Indiana 2023 Regular Session

Indiana Senate Bill SB0250 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	Introduced Version
3	3	SENATE BILL No. 250
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 6-3.1-37.
7	7	Synopsis: Short line railroad tax credit. Allows a taxpayer to claim a
8	8	credit against state income tax liability for certain qualified railroad
9	9	expenditures and qualified new rail infrastructure expenditures.
10	10	Specifies the amount of the credit. Limits the total amount of credits
11	11	that may be allowed in a state fiscal year to: (1) $9,500,000 for
12	12	qualified railroad expenditures; and (2) $10,000,000 for qualified new
13	13	rail infrastructure expenditures.
14	14	Effective: January 1, 2023 (retroactive).
15	15	Doriot
16	16	January 11, 2023, read first time and referred to Committee on Appropriations.
17	17	2023 IN 250—LS 6752/DI 120 Introduced
18	18	First Regular Session of the 123rd General Assembly (2023)
19	19	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
20	20	Constitution) is being amended, the text of the existing provision will appear in this style type,
21	21	additions will appear in this style type, and deletions will appear in this style type.
22	22	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
23	23	provision adopted), the text of the new provision will appear in this style type. Also, the
24	24	word NEW will appear in that style type in the introductory clause of each SECTION that adds
25	25	a new provision to the Indiana Code or the Indiana Constitution.
26	26	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
27	27	between statutes enacted by the 2022 Regular Session of the General Assembly.
28	28	SENATE BILL No. 250
29	29	A BILL FOR AN ACT to amend the Indiana Code concerning
30	30	taxation.
31	31	Be it enacted by the General Assembly of the State of Indiana:
32	32	1 SECTION 1. IC 6-3.1-37 IS ADDED TO THE INDIANA CODE
33	33	2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
34	34	3 JANUARY 1, 2023 (RETROACTIVE)]:
35	35	4 Chapter 37. Railroad Tax Credit for Qualified Infrastructure
36	36	5 Investment
37	37	6 Sec. 1. As used in this chapter, "pass through entity" means:
38	38	7 (1) a corporation that is exempt from the adjusted gross
39	39	8 income tax under IC 6-3-2-2.8(2);
40	40	9 (2) a partnership;
41	41	10 (3) a limited liability company; or
42	42	11 (4) a limited liability partnership.
43	43	12 Sec. 2. As used in this chapter, "qualified applicant" means:
44	44	13 (1) a short line rail company located in whole or in part in
45	45	14 Indiana that is classified by the United States Surface
46	46	15 Transportation Board as a Class II or Class III railroad that
47	47	16 makes qualified railroad expenditures; or
48	48	17 (2) an owner or lessee of a rail siding, industrial spur, or
49	49	2023 IN 250—LS 6752/DI 120 2
50	50	1 industry track located:
51	51	2 (A) on or adjacent to a Class II or Class III railroad in
52	52	3 Indiana; or
53	53	4 (B) in a qualified rural county;
54	54	5 that makes qualified new rail infrastructure expenditures.
55	55	6 Sec. 3. As used in this chapter, "qualified new rail infrastructure
56	56	7 expenditures" means gross expenditures for new rail
57	57	8 infrastructure, including:
58	58	9 (1) construction of new track infrastructure such as industrial
59	59	10 leads, switches, spurs, sidings, rail loading docks, and
60	60	11 transloading structures, and engineering and site preparation
61	61	12 involved with servicing new customer locations;
62	62	13 (2) the expansion by a Class II or Class III railroad; or
63	63	14 (3) construction of new track infrastructure involved with
64	64	15 servicing new customer locations located in a qualified rural
65	65	16 county.
66	66	17 Sec. 4. As used in this chapter, "qualified railroad expenditures"
67	67	18 means gross expenditures for maintenance, reconstruction, or
68	68	19 replacement of railroad infrastructure, including track, roadbed,
69	69	20 bridges, crossings, signals, industrial leads and sidings, and track
70	70	21 related structures, owned or leased by a Class II or Class III
71	71	22 railroad located in Indiana. The term does not include
72	72	23 expenditures used to generate a federal tax credit or expenditures
73	73	24 funded by a state or federal grant.
74	74	25 Sec. 5. As used in this chapter, "qualified rural county" means
75	75	26 a county in Indiana with a population of not more than three
76	76	27 hundred thousand (300,000).
77	77	28 Sec. 6. As used in this chapter, "state tax liability" means a
78	78	29 taxpayer's total tax liability incurred under IC 6-3-1 through
79	79	30 IC 6-3-7 (the adjusted gross income tax), as computed after the
80	80	31 application of all credits that under IC 6-3.1-1-2 are to be applied
81	81	32 before the credit provided by this chapter.
82	82	33 Sec. 7. As used in this chapter, "taxpayer" means a qualified
83	83	34 applicant that has any state tax liability, or a qualified applicant
84	84	35 that is considered a tax exempt entity (owned by a port or
85	85	36 governmental entity).
86	86	37 Sec. 8. (a) A taxpayer wishing to claim a tax credit under this
87	87	38 chapter must apply to the department after completion of the
88	88	39 project for which qualified railroad expenditures or qualified new
89	89	40 rail infrastructure expenditures were incurred. The department
90	90	41 shall prescribe the form and manner of the application, which must
91	91	42 include:
92	92	2023 IN 250—LS 6752/DI 120 3
93	93	1 (1) the number of miles of railroad track owned or leased in
94	94	2 Indiana; and
95	95	3 (2) a description and certification of the amount of the
96	96	4 taxpayer's qualified railroad expenditures or qualified new
97	97	5 rail infrastructure expenditures.
98	98	6 (b) The department shall evaluate a taxpayer's eligibility for a
99	99	7 tax credit under this chapter.
100	100	8 (c) The department shall certify the eligibility of a taxpayer that
101	101	9 meets the requirements for a tax credit under this chapter.
102	102	10 Sec. 9. (a) Subject to subsection (b), if the department certifies
103	103	11 a taxpayer under section 8 of this chapter, the taxpayer is entitled
104	104	12 to a tax credit against the taxpayer's state tax liability equal to:
105	105	13 (1) the taxpayer's:
106	106	14 (A) qualified railroad expenditures; or
107	107	15 (B) qualified new rail infrastructure expenditures;
108	108	16 multiplied by
109	109	17 (2) fifty percent (50%).
110	110	18 (b) The amount of a tax credit allowed under subsection (a) shall
111	111	19 not exceed the following:
112	112	20 (1) For qualified railroad expenditures, the product of:
113	113	21 (A) the number of miles of Class II or Class III railroad
114	114	22 track owned or leased by the taxpayer in Indiana at the
115	115	23 close of the taxable year; multiplied by
116	116	24 (B) five thousand dollars ($5,000).
117	117	25 (2) For qualified new rail infrastructure expenditures, the
118	118	26 lesser of:
119	119	27 (A) fifty percent (50%) of the qualified new rail
120	120	28 expenditures for each new rail served customer project
121	121	29 completed by the taxpayer in the taxable year; or
122	122	30 (B) five hundred thousand dollars ($500,000) per rail
123	123	31 served customer project.
124	124	32 Sec. 10. (a) If a pass through entity is entitled to a credit under
125	125	33 section 9 of this chapter but does not have state tax liability against
126	126	34 which the credit may be applied, a shareholder, partner, or
127	127	35 member of the pass through entity is entitled to a credit equal to:
128	128	36 (1) the credit determined for the pass through entity for the
129	129	37 taxable year; multiplied by
130	130	38 (2) the percentage of the pass through entity's distributive
131	131	39 income to which the shareholder, partner, or member is
132	132	40 entitled.
133	133	41 (b) The credit provided under subsection (a) is in addition to a
134	134	42 credit to which a shareholder, partner, or member of a pass
135	135	2023 IN 250—LS 6752/DI 120 4
136	136	1 through entity is otherwise entitled under this chapter. However,
137	137	2 a pass through entity and a shareholder, partner, or member of the
138	138	3 pass through entity may not claim more than one (1) credit for the
139	139	4 same qualified railroad expenditure or qualified new rail
140	140	5 infrastructure expenditure.
141	141	6 Sec. 11. To obtain a credit under this chapter, a taxpayer must
142	142	7 claim the credit on the taxpayer's annual state tax return or
143	143	8 returns in the manner prescribed by the department. The taxpayer
144	144	9 shall submit to the department all information that the department
145	145	10 determines is necessary for the allowance of the credit provided by
146	146	11 this chapter.
147	147	12 Sec. 12. (a) If the credit provided by this chapter exceeds a
148	148	13 taxpayer's state tax liability for the taxable year for which the
149	149	14 credit is first claimed, the excess may be carried over to succeeding
150	150	15 taxable years and used as a credit against the tax otherwise due
151	151	16 and payable by the taxpayer under IC 6-3 during those taxable
152	152	17 years. Each time that the credit is carried over to a succeeding
153	153	18 taxable year, the credit is to be reduced by the amount that was
154	154	19 used as a credit during the immediately preceding taxable year.
155	155	20 The credit provided by this chapter may be carried forward and
156	156	21 applied to succeeding taxable years for five (5) taxable years
157	157	22 following the unused credit year.
158	158	23 (b) A taxpayer is not entitled to any carryback or refund of any
159	159	24 unused credit.
160	160	25 Sec. 13. (a) A taxpayer may assign any part of the credit that the
161	161	26 taxpayer may claim under this chapter. A credit that is assigned
162	162	27 under this section remains subject to this chapter. If a taxpayer
163	163	28 assigns a part of a credit during a taxable year, the assignee may
164	164	29 not subsequently assign all or part of the credit to another
165	165	30 taxpayer. A taxpayer may make only one (1) assignment of a
166	166	31 credit.
167	167	32 (b) An assignment of a credit must be in writing, and both the
168	168	33 taxpayer and assignee shall report the assignment on the
169	169	34 taxpayer's and assignee's state tax returns for the year in which the
170	170	35 assignment is made, in the manner prescribed by the department.
171	171	36 A taxpayer may not receive value in connection with an assignment
172	172	37 under this section that exceeds the value of the part of the credit
173	173	38 assigned.
174	174	39 (c) If the transferor is a tax exempt entity, the transfer must be
175	175	40 completed on or before the date that is one (1) year after the close
176	176	41 of the tax year for which the credit was certified. As used in this
177	177	42 subsection, "tax exempt entity" means a government agency or an
178	178	2023 IN 250—LS 6752/DI 120 5
179	179	1 organization that is recognized as exempt under section 501(c)(3)
180	180	2 of the Internal Revenue Code.
181	181	3 Sec. 14. For each state fiscal year beginning after June 30, 2023,
182	182	4 the aggregate amount of state tax credits permitted:
183	183	5 (1) for qualified railroad expenditures allowed under this
184	184	6 chapter may not exceed nine million five hundred thousand
185	185	7 dollars ($9,500,000); and
186	186	8 (2) for qualified new rail infrastructure expenditures allowed
187	187	9 under this chapter may not exceed ten million dollars
188	188	10 ($10,000,000).
189	189	11 Sec. 15. The department may adopt rules under IC 4-22-2,
190	190	12 including emergency rules under IC 4-22-2-37.1, to carry out this
191	191	13 chapter.
192	192	14 SECTION 2. An emergency is declared for this act.
193	193	2023 IN 250—LS 6752/DI 120