Indiana Senate Bill SB0002 Latest Draft

                            First Regular Session of the 123rd General Assembly (2023)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
  Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in  this  style  type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
  Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2022 Regular Session of the General Assembly.
SENATE ENROLLED ACT No. 2
AN ACT to amend the Indiana Code concerning taxation.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 6-3-1-3.5, AS AMENDED BY P.L.180-2022(ss),
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3.5. When used in this
article, the term "adjusted gross income" shall mean the following:
(a) In the case of all individuals, "adjusted gross income" (as
defined in Section 62 of the Internal Revenue Code), modified as
follows:
(1) Subtract income that is exempt from taxation under this article
by the Constitution and statutes of the United States.
(2) Except as provided in subsection (c), add an amount equal to
any deduction or deductions allowed or allowable pursuant to
Section 62 of the Internal Revenue Code for taxes based on or
measured by income and levied at the state level by any state of
the United States.
(3) Subtract one thousand dollars ($1,000), or in the case of a
joint return filed by a husband and wife, subtract for each spouse
one thousand dollars ($1,000).
(4) Subtract one thousand dollars ($1,000) for:
(A) each of the exemptions provided by Section 151(c) of the
Internal Revenue Code (as effective January 1, 2017);
(B) each additional amount allowable under Section 63(f) of
the Internal Revenue Code; and
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(C) the spouse of the taxpayer if a separate return is made by
the taxpayer and if the spouse, for the calendar year in which
the taxable year of the taxpayer begins, has no gross income
and is not the dependent of another taxpayer.
(5) Subtract:
(A) One thousand five hundred dollars ($1,500) for each of the
exemptions allowed under Section 151(c)(1)(B) of the Internal
Revenue Code (as effective January 1, 2004).
(B) One thousand five hundred dollars ($1,500) for each
exemption allowed under Section 151(c) of the Internal
Revenue Code (as effective January 1, 2017) for an individual:
(i) who is less than nineteen (19) years of age or is a
full-time student who is less than twenty-four (24) years of
age;
(ii) for whom the taxpayer is the legal guardian; and
(iii) for whom the taxpayer does not claim an exemption
under clause (A).
(C) Five hundred dollars ($500) for each additional amount
allowable under Section 63(f)(1) of the Internal Revenue Code
if the federal adjusted gross income of the taxpayer, or the
taxpayer and the taxpayer's spouse in the case of a joint return,
is less than forty thousand dollars ($40,000). In the case of a
married individual filing a separate return, the qualifying
income amount in this clause is equal to twenty thousand
dollars ($20,000).
(D) Three thousand dollars ($3,000) for each exemption
allowed under Section 151(c) of the Internal Revenue Code (as
effective January 1, 2017) for an individual who is:
(i) an adopted child of the taxpayer; and
(ii) less than nineteen (19) years of age or is a full-time
student who is less than twenty-four (24) years of age.
This amount is in addition to any amount subtracted under
clause (A) or (B).
This amount is in addition to the amount subtracted under
subdivision (4).
(6) Subtract any amounts included in federal adjusted gross
income under Section 111 of the Internal Revenue Code as a
recovery of items previously deducted as an itemized deduction
from adjusted gross income.
(7) Subtract any amounts included in federal adjusted gross
income under the Internal Revenue Code which amounts were
received by the individual as supplemental railroad retirement
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annuities under 45 U.S.C. 231 and which are not deductible under
subdivision (1).
(8) Subtract an amount equal to the amount of federal Social
Security and Railroad Retirement benefits included in a taxpayer's
federal gross income by Section 86 of the Internal Revenue Code.
(9) In the case of a nonresident taxpayer or a resident taxpayer
residing in Indiana for a period of less than the taxpayer's entire
taxable year, the total amount of the deductions allowed pursuant
to subdivisions (3), (4), and (5) shall be reduced to an amount
which bears the same ratio to the total as the taxpayer's income
taxable in Indiana bears to the taxpayer's total income.
(10) In the case of an individual who is a recipient of assistance
under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
subtract an amount equal to that portion of the individual's
adjusted gross income with respect to which the individual is not
allowed under federal law to retain an amount to pay state and
local income taxes.
(11) In the case of an eligible individual, subtract the amount of
a Holocaust victim's settlement payment included in the
individual's federal adjusted gross income.
(12) Subtract an amount equal to the portion of any premiums
paid during the taxable year by the taxpayer for a qualified long
term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
file a joint income tax return or the taxpayer is otherwise entitled
to a deduction under this subdivision for the taxpayer's spouse, or
both.
(13) Subtract an amount equal to the lesser of:
(A) two thousand five hundred dollars ($2,500), or one
thousand two hundred fifty dollars ($1,250) in the case of a
married individual filing a separate return; or
(B) the amount of property taxes that are paid during the
taxable year in Indiana by the individual on the individual's
principal place of residence.
(14) Subtract an amount equal to the amount of a September 11
terrorist attack settlement payment included in the individual's
federal adjusted gross income.
(15) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross income
that would have been computed had an election not been made
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under Section 168(k) of the Internal Revenue Code to apply bonus
depreciation to the property in the year that it was placed in
service.
(16) Add an amount equal to any deduction allowed under
Section 172 of the Internal Revenue Code (concerning net
operating losses).
(17) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in service
in the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding the sum of:
(A) twenty-five thousand dollars ($25,000) to the extent
deductions under Section 179 of the Internal Revenue Code
were not elected as provided in clause (B); and
(B) for taxable years beginning after December 31, 2017, the
deductions elected under Section 179 of the Internal Revenue
Code on property acquired in an exchange if:
(i) the exchange would have been eligible for
nonrecognition of gain or loss under Section 1031 of the
Internal Revenue Code in effect on January 1, 2017;
(ii) the exchange is not eligible for nonrecognition of gain or
loss under Section 1031 of the Internal Revenue Code; and
(iii) the taxpayer made an election to take deductions under
Section 179 of the Internal Revenue Code with regard to the
acquired property in the year that the property was placed
into service.
The amount of deductions allowable for an item of property
under this clause may not exceed the amount of adjusted gross
income realized on the property that would have been deferred
under the Internal Revenue Code in effect on January 1, 2017.
(18) Subtract an amount equal to the amount of the taxpayer's
qualified military income that was not excluded from the
taxpayer's gross income for federal income tax purposes under
Section 112 of the Internal Revenue Code.
(19) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7 (certain income
derived from patents); and
(B) included in the individual's federal adjusted gross income
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under the Internal Revenue Code.
(20) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from business
indebtedness discharged in connection with the reacquisition after
December 31, 2008, and before January 1, 2011, of an applicable
debt instrument, as provided in Section 108(i) of the Internal
Revenue Code. Subtract the amount necessary from the adjusted
gross income of any taxpayer that added an amount to adjusted
gross income in a previous year to offset the amount included in
federal gross income as a result of the deferral of income arising
from business indebtedness discharged in connection with the
reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(21) Add the amount excluded from federal gross income under
Section 103 of the Internal Revenue Code for interest received on
an obligation of a state other than Indiana, or a political
subdivision of such a state, that is acquired by the taxpayer after
December 31, 2011.
(22) Subtract an amount as described in Section 1341(a)(2) of the
Internal Revenue Code to the extent, if any, that the amount was
previously included in the taxpayer's adjusted gross income for a
prior taxable year.
(23) For taxable years beginning after December 25, 2016, add an
amount equal to the deduction for deferred foreign income that
was claimed by the taxpayer for the taxable year under Section
965(c) of the Internal Revenue Code.
(24) Subtract any interest expense paid or accrued in the current
taxable year but not deducted as a result of the limitation imposed
under Section 163(j)(1) of the Internal Revenue Code. Add any
interest expense paid or accrued in a previous taxable year but
allowed as a deduction under Section 163 of the Internal Revenue
Code in the current taxable year. For purposes of this subdivision,
an interest expense is considered paid or accrued only in the first
taxable year the deduction would have been allowable under
Section 163 of the Internal Revenue Code if the limitation under
Section 163(j)(1) of the Internal Revenue Code did not exist.
(25) Subtract the amount that would have been excluded from
gross income but for the enactment of Section 118(b)(2) of the
Internal Revenue Code for taxable years ending after December
22, 2017.
(26) For taxable years beginning after December 31, 2019, and
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before January 1, 2021, add an amount of the deduction claimed
under Section 62(a)(22) of the Internal Revenue Code.
(27) For taxable years beginning after December 31, 2019, for
payments made by an employer under an education assistance
program after March 27, 2020:
(A) add the amount of payments by an employer that are
excluded from the taxpayer's federal gross income under
Section 127(c)(1)(B) of the Internal Revenue Code; and
(B) deduct the interest allowable under Section 221 of the
Internal Revenue Code, if the disallowance under Section
221(e)(1) of the Internal Revenue Code did not apply to the
payments described in clause (A). For purposes of applying
Section 221(b) of the Internal Revenue Code to the amount
allowable under this clause, the amount under clause (A) shall
not be added to adjusted gross income.
(28) Add an amount equal to the remainder of:
(A) the amount allowable as a deduction under Section 274(n)
of the Internal Revenue Code; minus
(B) the amount otherwise allowable as a deduction under
Section 274(n) of the Internal Revenue Code, if Section
274(n)(2)(D) of the Internal Revenue Code was not in effect
for amounts paid or incurred after December 31, 2020.
(29) For taxable years beginning after December 31, 2017, and
before January 1, 2021, add an amount equal to the excess
business loss of the taxpayer as defined in Section 461(l)(3) of the
Internal Revenue Code. In addition:
(A) If a taxpayer has an excess business loss under this
subdivision and also has modifications under subdivisions (15)
and (17) for property placed in service during the taxable year,
the taxpayer shall treat a portion of the taxable year
modifications for that property as occurring in the taxable year
the property is placed in service and a portion of the
modifications as occurring in the immediately following
taxable year.
(B) The portion of the modifications under subdivisions (15)
and (17) for property placed in service during the taxable year
treated as occurring in the taxable year in which the property
is placed in service equals:
(i) the modification for the property otherwise determined
under this section; minus
(ii) the excess business loss disallowed under this
subdivision;
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but not less than zero (0).
(C) The portion of the modifications under subdivisions (15)
and (17) for property placed in service during the taxable year
treated as occurring in the taxable year immediately following
the taxable year in which the property is placed in service
equals the modification for the property otherwise determined
under this section minus the amount in clause (B).
(D) Any reallocation of modifications between taxable years
under clauses (B) and (C) shall be first allocated to the
modification under subdivision (15), then to the modification
under subdivision (17).
(30) Add an amount equal to the amount excluded from federal
gross income under Section 108(f)(5) of the Internal Revenue
Code. For purposes of this subdivision:
(A) if an amount excluded under Section 108(f)(5) of the
Internal Revenue Code would be excludible under Section
108(a)(1)(B) of the Internal Revenue Code, the exclusion
under Section 108(a)(1)(B) of the Internal Revenue Code shall
take precedence; and
(B) if an amount would have been excludible under Section
108(f)(5) of the Internal Revenue Code as in effect on January
1, 2020, the amount is not required to be added back under this
subdivision.
(31) For taxable years ending after March 12, 2020, subtract an
amount equal to the deduction disallowed pursuant to:
(A) Section 2301(e) of the CARES Act (Public Law 116-136),
as modified by Sections 206 and 207 of the Taxpayer Certainty
and Disaster Relief Tax Act (Division EE of Public Law
116-260); and
(B) Section 3134(e) of the Internal Revenue Code.
(32) Subtract the amount of an annual grant amount distributed to
a taxpayer's Indiana education scholarship account under
IC 20-51.4-4-2 that is used for a qualified expense (as defined in
IC 20-51.4-2-9) or to an Indiana enrichment scholarship account
under IC 20-52 that is used for qualified expenses (as defined in
IC 20-52-2-6), to the extent the distribution used for the qualified
expense is included in the taxpayer's federal adjusted gross
income under the Internal Revenue Code.
(33) For taxable years beginning after December 31, 2019, and
before January 1, 2021, add an amount equal to the amount of
unemployment compensation excluded from federal gross income
under Section 85(c) of the Internal Revenue Code.
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(34) For taxable years beginning after December 31, 2022,
subtract an amount equal to the deduction disallowed under
Section 280C(h) of the Internal Revenue Code.
(35) Subtract any other amounts the taxpayer is entitled to deduct
under IC 6-3-2.
(b) In the case of corporations, the same as "taxable income" (as
defined in Section 63 of the Internal Revenue Code) adjusted as
follows:
(1) Subtract income that is exempt from taxation under this article
by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction or deductions allowed
or allowable pursuant to Section 170 of the Internal Revenue
Code (concerning charitable contributions).
(3) Except as provided in subsection (c), add an amount equal to
any deduction or deductions allowed or allowable pursuant to
Section 63 of the Internal Revenue Code for taxes based on or
measured by income and levied at the state level by any state of
the United States.
(4) Subtract an amount equal to the amount included in the
corporation's taxable income under Section 78 of the Internal
Revenue Code (concerning foreign tax credits).
(5) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross income
that would have been computed had an election not been made
under Section 168(k) of the Internal Revenue Code to apply bonus
depreciation to the property in the year that it was placed in
service.
(6) Add an amount equal to any deduction allowed under Section
172 of the Internal Revenue Code (concerning net operating
losses).
(7) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in service
in the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding the sum of:
(A) twenty-five thousand dollars ($25,000) to the extent
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deductions under Section 179 of the Internal Revenue Code
were not elected as provided in clause (B); and
(B) for taxable years beginning after December 31, 2017, the
deductions elected under Section 179 of the Internal Revenue
Code on property acquired in an exchange if:
(i) the exchange would have been eligible for
nonrecognition of gain or loss under Section 1031 of the
Internal Revenue Code in effect on January 1, 2017;
(ii) the exchange is not eligible for nonrecognition of gain or
loss under Section 1031 of the Internal Revenue Code; and
(iii) the taxpayer made an election to take deductions under
Section 179 of the Internal Revenue Code with regard to the
acquired property in the year that the property was placed
into service.
The amount of deductions allowable for an item of property
under this clause may not exceed the amount of adjusted gross
income realized on the property that would have been deferred
under the Internal Revenue Code in effect on January 1, 2017.
(8) Add to the extent required by IC 6-3-2-20:
(A) the amount of intangible expenses (as defined in
IC 6-3-2-20) for the taxable year that reduced the corporation's
taxable income (as defined in Section 63 of the Internal
Revenue Code) for federal income tax purposes; and
(B) any directly related interest expenses (as defined in
IC 6-3-2-20) that reduced the corporation's adjusted gross
income (determined without regard to this subdivision). For
purposes of this clause, any directly related interest expense
that constitutes business interest within the meaning of Section
163(j) of the Internal Revenue Code shall be considered to
have reduced the taxpayer's federal taxable income only in the
first taxable year in which the deduction otherwise would have
been allowable under Section 163 of the Internal Revenue
Code if the limitation under Section 163(j)(1) of the Internal
Revenue Code did not exist.
(9) Add an amount equal to any deduction for dividends paid (as
defined in Section 561 of the Internal Revenue Code) to
shareholders of a captive real estate investment trust (as defined
in section 34.5 of this chapter).
(10) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7 (certain income
derived from patents); and
(B) included in the corporation's taxable income under the
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Internal Revenue Code.
(11) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from business
indebtedness discharged in connection with the reacquisition after
December 31, 2008, and before January 1, 2011, of an applicable
debt instrument, as provided in Section 108(i) of the Internal
Revenue Code. Subtract from the adjusted gross income of any
taxpayer that added an amount to adjusted gross income in a
previous year the amount necessary to offset the amount included
in federal gross income as a result of the deferral of income
arising from business indebtedness discharged in connection with
the reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(12) Add the amount excluded from federal gross income under
Section 103 of the Internal Revenue Code for interest received on
an obligation of a state other than Indiana, or a political
subdivision of such a state, that is acquired by the taxpayer after
December 31, 2011.
(13) For taxable years beginning after December 25, 2016:
(A) for a corporation other than a real estate investment trust,
add:
(i) an amount equal to the amount reported by the taxpayer
on IRC 965 Transition Tax Statement, line 1; or
(ii) if the taxpayer deducted an amount under Section 965(c)
of the Internal Revenue Code in determining the taxpayer's
taxable income for purposes of the federal income tax, the
amount deducted under Section 965(c) of the Internal
Revenue Code; and
(B) for a real estate investment trust, add an amount equal to
the deduction for deferred foreign income that was claimed by
the taxpayer for the taxable year under Section 965(c) of the
Internal Revenue Code, but only to the extent that the taxpayer
included income pursuant to Section 965 of the Internal
Revenue Code in its taxable income for federal income tax
purposes or is required to add back dividends paid under
subdivision (9).
(14) Add an amount equal to the deduction that was claimed by
the taxpayer for the taxable year under Section 250(a)(1)(B) of the
Internal Revenue Code (attributable to global intangible
low-taxed income). The taxpayer shall separately specify the
amount of the reduction under Section 250(a)(1)(B)(i) of the
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Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
Internal Revenue Code.
(15) Subtract any interest expense paid or accrued in the current
taxable year but not deducted as a result of the limitation imposed
under Section 163(j)(1) of the Internal Revenue Code. Add any
interest expense paid or accrued in a previous taxable year but
allowed as a deduction under Section 163 of the Internal Revenue
Code in the current taxable year. For purposes of this subdivision,
an interest expense is considered paid or accrued only in the first
taxable year the deduction would have been allowable under
Section 163 of the Internal Revenue Code if the limitation under
Section 163(j)(1) of the Internal Revenue Code did not exist.
(16) Subtract the amount that would have been excluded from
gross income but for the enactment of Section 118(b)(2) of the
Internal Revenue Code for taxable years ending after December
22, 2017.
(17) Add an amount equal to the remainder of:
(A) the amount allowable as a deduction under Section 274(n)
of the Internal Revenue Code; minus
(B) the amount otherwise allowable as a deduction under
Section 274(n) of the Internal Revenue Code, if Section
274(n)(2)(D) of the Internal Revenue Code was not in effect
for amounts paid or incurred after December 31, 2020.
(18) For taxable years ending after March 12, 2020, subtract an
amount equal to the deduction disallowed pursuant to:
(A) Section 2301(e) of the CARES Act (Public Law 116-136),
as modified by Sections 206 and 207 of the Taxpayer Certainty
and Disaster Relief Tax Act (Division EE of Public Law
116-260); and
(B) Section 3134(e) of the Internal Revenue Code.
(19) For taxable years beginning after December 31, 2022,
subtract an amount equal to the deduction disallowed under
Section 280C(h) of the Internal Revenue Code.
(20) Add or subtract any other amounts the taxpayer is:
(A) required to add or subtract; or
(B) entitled to deduct;
under IC 6-3-2.
(c) The following apply to taxable years beginning after December
31, 2018, for purposes of the add back of any deduction allowed on the
taxpayer's federal income tax return for wagering taxes, as provided in
subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
the taxpayer is a corporation:
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(1) For taxable years beginning after December 31, 2018, and
before January 1, 2020, a taxpayer is required to add back under
this section eighty-seven and five-tenths percent (87.5%) of any
deduction allowed on the taxpayer's federal income tax return for
wagering taxes.
(2) For taxable years beginning after December 31, 2019, and
before January 1, 2021, a taxpayer is required to add back under
this section seventy-five percent (75%) of any deduction allowed
on the taxpayer's federal income tax return for wagering taxes.
(3) For taxable years beginning after December 31, 2020, and
before January 1, 2022, a taxpayer is required to add back under
this section sixty-two and five-tenths percent (62.5%) of any
deduction allowed on the taxpayer's federal income tax return for
wagering taxes.
(4) For taxable years beginning after December 31, 2021, and
before January 1, 2023, a taxpayer is required to add back under
this section fifty percent (50%) of any deduction allowed on the
taxpayer's federal income tax return for wagering taxes.
(5) For taxable years beginning after December 31, 2022, and
before January 1, 2024, a taxpayer is required to add back under
this section thirty-seven and five-tenths percent (37.5%) of any
deduction allowed on the taxpayer's federal income tax return for
wagering taxes.
(6) For taxable years beginning after December 31, 2023, and
before January 1, 2025, a taxpayer is required to add back under
this section twenty-five percent (25%) of any deduction allowed
on the taxpayer's federal income tax return for wagering taxes.
(7) For taxable years beginning after December 31, 2024, and
before January 1, 2026, a taxpayer is required to add back under
this section twelve and five-tenths percent (12.5%) of any
deduction allowed on the taxpayer's federal income tax return for
wagering taxes.
(8) For taxable years beginning after December 31, 2025, a
taxpayer is not required to add back under this section any amount
of a deduction allowed on the taxpayer's federal income tax return
for wagering taxes.
(d) In the case of life insurance companies (as defined in Section
816(a) of the Internal Revenue Code) that are organized under Indiana
law, the same as "life insurance company taxable income" (as defined
in Section 801 of the Internal Revenue Code), adjusted as follows:
(1) Subtract income that is exempt from taxation under this article
by the Constitution and statutes of the United States.
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(2) Add an amount equal to any deduction allowed or allowable
under Section 170 of the Internal Revenue Code (concerning
charitable contributions).
(3) Add an amount equal to a deduction allowed or allowable
under Section 805 or Section 832(c) of the Internal Revenue Code
for taxes based on or measured by income and levied at the state
level by any state.
(4) Subtract an amount equal to the amount included in the
company's taxable income under Section 78 of the Internal
Revenue Code (concerning foreign tax credits).
(5) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross income
that would have been computed had an election not been made
under Section 168(k) of the Internal Revenue Code to apply bonus
depreciation to the property in the year that it was placed in
service.
(6) Add an amount equal to any deduction allowed under Section
172 of the Internal Revenue Code (concerning net operating
losses).
(7) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in service
in the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding the sum of:
(A) twenty-five thousand dollars ($25,000) to the extent
deductions under Section 179 of the Internal Revenue Code
were not elected as provided in clause (B); and
(B) for taxable years beginning after December 31, 2017, the
deductions elected under Section 179 of the Internal Revenue
Code on property acquired in an exchange if:
(i) the exchange would have been eligible for
nonrecognition of gain or loss under Section 1031 of the
Internal Revenue Code in effect on January 1, 2017;
(ii) the exchange is not eligible for nonrecognition of gain or
loss under Section 1031 of the Internal Revenue Code; and
(iii) the taxpayer made an election to take deductions under
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Section 179 of the Internal Revenue Code with regard to the
acquired property in the year that the property was placed
into service.
The amount of deductions allowable for an item of property
under this clause may not exceed the amount of adjusted gross
income realized on the property that would have been deferred
under the Internal Revenue Code in effect on January 1, 2017.
(8) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7 (certain income
derived from patents); and
(B) included in the insurance company's taxable income under
the Internal Revenue Code.
(9) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from business
indebtedness discharged in connection with the reacquisition after
December 31, 2008, and before January 1, 2011, of an applicable
debt instrument, as provided in Section 108(i) of the Internal
Revenue Code. Subtract from the adjusted gross income of any
taxpayer that added an amount to adjusted gross income in a
previous year the amount necessary to offset the amount included
in federal gross income as a result of the deferral of income
arising from business indebtedness discharged in connection with
the reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(10) Add an amount equal to any exempt insurance income under
Section 953(e) of the Internal Revenue Code that is active
financing income under Subpart F of Subtitle A, Chapter 1,
Subchapter N of the Internal Revenue Code.
(11) Add the amount excluded from federal gross income under
Section 103 of the Internal Revenue Code for interest received on
an obligation of a state other than Indiana, or a political
subdivision of such a state, that is acquired by the taxpayer after
December 31, 2011.
(12) For taxable years beginning after December 25, 2016, add:
(A) an amount equal to the amount reported by the taxpayer on
IRC 965 Transition Tax Statement, line 1; or
(B) if the taxpayer deducted an amount under Section 965(c)
of the Internal Revenue Code in determining the taxpayer's
taxable income for purposes of the federal income tax, the
amount deducted under Section 965(c) of the Internal Revenue
Code.
SEA 2 15
(13) Add an amount equal to the deduction that was claimed by
the taxpayer for the taxable year under Section 250(a)(1)(B) of the
Internal Revenue Code (attributable to global intangible
low-taxed income). The taxpayer shall separately specify the
amount of the reduction under Section 250(a)(1)(B)(i) of the
Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
Internal Revenue Code.
(14) Subtract any interest expense paid or accrued in the current
taxable year but not deducted as a result of the limitation imposed
under Section 163(j)(1) of the Internal Revenue Code. Add any
interest expense paid or accrued in a previous taxable year but
allowed as a deduction under Section 163 of the Internal Revenue
Code in the current taxable year. For purposes of this subdivision,
an interest expense is considered paid or accrued only in the first
taxable year the deduction would have been allowable under
Section 163 of the Internal Revenue Code if the limitation under
Section 163(j)(1) of the Internal Revenue Code did not exist.
(15) Subtract the amount that would have been excluded from
gross income but for the enactment of Section 118(b)(2) of the
Internal Revenue Code for taxable years ending after December
22, 2017.
(16) Add an amount equal to the remainder of:
(A) the amount allowable as a deduction under Section 274(n)
of the Internal Revenue Code; minus
(B) the amount otherwise allowable as a deduction under
Section 274(n) of the Internal Revenue Code, if Section
274(n)(2)(D) of the Internal Revenue Code was not in effect
for amounts paid or incurred after December 31, 2020.
(17) For taxable years ending after March 12, 2020, subtract an
amount equal to the deduction disallowed pursuant to:
(A) Section 2301(e) of the CARES Act (Public Law 116-136),
as modified by Sections 206 and 207 of the Taxpayer Certainty
and Disaster Relief Tax Act (Division EE of Public Law
116-260); and
(B) Section 3134(e) of the Internal Revenue Code.
(18) For taxable years beginning after December 31, 2022,
subtract an amount equal to the deduction disallowed under
Section 280C(h) of the Internal Revenue Code.
(19) Add or subtract any other amounts the taxpayer is:
(A) required to add or subtract; or
(B) entitled to deduct;
under IC 6-3-2.
SEA 2 16
(e) In the case of insurance companies subject to tax under Section
831 of the Internal Revenue Code and organized under Indiana law, the
same as "taxable income" (as defined in Section 832 of the Internal
Revenue Code), adjusted as follows:
(1) Subtract income that is exempt from taxation under this article
by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction allowed or allowable
under Section 170 of the Internal Revenue Code (concerning
charitable contributions).
(3) Add an amount equal to a deduction allowed or allowable
under Section 805 or Section 832(c) of the Internal Revenue Code
for taxes based on or measured by income and levied at the state
level by any state.
(4) Subtract an amount equal to the amount included in the
company's taxable income under Section 78 of the Internal
Revenue Code (concerning foreign tax credits).
(5) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross income
that would have been computed had an election not been made
under Section 168(k) of the Internal Revenue Code to apply bonus
depreciation to the property in the year that it was placed in
service.
(6) Add an amount equal to any deduction allowed under Section
172 of the Internal Revenue Code (concerning net operating
losses).
(7) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in service
in the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding the sum of:
(A) twenty-five thousand dollars ($25,000) to the extent
deductions under Section 179 of the Internal Revenue Code
were not elected as provided in clause (B); and
(B) for taxable years beginning after December 31, 2017, the
deductions elected under Section 179 of the Internal Revenue
Code on property acquired in an exchange if:
SEA 2 17
(i) the exchange would have been eligible for
nonrecognition of gain or loss under Section 1031 of the
Internal Revenue Code in effect on January 1, 2017;
(ii) the exchange is not eligible for nonrecognition of gain or
loss under Section 1031 of the Internal Revenue Code; and
(iii) the taxpayer made an election to take deductions under
Section 179 of the Internal Revenue Code with regard to the
acquired property in the year that the property was placed
into service.
The amount of deductions allowable for an item of property
under this clause may not exceed the amount of adjusted gross
income realized on the property that would have been deferred
under the Internal Revenue Code in effect on January 1, 2017.
(8) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7 (certain income
derived from patents); and
(B) included in the insurance company's taxable income under
the Internal Revenue Code.
(9) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from business
indebtedness discharged in connection with the reacquisition after
December 31, 2008, and before January 1, 2011, of an applicable
debt instrument, as provided in Section 108(i) of the Internal
Revenue Code. Subtract from the adjusted gross income of any
taxpayer that added an amount to adjusted gross income in a
previous year the amount necessary to offset the amount included
in federal gross income as a result of the deferral of income
arising from business indebtedness discharged in connection with
the reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(10) Add an amount equal to any exempt insurance income under
Section 953(e) of the Internal Revenue Code that is active
financing income under Subpart F of Subtitle A, Chapter 1,
Subchapter N of the Internal Revenue Code.
(11) Add the amount excluded from federal gross income under
Section 103 of the Internal Revenue Code for interest received on
an obligation of a state other than Indiana, or a political
subdivision of such a state, that is acquired by the taxpayer after
December 31, 2011.
(12) For taxable years beginning after December 25, 2016, add:
(A) an amount equal to the amount reported by the taxpayer on
SEA 2 18
IRC 965 Transition Tax Statement, line 1; or
(B) if the taxpayer deducted an amount under Section 965(c)
of the Internal Revenue Code in determining the taxpayer's
taxable income for purposes of the federal income tax, the
amount deducted under Section 965(c) of the Internal Revenue
Code.
(13) Add an amount equal to the deduction that was claimed by
the taxpayer for the taxable year under Section 250(a)(1)(B) of the
Internal Revenue Code (attributable to global intangible
low-taxed income). The taxpayer shall separately specify the
amount of the reduction under Section 250(a)(1)(B)(i) of the
Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
Internal Revenue Code.
(14) Subtract any interest expense paid or accrued in the current
taxable year but not deducted as a result of the limitation imposed
under Section 163(j)(1) of the Internal Revenue Code. Add any
interest expense paid or accrued in a previous taxable year but
allowed as a deduction under Section 163 of the Internal Revenue
Code in the current taxable year. For purposes of this subdivision,
an interest expense is considered paid or accrued only in the first
taxable year the deduction would have been allowable under
Section 163 of the Internal Revenue Code if the limitation under
Section 163(j)(1) of the Internal Revenue Code did not exist.
(15) Subtract the amount that would have been excluded from
gross income but for the enactment of Section 118(b)(2) of the
Internal Revenue Code for taxable years ending after December
22, 2017.
(16) Add an amount equal to the remainder of:
(A) the amount allowable as a deduction under Section 274(n)
of the Internal Revenue Code; minus
(B) the amount otherwise allowable as a deduction under
Section 274(n) of the Internal Revenue Code, if Section
274(n)(2)(D) of the Internal Revenue Code was not in effect
for amounts paid or incurred after December 31, 2020.
(17) For taxable years ending after March 12, 2020, subtract an
amount equal to the deduction disallowed pursuant to:
(A) Section 2301(e) of the CARES Act (Public Law 116-136),
as modified by Sections 206 and 207 of the Taxpayer Certainty
and Disaster Relief Tax Act (Division EE of Public Law
116-260); and
(B) Section 3134(e) of the Internal Revenue Code.
(18) For taxable years beginning after December 31, 2022,
SEA 2 19
subtract an amount equal to the deduction disallowed under
Section 280C(h) of the Internal Revenue Code.
(19) Add or subtract any other amounts the taxpayer is:
(A) required to add or subtract; or
(B) entitled to deduct;
under IC 6-3-2.
(f) In the case of trusts and estates, "taxable income" (as defined for
trusts and estates in Section 641(b) of the Internal Revenue Code)
adjusted as follows:
(1) Subtract income that is exempt from taxation under this article
by the Constitution and statutes of the United States.
(2) Subtract an amount equal to the amount of a September 11
terrorist attack settlement payment included in the federal
adjusted gross income of the estate of a victim of the September
11 terrorist attack or a trust to the extent the trust benefits a victim
of the September 11 terrorist attack.
(3) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross income
that would have been computed had an election not been made
under Section 168(k) of the Internal Revenue Code to apply bonus
depreciation to the property in the year that it was placed in
service.
(4) Add an amount equal to any deduction allowed under Section
172 of the Internal Revenue Code (concerning net operating
losses).
(5) Add or subtract the amount necessary to make the adjusted
gross income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in service
in the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes not
been made for the year in which the property was placed in
service to take deductions under Section 179 of the Internal
Revenue Code in a total amount exceeding the sum of:
(A) twenty-five thousand dollars ($25,000) to the extent
deductions under Section 179 of the Internal Revenue Code
were not elected as provided in clause (B); and
(B) for taxable years beginning after December 31, 2017, the
deductions elected under Section 179 of the Internal Revenue
Code on property acquired in an exchange if:
SEA 2 20
(i) the exchange would have been eligible for
nonrecognition of gain or loss under Section 1031 of the
Internal Revenue Code in effect on January 1, 2017;
(ii) the exchange is not eligible for nonrecognition of gain or
loss under Section 1031 of the Internal Revenue Code; and
(iii) the taxpayer made an election to take deductions under
Section 179 of the Internal Revenue Code with regard to the
acquired property in the year that the property was placed
into service.
The amount of deductions allowable for an item of property
under this clause may not exceed the amount of adjusted gross
income realized on the property that would have been deferred
under the Internal Revenue Code in effect on January 1, 2017.
(6) Subtract income that is:
(A) exempt from taxation under IC 6-3-2-21.7 (certain income
derived from patents); and
(B) included in the taxpayer's taxable income under the
Internal Revenue Code.
(7) Add an amount equal to any income not included in gross
income as a result of the deferral of income arising from business
indebtedness discharged in connection with the reacquisition after
December 31, 2008, and before January 1, 2011, of an applicable
debt instrument, as provided in Section 108(i) of the Internal
Revenue Code. Subtract from the adjusted gross income of any
taxpayer that added an amount to adjusted gross income in a
previous year the amount necessary to offset the amount included
in federal gross income as a result of the deferral of income
arising from business indebtedness discharged in connection with
the reacquisition after December 31, 2008, and before January 1,
2011, of an applicable debt instrument, as provided in Section
108(i) of the Internal Revenue Code.
(8) Add the amount excluded from federal gross income under
Section 103 of the Internal Revenue Code for interest received on
an obligation of a state other than Indiana, or a political
subdivision of such a state, that is acquired by the taxpayer after
December 31, 2011.
(9) For taxable years beginning after December 25, 2016, add an
amount equal to:
(A) the amount reported by the taxpayer on IRC 965
Transition Tax Statement, line 1;
(B) if the taxpayer deducted an amount under Section 965(c)
of the Internal Revenue Code in determining the taxpayer's
SEA 2 21
taxable income for purposes of the federal income tax, the
amount deducted under Section 965(c) of the Internal Revenue
Code; and
(C) with regard to any amounts of income under Section 965
of the Internal Revenue Code distributed by the taxpayer, the
deduction under Section 965(c) of the Internal Revenue Code
attributable to such distributed amounts and not reported to the
beneficiary.
For purposes of this article, the amount required to be added back
under clause (B) is not considered to be distributed or
distributable to a beneficiary of the estate or trust for purposes of
Sections 651 and 661 of the Internal Revenue Code.
(10) Subtract any interest expense paid or accrued in the current
taxable year but not deducted as a result of the limitation imposed
under Section 163(j)(1) of the Internal Revenue Code. Add any
interest expense paid or accrued in a previous taxable year but
allowed as a deduction under Section 163 of the Internal Revenue
Code in the current taxable year. For purposes of this subdivision,
an interest expense is considered paid or accrued only in the first
taxable year the deduction would have been allowable under
Section 163 of the Internal Revenue Code if the limitation under
Section 163(j)(1) of the Internal Revenue Code did not exist.
(11) Add an amount equal to the deduction for qualified business
income that was claimed by the taxpayer for the taxable year
under Section 199A of the Internal Revenue Code.
(12) Subtract the amount that would have been excluded from
gross income but for the enactment of Section 118(b)(2) of the
Internal Revenue Code for taxable years ending after December
22, 2017.
(13) Add an amount equal to the remainder of:
(A) the amount allowable as a deduction under Section 274(n)
of the Internal Revenue Code; minus
(B) the amount otherwise allowable as a deduction under
Section 274(n) of the Internal Revenue Code, if Section
274(n)(2)(D) of the Internal Revenue Code was not in effect
for amounts paid or incurred after December 31, 2020.
(14) For taxable years beginning after December 31, 2017, and
before January 1, 2021, add an amount equal to the excess
business loss of the taxpayer as defined in Section 461(l)(3) of the
Internal Revenue Code. In addition:
(A) If a taxpayer has an excess business loss under this
subdivision and also has modifications under subdivisions (3)
SEA 2 22
and (5) for property placed in service during the taxable year,
the taxpayer shall treat a portion of the taxable year
modifications for that property as occurring in the taxable year
the property is placed in service and a portion of the
modifications as occurring in the immediately following
taxable year.
(B) The portion of the modifications under subdivisions (3)
and (5) for property placed in service during the taxable year
treated as occurring in the taxable year in which the property
is placed in service equals:
(i) the modification for the property otherwise determined
under this section; minus
(ii) the excess business loss disallowed under this
subdivision;
but not less than zero (0).
(C) The portion of the modifications under subdivisions (3)
and (5) for property placed in service during the taxable year
treated as occurring in the taxable year immediately following
the taxable year in which the property is placed in service
equals the modification for the property otherwise determined
under this section minus the amount in clause (B).
(D) Any reallocation of modifications between taxable years
under clauses (B) and (C) shall be first allocated to the
modification under subdivision (3), then to the modification
under subdivision (5).
(15) For taxable years ending after March 12, 2020, subtract an
amount equal to the deduction disallowed pursuant to:
(A) Section 2301(e) of the CARES Act (Public Law 116-136),
as modified by Sections 206 and 207 of the Taxpayer Certainty
and Disaster Relief Tax Act (Division EE of Public Law
116-260); and
(B) Section 3134(e) of the Internal Revenue Code.
(16) For taxable years beginning after December 31, 2022,
subtract an amount equal to the deduction disallowed under
Section 280C(h) of the Internal Revenue Code.
(17) Except as provided in subsection (c), for taxable years
beginning after December 31, 2022, add an amount equal to
any deduction or deductions allowed or allowable in
determining taxable income under Section 641(b) of the
Internal Revenue Code for taxes based on or measured by
income and levied at the state level by any state of the United
States.
SEA 2 23
(17) (18) Add or subtract any other amounts the taxpayer is:
(A) required to add or subtract; or
(B) entitled to deduct;
under IC 6-3-2.
(g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
IC 6-3-4-15 for taxable years beginning after December 31, 2022,
"adjusted gross income" of a pass through entity means the
aggregate of items of ordinary income and loss in the case of a
partnership or a corporation described in IC 6-3-2-2.8(2), or
aggregate distributable net income of a trust or estate as defined in
Section 643 of the Internal Revenue Code, whichever is applicable,
for the taxable year modified as follows:
(1) Add the separately stated items of income and gains, or the
equivalent items that must be considered separately by a
beneficiary, as determined for federal purposes, attributed to
the partners, shareholders, or beneficiaries of the pass
through entity, determined without regard to whether the
owner is permitted to exclude all or part of the income or gain
or deduct any amount against the income or gain.
(2) Subtract the separately stated items of deductions or losses
or items that must be considered separately by beneficiaries,
as determined for federal purposes, attributed to partners,
shareholders, or beneficiaries of the pass through entity and
that are deductible by an individual in determining adjusted
gross income as defined under Section 62 of the Internal
Revenue Code:
(A) limited as if the partners, shareholders, and
beneficiaries deducted the maximum allowable loss or
deduction allowable for the taxable year prior to any
amount deductible from the pass through entity; but
(B) not considering any disallowance of deductions
resulting from federal basis limitations for the partner,
shareholder, or beneficiary.
(3) Add or subtract any modifications to adjusted gross
income that would be required both for individuals under
subsection (a) and corporations under subsection (b) to the
extent otherwise provided in those subsections, including
amounts that are allowable for which such modifications are
necessary to account for separately stated items in subdivision
(1) or (2).
(g) (h) Subsections (a)(35), (b)(20), (d)(19), (e)(19), or (f)(17)
(f)(18) may not be construed to require an add back or allow a
SEA 2 24
deduction or exemption more than once for a particular add back,
deduction, or exemption.
(h) (i) For taxable years beginning after December 25, 2016, if:
(1) a taxpayer is a shareholder, either directly or indirectly, in a
corporation that is an E&P deficit foreign corporation as defined
in Section 965(b)(3)(B) of the Internal Revenue Code, and the
earnings and profit deficit, or a portion of the earnings and profit
deficit, of the E&P deficit foreign corporation is permitted to
reduce the federal adjusted gross income or federal taxable
income of the taxpayer, the deficit, or the portion of the deficit,
shall also reduce the amount taxable under this section to the
extent permitted under the Internal Revenue Code, however, in no
case shall this permit a reduction in the amount taxable under
Section 965 of the Internal Revenue Code for purposes of this
section to be less than zero (0); and
(2) the Internal Revenue Service issues guidance that such an
income or deduction is not reported directly on a federal tax
return or is to be reported in a manner different than specified in
this section, this section shall be construed as if federal adjusted
gross income or federal taxable income included the income or
deduction.
(i) (j) If a partner is required to include an item of income, a
deduction, or another tax attribute in the partner's adjusted gross
income tax return pursuant to IC 6-3-4.5, such item shall be considered
to be includible in the partner's federal adjusted gross income or federal
taxable income, regardless of whether such item is actually required to
be reported by the partner for federal income tax purposes. For
purposes of this subsection:
(1) items for which a valid election is made under IC 6-3-4.5-6,
IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
in the partner's adjusted gross income or taxable income; and
(2) items for which the partnership did not make an election under
IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
partnership is required to remit tax pursuant to IC 6-3-4.5-18,
shall be included in the partner's adjusted gross income or taxable
income.
SECTION 2. IC 6-3-2-2.5, AS AMENDED BY P.L.137-2022,
SECTION 35, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.5. (a) This section
applies to a resident person.
(b) Resident persons are entitled to a net operating loss deduction.
The amount of the deduction taken in a taxable year may not exceed
SEA 2 25
the taxpayer's unused Indiana net operating losses carried over to that
year. A taxpayer is not entitled to carryback any net operating losses
after December 31, 2011.
(c) An Indiana net operating loss equals the sum of:
(1) the taxpayer's federal net operating loss for a taxable year as
calculated under Section 172 of the Internal Revenue Code,
adjusted for certain modifications required by IC 6-3-1-3.5 as set
forth in subsection (d)(1) and, in the case of an individual,
reduced by any deductions allowable in determining the federal
net operating loss for the taxable year, but not allowable in
determining federal adjusted gross income;
(2) the excess business loss deduction disallowed under
IC 6-3-1-3.5(a)(29) and IC 6-3-1-3.5(f)(14); and
(3) for taxable years beginning after December 31, 2020, a loss
for a taxable year disallowed because of Section 461(l) of the
Internal Revenue Code, without any modifications under
subsection (d).
(d) The following provisions apply for purposes of subsection (c):
(1) The modifications that are to be applied are those
modifications required under IC 6-3-1-3.5 for the same taxable
year in which each net operating loss was incurred, except that the
modifications do not include the modifications required under:
(A) IC 6-3-1-3.5(a)(3);
(B) IC 6-3-1-3.5(a)(4);
(C) IC 6-3-1-3.5(a)(5);
(D) IC 6-3-1-3.5(a)(35);
(E) IC 6-3-1-3.5(f)(11); and
(F) IC 6-3-1-3.5(f)(17). IC 6-3-1-3.5(f)(18).
(2) An Indiana net operating loss includes a net operating loss that
arises when the applicable modifications required by IC 6-3-1-3.5
as set forth in subdivision (1) exceed the sum of the taxpayer's
federal adjusted gross income (as defined in Section 62 of the
Internal Revenue Code) if the taxpayer is an individual, or federal
taxable income (as defined in Section 63 of the Internal Revenue
Code) if the taxpayer is a trust or an estate for the taxable year in
which the Indiana net operating loss is determined and the
modifications otherwise required for federal net operating losses
for the taxable year by Section 172(d) of the Internal Revenue
Code. A modification that reduces a federal net operating loss
shall be treated as a positive number for purposes of this
subdivision, and a modification that increases a federal net
operating loss shall be treated as a negative number for purposes
SEA 2 26
of this subdivision.
(e) Subject to the limitations contained in subsection (g), an Indiana
net operating loss carryover shall be available as a deduction from the
taxpayer's adjusted gross income (as defined in IC 6-3-1-3.5) in the
carryover year provided in subsection (f), but not in excess of the
taxpayer's adjusted gross income (as defined in IC 6-3-1-3.5) in the
carryover year determined without regard to this section.
(f) Carryovers shall be determined under this subsection as follows:
(1) An Indiana net operating loss shall be an Indiana net operating
loss carryover to each of the carryover years following the taxable
year of the loss.
(2) An Indiana net operating loss may not be carried over for
more than twenty (20) taxable years after the taxable year of the
loss.
(g) The entire amount of the Indiana net operating loss for any
taxable year shall be carried to the earliest of the taxable years to which
(as determined under subsection (f)) the loss may be carried. The
amount of the Indiana net operating loss remaining after the deduction
is taken under this section in a taxable year may be carried over as
provided in subsection (f). The amount of the Indiana net operating loss
carried over from year to year shall be reduced to the extent that the
Indiana net operating loss carryover is used by the taxpayer to obtain
a deduction in a taxable year until the occurrence of the earlier of the
following:
(1) The entire amount of the Indiana net operating loss has been
used as a deduction.
(2) The Indiana net operating loss has been carried over to each
of the carryover years provided by subsection (f).
SECTION 3. IC 6-3-2-2.6, AS AMENDED BY P.L.137-2022,
SECTION 36, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.6. (a) This section
applies to a corporation or a nonresident person.
(b) Corporations and nonresident persons are entitled to a net
operating loss deduction. The amount of the deduction taken in a
taxable year may not exceed the taxpayer's unused Indiana net
operating losses carried over to that year. A taxpayer is not entitled to
carryback any net operating losses after December 31, 2011.
(c) An Indiana net operating loss equals the sum of:
(1) the taxpayer's federal net operating loss for a taxable year as
calculated under Section 172 of the Internal Revenue Code,
derived from sources within Indiana and adjusted for certain
modifications required by IC 6-3-1-3.5 as set forth in subsection
SEA 2 27
(d)(1) and, for a nonresident individual, reduced by any
deductions from Indiana sources allowable in determining the
federal net operating loss for the taxable year, but not allowable
in determining federal adjusted gross income;
(2) the excess business loss deduction disallowed under
IC 6-3-1-3.5(a)(29) and IC 6-3-1-3.5(f)(14) and incurred from
Indiana sources; and
(3) for taxable years beginning after December 31, 2020, the
portion of the loss for a taxable year disallowed because of
Section 461(l) of the Internal Revenue Code and incurred from
Indiana sources, without any modifications under subsection (d).
Any net operating loss under this subdivision shall be computed
in a manner consistent with the computation of adjusted gross
income under IC 6-3.
(d) The following provisions apply for purposes of subsection (c):
(1) The modifications that are to be applied are those
modifications required under IC 6-3-1-3.5 for the same taxable
year in which each net operating loss was incurred, except that the
modifications do not include the modifications required under:
(A) IC 6-3-1-3.5(a)(3);
(B) IC 6-3-1-3.5(a)(4);
(C) IC 6-3-1-3.5(a)(5);
(D) IC 6-3-1-3.5(a)(35);
(E) IC 6-3-1-3.5(b)(14);
(F) IC 6-3-1-3.5(b)(20);
(G) IC 6-3-1-3.5(d)(13);
(H) IC 6-3-1-3.5(d)(19);
(I) IC 6-3-1-3.5(e)(13);
(J) IC 6-3-1-3.5(e)(19);
(K) IC 6-3-1-3.5(f)(11); and
(L) IC 6-3-1-3.5(f)(17). IC 6-3-1-3.5(f)(18).
(2) The amount of the taxpayer's net operating loss that is derived
from sources within Indiana shall be determined in the same
manner that the amount of the taxpayer's adjusted gross income
derived from sources within Indiana is determined under section
2 of this chapter for the same taxable year during which each loss
was incurred.
(3) An Indiana net operating loss includes a net operating loss that
arises when the applicable modifications required by IC 6-3-1-3.5
as set forth in subdivision (1) exceed the sum of:
(A) either:
(i) the taxpayer's federal taxable income (as defined in
SEA 2 28
Section 63 of the Internal Revenue Code), if the taxpayer is
a corporation, nonresident estate, or nonresident trust; or
(ii) the taxpayer's federal adjusted gross income (as defined
by Section 62 of the Internal Revenue Code), if the taxpayer
is a nonresident individual;
for the taxable year in which the Indiana net operating loss is
determined; and
(B) the modifications otherwise required for federal net
operating losses for the taxable year of the Indiana net
operating loss under Section 172(d) of the Internal Revenue
Code or Section 512(b) of the Internal Revenue Code. A
modification that reduces a federal net operating loss shall be
treated as a positive number for purposes of this subdivision,
and a modification that increases a federal net operating loss
shall be treated as a negative number for purposes of this
subdivision.
(e) Subject to the limitations contained in subsection (g), an Indiana
net operating loss carryover shall be available as a deduction from the
taxpayer's adjusted gross income derived from sources within Indiana
(as defined in section 2 of this chapter) in the carryover year provided
in subsection (f), but not in excess of the taxpayer's adjusted gross
income (as defined in IC 6-3-1-3.5) in the carryover year determined
without regard to the deduction allowable under this section.
(f) Carryovers shall be determined under this subsection as follows:
(1) An Indiana net operating loss shall be an Indiana net operating
loss carryover to each of the carryover years following the taxable
year of the loss.
(2) An Indiana net operating loss may not be carried over for
more than twenty (20) taxable years after the taxable year of the
loss.
(g) The entire amount of the Indiana net operating loss for any
taxable year shall be carried to the earliest of the taxable years to which
(as determined under subsection (f)) the loss may be carried. The
amount of the Indiana net operating loss remaining after the deduction
is taken under this section in a taxable year may be carried over as
provided in subsection (f). The amount of the Indiana net operating loss
carried over from year to year shall be reduced to the extent that the
Indiana net operating loss carryover is used by the taxpayer to obtain
a deduction in a taxable year until the occurrence of the earlier of the
following:
(1) The entire amount of the Indiana net operating loss has been
used as a deduction.
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(2) The Indiana net operating loss has been carried over to each
of the carryover years provided by subsection (f).
(h) An Indiana net operating loss deduction determined under this
section shall be allowed notwithstanding the fact that in the year the
taxpayer incurred the net operating loss the taxpayer was not subject to
the tax imposed under section 1 of this chapter because the taxpayer
was:
(1) a life insurance company (as defined in Section 816(a) of the
Internal Revenue Code); or
(2) an insurance company subject to tax under Section 831 of the
Internal Revenue Code.
(i) In the case of a life insurance company, this section shall be
applied by substituting life insurance company taxable income (as
defined in Section 801 the Internal Revenue Code) in place of
references to taxable income (as defined in Section 63 of the Internal
Revenue Code).
SECTION 4. IC 6-3-2-2.8, AS AMENDED BY P.L.129-2014,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2.8. Notwithstanding any
provision of IC 6-3-1 through IC 6-3-7, there shall be no tax on the
adjusted gross income of the following:
(1) Any organization described in Section 501(a) of the Internal
Revenue Code, except that any income of such organization
which is subject to income tax under the Internal Revenue Code
shall be subject to the tax under IC 6-3-1 through IC 6-3-7.
(2) Any corporation which is exempt from income tax under
Section 1363 of the Internal Revenue Code and which complies
with the requirements of IC 6-3-4-13. However, income of a
corporation described under this subdivision that is subject to
income tax under the Internal Revenue Code is subject to the tax
under IC 6-3-1 through IC 6-3-7. A corporation will not lose its
exemption under this section because it fails to comply with
IC 6-3-4-13 but it will be subject to the penalties provided by
IC 6-8.1-10. Any corporation that is exempt from income tax
under Section 1363 of the Internal Revenue Code and that
makes an election under IC 6-3-2.1 for a taxable year shall be
subject to tax as provided in IC 6-3-2.1 for the taxable year of
the election.
(3) Banks and trust companies, national banking associations,
savings banks, building and loan associations, and savings and
loan associations.
(4) Insurance companies subject to tax under any of the following:
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(A) IC 27-1-18-2, including a domestic insurance company
that elects to be taxed under IC 27-1-18-2.
(B) IC 27-1-2-2.3.
(5) International banking facilities (as defined in Regulation D of
the Board of Governors of the Federal Reserve System (12 CFR
204)).
SECTION 5. IC 6-3-2.1 IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]:
Chapter 2.1. Pass Through Entity Tax
Sec. 1. This chapter applies to taxable years beginning after
December 31, 2021.
Sec. 2. The following definitions apply throughout this chapter:
(1) "Electing entity" means a pass through entity described in
IC 6-3-1-35 that is subject to Subchapter K or Subchapter S
of the Internal Revenue Code and makes the election under
this chapter.
(2) "Entity owner" means the direct or indirect owners of an
electing entity that are ultimately taxable on the entity's
income under Subchapter K or Subchapter S of the Internal
Revenue Code, except an owner described in subdivision
(4)(A) through (4)(C).
(3) "Nonresident" means a nonresident partner as defined by
IC 6-3-4-12(n), a nonresident shareholder as defined by
IC 6-3-4-13(n), or a nonresident beneficiary as defined by
IC 6-3-4-15(i), whichever is applicable.
(4) "Owner" means a direct or indirect owner of an electing
entity and includes a beneficiary of an estate or trust.
However an owner shall not include:
(A) an entity described in IC 6-3-2-2.8(3);
(B) an entity described in IC 6-3-2-2.8(5); or
(C) any other entity as determined by the department and
listed in instructions or guidance issued by the department.
Sec. 3. (a) For purposes of this section, "authorized person"
means any individual with the authority from the electing entity to
bind the electing entity or sign returns on its behalf.
(b) Each taxable year, an authorized person may elect, on behalf
of the electing entity, to have the adjusted gross income tax under
IC 6-3-1 through IC 6-3-7 imposed upon the electing entity. The
entity owners shall remain liable for adjusted gross income tax
under IC 6-3-1 through IC 6-3-7 on their share of the electing
entity's adjusted gross income but with the credit provided to the
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entity owners as set forth in section 5 of this chapter.
(c) The election is applicable for the taxable year of the return.
(d) The following apply to an election under this section:
(1) For taxable years beginning after December 31, 2022, the
election may be made at any time during the taxable year or
after the end of the taxable year, but not later than the earlier
of:
(A) the due date of the electing entity's return for the
taxable year, including any extensions; or
(B) the date the electing entity files its return for the
taxable year.
(2) For taxable years beginning after December 31, 2021, and
before January 1, 2023, the election must be made after
March 31, 2023, and before August 31, 2024.
(3) The election shall be made in the form and manner
prescribed by the department.
(4) The election, once made for a taxable year, is irrevocable,
provided that an election under subdivision (2) may be made
on an amended return if the electing entity filed a return on
or before April 18, 2023.
Sec. 4. (a) A tax shall be imposed on the adjusted gross income
of an electing entity for the taxable year of the election. The
adjusted gross income of the electing entity shall be the aggregate
of the direct owners' share of the electing entity's adjusted gross
income. For purposes of this section:
(1) the electing entity shall determine each nonresident direct
owner's share after allocation and apportionment pursuant to
IC 6-3-2-2; and
(2) the electing entity shall determine the resident direct
owner's share either before allocation and apportionment
pursuant to IC 6-3-2-2 or after allocation and apportionment
pursuant to IC 6-3-2-2. The electing entity must use the same
method for all resident direct owners.
(b) The tax rate shall be the tax rate specified in IC 6-3-2-1(b)
as of the last day of the electing entity's taxable year, and the tax
shall be due on the same date as the entity return for the taxable
year is due under this article, without regard to extensions.
(c) On its return for the taxable year, the electing entity shall
attach a schedule showing the calculation of the tax and the credit
for each entity owner, and remit the tax with the return, taking
into account prior estimated tax payments and other tax payments
by the electing entity, along with other payments that are credited
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to the electing entity as tax paid under this chapter or as tax
withheld under IC 6-3-4 or IC 6-5.5-2-8. The department may
prescribe the form for providing the information required by this
section.
(d) If a pass through entity makes estimated tax payments,
makes other tax payments, or has other payments that are credited
to the electing entity as tax paid under this chapter or a tax
withheld under IC 6-3-4 or IC 6-5.5-2-8, and the pass through
entity does not make the election under section 3 of this chapter,
the pass through entity:
(1) may treat pass through entity tax remitted on its behalf
under this chapter as pass through entity tax to its direct
owners, provided that:
(A) the tax is designated on a schedule similar to the
schedule required under subsection (c) and is reported to
the direct owners in the manner provided in section 5 of
this chapter; and
(B) the pass through entity credits an amount to a direct
owner no greater than the tax that otherwise would be due
under this chapter on their share of the adjusted gross
income from the pass through entity or the direct owner's
portion (as determined under subsection (a)) of the pass
through entity tax passed through to the pass through
entity, whichever is greater (for purposes of this clause, a
trust or estate shall compute the tax in the same manner as
an electing entity);
(2) shall treat any payment other than a payment designated
under subdivision (1) as a withholding tax payment under
IC 6-3-4-12, IC 6-3-4-13, IC 6-3-4-15, or IC 6-5.5-2-8 to the
extent the pass through entity otherwise has not remitted or
been credited with such withholding; and
(3) may request a refund of any payment in excess of the
amounts credited or designated under subdivision (1) or (2).
Sec. 5. (a) Each electing entity shall compute each direct owner's
share of the tax imposed by section 4 of this chapter and reflect
that amount in the form and manner prescribed by the
department.
(b) Each entity owner shall be entitled to a refundable credit in
an amount equal to the amount of tax under this chapter credited
to the entity owner.
(c) All other credits arising from the operations of the electing
entity, or which are passed through to or assigned to the electing
SEA 2 33
entity, shall pass through to the entity owners as provided in this
article or IC 6-3.1 and shall not apply to the tax imposed in section
4 of this chapter. All such other credits shall apply before the
application of the pass through entity tax credit. This subsection
also applies to pass through entities that pass the tax under this
chapter through to their owners. However, this subsection shall not
limit the ability of an electing entity or pass through entity to claim
credit for taxes withheld or paid on the entity's behalf.
Sec. 6. (a) Except as otherwise provided in this section, an
electing entity shall be subject to the obligation to make estimated
tax payments under this article for the tax imposed under section
4 of this chapter in the same manner as applicable to corporations
under IC 6-3-4-4.1(c).
(b) For taxable years ending on or before June 30, 2023, an
electing entity is not required to make estimated tax payments.
(c) For taxable years ending after June 30, 2023, and on or
before December 31, 2024, an electing entity shall make an
estimated tax payment for the taxable years on or before the end
of the taxable year. There shall be no penalty for underpayment of
estimated tax, except to the extent the underpayment fails to equal
or exceed fifty percent (50%) of the tax imposed by section 4 of this
chapter for the taxable year.
(d) For taxable years ending after December 31, 2024, there
shall be no penalty for underpayment of estimated tax, except to
the extent the payments during the taxable year fail to equal or
exceed the lesser of eighty percent (80%) of the tax imposed under
this chapter for the taxable year or one hundred percent (100%)
of the tax imposed under this chapter for the preceding taxable
year.
(e) In the event of an underpayment under subsection (c) or (d),
the electing entity shall be subject to a penalty in the amount
prescribed under IC 6-8.1-10-2.1(b) on the amount of the
underpayment.
Sec. 7. (a) This section applies if:
(1) the department determines that an electing entity
underreported its tax under this chapter;
(2) an electing entity files an amended return reporting an
underpayment of tax under this chapter; or
(3) the Internal Revenue Service adjusts the adjusted gross
income of an electing entity.
(b) If a partnership is an electing entity, the partnership shall be
subject to IC 6-3-4.5 on any assessment and reporting of changes.
SEA 2 34
(c) If a corporation described in IC 6-3-2-2.8(2) is an electing
entity, the corporation and its shareholders shall be subject to the
provisions of IC 6-3-4.5 in the same manner as a partnership and
its partners with regard to the tax imposed under this chapter,
except that any change in attributes is treated as occurring in the
year to which the change relates unless required by the Internal
Revenue Code.
SECTION 6. IC 6-3-3-3, AS AMENDED BY P.L.159-2021,
SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2019 (RETROACTIVE)]: Sec. 3. (a) Whenever a
resident person has become liable for tax to another state upon all or
any part of the person's income for a taxable year derived from sources
without this state and subject to taxation under IC 6-3-2, the amount of
tax paid by the person to the other state shall be credited against the
amount of the tax payable by the person. Such credit shall be allowed
upon the production to the department of satisfactory evidence of the
fact of such payment, except that such application for credit shall not
operate to reduce the tax payable under IC 6-3-2 to an amount less than
would have been payable were the income from the other state ignored.
The credit provided for by this subsection shall not be granted to a
taxpayer when the laws of the other state, under which the adjusted
gross income in question is subject to taxation, provides for a credit to
the taxpayer substantially similar to that granted by subsection (b).
(b) Whenever a nonresident person has become liable for tax to the
state where the person resides upon the person's income for the taxable
year derived from sources within this state and subject to taxation
under IC 6-3-2, the proportion of tax paid by the person to the state
where the person resides that the person's income subject to taxation
under IC 6-3-2 bears to the person's income upon which the tax so
payable to the other state was imposed shall be credited against the tax
payable by the person under IC 6-3-2, but only if the laws of the other
state grant a substantially similar credit to residents of this state subject
to income tax under the laws of such other state, or impose a tax upon
the income of its residents derived from sources in this state and
exempt from taxation the income of residents of this state. No credit
shall be allowed against the amount of the tax on any adjusted gross
income taxable under IC 6-3-2 that is exempt from taxation under the
laws of the other state.
(c) Notwithstanding subsection (a), if a resident person will be liable
for income tax to a foreign country upon the person's income included
under the Internal Revenue Code, the income is considered from
sources outside the United States under the Internal Revenue Code, and
SEA 2 35
the income is included in the person's Indiana adjusted gross income
due solely to an acceleration of the income inclusion for federal income
tax purposes, the person may claim the credit allowable under this
section by providing evidence to the department of the following:
(1) The foreign country in which the income is subject to tax.
(2) The amount of income included in Indiana adjusted gross
income that is derived from the foreign country.
(3) The amount of tax that will be imposed in the foreign country
upon the individual's realization of the income under the laws of
the foreign country, including any withholding tax or composite
tax.
(4) Any other information required by the department.
The department may impose limitations and conditions on the claim
under this subsection, including reporting requirements on the part of
the person and extensions of statutes of limitations under IC 6-8.1-5-2.
(d) As used in this subsection, "pass through entity tax" means
a state net income tax imposed by another state on a pass through
entity enacted by the state after 2017 that is substantially similar
to that imposed under IC 6-3-2.1. Solely for purposes of this
section, an owner of a pass through entity shall be considered liable
for tax paid to another state by the pass through entity pursuant to
a pass through entity tax imposed by the state (whether elected or
otherwise) in an amount equal to that portion of the pass through
entity tax representing the pass through entity tax credited to or
otherwise attributed to the owner by the pass through entity, and
the owner shall be considered to have paid that portion of the tax
paid by the pass through entity. The owner of a pass through entity
shall also be considered liable for and to have paid state income
taxes to another state paid by the pass through entity on behalf of
an owner through withholding, a composite return, or otherwise.
SECTION 7. IC 6-3-4-11 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2022 (RETROACTIVE)]: Sec. 11. (a) A
partnership as such shall not be subject to the adjusted gross income
tax imposed by IC 6-3-1 through IC 6-3-7, except to the extent the
partnership is an electing entity (as defined in IC 6-3-2.1-2) or the
partnership has made an election to be taxed at the partnership
level under IC 6-3-4.5. Persons or corporations carrying on business
as partners shall be liable for the adjusted gross income tax only in
their separate or individual capacities. In determining each partner's
adjusted gross income, such partner shall take into account his or its
distributive share of the adjustments provided for in IC 6-3-1-3.5.
(b) The adjustments provided for in IC 6-3-1-3.5 shall be allowed
SEA 2 36
for the taxable year of the partner within or with which the partnership's
taxable year ends.
SECTION 8. IC 6-3-4-12, AS AMENDED BY P.L.137-2022,
SECTION 38, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 12. (a) Every partnership
shall, at the time that the partnership pays or credits amounts to any of
its nonresident partners on account of their distributive shares of
partnership income, for a taxable year of the partnership, deduct and
retain therefrom the amount prescribed in the withholding instructions
referred to in section 8 of this chapter. Such partnership so paying or
crediting any nonresident partner:
(1) shall be liable to the state of Indiana for the payment of the tax
required to be deducted and retained under this section and shall
not be liable to such partner for the amount deducted from such
payment or credit and paid over in compliance or intended
compliance with this section; and
(2) shall make return of and payment to the department monthly
whenever the amount of tax due under IC 6-3 and IC 6-3.6
exceeds an aggregate amount of fifty dollars ($50) per month with
such payment due on the thirtieth day of the following month,
unless an earlier date is specified by section 8.1 of this chapter.
Where the aggregate amount due under IC 6-3 and IC 6-3.6 does not
exceed fifty dollars ($50) per month, then such partnership shall make
return and payment to the department quarterly, on such dates and in
such manner as the department shall prescribe, of the amount of tax
which, under IC 6-3 and IC 6-3.6, it is required to withhold. If a
partnership credits a partner with pass through entity tax imposed
under IC 6-3-2.1, the withholding required for that partner under
this section shall be reduced by the tax credited to the partner
under IC 6-3-2.1, but in no event shall the tax required to be
withheld be reduced to less than zero dollars ($0).
(b) Every partnership shall, at the time of each payment made by it
to the department pursuant to this section, deliver to the department a
return upon such form as shall be prescribed by the department
showing the total amounts paid or credited to its nonresident partners,
the amount deducted therefrom in accordance with the provisions of
this section, and such other information as the department may require.
Every partnership making the deduction and retention provided in this
section shall furnish to its nonresident partners annually, but not later
than the fifteenth day of the third month after the end of its taxable
year, a record of the amount of tax deducted and retained from such
partners on forms to be prescribed by the department.
SEA 2 37
(c) All money deducted and retained by the partnership, as provided
in this section, shall immediately upon such deduction be the money of
the state of Indiana and every partnership which deducts and retains
any amount of money under the provisions of IC 6-3 shall hold the
same in trust for the state of Indiana and for payment thereof to the
department in the manner and at the times provided in IC 6-3. Any
partnership may be required to post a surety bond in such sum as the
department shall determine to be appropriate to protect the state of
Indiana with respect to money deducted and retained pursuant to this
section.
(d) The provisions of IC 6-8.1 relating to additions to tax in case of
delinquency and penalties shall apply to partnerships subject to the
provisions of this section, and for these purposes any amount deducted,
or required to be deducted and remitted to the department under this
section, shall be considered to be the tax of the partnership, and with
respect to such amount it shall be considered the taxpayer.
(e) Amounts deducted from payments or credits to a nonresident
partner during any taxable year of the partnership in accordance with
the provisions of this section shall be considered to be in part payment
of the tax imposed on such nonresident partner for the nonresident
partner's taxable year within or with which the partnership's taxable
year ends. A return made by the partnership under subsection (b) shall
be accepted by the department as evidence in favor of the nonresident
partner of the amount so deducted for the nonresident partner's
distributive share.
(f) This section shall in no way relieve any nonresident partner from
the nonresident partner's obligations of filing a return or returns at the
time required under IC 6-3 or IC 6-3.6, and any unpaid tax shall be paid
at the time prescribed by section 5 of this chapter.
(g) Instead of the reporting periods required under subsection (a),
the department may permit a partnership to file one (1) return and
payment each year if the partnership pays or credits amounts to its
nonresident partners only one (1) time each year. The return and
payment are due on or before the fifteenth day of the fourth month after
the end of the year. However, if a partnership is permitted an extension
to file its income tax return under IC 6-8.1-6-1, the return and payment
due under this subsection shall be allowed the same treatment as an
extended income tax return with respect to due dates, interest, and
penalties under IC 6-8.1-6-1.
(h) If a partnership fails to withhold and pay any amount of tax
required to be withheld under this section and thereafter the tax is paid
by the partners, the amounts of tax as paid by the partners shall not be
SEA 2 38
collected from the partnership but it may not be relieved from liability
for interest or penalty otherwise due in respect to the failure to
withhold under IC 6-8.1-10.
(i) A partnership shall file a composite adjusted gross income tax
return on behalf of all nonresident partners. The composite return must
include each nonresident partner regardless of whether or not the
nonresident partner has other Indiana source income.
(j) If a partnership does not include all nonresident partners in the
composite return, the partnership is subject to the penalty imposed
under IC 6-8.1-10-2.1(j).
(k) For taxable years beginning after December 31, 2013, the
department may not impose a late payment penalty on a partnership for
the failure to file a return, pay the full amount of the tax shown on the
partnership's return, or pay the deficiency of the withholding taxes due
under this section if the partnership pays the department before the
fifteenth day of the fourth month after the end of the partnership's
taxable year at least:
(1) eighty percent (80%) of the withholding tax due for the
current year; or
(2) one hundred percent (100%) of the withholding tax due for the
preceding year.
(l) Notwithstanding subsection (a) or (i), a partnership is not
required to withhold tax or file a composite adjusted gross income tax
return for a nonresident partner if the partnership:
(1) is a publicly traded partnership as defined by Section 7704(b)
of the Internal Revenue Code;
(2) meets the exception for partnerships under Section 7704(c) of
the Internal Revenue Code; and
(3) has agreed to file an annual information return reporting the
name, address, taxpayer identification number, and other
information requested by the department of each unit holder.
The department may issue written guidance explaining circumstances
under which limited partnerships or limited liability companies owned
by a publicly traded partnership may be excluded from the withholding
requirements of this section.
(m) Notwithstanding subsection (k), a partnership is subject to a late
payment penalty for the failure to file a return, pay the full amount of
the tax shown on the partnership's return, or pay the deficiency of the
withholding taxes due under this section for any amounts of
withholding tax, including any interest under IC 6-8.1-10-1, reported
or paid after the due date of the return, as adjusted by any extension
under IC 6-8.1-6-1.
SEA 2 39
(n) For purposes of this section, a "nonresident partner" is:
(1) an individual who does not reside in Indiana;
(2) a trust that does not reside in Indiana;
(3) an estate that does not reside in Indiana;
(4) a partnership not domiciled in Indiana;
(5) a C corporation not domiciled in Indiana; or
(6) an S corporation not domiciled in Indiana.
SECTION 9. IC 6-3-4-13, AS AMENDED BY P.L.197-2016,
SECTION 27, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 13. (a) Every corporation
which is exempt from tax under IC 6-3 pursuant to IC 6-3-2-2.8(2)
shall, at the time that it pays or credits amounts to any of its
nonresident shareholders as dividends or as their share of the
corporation's undistributed taxable income, withhold the amount
prescribed by the department. Such corporation so paying or crediting
any nonresident shareholder:
(1) shall be liable to the state of Indiana for the payment of the tax
required to be withheld under this section and shall not be liable
to such shareholder for the amount withheld and paid over in
compliance or intended compliance with this section; and
(2) when the aggregate amount due under IC 6-3 and IC 6-3.6
exceeds one hundred fifty dollars ($150) per quarter, then such
corporation shall make return and payment to the department
quarterly, on such dates and in such manner as the department
shall prescribe, of the amount of tax which, under IC 6-3 and
IC 6-3.6, it is required to withhold.
If a corporation credits a shareholder with pass through entity tax
imposed under IC 6-3-2.1, the withholding required for that
shareholder under this section shall be reduced by the tax credited
to the shareholder under IC 6-3-2.1, but in no event shall the tax
required to be withheld be reduced to less than zero dollars ($0).
(b) Every corporation shall, at the time of each payment made by it
to the department pursuant to this section, deliver to the department a
return upon such form as shall be prescribed by the department
showing the total amounts paid or credited to its nonresident
shareholders, the amount withheld in accordance with the provisions
of this section, and such other information as the department may
require. Every corporation withholding as provided in this section shall
furnish to its nonresident shareholders annually, but not later than the
fifteenth day of the third month after the end of its taxable year, a
record of the amount of tax withheld on behalf of such shareholders on
forms to be prescribed by the department.
SEA 2 40
(c) All money withheld by a corporation, pursuant to this section,
shall immediately upon being withheld be the money of the state of
Indiana and every corporation which withholds any amount of money
under the provisions of this section shall hold the same in trust for the
state of Indiana and for payment thereof to the department in the
manner and at the times provided in IC 6-3. Any corporation may be
required to post a surety bond in such sum as the department shall
determine to be appropriate to protect the state of Indiana with respect
to money withheld pursuant to this section.
(d) The provisions of IC 6-8.1 relating to additions to tax in case of
delinquency and penalties shall apply to corporations subject to the
provisions of this section, and for these purposes any amount withheld,
or required to be withheld and remitted to the department under this
section, shall be considered to be the tax of the corporation, and with
respect to such amount it shall be considered the taxpayer.
(e) Amounts withheld from payments or credits to a nonresident
shareholder during any taxable year of the corporation in accordance
with the provisions of this section shall be considered to be a part
payment of the tax imposed on such nonresident shareholder for the
shareholder's taxable year within or with which the corporation's
taxable year ends. A return made by the corporation under subsection
(b) shall be accepted by the department as evidence in favor of the
nonresident shareholder of the amount so withheld from the
shareholder's distributive share.
(f) This section shall in no way relieve any nonresident shareholder
from the shareholder's obligation of filing a return or returns at the time
required under IC 6-3 or IC 6-3.6, and any unpaid tax shall be paid at
the time prescribed by section 5 of this chapter.
(g) Instead of the reporting periods required under subsection (a),
the department may permit a corporation to file one (1) return and
payment each year if the corporation pays or credits amounts to its
nonresident shareholders only one (1) time each year. The withholding
return and payment are due on or before the fifteenth day of the fourth
month after the end of the taxable year of the corporation. However, if
a corporation is permitted an extension to file its income tax return
under IC 6-8.1-6-1, the return and payment due under this subsection
shall be allowed the same treatment as the extended income tax return
with respect to the due dates, interest, and penalties under IC 6-8.1-6-1.
(h) If a distribution will be made with property other than money or
a gain is realized without the payment of money, the corporation shall
not release the property or credit the gain until it has funds sufficient
to enable it to pay the tax required to be withheld under this section. If
SEA 2 41
necessary, the corporation shall obtain such funds from the
shareholders.
(i) If a corporation fails to withhold and pay any amount of tax
required to be withheld under this section and thereafter the tax is paid
by the shareholders, such amount of tax as paid by the shareholders
shall not be collected from the corporation but it shall not be relieved
from liability for interest or penalty otherwise due in respect to such
failure to withhold under IC 6-8.1-10.
(j) A corporation described in subsection (a) shall file a composite
adjusted gross income tax return on behalf of all nonresident
shareholders. The composite return must include each nonresident
shareholder regardless of whether or not the nonresident shareholder
has other Indiana source income.
(k) If a corporation described in subsection (a) does not include all
nonresident shareholders in the composite return, the corporation is
subject to the penalty imposed under IC 6-8.1-10-2.1(j).
(l) For taxable years beginning after December 31, 2013, the
department may not impose a late payment penalty on a corporation for
the failure to file a return, pay the full amount of the tax shown on the
corporation's return, or pay the deficiency of the withholding taxes due
under this section if the corporation pays the department before the
fifteenth day of the fourth month after the end of the partnership's
taxable year at least:
(1) eighty percent (80%) of the withholding tax due for the
current year; or
(2) one hundred percent (100%) of the withholding tax due for the
preceding year.
(m) Notwithstanding subsection (l), a corporation is subject to a late
payment penalty for the failure to file a return, pay the full amount of
the tax shown on the corporation's return, or pay the deficiency of the
withholding taxes due under this section for any amounts of
withholding tax, including any interest under IC 6-8.1-10-1, reported
or paid after the due date of the return, as adjusted by any extension
under IC 6-8.1-6-1.
(n) For purposes of this section, a "nonresident shareholder" is:
(1) an individual who does not reside in Indiana;
(2) a trust that does not reside in Indiana; or
(3) an estate that does not reside in Indiana.
SECTION 10. IC 6-3-4-15, AS AMENDED BY P.L.181-2016,
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 15. (a) A trust or estate
shall, at the time that it distributes income (except income attributable
SEA 2 42
to interest or dividends) to a nonresident beneficiary, deduct and retain
therefrom the amount prescribed in the withholding instructions
referred to in section 8 of this chapter. The trust or estate so
distributing income to a nonresident beneficiary:
(1) is liable to this state for the tax which it is required to deduct
and retain under this section and is not liable to the beneficiary for
the amount deducted from the distribution and paid to the
department in compliance, or intended compliance, with this
section; and
(2) shall pay the amount deducted to the department before the
thirtieth day of the month following the distribution, unless an
earlier date is specified by section 8.1 of this chapter.
If a trust or estate credits a beneficiary with pass through entity
tax imposed under IC 6-3-2.1, the withholding required for that
beneficiary under this section shall be reduced by the tax credited
to the beneficiary under IC 6-3-2.1, but in no event shall the tax
required to be withheld be reduced to less than zero dollars ($0).
(b) A trust or estate shall, at the time that it makes a payment to the
department under this section, deliver to the department a return which
shows the total amounts distributed to the trust's or estate's nonresident
beneficiaries, the amount deducted from the distributions under this
section, and any other information required by the department. The
trust or estate shall file the return on the form prescribed by the
department. A trust or estate which makes the deduction and retention
required by this section shall furnish to its nonresident beneficiaries
annually, but not later than thirty (30) days after the end of the trust's
or estate's taxable year, a record of the amount of tax deducted and
retained from the beneficiaries. The trust or estate shall furnish the
information on the form prescribed by the department.
(c) The money deducted and retained by a trust or estate under this
section is money of this state. Every trust or estate which deducts and
retains any money under this section shall hold the money in trust for
this state until it pays the money to the department in the manner and
at the time provided in this section. The department may require a trust
or estate to post a surety bond to protect this state with respect to
money deducted and retained by the trust or estate under this section.
The department shall determine the amount of the surety bond.
(d) The provisions of IC 6-8.1 relating to penalties or to additions to
tax in case of a delinquency apply to trusts and estates which are
subject to this section. For purposes of this subsection, any amount
deducted, or required to be deducted and remitted to the department,
under this section is considered the tax of the trust or estate, and with
SEA 2 43
respect to that amount, it is considered the taxpayer.
(e) Amounts deducted from distributions to nonresident
beneficiaries under this section during a taxable year of the trust or
estate are considered a partial payment of the tax imposed on the
nonresident beneficiary for his taxable year within or with which the
trust's or estate's taxable year ends. The department shall accept a
return made by the trust or estate under subsection (b) as evidence of
the amount of tax deducted from the income distributed to a
nonresident beneficiary.
(f) This section does not relieve a nonresident beneficiary of his
duty to file a return at the time required under IC 6-3. The nonresident
beneficiary shall pay any unpaid tax at the time prescribed by section
5 of this chapter.
(g) If a trust or estate fails to withhold and pay any amount of tax
required to be withheld under this section and thereafter the tax is paid
by the beneficiaries, the amount of tax paid by the beneficiaries may
not be collected from the trust or estate but it may not be relieved from
liability for interest or penalty otherwise due in respect to the failure to
withhold under IC 6-8.1-10.
(h) A trust or estate shall file a composite adjusted gross income tax
return on behalf of all nonresident beneficiaries. The composite return
must include each nonresident beneficiary regardless of whether the
nonresident beneficiary has other Indiana source income.
(i) For purposes of this section, a "nonresident beneficiary" is:
(1) an individual who does not reside in Indiana;
(2) a trust that does not reside in Indiana;
(3) an estate that does not reside in Indiana;
(4) a partnership that is not domiciled in Indiana;
(5) a C corporation that is not domiciled in Indiana; or
(6) an S corporation that is not domiciled in Indiana.
(j) If a trust or estate is permitted an extension to file its income tax
return under IC 6-8.1-6-1, then the return and payment due under this
subsection shall be allowed the same treatment as the extended income
tax return with respect to due dates, interest, and penalties under
IC 6-8.1-6-1.
SECTION 11. IC 6-3-4.5-1, AS AMENDED BY P.L.178-2022(ts),
SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 1. The following
definitions apply throughout this chapter:
(1) "Adjustment year" means the partnership taxable year
described in Section 6225(d)(2) of the Internal Revenue Code.
(2) "Administrative adjustment request" means an administrative
SEA 2 44
adjustment request filed by a partnership under Section 6227 of
the Internal Revenue Code.
(3) "Affected year" means any taxable year for a taxpayer that is
affected by an adjustment under this chapter, regardless of
whether the partnership has received an adjustment for that
taxable year.
(4) "Audited partnership" means a partnership subject to a
partnership level audit resulting in a federal adjustment.
(5) "Corporate partner" means a partner that is subject to the state
adjusted gross income tax under IC 6-3-2-1(c) or the financial
institutions tax under IC 6-5.5-2-1. In the case of a partner that is
a corporation described in IC 6-3-2-2.8(2) that also is subject to
tax under IC 6-3-2-1(c), the corporation is a corporate partner
only to the extent that its income is subject to tax under
IC 6-3-2-1(c).
(6) "Direct partner" means a partner that holds an interest directly
in a partnership or pass through entity.
(7) "Exempt partner" means a partner that is exempt from the
adjusted gross income tax under IC 6-3-2-2.8(1) or the financial
institutions tax under IC 6-5.5-2-7(4), except to the extent of
unrelated business taxable income.
(8) "Federal adjustment" means a change to an item or amount
determined under the Internal Revenue Code or a change to any
other tax attribute that is used by a taxpayer to compute state
adjusted gross income taxes or financial institutions tax owed,
whether that change results from action by the Internal Revenue
Service, including a partnership level audit, or the filing of an
amended federal return, a federal refund claim, or an
administrative adjustment request by the taxpayer. A federal
adjustment is positive to the extent that it increases state adjusted
gross income as determined under IC 6-3 or IC 6-5.5 and is
negative to the extent that it decreases state adjusted gross income
as determined under IC 6-3 or IC 6-5.5.
(9) "Federal adjustment reports" includes methods or forms
required by the department for use by a taxpayer to report final
federal adjustments for purposes of this chapter, including an
amended Indiana tax return, information return, or uniform
multistate report.
(10) "Federal partnership representative" means a person the
partnership designates for the taxable year as the partnership's
representative, or the person the Internal Revenue Service has
appointed to act as the federal partnership representative,
SEA 2 45
pursuant to Section 6223(a) of the Internal Revenue Code.
(11) "Final determination date" means the following:
(A) Except as provided in clause (B) or (C), if the federal
adjustment arises from an Internal Revenue Service audit or
other action by the Internal Revenue Service, the final
determination date is the date on which the federal adjustment
is a final determination under IC 6-3-4-6(d).
(B) For federal adjustments arising from an Internal Revenue
Service audit or other action by the Internal Revenue Service,
if the taxpayer filed as a member of a consolidated tax return
filed under IC 6-3-4-14, a combined return filed under
IC 6-3-2-2 or IC 6-5.5-5-1, or a return combined by the
department under IC 6-3-2-2(p), the final determination date
means the first date on which no related federal adjustments
arising from that audit remain to be finally determined, as
described in clause (A), for the entire group.
(C) If the federal adjustment results from filing an amended
federal return, a federal refund claim, or an administrative
adjustment request, the final determination date means the day
on which the amended return, refund claim, administrative
adjustment request, or other similar report was filed.
(12) "Final federal adjustment" means a federal adjustment after
the final determination date for that federal adjustment has
passed.
(13) "Indirect partner" means a partner in a partnership or pass
through entity that itself holds an interest directly, or through
another indirect partner, in a partnership or pass through entity.
(14) "Internal Revenue Code" has the meaning set forth in
IC 6-3-1-11.
(15) "Nonresident partner" has the meaning provided in
IC 6-3-4-12(n).
(16) "Partner" means a person or entity that holds an interest
directly or indirectly in a partnership or other pass through entity.
(17) "Partner level adjustments report" means a report provided
by a partnership to its partners as a result of a department action
with regard to the partnership. A partner level adjustments report
does not include an amended statement provided by a partnership
or other entity as a result of an adjustment reported by the
partnership.
(18) "Partnership" has the meaning set forth in IC 6-3-1-19.
(19) "Partnership level audit" means an examination by the
Internal Revenue Service at the partnership level under Sections
SEA 2 46
6221 through 6241 of the Internal Revenue Code, as enacted by
the Bipartisan Budget Act of 2015, Public Law 114-74, which
results in federal adjustments.
(20) "Partnership return" means a return required to be filed by a
partnership pursuant to IC 6-3-4-10. In the case of a partnership
that is required to withhold tax or file a composite return pursuant
to IC 6-3-4-12 or IC 6-5.5-2-8, the term also includes the returns
or schedules required for tax withholding or composite filing. In
the case of a partnership that is an electing entity under
IC 6-3-2.1, the term also includes the returns or schedules
required for the pass through entity tax under IC 6-3-2.1.
(21) "Pass through entity" means an entity defined in IC 6-3-1-35,
other than a partnership, that: is not subject to tax under IC 6-3.
(A) is not subject to tax except as provided in
IC 6-3-2-2.8(2), in the case of a corporation described in
IC 6-3-2-2.8(2); or
(B) is not subject to tax except on its undistributed taxable
income, in the case of an estate or a trust.
(22) "Reallocation adjustment" means a federal adjustment
resulting from a partnership level audit or an administrative
adjustment request that changes the shares of one (1) or more
items of partnership income, gain, loss, expense, or credit
allocated to direct partners. A positive reallocation adjustment
means the portion of a reallocation adjustment that would
increase federal adjusted gross income or federal taxable income
for one (1) or more direct partners, and a negative reallocation
adjustment means the portion of a reallocation adjustment that
would decrease federal adjusted gross income or federal taxable
income for one (1) or more direct partners, according to Section
6225 of the Internal Revenue Code and the regulations under that
section.
(23) "Resident partner" means a partner that is not a nonresident
partner.
(24) "Review year" means the taxable year of a partnership that
is subject to a partnership level audit, an administrative
adjustment request, or an amended federal return that results in
federal adjustments, regardless of whether any federal tax
determined to be due is the responsibility of the partnership or
partners.
(25) "Statement" means a form or schedule prescribed by the
department through which a partnership or pass through entity
reports tax attributes to its owners or beneficiaries.
SEA 2 47
(26) "Tax attribute" means any item of income, deduction, credit,
receipts for apportionment, or other amount or status that
determines a partner's liability under IC 6-3, IC 6-3.6, or IC 6-5.5.
(27) "Taxable year" means, in the case of a partnership, the year
or partial year for which a partnership files a return for state and
federal purposes and, in the case of a partner, the taxable year in
which the partner reports tax attributes from the partnership.
(28) "Taxpayer" has the meaning set forth in IC 6-3-1-15 (in the
case of the adjusted gross income tax) and IC 6-5.5-1-17 (in the
case of the financial institutions tax) and, unless the context
clearly indicates otherwise, includes a partnership subject to a
partnership level audit or a partnership that has made an
administrative adjustment request, as well as a tiered partner of
that partnership.
(29) "Tiered partner" means any partner that is a partnership or
pass through entity.
(30) "Unrelated business taxable income" has the meaning set
forth in Section 512 of the Internal Revenue Code.
SECTION 12. IC 6-3-4.5-3, AS AMENDED BY P.L.137-2022,
SECTION 43, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3. (a) If the department
conducts an audit or investigation of a partnership, and the department
determines that the partnership:
(1) did not correctly report any tax attribute for a taxable year; or
(2) did not correctly allocate any tax attribute for a taxable year;
the department may adjust or reallocate the tax attribute. If the
department makes an adjustment or reallocation to one (1) or more tax
attributes, the department shall provide a report of proposed
partnership adjustments for the taxable year to the partnership.
(b) The report of proposed partnership adjustments shall list:
(1) the department's adjustments to tax attributes; and
(2) the allocation of the department's adjustments to all affected
direct partners. if the report of proposed partnership
adjustments is not attributed to one (1) or more affected
direct partners in proportion to their share of income from
the partnership, the allocation of the department's
adjustments to such affected direct partners. The portion of
adjustments not specifically allocated to partners in the report
of proposed partnership adjustments shall be considered to be
allocated in proportion to their share of income from the
partnership and adjusted to account for the partners whose
adjustments are specifically allocated to them.
SEA 2 48
(c) If the report of proposed partnership adjustments for a taxable
year results in either:
(1) a potential increase in tax to one (1) or more direct partners;
or
(2) if the partnership reported tax attributes that would result in a
refund of tax to one (1) or more partners, a reduction in that
refund;
such report shall be treated as a proposed assessment under IC 6-8.1-5
to the partnership.
(d) If the result for partnership adjustments for a taxable year results
in:
(1) no direct increase in tax to any direct partner; and
(2) a change in tax attributes to one (1) or more direct partners
that would result in a refund in excess of any refund claimed;
the department shall issue a report of proposed partnership adjustments
to the partnership reflecting such adjustments. Any refund arising from
a report of proposed partnership adjustments shall be issued to the
partners, subject to the partner claiming the refund and any statute of
limitations on such refunds. In the case of partnership adjustments
otherwise described in this subsection that result from a partnership
adjustment described in subsection (c), all such partnership
adjustments shall be treated as adjustments to which subsection (c)
applies.
SECTION 13. IC 6-3-4.5-3.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2022 (RETROACTIVE)]: Sec. 3.5. If a
partnership is assessed tax due pursuant to IC 6-3-2.1, IC 6-3-4-12,
IC 6-5.5-2-8, or this chapter as a result of underreporting the tax
due for one (1) or more partners, the provisions of this chapter for
timeliness of assessments, reporting, and rights to appeal apply in
the same manner as a report of proposed partnership adjustments,
except as specifically provided in this chapter.
SECTION 14. IC 6-3-4.5-6, AS ADDED BY P.L.159-2021,
SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 6. (a) Once a report of
partnership adjustments is considered final, the partnership shall, not
later than the applicable deadline:
(1) supply to its direct partners and the department a partner level
adjustments report attributable to each partner in the form and
manner prescribed by the department; and
(2) remit any composite tax or withholding tax due under
IC 6-3-4-12 or IC 6-5.5-2-8; and
SEA 2 49
(3) remit any pass through entity tax due under IC 6-3-2.1.
(b) If the partner is a tiered partner, the tiered partner shall, not later
than the applicable deadline for the tiered partner:
(1) file an amended return for the taxable year and for any other
affected year reporting its share of the adjustments;
(2) supply its owners or beneficiaries and the department
amended statements reflecting the adjustments attributable to the
owner or beneficiary, or a report, in the form and manner
prescribed by the department; and
(3) remit any tax due under IC 6-3, IC 6-3.6, or IC 6-5.5,
including any pass through entity tax, composite tax or
withholding tax due under IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13,
IC 6-3-4-15, and IC 6-5.5-2-8.
(c) Upon receipt of a partner level adjustments report or any
statement from tiered partners arising from a partner level adjustments
report, the taxpayer receiving the report or statement shall file an
amended return for the taxable year reporting the adjustments along
with any other affected year and remit any tax due not later than the
applicable deadline for the partner.
(d) Notwithstanding any other provision of this chapter or
IC 6-3-4-11:
(1) A partnership that has been issued a report of proposed
partnership adjustments, or a tiered partner that is a partnership
that has received a partner level adjustment report or statement
arising from a report of final partnership adjustments, may elect
to pay any tax due arising from a report of final partnership
adjustments.
(2) Such election must be filed with the department not later than
sixty (60) days after the department issues the report of proposed
partnership adjustments or, in the case of an election by a tiered
partner, not later than the date by which the tiered partner is
required to file an amended return under this section.
(3) The computation of tax and other provisions governing this
election shall be in a manner consistent with an election under
section 9(c) of this chapter.
(4) If a partnership has made an election under this chapter to
report and remit any tax due at the partnership level for a taxable
year, the partnership shall be considered to have made a timely
election under this subsection with regard to any adjustments in
the report of partnership adjustments for that taxable year.
(5) No election may be made under this subsection after April
30, 2023.
SEA 2 50
SECTION 15. IC 6-3-4.5-8, AS AMENDED BY P.L.137-2022,
SECTION 45, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 8. (a) If a partnership:
(1) determines that it did not correctly report any tax attribute for
a taxable year;
(2) determines that it did not correctly allocate any tax attribute
for a taxable year; or
(3) receives final federal adjustments as a result of a federal
partnership audit or administrative adjustment request for a
taxable year;
the partnership shall file an amended partnership return with the
department and provide its direct partners with amended statements or
a report in the form and manner prescribed by the department reflecting
the correctly reported and allocated tax attributes for any applicable
year.
(b) If the partnership files an amended partnership return under this
section for a taxable year:
(1) the partnership shall remit any composite tax or withholding
tax due under IC 6-3-4-12 or IC 6-5.5-2-8 and any pass through
entity tax due under IC 6-3-2.1 on its direct partners resulting
from the amended return at the time of filing;
(2) any tiered partners shall, not later than the applicable deadline
for the tiered partner:
(A) file an amended return and, if applicable, remit any tax
due under IC 6-3, IC 6-3.6, or IC 6-5.5, including any amounts
due under IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, IC 6-3-4-15,
or IC 6-5.5-2-8; and
(B) report any adjustments to the tiered partner's owners or
beneficiaries by providing amended statements to the tiered
partner's owners or beneficiaries, or a report in the form and
manner prescribed by the department; and
(3) any direct or indirect partners who are not tiered partners and
who are required to file a return under IC 6-3 or IC 6-5.5 or who
have filed a return under IC 6-3 or IC 6-5.5 shall file amended
returns with the department for any taxable year affected by the
amended partnership return and remit any tax due not later than
the applicable deadline for the partner.
(c) Notwithstanding any other provision of this chapter or
IC 6-3-4-11:
(1) A partnership that has filed an amended partnership return
under this section, or a tiered partner that is a partnership and that
is a partner of a partnership that has filed an amended partnership
SEA 2 51
return under this section, may elect to pay any tax due arising
from an amended partnership return.
(2) Such election must be filed with the department not later than
the date on which the amended partnership return is filed with the
department or, in the case of an election by a tiered partner that is
a partnership, not later than the date by which the tiered partner
is required to file an amended return under this section.
(3) The computation and payment of tax and other provisions
governing this election shall be in a manner consistent with an
election under section 9(c) of this chapter.
(4) If a partnership has made an election under this chapter to
report and remit all tax otherwise due at the partnership level for
a taxable year, the partnership shall be considered to have made
a timely election under this subsection with regard to any changes
arising from an amended return under this section for that taxable
year.
(5) No election may be made under this subsection for an
amended return filed after April 30, 2023.
(d) If the department determines that a partnership:
(1) did not correctly report any tax attributes for a taxable year; or
(2) did not correctly allocate any tax attributes for a taxable year;
or
(3) did not report the proper amount of tax under IC 6-3-2.1,
IC 6-3-4-12, or IC 6-5.5-2-8;
the department may proceed against the partnership in the manner
provided under sections 3 through 6 of this chapter.
SECTION 16. IC 6-3-4.5-9, AS AMENDED BY P.L.178-2022(ts),
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 9. (a) Partnerships and
partners shall report final federal adjustments arising from a
partnership level audit or an administrative adjustment request and
make payments as required under this section.
(b) Final federal adjustments subject to the requirements of this
section, except those subject to a properly made election under
subsection (c), shall be reported as follows:
(1) Not later than the applicable deadline, the partnership shall:
(A) file an amended partnership return for the review year and
any other taxable year affected by the final federal adjustments
with the department as provided in section 8 of this chapter
and provide any other information required by the department;
(B) notify each of its direct partners of their distributive share
of the final federal adjustments as provided in section 8 of this
SEA 2 52
chapter for all affected taxable years for which the partnership
filed an amended partnership return by an amended statement
or a report in the form and manner prescribed by the
department; and
(C) file an amended composite return for direct partners and
an amended withholding return for direct partners for the
review year and any affected taxable years as otherwise
required by IC 6-3-4-12 or IC 6-5.5-2-8 and pay any tax due
for the taxable years; and
(D) if the partnership is an electing entity, file an amended
return under IC 6-3-2.1 for the review year and any
affected taxable year and pay any tax due for the taxable
year.
(2) Each direct partner that is subject to tax under IC 6-3,
IC 6-3.6, or IC 6-5.5 shall, on or before the applicable deadline:
(A) file an amended return as provided in section 8 of this
chapter reporting their distributive share of the adjustments
reported to them under subdivision (1)(B) for the taxable year
in which affected taxable year attributes would be reported by
the direct partner as provided in section 8 of this chapter; and
(B) pay any additional amount of tax due as if final federal
partnership adjustments had been properly reported, less any
credit for related amounts paid or withheld and remitted on
behalf of the direct partner.
(3) Each tiered partner shall treat any final federal partnership
adjustments under this section in a manner consistent with the
treatment of tiered partners under section 8 of this chapter.
(c) Except as provided in subsection (d), an audited partnership
making an election under this subsection shall:
(1) not later than the applicable deadline, file an amended
partnership return for the review year and for any other affected
taxable year elected by the audited partnership, including
information as required by the department, and notify the
department that it is making the election under this subsection;
and
(2) not later than ninety (90) days after the applicable deadline,
pay an amount, determined as follows, in lieu of taxes owed by its
direct or indirect partners:
(A) Exclude from final federal adjustments the distributive
share of these adjustments reported to a direct exempt partner
that is not unrelated business income.
(B) For the total distributive shares of the remaining final
SEA 2 53
federal adjustments reported to direct corporate partners and
to direct exempt partners, apportion and allocate such
adjustments as provided under IC 6-3-2-2 or IC 6-3-2-2.2 (in
the case of the adjusted gross income tax) or IC 6-5.5-4 (in the
case of the financial institutions tax), and multiply the
resulting amount by the tax rate for the taxable year under
IC 6-3-2-1(c), IC 6-3-2-1.5, or IC 6-5.5-2-1, as applicable.
(C) For the total distributive shares of the remaining final
federal adjustments reported to nonresident direct partners
other than tiered partners or corporate partners, determine the
amount of such adjustments which is Indiana source income
under IC 6-3-2-2 or IC 6-3-2-2.2, and multiply the resulting
amount by the tax rate under IC 6-3-2-1(b), and if applicable
IC 6-3.6. If a partnership is unable to determine whether a
nonresident is subject to tax under IC 6-3.6, or to determine in
what county the nonresident is subject to tax under IC 6-3.6,
tax shall also be imposed at the highest rate for which a county
imposes a tax under IC 6-3.6 for the taxable year.
(D) For the total distributive shares of the remaining final
federal adjustments reported to tiered partners:
(i) determine the amount of any adjustment that is of a type
that it would be subject to sourcing in Indiana under
IC 6-3-2-2, IC 6-3-2-2.2, or IC 6-5.5-4, as applicable, and
determine the portion of this amount that would be sourced
to Indiana;
(ii) determine the amount of any adjustment that is of a type
that it would not be subject to sourcing to Indiana by a
nonresident partner under IC 6-3-2-2, IC 6-3-2-2.2, or
IC 6-5.5-4, as applicable;
(iii) determine the portion of the amount determined under
item (ii) that can be established, as prescribed by the
department by rule under IC 4-22-2, to be properly allocable
to nonresident indirect partners or other partners not subject
to tax on the adjustments; and
(iv) multiply the sum of the amounts determined in items (i)
and (ii) reduced by the amount determined in item (iii) by
the highest combined rate for the taxable year under
IC 6-3-2-1(b) and IC 6-3.6 for any county, the rate under
IC 6-3-2-1(c), or the rate under 6-5.5-2-1 for the taxable
year, whichever is highest.
(E) For the total distributive shares of the remaining final
federal adjustments reported to resident individual, estate, or
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trust direct partners, multiply that amount by the tax rate under
IC 6-3-2-1(b) and IC 6-3.6. If a partnership does not
reasonably ascertain the county of residence for an individual
direct partner, the rate under IC 6-3.6 for that partner shall be
treated as the highest rate imposed in any county under
IC 6-3.6 for the taxable year.
(F) Add an amount equal to any credit reduction under
IC 6-3-3, IC 6-3.1, and IC 6-5.5 attributable as a result of final
federal adjustments.
(G) Add the amounts determined in clauses (B), (C), (D)(iv),
(E), and (F). For purposes of determining interest and
penalties, the due date of payment shall be the due date of the
partnership's return under IC 6-3-4-10 for the taxable year,
determined without regard to any extensions.
(d) Final federal adjustments subject to an election under subsection
(c) shall not include:
(1) the distributive share of final federal adjustments that would
constitute income derived from a partnership to any direct or
indirect partner that is a corporation taxable under IC 6-3-2-1(c),
IC 6-3-2-1.5, or IC 6-5.5-2-1 and is considered unitary to the
partnership; or
(2) any final federal adjustments resulting from an administrative
adjustment request; or
(3) (2) any other circumstances that the department determines
would result in avoidance or evasion of any tax otherwise due
from one (1) or more partners under IC 6-3 or IC 6-5.5.
(e) No election under subsection (c) may be made for federal
audit adjustments received by the department after April 30, 2023.
(e) (f) Notwithstanding IC 6-3-4-11, an audited partnership not
otherwise subject to any reporting or payment obligations to Indiana
that makes an election under subsection (c) consents to be subject to
Indiana law related to reporting, assessment, payment, and collection
of Indiana tax calculated under the election.
SECTION 17. IC 6-5.5-5-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2023 (RETROACTIVE)]:
Sec. 1. (a) Except as provided in this section, a unitary group consisting
of at least two (2) taxpayers shall file a combined return covering all
the operations of the unitary business and including all of the members
of the unitary business. However, only one (1) combined return needs
to be filed, as provided in IC 6-5.5-6-1.
(b) If the department or taxpayer determines that the result of
applying this section or article do not fairly represent the taxpayer's
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income within Indiana or the taxpayer's income within Indiana may be
more fairly represented by a separate return, the taxpayer may petition
for and the department may allow, or the department may require, in
respect to all or a part of the taxpayer's business activity any of the
following:
(1) Separate accounting.
(2) The filing of a separate return for the taxpayer.
(3) A reallocation of tax items between a taxpayer and a member
of the taxpayer's unitary group or an entity that would be a
member of a taxpayer's unitary group if it were transacting
business in Indiana.
For purposes of this subsection, "tax items" means gross income,
deductions, gains, losses, and credits used in computing the tax
under this article, except the term shall exclude dividends or other
distributions regardless of whether the amounts are deductible or
taxable in computing taxable income under the Internal Revenue
Code.
(c) Income apportioned under this article must reflect a change in
adjusted gross income that is required to comply with a department
order under this section.
SECTION 18. IC 6-5.5-5-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2023 (RETROACTIVE)]:
Sec. 2. A combined return must include the adjusted gross income of
all members of the unitary group, even if some of the members would
not otherwise be subject to taxation under this article. The department
may require a member of a unitary group to provide any information
that is needed by the department to determine the unitary group's
apportioned income under this article. However, income of
corporations or other entities organized in foreign countries, except a
foreign bank (or its subsidiary) that transacts business in the United
States, shall not be included in the combined return. In addition, the
taxpayer shall eliminate, in calculating adjusted gross income, the
taxpayer shall eliminate all income and deductions from transactions
between entities that are included in the unitary group. combined
return. In addition, in computing receipts for the apportionment
factor under IC 6-5.5-2-4(2), the taxpayer shall eliminate receipts
between unitary group members included in the combined return.
SECTION 19. IC 6-8.1-1-1, AS AMENDED BY P.L.138-2022,
SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 1. "Listed taxes" or
"taxes" includes only the pari-mutuel taxes (IC 4-31-9-3 through
IC 4-31-9-5); the supplemental wagering tax (IC 4-33-12); the
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riverboat wagering tax (IC 4-33-13); the slot machine wagering tax
(IC 4-35-8); the type II gambling game excise tax (IC 4-36-9); the gross
income tax (IC 6-2.1) (repealed); the utility receipts and utility services
use taxes (IC 6-2.3) (repealed); the state gross retail and use taxes
(IC 6-2.5); the adjusted gross income tax (IC 6-3); the pass through
entity tax (IC 6-3-2.1); the supplemental net income tax (IC 6-3-8)
(repealed); the county adjusted gross income tax (IC 6-3.5-1.1)
(repealed); the county option income tax (IC 6-3.5-6) (repealed); the
county economic development income tax (IC 6-3.5-7) (repealed); the
local income tax (IC 6-3.6); the auto rental excise tax (IC 6-6-9); the
financial institutions tax (IC 6-5.5); the gasoline tax (IC 6-6-1.1); the
special fuel tax (IC 6-6-2.5); the motor carrier fuel tax (IC 6-6-4.1); a
motor fuel tax collected under a reciprocal agreement under IC 6-8.1-3;
the vehicle excise tax (IC 6-6-5); the aviation fuel excise tax
(IC 6-6-13); the commercial vehicle excise tax (IC 6-6-5.5); the excise
tax imposed on recreational vehicles and truck campers (IC 6-6-5.1);
the hazardous waste disposal tax (IC 6-6-6.6) (repealed); the heavy
equipment rental excise tax (IC 6-6-15); the vehicle sharing excise tax
(IC 6-6-16); the cigarette tax (IC 6-7-1); the closed system cartridge tax
(IC 6-7-2-7.5); the electronic cigarette tax (IC 6-7-4); the beer excise
tax (IC 7.1-4-2); the liquor excise tax (IC 7.1-4-3); the wine excise tax
(IC 7.1-4-4); the hard cider excise tax (IC 7.1-4-4.5); the petroleum
severance tax (IC 6-8-1); the various innkeeper's taxes (IC 6-9); the
various food and beverage taxes (IC 6-9); the county admissions tax
(IC 6-9-13 and IC 6-9-28); the oil inspection fee (IC 16-44-2); the
penalties assessed for oversize vehicles (IC 9-20-3 and IC 9-20-18); the
fees and penalties assessed for overweight vehicles (IC 9-20-4 and
IC 9-20-18); and any other tax or fee that the department is required to
collect or administer.
SECTION 20. IC 6-8.1-5-2, AS AMENDED BY P.L.138-2022,
SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 2. (a) Except as
otherwise provided in this section and section 2.5 of this chapter, the
department may not issue a proposed assessment under section 1 of this
chapter more than three (3) years after the latest of the date the return
is filed, or the following:
(1) The due date of the return.
(2) In the case of a return filed for the state gross retail or use tax,
the gasoline use tax, the gasoline tax (including the inventory
tax), the special fuel tax (including the inventory tax), the motor
carrier fuel tax (including the inventory tax), the oil inspection
fee, the cigarette tax, the tobacco products tax, any county
SEA 2 57
innkeeper's taxes imposed under IC 6-9, any food and beverage
taxes imposed under IC 6-9, any county or local admissions taxes
imposed under IC 6-9, or the petroleum severance tax, the end of
the calendar year which contains the taxable period for which the
return is filed.
(3) In the case of the use tax, three (3) years from the end of the
calendar year in which the first taxable use, other than an
incidental nonexempt use, of the property occurred.
(b) If a person files a return for the utility receipts tax (IC 6-2.3)
(repealed), adjusted gross income tax (IC 6-3), pass through entity tax
(IC 6-3-2.1), supplemental net income tax (IC 6-3-8) (repealed),
county adjusted gross income tax (IC 6-3.5-1.1) (repealed), county
option income tax (IC 6-3.5-6) (repealed), local income tax (IC 6-3.6),
or financial institutions tax (IC 6-5.5) that understates the person's
income, as that term is defined in the particular income tax law, by at
least twenty-five percent (25%), the proposed assessment limitation is
six (6) years instead of the three (3) years provided in subsection (a).
(c) In the case of the vehicle excise tax (IC 6-6-5), the tax shall be
assessed as provided in IC 6-6-5 and shall include the penalties and
interest due on all listed taxes not paid by the due date. A person that
fails to properly register a vehicle as required by IC 9-18 (before its
expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5 is
considered to have failed to file a return for purposes of this article.
(d) In the case of the commercial vehicle excise tax imposed under
IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5 and shall
include the penalties and interest due on all listed taxes not paid by the
due date. A person that fails to properly register a commercial vehicle
as required by IC 9-18 (before its expiration) or IC 9-18.1 and pay the
tax due under IC 6-6-5.5 is considered to have failed to file a return for
purposes of this article.
(e) In the case of the excise tax imposed on recreational vehicles
and truck campers under IC 6-6-5.1, the tax shall be assessed as
provided in IC 6-6-5.1 and must include the penalties and interest due
on all listed taxes not paid by the due date. A person that fails to
properly register a recreational vehicle as required by IC 9-18 (before
its expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5.1 is
considered to have failed to file a return for purposes of this article. A
person that fails to pay the tax due under IC 6-6-5.1 on a truck camper
is considered to have failed to file a return for purposes of this article.
(f) In the case of a credit against a listed tax based on payments of
taxes to a state or local jurisdiction outside Indiana or payments of
amounts that are subsequently refunded or returned, a proposed
SEA 2 58
assessment for the refunded or returned credit must be issued by the
later of:
(1) the date by which a proposed assessment must be issued under
this section; or
(2) one hundred eighty (180) days from the date the taxpayer
notifies the department of the refund or return of payment.
For purposes of this subsection, if a taxpayer receives a refund of an
amount paid by or on behalf of the taxpayer for a listed tax, that refund
shall not be considered the payment of an amount that is subsequently
refunded or returned.
(g) If a person files a fraudulent, unsigned, or substantially blank
return, or if a person does not file a return, there is no time limit within
which the department must issue its proposed assessment, except as
provided in subsection (l).
(h) If any part of a listed tax has been erroneously refunded by the
department, the erroneous refund may be recovered through the
assessment procedures established in this chapter. An assessment
issued for an erroneous refund must be issued within the later of:
(1) the period for which an assessment could otherwise be issued
under this section; or
(2) whichever is applicable:
(A) within two (2) years after making the refund; or
(B) within five (5) years after making the refund if the refund
was induced by fraud or misrepresentation.
(i) If, before the end of the time within which the department may
make an assessment, the department and the person agree to extend
that assessment period, the period may be extended according to the
terms of a written agreement signed by both the department and the
person. The agreement must contain:
(1) the date to which the extension is made; and
(2) a statement that the person agrees to preserve the person's
records until the extension terminates.
The department and a person may agree to more than one (1) extension
under this subsection.
(j) Except as otherwise provided in subsection (k), if a taxpayer's
federal taxable income, federal adjusted gross income, or federal
income tax liability for a taxable year is modified due to a modification
as provided under IC 6-3-4-6(c) and IC 6-3-4-6(d) (for the adjusted
gross income tax), or a modification or alteration as provided under
IC 6-5.5-6-6(c) and IC 6-5.5-6-6(e) (for the financial institutions tax),
then the date by which the department must issue a proposed
assessment under section 1 of this chapter for tax imposed under IC 6-3
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is extended to six (6) months after the date on which the notice of
modification is filed with the department by the taxpayer.
(k) The following apply:
(1) This subsection applies to partnerships whose taxable year:
(A) begins after December 31, 2017;
(B) ends after August 12, 2018; or
(C) begins after November 2, 2015, and before January 1,
2018, and for which a valid election under United States
Treasury Regulation 301.9100-22 is in effect;
and to the partners of such partnerships, including any partners,
shareholders, or beneficiaries of a pass through entity that is a
partner in such partnership.
(2) Notwithstanding any other provision of this article, if a
partnership is subject to federal income tax liability or a federal
tax adjustment at the partnership level as the result of a
modification under Sections 6221 through 6241 of the Internal
Revenue Code, the date on which the department must issue a
proposed assessment to either the partners or the partnership shall
be the later of:
(A) the date on which a proposed assessment must otherwise
be issued to the partner or the partnership under this section or
IC 6-3-4.5 with regard to the taxable year of the partnership to
which the modification is taxed at the partnership level; or
(B) December 31, 2021.
(3) For purposes of this section and IC 6-8.1-9-1, a modification
under this subsection shall be considered a modification to the
federal taxable income, federal adjusted gross income, or federal
income tax liability of both the partners and the partnership within
the meaning of IC 6-3-4-6 and IC 6-5.5-6-6, and shall be
considered to be included in the federal taxable income or federal
adjusted gross income of both the partners and partnerships for
purposes of this article and IC 6-5.5.
(4) If a modification made to a partnership for federal income tax
purposes is reported to the partners to determine the partners'
respective federal taxable income, federal adjusted gross income,
or federal income tax liability, including reporting to partners as
the result of an election made under Section 6226 of the Internal
Revenue Code, subdivision (2) shall not apply, and those
modifications shall be treated as modifications to the partners'
federal taxable income, federal adjusted gross income, or federal
income tax liability for purposes of the following:
(A) This section.
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(B) IC 6-3-4-6.
(C) IC 6-5.5-6-6.
(D) IC 6-8.1-9-1.
(l) Notwithstanding any other provision, a nonresident
individual is considered to have filed a return for purposes of this
section for a taxable year if the individual does not file a return
otherwise required under IC 6-3-4-1 for a taxable year and all of
the following apply:
(1) the:
(A) individual did not have income from sources within
Indiana; or
(B) only income derived from sources within Indiana and
includible in the individual's adjusted gross income is
distributive share income from one (1) or more pass
through entities (as defined by IC 6-3-1-35);
(2) the individual is not a resident of Indiana for any portion
of the taxable year;
(3) the individual does not request a reduction in tax
withholding for a pass through entity under IC 6-3-4-12,
IC 6-3-4-13, or IC 6-3-4-15 for the taxable year; and
(4) all pass through entities from which the individual derives
income from Indiana sources:
(A) file a composite return required under IC 6-3-4-12,
IC 6-3-4-13, or IC 6-3-4-15; and
(B) include the individual on the composite return.
(m) The following provisions apply to subsection (l):
(1) If an individual is married and files a joint federal tax
return with the individual's spouse, the individual is
considered to have filed a return for purposes of this section
only if both the individual and the individual's spouse meet
the conditions under subsection (l)(1) through (l)(4).
(2) If an individual does not file a return, the last date for
assessment with regard to the individual's share of income
from a pass through entity shall be determined at the pass
through entity and shall be determined separately for each
pass through entity.
(3) In the event the individual files a return, the period for
assessment shall be determined based on the individual's filing
unless a different period for assessment is prescribed under
this title.
(4) The individual is required to file a return to request a
refund or carryforward of an overpayment for a taxable year.
SEA 2 61
(5) If the individual has a net operating loss deduction under
IC 6-3-2-2.5 or IC 6-3-2-2.6, or a credit carryforward
allowable under IC 6-3-3 or IC 6-3.1 for the taxable year, the
amount of net operating loss or credit carryforward shall be
reduced to reflect the amount of net operating loss or credit
carryforward that otherwise would have been allowable for
the taxable year.
SECTION 21. [EFFECTIVE JANUARY 1, 2022
(RETROACTIVE)] (a) This SECTION applies to the election and
imposition of the pass through entity tax pursuant to IC 6-3-2.1, as
added by this act, for tax years ending before January 1, 2023.
(b) For the applicable period, the tax shall be paid and filed in
conjunction with and consistent with the filing of a composite tax
return pursuant to IC 6-3-4-12 or IC 6-3-4-13.
(c) Notwithstanding any other provision, no estimated payments
shall be due for the applicable period other than any such payment
that is currently required for purposes of withholding tax pursuant
to IC 6-3-4-12 or IC 6-3-4-13.
(d) All provisions of IC 6-3-2.1, as added by this act, shall apply
to the applicable period unless any such provision is inconsistent
with the provisions and procedures applicable to the filing of
composite returns pursuant to IC 6-3-4-12 or IC 6-3-4-13.
(e) A pass through entity that elects to pay the tax imposed by
IC 6-3-2.1, as added by this act, for the applicable period will not
be subject to an underpayment penalty pursuant to
IC 6-8.1-10-2.1(a)(2) for failure to pay any tax due pursuant to
IC 6-3-2.1, as added by this act, for any such tax not remitted as of
the due date of the return, including extensions. This provision
does not waive any interest due on such amounts pursuant to
IC 6-8.1-10-1.
(f) Notwithstanding any provision to the contrary in
IC 6-8.1-10-1 or IC 6-8.1-10-2.1, if the tax under IC 6-3-2.1, as
added by this act, is due before August 31, 2024, interest and
penalty for late payment of the tax shall be waived for the period
from the due date to August 30, 2024. Interest and penalty shall be
due on any amounts unpaid after August 30, 2024, in the manner
otherwise provided by law.
SECTION 22. An emergency is declared for this act.
SEA 2 President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date: 	Time: 
SEA 2