;
1630-(2) a trust that does not reside in Indiana;
1631-(3) an estate that does not reside in Indiana;
1632-(4) a partnership not domiciled in Indiana;
1633-(5) a C corporation not domiciled in Indiana; or
1634-(6) an S corporation not domiciled in Indiana.
1635-SECTION 9. IC 6-3-4-13, AS AMENDED BY P.L.197-2016,
1636-SECTION 27, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1637-JANUARY 1, 2022 (RETROACTIVE)]: Sec. 13. (a) Every corporation
1638-which is exempt from tax under IC 6-3 pursuant to IC 6-3-2-2.8(2)
1639-shall, at the time that it pays or credits amounts to any of its
1640-nonresident shareholders as dividends or as their share of the
1641-corporation's undistributed taxable income, withhold the amount
1642-prescribed by the department. Such corporation so paying or crediting
1643-any nonresident shareholder:
1644-(1) shall be liable to the state of Indiana for the payment of the tax
1645-required to be withheld under this section and shall not be liable
1646-to such shareholder for the amount withheld and paid over in
1647-compliance or intended compliance with this section; and
1648-(2) when the aggregate amount due under IC 6-3 and IC 6-3.6
1649-exceeds one hundred fifty dollars ($150) per quarter, then such
1650-corporation shall make return and payment to the department
1651-quarterly, on such dates and in such manner as the department
1652-shall prescribe, of the amount of tax which, under IC 6-3 and
1653-IC 6-3.6, it is required to withhold.
1654-If a corporation credits a shareholder with pass through entity tax
4013+Revenue Code.".
4014+Page 5, line 32, delete "refers" and insert "means".
4015+Page 5, line 33, delete "to".
4016+Page 5, line 34, delete "under provisions".
4017+Page 5, line 34, delete "." and insert "that is substantially similar
4018+to that imposed under IC 6-3-2.1.".
4019+Page 5, line 39, delete "representing the owner's" and insert
4020+"representing the pass through entity tax credited to or otherwise
4021+ES 2—LS 7135/DI 125 95
4022+attributed to the owner by the pass through entity,".
4023+Page 5, line 40, delete "share of the pass through entity's income
4024+subject to the tax,".
4025+Page 6, delete lines 4 through 40.
4026+Page 7, line 3, delete "." and insert "or the partnership has made
4027+an election to be taxed at the partnership level under IC 6-3-4.5.".
4028+Page 7, line 35, after "withhold." insert "If a partnership credits a
4029+partner with pass through entity tax imposed under IC 6-3-2.1, the
4030+withholding required for that partner under this section shall be
4031+reduced by the tax credited to the partner under IC 6-3-2.1, but in
4032+no event shall the tax required to be withheld be reduced to less
4033+than zero dollars ($0).".
4034+Page 9, line 11, delete "If the".
4035+Page 9, delete lines 12 through 17.
4036+Page 10, delete lines 18 through 20.
4037+Page 10, between lines 39 and 40, begin a new line blocked left and
4038+insert:
4039+"If a corporation credits a shareholder with pass through entity tax
16554040 imposed under IC 6-3-2.1, the withholding required for that
16564041 shareholder under this section shall be reduced by the tax credited
16574042 to the shareholder under IC 6-3-2.1, but in no event shall the tax
1658-required to be withheld be reduced to less than zero dollars ($0).
1659-(b) Every corporation shall, at the time of each payment made by it
1660-to the department pursuant to this section, deliver to the department a
1661-return upon such form as shall be prescribed by the department
1662-showing the total amounts paid or credited to its nonresident
1663-shareholders, the amount withheld in accordance with the provisions
1664-of this section, and such other information as the department may
1665-require. Every corporation withholding as provided in this section shall
1666-furnish to its nonresident shareholders annually, but not later than the
1667-fifteenth day of the third month after the end of its taxable year, a
1668-record of the amount of tax withheld on behalf of such shareholders on
1669-forms to be prescribed by the department.
1670-SEA 2 40
1671-(c) All money withheld by a corporation, pursuant to this section,
1672-shall immediately upon being withheld be the money of the state of
1673-Indiana and every corporation which withholds any amount of money
1674-under the provisions of this section shall hold the same in trust for the
1675-state of Indiana and for payment thereof to the department in the
1676-manner and at the times provided in IC 6-3. Any corporation may be
1677-required to post a surety bond in such sum as the department shall
1678-determine to be appropriate to protect the state of Indiana with respect
1679-to money withheld pursuant to this section.
1680-(d) The provisions of IC 6-8.1 relating to additions to tax in case of
1681-delinquency and penalties shall apply to corporations subject to the
1682-provisions of this section, and for these purposes any amount withheld,
1683-or required to be withheld and remitted to the department under this
1684-section, shall be considered to be the tax of the corporation, and with
1685-respect to such amount it shall be considered the taxpayer.
1686-(e) Amounts withheld from payments or credits to a nonresident
1687-shareholder during any taxable year of the corporation in accordance
1688-with the provisions of this section shall be considered to be a part
1689-payment of the tax imposed on such nonresident shareholder for the
1690-shareholder's taxable year within or with which the corporation's
1691-taxable year ends. A return made by the corporation under subsection
1692-(b) shall be accepted by the department as evidence in favor of the
1693-nonresident shareholder of the amount so withheld from the
1694-shareholder's distributive share.
1695-(f) This section shall in no way relieve any nonresident shareholder
1696-from the shareholder's obligation of filing a return or returns at the time
1697-required under IC 6-3 or IC 6-3.6, and any unpaid tax shall be paid at
1698-the time prescribed by section 5 of this chapter.
1699-(g) Instead of the reporting periods required under subsection (a),
1700-the department may permit a corporation to file one (1) return and
1701-payment each year if the corporation pays or credits amounts to its
1702-nonresident shareholders only one (1) time each year. The withholding
1703-return and payment are due on or before the fifteenth day of the fourth
1704-month after the end of the taxable year of the corporation. However, if
1705-a corporation is permitted an extension to file its income tax return
1706-under IC 6-8.1-6-1, the return and payment due under this subsection
1707-shall be allowed the same treatment as the extended income tax return
1708-with respect to the due dates, interest, and penalties under IC 6-8.1-6-1.
1709-(h) If a distribution will be made with property other than money or
1710-a gain is realized without the payment of money, the corporation shall
1711-not release the property or credit the gain until it has funds sufficient
1712-to enable it to pay the tax required to be withheld under this section. If
1713-SEA 2 41
1714-necessary, the corporation shall obtain such funds from the
1715-shareholders.
1716-(i) If a corporation fails to withhold and pay any amount of tax
1717-required to be withheld under this section and thereafter the tax is paid
1718-by the shareholders, such amount of tax as paid by the shareholders
1719-shall not be collected from the corporation but it shall not be relieved
1720-from liability for interest or penalty otherwise due in respect to such
1721-failure to withhold under IC 6-8.1-10.
1722-(j) A corporation described in subsection (a) shall file a composite
1723-adjusted gross income tax return on behalf of all nonresident
1724-shareholders. The composite return must include each nonresident
1725-shareholder regardless of whether or not the nonresident shareholder
1726-has other Indiana source income.
1727-(k) If a corporation described in subsection (a) does not include all
1728-nonresident shareholders in the composite return, the corporation is
1729-subject to the penalty imposed under IC 6-8.1-10-2.1(j).
1730-(l) For taxable years beginning after December 31, 2013, the
1731-department may not impose a late payment penalty on a corporation for
1732-the failure to file a return, pay the full amount of the tax shown on the
1733-corporation's return, or pay the deficiency of the withholding taxes due
1734-under this section if the corporation pays the department before the
1735-fifteenth day of the fourth month after the end of the partnership's
1736-taxable year at least:
1737-(1) eighty percent (80%) of the withholding tax due for the
1738-current year; or
1739-(2) one hundred percent (100%) of the withholding tax due for the
1740-preceding year.
1741-(m) Notwithstanding subsection (l), a corporation is subject to a late
1742-payment penalty for the failure to file a return, pay the full amount of
1743-the tax shown on the corporation's return, or pay the deficiency of the
1744-withholding taxes due under this section for any amounts of
1745-withholding tax, including any interest under IC 6-8.1-10-1, reported
1746-or paid after the due date of the return, as adjusted by any extension
1747-under IC 6-8.1-6-1.
1748-(n) For purposes of this section, a "nonresident shareholder" is:
1749-(1) an individual who does not reside in Indiana;
1750-(2) a trust that does not reside in Indiana; or
1751-(3) an estate that does not reside in Indiana.
1752-SECTION 10. IC 6-3-4-15, AS AMENDED BY P.L.181-2016,
4043+required to be withheld be reduced to less than zero dollars ($0).".
4044+Page 12, line 21, delete "If the corporation is an electing".
4045+Page 12, delete lines 22 through 27.
4046+Page 13, delete lines 11 through 13, begin a new paragraph and
4047+insert:
4048+"SECTION 9. IC 6-3-4-15, AS AMENDED BY P.L.181-2016,
17534049 SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17544050 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 15. (a) A trust or estate
17554051 shall, at the time that it distributes income (except income attributable
1756-SEA 2 42
17574052 to interest or dividends) to a nonresident beneficiary, deduct and retain
17584053 therefrom the amount prescribed in the withholding instructions
17594054 referred to in section 8 of this chapter. The trust or estate so
17604055 distributing income to a nonresident beneficiary:
17614056 (1) is liable to this state for the tax which it is required to deduct
17624057 and retain under this section and is not liable to the beneficiary for
17634058 the amount deducted from the distribution and paid to the
17644059 department in compliance, or intended compliance, with this
17654060 section; and
17664061 (2) shall pay the amount deducted to the department before the
17674062 thirtieth day of the month following the distribution, unless an
17684063 earlier date is specified by section 8.1 of this chapter.
4064+ES 2—LS 7135/DI 125 96
17694065 If a trust or estate credits a beneficiary with pass through entity
17704066 tax imposed under IC 6-3-2.1, the withholding required for that
17714067 beneficiary under this section shall be reduced by the tax credited
17724068 to the beneficiary under IC 6-3-2.1, but in no event shall the tax
17734069 required to be withheld be reduced to less than zero dollars ($0).
17744070 (b) A trust or estate shall, at the time that it makes a payment to the
17754071 department under this section, deliver to the department a return which
17764072 shows the total amounts distributed to the trust's or estate's nonresident
17774073 beneficiaries, the amount deducted from the distributions under this
17784074 section, and any other information required by the department. The
17794075 trust or estate shall file the return on the form prescribed by the
17804076 department. A trust or estate which makes the deduction and retention
17814077 required by this section shall furnish to its nonresident beneficiaries
17824078 annually, but not later than thirty (30) days after the end of the trust's
17834079 or estate's taxable year, a record of the amount of tax deducted and
17844080 retained from the beneficiaries. The trust or estate shall furnish the
17854081 information on the form prescribed by the department.
17864082 (c) The money deducted and retained by a trust or estate under this
17874083 section is money of this state. Every trust or estate which deducts and
17884084 retains any money under this section shall hold the money in trust for
17894085 this state until it pays the money to the department in the manner and
17904086 at the time provided in this section. The department may require a trust
17914087 or estate to post a surety bond to protect this state with respect to
17924088 money deducted and retained by the trust or estate under this section.
17934089 The department shall determine the amount of the surety bond.
17944090 (d) The provisions of IC 6-8.1 relating to penalties or to additions to
17954091 tax in case of a delinquency apply to trusts and estates which are
17964092 subject to this section. For purposes of this subsection, any amount
17974093 deducted, or required to be deducted and remitted to the department,
17984094 under this section is considered the tax of the trust or estate, and with
1799-SEA 2 43
18004095 respect to that amount, it is considered the taxpayer.
18014096 (e) Amounts deducted from distributions to nonresident
18024097 beneficiaries under this section during a taxable year of the trust or
18034098 estate are considered a partial payment of the tax imposed on the
18044099 nonresident beneficiary for his taxable year within or with which the
18054100 trust's or estate's taxable year ends. The department shall accept a
18064101 return made by the trust or estate under subsection (b) as evidence of
18074102 the amount of tax deducted from the income distributed to a
18084103 nonresident beneficiary.
18094104 (f) This section does not relieve a nonresident beneficiary of his
18104105 duty to file a return at the time required under IC 6-3. The nonresident
18114106 beneficiary shall pay any unpaid tax at the time prescribed by section
4107+ES 2—LS 7135/DI 125 97
18124108 5 of this chapter.
18134109 (g) If a trust or estate fails to withhold and pay any amount of tax
18144110 required to be withheld under this section and thereafter the tax is paid
18154111 by the beneficiaries, the amount of tax paid by the beneficiaries may
18164112 not be collected from the trust or estate but it may not be relieved from
18174113 liability for interest or penalty otherwise due in respect to the failure to
18184114 withhold under IC 6-8.1-10.
18194115 (h) A trust or estate shall file a composite adjusted gross income tax
18204116 return on behalf of all nonresident beneficiaries. The composite return
18214117 must include each nonresident beneficiary regardless of whether the
18224118 nonresident beneficiary has other Indiana source income.
18234119 (i) For purposes of this section, a "nonresident beneficiary" is:
18244120 (1) an individual who does not reside in Indiana;
18254121 (2) a trust that does not reside in Indiana;
18264122 (3) an estate that does not reside in Indiana;
18274123 (4) a partnership that is not domiciled in Indiana;
18284124 (5) a C corporation that is not domiciled in Indiana; or
18294125 (6) an S corporation that is not domiciled in Indiana.
18304126 (j) If a trust or estate is permitted an extension to file its income tax
18314127 return under IC 6-8.1-6-1, then the return and payment due under this
18324128 subsection shall be allowed the same treatment as the extended income
18334129 tax return with respect to due dates, interest, and penalties under
18344130 IC 6-8.1-6-1.
1835-SECTION 11. IC 6-3-4.5-1, AS AMENDED BY P.L.178-2022(ts),
4131+SECTION 10. IC 6-3-4.5-1, AS AMENDED BY P.L.178-2022(ts),
18364132 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
18374133 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 1. The following
18384134 definitions apply throughout this chapter:
18394135 (1) "Adjustment year" means the partnership taxable year
18404136 described in Section 6225(d)(2) of the Internal Revenue Code.
18414137 (2) "Administrative adjustment request" means an administrative
1842-SEA 2 44
18434138 adjustment request filed by a partnership under Section 6227 of
18444139 the Internal Revenue Code.
18454140 (3) "Affected year" means any taxable year for a taxpayer that is
18464141 affected by an adjustment under this chapter, regardless of
18474142 whether the partnership has received an adjustment for that
18484143 taxable year.
18494144 (4) "Audited partnership" means a partnership subject to a
18504145 partnership level audit resulting in a federal adjustment.
18514146 (5) "Corporate partner" means a partner that is subject to the state
18524147 adjusted gross income tax under IC 6-3-2-1(c) or the financial
18534148 institutions tax under IC 6-5.5-2-1. In the case of a partner that is
18544149 a corporation described in IC 6-3-2-2.8(2) that also is subject to
4150+ES 2—LS 7135/DI 125 98
18554151 tax under IC 6-3-2-1(c), the corporation is a corporate partner
18564152 only to the extent that its income is subject to tax under
18574153 IC 6-3-2-1(c).
18584154 (6) "Direct partner" means a partner that holds an interest directly
18594155 in a partnership or pass through entity.
18604156 (7) "Exempt partner" means a partner that is exempt from the
18614157 adjusted gross income tax under IC 6-3-2-2.8(1) or the financial
18624158 institutions tax under IC 6-5.5-2-7(4), except to the extent of
18634159 unrelated business taxable income.
18644160 (8) "Federal adjustment" means a change to an item or amount
18654161 determined under the Internal Revenue Code or a change to any
18664162 other tax attribute that is used by a taxpayer to compute state
18674163 adjusted gross income taxes or financial institutions tax owed,
18684164 whether that change results from action by the Internal Revenue
18694165 Service, including a partnership level audit, or the filing of an
18704166 amended federal return, a federal refund claim, or an
18714167 administrative adjustment request by the taxpayer. A federal
18724168 adjustment is positive to the extent that it increases state adjusted
18734169 gross income as determined under IC 6-3 or IC 6-5.5 and is
18744170 negative to the extent that it decreases state adjusted gross income
18754171 as determined under IC 6-3 or IC 6-5.5.
18764172 (9) "Federal adjustment reports" includes methods or forms
18774173 required by the department for use by a taxpayer to report final
18784174 federal adjustments for purposes of this chapter, including an
18794175 amended Indiana tax return, information return, or uniform
18804176 multistate report.
18814177 (10) "Federal partnership representative" means a person the
18824178 partnership designates for the taxable year as the partnership's
18834179 representative, or the person the Internal Revenue Service has
18844180 appointed to act as the federal partnership representative,
1885-SEA 2 45
18864181 pursuant to Section 6223(a) of the Internal Revenue Code.
18874182 (11) "Final determination date" means the following:
18884183 (A) Except as provided in clause (B) or (C), if the federal
18894184 adjustment arises from an Internal Revenue Service audit or
18904185 other action by the Internal Revenue Service, the final
18914186 determination date is the date on which the federal adjustment
18924187 is a final determination under IC 6-3-4-6(d).
18934188 (B) For federal adjustments arising from an Internal Revenue
18944189 Service audit or other action by the Internal Revenue Service,
18954190 if the taxpayer filed as a member of a consolidated tax return
18964191 filed under IC 6-3-4-14, a combined return filed under
18974192 IC 6-3-2-2 or IC 6-5.5-5-1, or a return combined by the
4193+ES 2—LS 7135/DI 125 99
18984194 department under IC 6-3-2-2(p), the final determination date
18994195 means the first date on which no related federal adjustments
19004196 arising from that audit remain to be finally determined, as
19014197 described in clause (A), for the entire group.
19024198 (C) If the federal adjustment results from filing an amended
19034199 federal return, a federal refund claim, or an administrative
19044200 adjustment request, the final determination date means the day
19054201 on which the amended return, refund claim, administrative
19064202 adjustment request, or other similar report was filed.
19074203 (12) "Final federal adjustment" means a federal adjustment after
19084204 the final determination date for that federal adjustment has
19094205 passed.
19104206 (13) "Indirect partner" means a partner in a partnership or pass
19114207 through entity that itself holds an interest directly, or through
19124208 another indirect partner, in a partnership or pass through entity.
19134209 (14) "Internal Revenue Code" has the meaning set forth in
19144210 IC 6-3-1-11.
19154211 (15) "Nonresident partner" has the meaning provided in
19164212 IC 6-3-4-12(n).
19174213 (16) "Partner" means a person or entity that holds an interest
19184214 directly or indirectly in a partnership or other pass through entity.
19194215 (17) "Partner level adjustments report" means a report provided
19204216 by a partnership to its partners as a result of a department action
19214217 with regard to the partnership. A partner level adjustments report
19224218 does not include an amended statement provided by a partnership
19234219 or other entity as a result of an adjustment reported by the
19244220 partnership.
19254221 (18) "Partnership" has the meaning set forth in IC 6-3-1-19.
19264222 (19) "Partnership level audit" means an examination by the
19274223 Internal Revenue Service at the partnership level under Sections
1928-SEA 2 46
19294224 6221 through 6241 of the Internal Revenue Code, as enacted by
19304225 the Bipartisan Budget Act of 2015, Public Law 114-74, which
19314226 results in federal adjustments.
19324227 (20) "Partnership return" means a return required to be filed by a
19334228 partnership pursuant to IC 6-3-4-10. In the case of a partnership
19344229 that is required to withhold tax or file a composite return pursuant
19354230 to IC 6-3-4-12 or IC 6-5.5-2-8, the term also includes the returns
19364231 or schedules required for tax withholding or composite filing. In
19374232 the case of a partnership that is an electing entity under
19384233 IC 6-3-2.1, the term also includes the returns or schedules
19394234 required for the pass through entity tax under IC 6-3-2.1.
19404235 (21) "Pass through entity" means an entity defined in IC 6-3-1-35,
4236+ES 2—LS 7135/DI 125 100
19414237 other than a partnership, that: is not subject to tax under IC 6-3.
19424238 (A) is not subject to tax except as provided in
19434239 IC 6-3-2-2.8(2), in the case of a corporation described in
19444240 IC 6-3-2-2.8(2); or
19454241 (B) is not subject to tax except on its undistributed taxable
19464242 income, in the case of an estate or a trust.
19474243 (22) "Reallocation adjustment" means a federal adjustment
19484244 resulting from a partnership level audit or an administrative
19494245 adjustment request that changes the shares of one (1) or more
19504246 items of partnership income, gain, loss, expense, or credit
19514247 allocated to direct partners. A positive reallocation adjustment
19524248 means the portion of a reallocation adjustment that would
19534249 increase federal adjusted gross income or federal taxable income
19544250 for one (1) or more direct partners, and a negative reallocation
19554251 adjustment means the portion of a reallocation adjustment that
19564252 would decrease federal adjusted gross income or federal taxable
19574253 income for one (1) or more direct partners, according to Section
19584254 6225 of the Internal Revenue Code and the regulations under that
19594255 section.
19604256 (23) "Resident partner" means a partner that is not a nonresident
19614257 partner.
19624258 (24) "Review year" means the taxable year of a partnership that
19634259 is subject to a partnership level audit, an administrative
19644260 adjustment request, or an amended federal return that results in
19654261 federal adjustments, regardless of whether any federal tax
19664262 determined to be due is the responsibility of the partnership or
19674263 partners.
19684264 (25) "Statement" means a form or schedule prescribed by the
19694265 department through which a partnership or pass through entity
19704266 reports tax attributes to its owners or beneficiaries.
1971-SEA 2 47
19724267 (26) "Tax attribute" means any item of income, deduction, credit,
19734268 receipts for apportionment, or other amount or status that
19744269 determines a partner's liability under IC 6-3, IC 6-3.6, or IC 6-5.5.
19754270 (27) "Taxable year" means, in the case of a partnership, the year
19764271 or partial year for which a partnership files a return for state and
19774272 federal purposes and, in the case of a partner, the taxable year in
19784273 which the partner reports tax attributes from the partnership.
19794274 (28) "Taxpayer" has the meaning set forth in IC 6-3-1-15 (in the
19804275 case of the adjusted gross income tax) and IC 6-5.5-1-17 (in the
19814276 case of the financial institutions tax) and, unless the context
19824277 clearly indicates otherwise, includes a partnership subject to a
19834278 partnership level audit or a partnership that has made an
4279+ES 2—LS 7135/DI 125 101
19844280 administrative adjustment request, as well as a tiered partner of
19854281 that partnership.
19864282 (29) "Tiered partner" means any partner that is a partnership or
19874283 pass through entity.
19884284 (30) "Unrelated business taxable income" has the meaning set
19894285 forth in Section 512 of the Internal Revenue Code.
1990-SECTION 12. IC 6-3-4.5-3, AS AMENDED BY P.L.137-2022,
4286+SECTION 11. IC 6-3-4.5-3, AS AMENDED BY P.L.137-2022,
19914287 SECTION 43, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
19924288 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3. (a) If the department
19934289 conducts an audit or investigation of a partnership, and the department
19944290 determines that the partnership:
19954291 (1) did not correctly report any tax attribute for a taxable year; or
19964292 (2) did not correctly allocate any tax attribute for a taxable year;
19974293 the department may adjust or reallocate the tax attribute. If the
19984294 department makes an adjustment or reallocation to one (1) or more tax
19994295 attributes, the department shall provide a report of proposed
20004296 partnership adjustments for the taxable year to the partnership.
20014297 (b) The report of proposed partnership adjustments shall list:
20024298 (1) the department's adjustments to tax attributes; and
20034299 (2) the allocation of the department's adjustments to all affected
20044300 direct partners. if the report of proposed partnership
20054301 adjustments is not attributed to one (1) or more affected
20064302 direct partners in proportion to their share of income from
20074303 the partnership, the allocation of the department's
20084304 adjustments to such affected direct partners. The portion of
20094305 adjustments not specifically allocated to partners in the report
20104306 of proposed partnership adjustments shall be considered to be
20114307 allocated in proportion to their share of income from the
20124308 partnership and adjusted to account for the partners whose
20134309 adjustments are specifically allocated to them.
2014-SEA 2 48
20154310 (c) If the report of proposed partnership adjustments for a taxable
20164311 year results in either:
20174312 (1) a potential increase in tax to one (1) or more direct partners;
20184313 or
20194314 (2) if the partnership reported tax attributes that would result in a
20204315 refund of tax to one (1) or more partners, a reduction in that
20214316 refund;
20224317 such report shall be treated as a proposed assessment under IC 6-8.1-5
20234318 to the partnership.
20244319 (d) If the result for partnership adjustments for a taxable year results
20254320 in:
20264321 (1) no direct increase in tax to any direct partner; and
4322+ES 2—LS 7135/DI 125 102
20274323 (2) a change in tax attributes to one (1) or more direct partners
20284324 that would result in a refund in excess of any refund claimed;
20294325 the department shall issue a report of proposed partnership adjustments
20304326 to the partnership reflecting such adjustments. Any refund arising from
20314327 a report of proposed partnership adjustments shall be issued to the
20324328 partners, subject to the partner claiming the refund and any statute of
20334329 limitations on such refunds. In the case of partnership adjustments
20344330 otherwise described in this subsection that result from a partnership
20354331 adjustment described in subsection (c), all such partnership
20364332 adjustments shall be treated as adjustments to which subsection (c)
20374333 applies.
2038-SECTION 13. IC 6-3-4.5-3.5 IS ADDED TO THE INDIANA
4334+SECTION 12. IC 6-3-4.5-3.5 IS ADDED TO THE INDIANA
20394335 CODE AS A NEW SECTION TO READ AS FOLLOWS
20404336 [EFFECTIVE JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3.5. If a
20414337 partnership is assessed tax due pursuant to IC 6-3-2.1, IC 6-3-4-12,
20424338 IC 6-5.5-2-8, or this chapter as a result of underreporting the tax
20434339 due for one (1) or more partners, the provisions of this chapter for
20444340 timeliness of assessments, reporting, and rights to appeal apply in
20454341 the same manner as a report of proposed partnership adjustments,
20464342 except as specifically provided in this chapter.
2047-SECTION 14. IC 6-3-4.5-6, AS ADDED BY P.L.159-2021,
4343+SECTION 13. IC 6-3-4.5-6, AS ADDED BY P.L.159-2021,
20484344 SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
20494345 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 6. (a) Once a report of
20504346 partnership adjustments is considered final, the partnership shall, not
20514347 later than the applicable deadline:
20524348 (1) supply to its direct partners and the department a partner level
20534349 adjustments report attributable to each partner in the form and
20544350 manner prescribed by the department; and
20554351 (2) remit any composite tax or withholding tax due under
20564352 IC 6-3-4-12 or IC 6-5.5-2-8; and
2057-SEA 2 49
20584353 (3) remit any pass through entity tax due under IC 6-3-2.1.
20594354 (b) If the partner is a tiered partner, the tiered partner shall, not later
20604355 than the applicable deadline for the tiered partner:
20614356 (1) file an amended return for the taxable year and for any other
20624357 affected year reporting its share of the adjustments;
20634358 (2) supply its owners or beneficiaries and the department
20644359 amended statements reflecting the adjustments attributable to the
20654360 owner or beneficiary, or a report, in the form and manner
20664361 prescribed by the department; and
20674362 (3) remit any tax due under IC 6-3, IC 6-3.6, or IC 6-5.5,
20684363 including any pass through entity tax, composite tax or
20694364 withholding tax due under IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13,
4365+ES 2—LS 7135/DI 125 103
20704366 IC 6-3-4-15, and IC 6-5.5-2-8.
20714367 (c) Upon receipt of a partner level adjustments report or any
20724368 statement from tiered partners arising from a partner level adjustments
20734369 report, the taxpayer receiving the report or statement shall file an
20744370 amended return for the taxable year reporting the adjustments along
20754371 with any other affected year and remit any tax due not later than the
20764372 applicable deadline for the partner.
20774373 (d) Notwithstanding any other provision of this chapter or
20784374 IC 6-3-4-11:
20794375 (1) A partnership that has been issued a report of proposed
20804376 partnership adjustments, or a tiered partner that is a partnership
20814377 that has received a partner level adjustment report or statement
20824378 arising from a report of final partnership adjustments, may elect
20834379 to pay any tax due arising from a report of final partnership
20844380 adjustments.
20854381 (2) Such election must be filed with the department not later than
20864382 sixty (60) days after the department issues the report of proposed
20874383 partnership adjustments or, in the case of an election by a tiered
20884384 partner, not later than the date by which the tiered partner is
20894385 required to file an amended return under this section.
20904386 (3) The computation of tax and other provisions governing this
20914387 election shall be in a manner consistent with an election under
20924388 section 9(c) of this chapter.
20934389 (4) If a partnership has made an election under this chapter to
20944390 report and remit any tax due at the partnership level for a taxable
20954391 year, the partnership shall be considered to have made a timely
20964392 election under this subsection with regard to any adjustments in
20974393 the report of partnership adjustments for that taxable year.
20984394 (5) No election may be made under this subsection after April
20994395 30, 2023.
2100-SEA 2 50
2101-SECTION 15. IC 6-3-4.5-8, AS AMENDED BY P.L.137-2022,
4396+SECTION 14. IC 6-3-4.5-8, AS AMENDED BY P.L.137-2022,
21024397 SECTION 45, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
21034398 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 8. (a) If a partnership:
21044399 (1) determines that it did not correctly report any tax attribute for
21054400 a taxable year;
21064401 (2) determines that it did not correctly allocate any tax attribute
21074402 for a taxable year; or
21084403 (3) receives final federal adjustments as a result of a federal
21094404 partnership audit or administrative adjustment request for a
21104405 taxable year;
21114406 the partnership shall file an amended partnership return with the
21124407 department and provide its direct partners with amended statements or
4408+ES 2—LS 7135/DI 125 104
21134409 a report in the form and manner prescribed by the department reflecting
21144410 the correctly reported and allocated tax attributes for any applicable
21154411 year.
21164412 (b) If the partnership files an amended partnership return under this
21174413 section for a taxable year:
21184414 (1) the partnership shall remit any composite tax or withholding
21194415 tax due under IC 6-3-4-12 or IC 6-5.5-2-8 and any pass through
21204416 entity tax due under IC 6-3-2.1 on its direct partners resulting
21214417 from the amended return at the time of filing;
21224418 (2) any tiered partners shall, not later than the applicable deadline
21234419 for the tiered partner:
21244420 (A) file an amended return and, if applicable, remit any tax
21254421 due under IC 6-3, IC 6-3.6, or IC 6-5.5, including any amounts
21264422 due under IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, IC 6-3-4-15,
21274423 or IC 6-5.5-2-8; and
21284424 (B) report any adjustments to the tiered partner's owners or
21294425 beneficiaries by providing amended statements to the tiered
21304426 partner's owners or beneficiaries, or a report in the form and
21314427 manner prescribed by the department; and
21324428 (3) any direct or indirect partners who are not tiered partners and
21334429 who are required to file a return under IC 6-3 or IC 6-5.5 or who
21344430 have filed a return under IC 6-3 or IC 6-5.5 shall file amended
21354431 returns with the department for any taxable year affected by the
21364432 amended partnership return and remit any tax due not later than
21374433 the applicable deadline for the partner.
21384434 (c) Notwithstanding any other provision of this chapter or
21394435 IC 6-3-4-11:
21404436 (1) A partnership that has filed an amended partnership return
21414437 under this section, or a tiered partner that is a partnership and that
21424438 is a partner of a partnership that has filed an amended partnership
2143-SEA 2 51
21444439 return under this section, may elect to pay any tax due arising
21454440 from an amended partnership return.
21464441 (2) Such election must be filed with the department not later than
21474442 the date on which the amended partnership return is filed with the
21484443 department or, in the case of an election by a tiered partner that is
21494444 a partnership, not later than the date by which the tiered partner
21504445 is required to file an amended return under this section.
21514446 (3) The computation and payment of tax and other provisions
21524447 governing this election shall be in a manner consistent with an
21534448 election under section 9(c) of this chapter.
21544449 (4) If a partnership has made an election under this chapter to
21554450 report and remit all tax otherwise due at the partnership level for
4451+ES 2—LS 7135/DI 125 105
21564452 a taxable year, the partnership shall be considered to have made
21574453 a timely election under this subsection with regard to any changes
21584454 arising from an amended return under this section for that taxable
21594455 year.
21604456 (5) No election may be made under this subsection for an
21614457 amended return filed after April 30, 2023.
21624458 (d) If the department determines that a partnership:
21634459 (1) did not correctly report any tax attributes for a taxable year; or
21644460 (2) did not correctly allocate any tax attributes for a taxable year;
21654461 or
21664462 (3) did not report the proper amount of tax under IC 6-3-2.1,
21674463 IC 6-3-4-12, or IC 6-5.5-2-8;
21684464 the department may proceed against the partnership in the manner
21694465 provided under sections 3 through 6 of this chapter.
2170-SECTION 16. IC 6-3-4.5-9, AS AMENDED BY P.L.178-2022(ts),
4466+SECTION 15. IC 6-3-4.5-9, AS AMENDED BY P.L.178-2022(ts),
21714467 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
21724468 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 9. (a) Partnerships and
21734469 partners shall report final federal adjustments arising from a
21744470 partnership level audit or an administrative adjustment request and
21754471 make payments as required under this section.
21764472 (b) Final federal adjustments subject to the requirements of this
21774473 section, except those subject to a properly made election under
21784474 subsection (c), shall be reported as follows:
21794475 (1) Not later than the applicable deadline, the partnership shall:
21804476 (A) file an amended partnership return for the review year and
21814477 any other taxable year affected by the final federal adjustments
21824478 with the department as provided in section 8 of this chapter
21834479 and provide any other information required by the department;
21844480 (B) notify each of its direct partners of their distributive share
21854481 of the final federal adjustments as provided in section 8 of this
2186-SEA 2 52
21874482 chapter for all affected taxable years for which the partnership
21884483 filed an amended partnership return by an amended statement
21894484 or a report in the form and manner prescribed by the
21904485 department; and
21914486 (C) file an amended composite return for direct partners and
21924487 an amended withholding return for direct partners for the
21934488 review year and any affected taxable years as otherwise
21944489 required by IC 6-3-4-12 or IC 6-5.5-2-8 and pay any tax due
21954490 for the taxable years; and
21964491 (D) if the partnership is an electing entity, file an amended
21974492 return under IC 6-3-2.1 for the review year and any
21984493 affected taxable year and pay any tax due for the taxable
4494+ES 2—LS 7135/DI 125 106
21994495 year.
22004496 (2) Each direct partner that is subject to tax under IC 6-3,
22014497 IC 6-3.6, or IC 6-5.5 shall, on or before the applicable deadline:
22024498 (A) file an amended return as provided in section 8 of this
22034499 chapter reporting their distributive share of the adjustments
22044500 reported to them under subdivision (1)(B) for the taxable year
22054501 in which affected taxable year attributes would be reported by
22064502 the direct partner as provided in section 8 of this chapter; and
22074503 (B) pay any additional amount of tax due as if final federal
22084504 partnership adjustments had been properly reported, less any
22094505 credit for related amounts paid or withheld and remitted on
22104506 behalf of the direct partner.
22114507 (3) Each tiered partner shall treat any final federal partnership
22124508 adjustments under this section in a manner consistent with the
22134509 treatment of tiered partners under section 8 of this chapter.
22144510 (c) Except as provided in subsection (d), an audited partnership
22154511 making an election under this subsection shall:
22164512 (1) not later than the applicable deadline, file an amended
22174513 partnership return for the review year and for any other affected
22184514 taxable year elected by the audited partnership, including
22194515 information as required by the department, and notify the
22204516 department that it is making the election under this subsection;
22214517 and
22224518 (2) not later than ninety (90) days after the applicable deadline,
22234519 pay an amount, determined as follows, in lieu of taxes owed by its
22244520 direct or indirect partners:
22254521 (A) Exclude from final federal adjustments the distributive
22264522 share of these adjustments reported to a direct exempt partner
22274523 that is not unrelated business income.
22284524 (B) For the total distributive shares of the remaining final
2229-SEA 2 53
22304525 federal adjustments reported to direct corporate partners and
22314526 to direct exempt partners, apportion and allocate such
22324527 adjustments as provided under IC 6-3-2-2 or IC 6-3-2-2.2 (in
22334528 the case of the adjusted gross income tax) or IC 6-5.5-4 (in the
22344529 case of the financial institutions tax), and multiply the
22354530 resulting amount by the tax rate for the taxable year under
22364531 IC 6-3-2-1(c), IC 6-3-2-1.5, or IC 6-5.5-2-1, as applicable.
22374532 (C) For the total distributive shares of the remaining final
22384533 federal adjustments reported to nonresident direct partners
22394534 other than tiered partners or corporate partners, determine the
22404535 amount of such adjustments which is Indiana source income
22414536 under IC 6-3-2-2 or IC 6-3-2-2.2, and multiply the resulting
4537+ES 2—LS 7135/DI 125 107
22424538 amount by the tax rate under IC 6-3-2-1(b), and if applicable
22434539 IC 6-3.6. If a partnership is unable to determine whether a
22444540 nonresident is subject to tax under IC 6-3.6, or to determine in
22454541 what county the nonresident is subject to tax under IC 6-3.6,
22464542 tax shall also be imposed at the highest rate for which a county
22474543 imposes a tax under IC 6-3.6 for the taxable year.
22484544 (D) For the total distributive shares of the remaining final
22494545 federal adjustments reported to tiered partners:
22504546 (i) determine the amount of any adjustment that is of a type
22514547 that it would be subject to sourcing in Indiana under
22524548 IC 6-3-2-2, IC 6-3-2-2.2, or IC 6-5.5-4, as applicable, and
22534549 determine the portion of this amount that would be sourced
22544550 to Indiana;
22554551 (ii) determine the amount of any adjustment that is of a type
22564552 that it would not be subject to sourcing to Indiana by a
22574553 nonresident partner under IC 6-3-2-2, IC 6-3-2-2.2, or
22584554 IC 6-5.5-4, as applicable;
22594555 (iii) determine the portion of the amount determined under
22604556 item (ii) that can be established, as prescribed by the
22614557 department by rule under IC 4-22-2, to be properly allocable
22624558 to nonresident indirect partners or other partners not subject
22634559 to tax on the adjustments; and
22644560 (iv) multiply the sum of the amounts determined in items (i)
22654561 and (ii) reduced by the amount determined in item (iii) by
22664562 the highest combined rate for the taxable year under
22674563 IC 6-3-2-1(b) and IC 6-3.6 for any county, the rate under
22684564 IC 6-3-2-1(c), or the rate under 6-5.5-2-1 for the taxable
22694565 year, whichever is highest.
22704566 (E) For the total distributive shares of the remaining final
22714567 federal adjustments reported to resident individual, estate, or
2272-SEA 2 54
22734568 trust direct partners, multiply that amount by the tax rate under
22744569 IC 6-3-2-1(b) and IC 6-3.6. If a partnership does not
22754570 reasonably ascertain the county of residence for an individual
22764571 direct partner, the rate under IC 6-3.6 for that partner shall be
22774572 treated as the highest rate imposed in any county under
22784573 IC 6-3.6 for the taxable year.
22794574 (F) Add an amount equal to any credit reduction under
22804575 IC 6-3-3, IC 6-3.1, and IC 6-5.5 attributable as a result of final
22814576 federal adjustments.
22824577 (G) Add the amounts determined in clauses (B), (C), (D)(iv),
22834578 (E), and (F). For purposes of determining interest and
22844579 penalties, the due date of payment shall be the due date of the
4580+ES 2—LS 7135/DI 125 108
22854581 partnership's return under IC 6-3-4-10 for the taxable year,
22864582 determined without regard to any extensions.
22874583 (d) Final federal adjustments subject to an election under subsection
22884584 (c) shall not include:
22894585 (1) the distributive share of final federal adjustments that would
22904586 constitute income derived from a partnership to any direct or
22914587 indirect partner that is a corporation taxable under IC 6-3-2-1(c),
22924588 IC 6-3-2-1.5, or IC 6-5.5-2-1 and is considered unitary to the
22934589 partnership; or
22944590 (2) any final federal adjustments resulting from an administrative
22954591 adjustment request; or
22964592 (3) (2) any other circumstances that the department determines
22974593 would result in avoidance or evasion of any tax otherwise due
22984594 from one (1) or more partners under IC 6-3 or IC 6-5.5.
22994595 (e) No election under subsection (c) may be made for federal
23004596 audit adjustments received by the department after April 30, 2023.
23014597 (e) (f) Notwithstanding IC 6-3-4-11, an audited partnership not
23024598 otherwise subject to any reporting or payment obligations to Indiana
23034599 that makes an election under subsection (c) consents to be subject to
23044600 Indiana law related to reporting, assessment, payment, and collection
23054601 of Indiana tax calculated under the election.
2306-SECTION 17. IC 6-5.5-5-1 IS AMENDED TO READ AS
4602+SECTION 16. IC 6-5.5-5-1 IS AMENDED TO READ AS
23074603 FOLLOWS [EFFECTIVE JANUARY 1, 2023 (RETROACTIVE)]:
23084604 Sec. 1. (a) Except as provided in this section, a unitary group consisting
23094605 of at least two (2) taxpayers shall file a combined return covering all
23104606 the operations of the unitary business and including all of the members
23114607 of the unitary business. However, only one (1) combined return needs
23124608 to be filed, as provided in IC 6-5.5-6-1.
23134609 (b) If the department or taxpayer determines that the result of
23144610 applying this section or article do not fairly represent the taxpayer's
2315-SEA 2 55
23164611 income within Indiana or the taxpayer's income within Indiana may be
23174612 more fairly represented by a separate return, the taxpayer may petition
23184613 for and the department may allow, or the department may require, in
23194614 respect to all or a part of the taxpayer's business activity any of the
23204615 following:
23214616 (1) Separate accounting.
23224617 (2) The filing of a separate return for the taxpayer.
23234618 (3) A reallocation of tax items between a taxpayer and a member
23244619 of the taxpayer's unitary group or an entity that would be a
23254620 member of a taxpayer's unitary group if it were transacting
23264621 business in Indiana.
23274622 For purposes of this subsection, "tax items" means gross income,
4623+ES 2—LS 7135/DI 125 109
23284624 deductions, gains, losses, and credits used in computing the tax
23294625 under this article, except the term shall exclude dividends or other
23304626 distributions regardless of whether the amounts are deductible or
23314627 taxable in computing taxable income under the Internal Revenue
23324628 Code.
23334629 (c) Income apportioned under this article must reflect a change in
23344630 adjusted gross income that is required to comply with a department
23354631 order under this section.
2336-SECTION 18. IC 6-5.5-5-2 IS AMENDED TO READ AS
4632+SECTION 17. IC 6-5.5-5-2 IS AMENDED TO READ AS
23374633 FOLLOWS [EFFECTIVE JANUARY 1, 2023 (RETROACTIVE)]:
23384634 Sec. 2. A combined return must include the adjusted gross income of
23394635 all members of the unitary group, even if some of the members would
23404636 not otherwise be subject to taxation under this article. The department
23414637 may require a member of a unitary group to provide any information
23424638 that is needed by the department to determine the unitary group's
23434639 apportioned income under this article. However, income of
23444640 corporations or other entities organized in foreign countries, except a
23454641 foreign bank (or its subsidiary) that transacts business in the United
23464642 States, shall not be included in the combined return. In addition, the
23474643 taxpayer shall eliminate, in calculating adjusted gross income, the
23484644 taxpayer shall eliminate all income and deductions from transactions
23494645 between entities that are included in the unitary group. combined
23504646 return. In addition, in computing receipts for the apportionment
23514647 factor under IC 6-5.5-2-4(2), the taxpayer shall eliminate receipts
2352-between unitary group members included in the combined return.
2353-SECTION 19. IC 6-8.1-1-1, AS AMENDED BY P.L.138-2022,
2354-SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2355-JANUARY 1, 2022 (RETROACTIVE)]: Sec. 1. "Listed taxes" or
2356-"taxes" includes only the pari-mutuel taxes (IC 4-31-9-3 through
2357-IC 4-31-9-5); the supplemental wagering tax (IC 4-33-12); the
2358-SEA 2 56
2359-riverboat wagering tax (IC 4-33-13); the slot machine wagering tax
2360-(IC 4-35-8); the type II gambling game excise tax (IC 4-36-9); the gross
2361-income tax (IC 6-2.1) (repealed); the utility receipts and utility services
2362-use taxes (IC 6-2.3) (repealed); the state gross retail and use taxes
2363-(IC 6-2.5); the adjusted gross income tax (IC 6-3); the pass through
2364-entity tax (IC 6-3-2.1); the supplemental net income tax (IC 6-3-8)
2365-(repealed); the county adjusted gross income tax (IC 6-3.5-1.1)
2366-(repealed); the county option income tax (IC 6-3.5-6) (repealed); the
2367-county economic development income tax (IC 6-3.5-7) (repealed); the
2368-local income tax (IC 6-3.6); the auto rental excise tax (IC 6-6-9); the
2369-financial institutions tax (IC 6-5.5); the gasoline tax (IC 6-6-1.1); the
2370-special fuel tax (IC 6-6-2.5); the motor carrier fuel tax (IC 6-6-4.1); a
2371-motor fuel tax collected under a reciprocal agreement under IC 6-8.1-3;
2372-the vehicle excise tax (IC 6-6-5); the aviation fuel excise tax
2373-(IC 6-6-13); the commercial vehicle excise tax (IC 6-6-5.5); the excise
2374-tax imposed on recreational vehicles and truck campers (IC 6-6-5.1);
2375-the hazardous waste disposal tax (IC 6-6-6.6) (repealed); the heavy
2376-equipment rental excise tax (IC 6-6-15); the vehicle sharing excise tax
2377-(IC 6-6-16); the cigarette tax (IC 6-7-1); the closed system cartridge tax
2378-(IC 6-7-2-7.5); the electronic cigarette tax (IC 6-7-4); the beer excise
2379-tax (IC 7.1-4-2); the liquor excise tax (IC 7.1-4-3); the wine excise tax
2380-(IC 7.1-4-4); the hard cider excise tax (IC 7.1-4-4.5); the petroleum
2381-severance tax (IC 6-8-1); the various innkeeper's taxes (IC 6-9); the
2382-various food and beverage taxes (IC 6-9); the county admissions tax
2383-(IC 6-9-13 and IC 6-9-28); the oil inspection fee (IC 16-44-2); the
2384-penalties assessed for oversize vehicles (IC 9-20-3 and IC 9-20-18); the
2385-fees and penalties assessed for overweight vehicles (IC 9-20-4 and
2386-IC 9-20-18); and any other tax or fee that the department is required to
2387-collect or administer.
2388-SECTION 20. IC 6-8.1-5-2, AS AMENDED BY P.L.138-2022,
4648+between unitary group members included in the combined
4649+return.".
4650+Page 14, between lines 5 and 6, begin a new paragraph and insert:
4651+"SECTION 19. IC 6-8.1-5-2, AS AMENDED BY P.L.138-2022,
23894652 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
23904653 JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2. (a) Except as
23914654 otherwise provided in this section and section 2.5 of this chapter, the
23924655 department may not issue a proposed assessment under section 1 of this
23934656 chapter more than three (3) years after the latest of the date the return
23944657 is filed, or the following:
23954658 (1) The due date of the return.
23964659 (2) In the case of a return filed for the state gross retail or use tax,
23974660 the gasoline use tax, the gasoline tax (including the inventory
23984661 tax), the special fuel tax (including the inventory tax), the motor
23994662 carrier fuel tax (including the inventory tax), the oil inspection
24004663 fee, the cigarette tax, the tobacco products tax, any county
2401-SEA 2 57
24024664 innkeeper's taxes imposed under IC 6-9, any food and beverage
24034665 taxes imposed under IC 6-9, any county or local admissions taxes
4666+ES 2—LS 7135/DI 125 110
24044667 imposed under IC 6-9, or the petroleum severance tax, the end of
24054668 the calendar year which contains the taxable period for which the
24064669 return is filed.
24074670 (3) In the case of the use tax, three (3) years from the end of the
24084671 calendar year in which the first taxable use, other than an
24094672 incidental nonexempt use, of the property occurred.
24104673 (b) If a person files a return for the utility receipts tax (IC 6-2.3)
24114674 (repealed), adjusted gross income tax (IC 6-3), pass through entity tax
24124675 (IC 6-3-2.1), supplemental net income tax (IC 6-3-8) (repealed),
24134676 county adjusted gross income tax (IC 6-3.5-1.1) (repealed), county
24144677 option income tax (IC 6-3.5-6) (repealed), local income tax (IC 6-3.6),
24154678 or financial institutions tax (IC 6-5.5) that understates the person's
24164679 income, as that term is defined in the particular income tax law, by at
24174680 least twenty-five percent (25%), the proposed assessment limitation is
24184681 six (6) years instead of the three (3) years provided in subsection (a).
24194682 (c) In the case of the vehicle excise tax (IC 6-6-5), the tax shall be
24204683 assessed as provided in IC 6-6-5 and shall include the penalties and
24214684 interest due on all listed taxes not paid by the due date. A person that
24224685 fails to properly register a vehicle as required by IC 9-18 (before its
24234686 expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5 is
24244687 considered to have failed to file a return for purposes of this article.
24254688 (d) In the case of the commercial vehicle excise tax imposed under
24264689 IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5 and shall
24274690 include the penalties and interest due on all listed taxes not paid by the
24284691 due date. A person that fails to properly register a commercial vehicle
24294692 as required by IC 9-18 (before its expiration) or IC 9-18.1 and pay the
24304693 tax due under IC 6-6-5.5 is considered to have failed to file a return for
24314694 purposes of this article.
24324695 (e) In the case of the excise tax imposed on recreational vehicles
24334696 and truck campers under IC 6-6-5.1, the tax shall be assessed as
24344697 provided in IC 6-6-5.1 and must include the penalties and interest due
24354698 on all listed taxes not paid by the due date. A person that fails to
24364699 properly register a recreational vehicle as required by IC 9-18 (before
24374700 its expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5.1 is
24384701 considered to have failed to file a return for purposes of this article. A
24394702 person that fails to pay the tax due under IC 6-6-5.1 on a truck camper
24404703 is considered to have failed to file a return for purposes of this article.
24414704 (f) In the case of a credit against a listed tax based on payments of
24424705 taxes to a state or local jurisdiction outside Indiana or payments of
24434706 amounts that are subsequently refunded or returned, a proposed
2444-SEA 2 58
24454707 assessment for the refunded or returned credit must be issued by the
24464708 later of:
4709+ES 2—LS 7135/DI 125 111
24474710 (1) the date by which a proposed assessment must be issued under
24484711 this section; or
24494712 (2) one hundred eighty (180) days from the date the taxpayer
24504713 notifies the department of the refund or return of payment.
24514714 For purposes of this subsection, if a taxpayer receives a refund of an
24524715 amount paid by or on behalf of the taxpayer for a listed tax, that refund
24534716 shall not be considered the payment of an amount that is subsequently
24544717 refunded or returned.
24554718 (g) If a person files a fraudulent, unsigned, or substantially blank
24564719 return, or if a person does not file a return, there is no time limit within
24574720 which the department must issue its proposed assessment, except as
24584721 provided in subsection (l).
24594722 (h) If any part of a listed tax has been erroneously refunded by the
24604723 department, the erroneous refund may be recovered through the
24614724 assessment procedures established in this chapter. An assessment
24624725 issued for an erroneous refund must be issued within the later of:
24634726 (1) the period for which an assessment could otherwise be issued
24644727 under this section; or
24654728 (2) whichever is applicable:
24664729 (A) within two (2) years after making the refund; or
24674730 (B) within five (5) years after making the refund if the refund
24684731 was induced by fraud or misrepresentation.
24694732 (i) If, before the end of the time within which the department may
24704733 make an assessment, the department and the person agree to extend
24714734 that assessment period, the period may be extended according to the
24724735 terms of a written agreement signed by both the department and the
24734736 person. The agreement must contain:
24744737 (1) the date to which the extension is made; and
24754738 (2) a statement that the person agrees to preserve the person's
24764739 records until the extension terminates.
24774740 The department and a person may agree to more than one (1) extension
24784741 under this subsection.
24794742 (j) Except as otherwise provided in subsection (k), if a taxpayer's
24804743 federal taxable income, federal adjusted gross income, or federal
24814744 income tax liability for a taxable year is modified due to a modification
24824745 as provided under IC 6-3-4-6(c) and IC 6-3-4-6(d) (for the adjusted
24834746 gross income tax), or a modification or alteration as provided under
24844747 IC 6-5.5-6-6(c) and IC 6-5.5-6-6(e) (for the financial institutions tax),
24854748 then the date by which the department must issue a proposed
24864749 assessment under section 1 of this chapter for tax imposed under IC 6-3
2487-SEA 2 59
24884750 is extended to six (6) months after the date on which the notice of
24894751 modification is filed with the department by the taxpayer.
4752+ES 2—LS 7135/DI 125 112
24904753 (k) The following apply:
24914754 (1) This subsection applies to partnerships whose taxable year:
24924755 (A) begins after December 31, 2017;
24934756 (B) ends after August 12, 2018; or
24944757 (C) begins after November 2, 2015, and before January 1,
24954758 2018, and for which a valid election under United States
24964759 Treasury Regulation 301.9100-22 is in effect;
24974760 and to the partners of such partnerships, including any partners,
24984761 shareholders, or beneficiaries of a pass through entity that is a
24994762 partner in such partnership.
25004763 (2) Notwithstanding any other provision of this article, if a
25014764 partnership is subject to federal income tax liability or a federal
25024765 tax adjustment at the partnership level as the result of a
25034766 modification under Sections 6221 through 6241 of the Internal
25044767 Revenue Code, the date on which the department must issue a
25054768 proposed assessment to either the partners or the partnership shall
25064769 be the later of:
25074770 (A) the date on which a proposed assessment must otherwise
25084771 be issued to the partner or the partnership under this section or
25094772 IC 6-3-4.5 with regard to the taxable year of the partnership to
25104773 which the modification is taxed at the partnership level; or
25114774 (B) December 31, 2021.
25124775 (3) For purposes of this section and IC 6-8.1-9-1, a modification
25134776 under this subsection shall be considered a modification to the
25144777 federal taxable income, federal adjusted gross income, or federal
25154778 income tax liability of both the partners and the partnership within
25164779 the meaning of IC 6-3-4-6 and IC 6-5.5-6-6, and shall be
25174780 considered to be included in the federal taxable income or federal
25184781 adjusted gross income of both the partners and partnerships for
25194782 purposes of this article and IC 6-5.5.
25204783 (4) If a modification made to a partnership for federal income tax
25214784 purposes is reported to the partners to determine the partners'
25224785 respective federal taxable income, federal adjusted gross income,
25234786 or federal income tax liability, including reporting to partners as
25244787 the result of an election made under Section 6226 of the Internal
25254788 Revenue Code, subdivision (2) shall not apply, and those
25264789 modifications shall be treated as modifications to the partners'
25274790 federal taxable income, federal adjusted gross income, or federal
25284791 income tax liability for purposes of the following:
25294792 (A) This section.
2530-SEA 2 60
25314793 (B) IC 6-3-4-6.
25324794 (C) IC 6-5.5-6-6.
4795+ES 2—LS 7135/DI 125 113
25334796 (D) IC 6-8.1-9-1.
25344797 (l) Notwithstanding any other provision, a nonresident
25354798 individual is considered to have filed a return for purposes of this
25364799 section for a taxable year if the individual does not file a return
25374800 otherwise required under IC 6-3-4-1 for a taxable year and all of
25384801 the following apply:
25394802 (1) the:
25404803 (A) individual did not have income from sources within
25414804 Indiana; or
25424805 (B) only income derived from sources within Indiana and
25434806 includible in the individual's adjusted gross income is
25444807 distributive share income from one (1) or more pass
25454808 through entities (as defined by IC 6-3-1-35);
25464809 (2) the individual is not a resident of Indiana for any portion
25474810 of the taxable year;
25484811 (3) the individual does not request a reduction in tax
25494812 withholding for a pass through entity under IC 6-3-4-12,
25504813 IC 6-3-4-13, or IC 6-3-4-15 for the taxable year; and
25514814 (4) all pass through entities from which the individual derives
25524815 income from Indiana sources:
25534816 (A) file a composite return required under IC 6-3-4-12,
25544817 IC 6-3-4-13, or IC 6-3-4-15; and
25554818 (B) include the individual on the composite return.
25564819 (m) The following provisions apply to subsection (l):
25574820 (1) If an individual is married and files a joint federal tax
25584821 return with the individual's spouse, the individual is
25594822 considered to have filed a return for purposes of this section
25604823 only if both the individual and the individual's spouse meet
25614824 the conditions under subsection (l)(1) through (l)(4).
25624825 (2) If an individual does not file a return, the last date for
25634826 assessment with regard to the individual's share of income
25644827 from a pass through entity shall be determined at the pass
25654828 through entity and shall be determined separately for each
25664829 pass through entity.
25674830 (3) In the event the individual files a return, the period for
25684831 assessment shall be determined based on the individual's filing
25694832 unless a different period for assessment is prescribed under
25704833 this title.
25714834 (4) The individual is required to file a return to request a
25724835 refund or carryforward of an overpayment for a taxable year.
2573-SEA 2 61
25744836 (5) If the individual has a net operating loss deduction under
25754837 IC 6-3-2-2.5 or IC 6-3-2-2.6, or a credit carryforward
4838+ES 2—LS 7135/DI 125 114
25764839 allowable under IC 6-3-3 or IC 6-3.1 for the taxable year, the
25774840 amount of net operating loss or credit carryforward shall be
25784841 reduced to reflect the amount of net operating loss or credit
25794842 carryforward that otherwise would have been allowable for
25804843 the taxable year.
2581-SECTION 21. [EFFECTIVE JANUARY 1, 2022
4844+SECTION 20. [EFFECTIVE JANUARY 1, 2022
25824845 (RETROACTIVE)] (a) This SECTION applies to the election and
25834846 imposition of the pass through entity tax pursuant to IC 6-3-2.1, as
25844847 added by this act, for tax years ending before January 1, 2023.
25854848 (b) For the applicable period, the tax shall be paid and filed in
25864849 conjunction with and consistent with the filing of a composite tax
25874850 return pursuant to IC 6-3-4-12 or IC 6-3-4-13.
25884851 (c) Notwithstanding any other provision, no estimated payments
25894852 shall be due for the applicable period other than any such payment
25904853 that is currently required for purposes of withholding tax pursuant
25914854 to IC 6-3-4-12 or IC 6-3-4-13.
25924855 (d) All provisions of IC 6-3-2.1, as added by this act, shall apply
25934856 to the applicable period unless any such provision is inconsistent
25944857 with the provisions and procedures applicable to the filing of
25954858 composite returns pursuant to IC 6-3-4-12 or IC 6-3-4-13.
25964859 (e) A pass through entity that elects to pay the tax imposed by
25974860 IC 6-3-2.1, as added by this act, for the applicable period will not
25984861 be subject to an underpayment penalty pursuant to
25994862 IC 6-8.1-10-2.1(a)(2) for failure to pay any tax due pursuant to
26004863 IC 6-3-2.1, as added by this act, for any such tax not remitted as of
26014864 the due date of the return, including extensions. This provision
26024865 does not waive any interest due on such amounts pursuant to
26034866 IC 6-8.1-10-1.
26044867 (f) Notwithstanding any provision to the contrary in
26054868 IC 6-8.1-10-1 or IC 6-8.1-10-2.1, if the tax under IC 6-3-2.1, as
26064869 added by this act, is due before August 31, 2024, interest and
26074870 penalty for late payment of the tax shall be waived for the period
26084871 from the due date to August 30, 2024. Interest and penalty shall be
26094872 due on any amounts unpaid after August 30, 2024, in the manner
2610-otherwise provided by law.
2611-SECTION 22. An emergency is declared for this act.
2612-SEA 2 President of the Senate
2613-President Pro Tempore
2614-Speaker of the House of Representatives
2615-Governor of the State of Indiana
2616-Date: Time:
2617-SEA 2
4873+otherwise provided by law.".
4874+Renumber all SECTIONS consecutively.
4875+and when so amended that said bill do pass.
4876+(Reference is to SB 2 as introduced.)
4877+ES 2—LS 7135/DI 125 115
4878+BALDWIN
4879+Committee Vote: Yeas 12, Nays 0.
4880+_____
4881+COMMITTEE REPORT
4882+Mr. Speaker: Your Committee on Ways and Means, to which was
4883+referred Senate Bill 2, has had the same under consideration and begs
4884+leave to report the same back to the House with the recommendation
4885+that said bill do pass.
4886+(Reference is to SB 2 as printed February 1, 2023.)
4887+THOMPSON
4888+Committee Vote: Yeas 23, Nays 0
4889+ES 2—LS 7135/DI 125