IN
Indiana Senate Bill SB0292

Indiana 2025 Regular Session

Indiana Senate Bill SB0292 Compare Versions

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1-*SB0292.2*
2-February 5, 2025
1+*SB0292.1*
2+January 22, 2025
33 SENATE BILL No. 292
44 _____
5-DIGEST OF SB 292 (Updated February 4, 2025 12:02 pm - DI 129)
6-Citations Affected: IC 6-3.1; noncode.
5+DIGEST OF SB 292 (Updated January 21, 2025 2:42 pm - DI 151)
6+Citations Affected: IC 6-3.1.
77 Synopsis: Short line railroad tax credit. Allows a taxpayer to claim a
88 credit against state income tax liability for certain qualified railroad
99 expenditures and qualified new rail infrastructure expenditures.
1010 Specifies the amount of the credit. Limits the total amount of credits
11-that may be allowed in a state fiscal year to: (1) $10,000 for qualified
12-railroad expenditures; and (2) $10,000 for qualified new rail
13-infrastructure expenditures.
11+that may be allowed in a state fiscal year to: (1) $9,500,000 for
12+qualified railroad expenditures; and (2) $10,000,000 for qualified new
13+rail infrastructure expenditures.
1414 Effective: January 1, 2025 (retroactive).
1515 Doriot, Holdman, Crider,
16-Charbonneau, Byrne, Tomes, Rogers
16+Charbonneau
1717 January 13, 2025, read first time and referred to Committee on Homeland Security and
1818 Transportation.
1919 January 21, 2025, amended, reported favorably — Do Pass; reassigned to Committee on
2020 Tax and Fiscal Policy.
21-February 4, 2025, amended, reported favorably — Do Pass.
22-SB 292—LS 6560/DI 120 February 5, 2025
21+SB 292—LS 6560/DI 120 January 22, 2025
2322 First Regular Session of the 124th General Assembly (2025)
2423 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
2524 Constitution) is being amended, the text of the existing provision will appear in this style type,
2625 additions will appear in this style type, and deletions will appear in this style type.
2726 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
2827 provision adopted), the text of the new provision will appear in this style type. Also, the
2928 word NEW will appear in that style type in the introductory clause of each SECTION that adds
3029 a new provision to the Indiana Code or the Indiana Constitution.
3130 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
3231 between statutes enacted by the 2024 Regular Session of the General Assembly.
3332 SENATE BILL No. 292
3433 A BILL FOR AN ACT to amend the Indiana Code concerning
3534 taxation.
3635 Be it enacted by the General Assembly of the State of Indiana:
3736 1 SECTION 1. IC 6-3.1-38.1 IS ADDED TO THE INDIANA CODE
3837 2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3938 3 JANUARY 1, 2025 (RETROACTIVE)]:
4039 4 Chapter 38.1. Railroad Tax Credit for Qualified Infrastructure
4140 5 Investment
4241 6 Sec. 1. As used in this chapter, "pass through entity" means:
4342 7 (1) a corporation that is exempt from the adjusted gross
4443 8 income tax under IC 6-3-2-2.8(2);
4544 9 (2) a partnership;
4645 10 (3) a limited liability company; or
4746 11 (4) a limited liability partnership.
4847 12 Sec. 2. As used in this chapter, "qualified applicant" means:
4948 13 (1) a short line rail company located in whole or in part in
5049 14 Indiana that is classified by the United States Surface
5150 15 Transportation Board as a Class II or Class III railroad that
5251 16 makes qualified railroad expenditures; or
5352 17 (2) an owner or lessee of a rail siding, industrial spur, or
5453 SB 292—LS 6560/DI 120 2
5554 1 industry track located:
5655 2 (A) on or adjacent to a Class II or Class III railroad in
5756 3 Indiana; or
5857 4 (B) in a qualified rural county;
5958 5 that makes qualified new rail infrastructure expenditures.
6059 6 Sec. 3. As used in this chapter, "qualified new rail infrastructure
6160 7 expenditures" means gross expenditures for new rail
6261 8 infrastructure, including:
6362 9 (1) construction of new track infrastructure such as industrial
6463 10 leads, switches, spurs, sidings, rail loading docks, and
6564 11 transloading structures, and engineering and site preparation
6665 12 involved with servicing new customer locations;
6766 13 (2) the expansion by a Class II or Class III railroad; or
6867 14 (3) construction of new track infrastructure involved with
6968 15 servicing new customer locations located in a qualified rural
7069 16 county.
7170 17 Sec. 4. As used in this chapter, "qualified railroad expenditures"
7271 18 means gross expenditures for maintenance, reconstruction, or
7372 19 replacement of railroad infrastructure, including track, roadbed,
7473 20 bridges, crossings, signals, industrial leads and sidings, and track
7574 21 related structures, owned or leased by a Class II or Class III
7675 22 railroad located in Indiana. The term does not include
7776 23 expenditures used to generate a federal tax credit or expenditures
7877 24 funded by a state or federal grant.
7978 25 Sec. 5. As used in this chapter, "qualified rural county" means
8079 26 a county in Indiana with a population of not more than three
8180 27 hundred thousand (300,000).
8281 28 Sec. 6. As used in this chapter, "state tax liability" means a
8382 29 taxpayer's total tax liability incurred under IC 6-3-1 through
8483 30 IC 6-3-7 (the adjusted gross income tax), as computed after the
8584 31 application of all credits that under IC 6-3.1-1-2 are to be applied
8685 32 before the credit provided by this chapter.
8786 33 Sec. 7. As used in this chapter, "taxpayer" means a qualified
8887 34 applicant that has any state tax liability, or a qualified applicant
8988 35 that is considered a tax exempt entity (owned by a port or
9089 36 governmental entity).
9190 37 Sec. 8. (a) A taxpayer wishing to claim a tax credit under this
9291 38 chapter must apply to the department after completion of the
9392 39 project for which qualified railroad expenditures or qualified new
9493 40 rail infrastructure expenditures were incurred. The department
9594 41 shall prescribe the form and manner of the application, which must
9695 42 include:
9796 SB 292—LS 6560/DI 120 3
9897 1 (1) the number of miles of railroad track owned or leased in
9998 2 Indiana; and
10099 3 (2) a description and certification of the amount of the
101100 4 taxpayer's qualified railroad expenditures or qualified new
102101 5 rail infrastructure expenditures.
103102 6 (b) The department shall evaluate a taxpayer's eligibility for a
104103 7 tax credit under this chapter.
105104 8 (c) The department shall certify the eligibility of a taxpayer that
106105 9 meets the requirements for a tax credit under this chapter.
107-10 Sec. 9. (a) Subject to subsection (b) and section 15 of this
108-11 chapter, if the department certifies a taxpayer under section 8 of
109-12 this chapter, the taxpayer may claim a tax credit against the
110-13 taxpayer's state tax liability equal to:
111-14 (1) the taxpayer's:
112-15 (A) qualified railroad expenditures; or
113-16 (B) qualified new rail infrastructure expenditures;
114-17 multiplied by
115-18 (2) fifty percent (50%).
116-19 (b) The amount of a tax credit allowed under subsection (a) shall
117-20 not exceed the following:
118-21 (1) For qualified railroad expenditures, the product of:
119-22 (A) the number of miles of Class II or Class III railroad
120-23 track owned or leased by the taxpayer in Indiana at the
121-24 close of the taxable year; multiplied by
122-25 (B) five thousand dollars ($5,000).
123-26 (2) For qualified new rail infrastructure expenditures, the
124-27 lesser of:
125-28 (A) fifty percent (50%) of the qualified new rail
126-29 expenditures for each new rail served customer project
127-30 completed by the taxpayer in the taxable year; or
128-31 (B) five hundred thousand dollars ($500,000) per rail
129-32 served customer project.
130-33 Sec. 10. (a) If a pass through entity that qualifies for the credit
131-34 does not have state tax liability against which the credit may be
132-35 applied, a shareholder, partner, or member of the pass through
133-36 entity may claim a credit under this chapter equal to:
134-37 (1) the credit determined for the pass through entity for the
135-38 taxable year; multiplied by
136-39 (2) the percentage of the pass through entity's distributive
137-40 income to which the shareholder, partner, or member is
138-41 entitled.
139-42 (b) The credit provided under subsection (a) is in addition to a
106+10 Sec. 9. (a) Subject to subsection (b), if the department certifies
107+11 a taxpayer under section 8 of this chapter, the taxpayer is entitled
108+12 to a tax credit against the taxpayer's state tax liability equal to:
109+13 (1) the taxpayer's:
110+14 (A) qualified railroad expenditures; or
111+15 (B) qualified new rail infrastructure expenditures;
112+16 multiplied by
113+17 (2) fifty percent (50%).
114+18 (b) The amount of a tax credit allowed under subsection (a) shall
115+19 not exceed the following:
116+20 (1) For qualified railroad expenditures, the product of:
117+21 (A) the number of miles of Class II or Class III railroad
118+22 track owned or leased by the taxpayer in Indiana at the
119+23 close of the taxable year; multiplied by
120+24 (B) five thousand dollars ($5,000).
121+25 (2) For qualified new rail infrastructure expenditures, the
122+26 lesser of:
123+27 (A) fifty percent (50%) of the qualified new rail
124+28 expenditures for each new rail served customer project
125+29 completed by the taxpayer in the taxable year; or
126+30 (B) five hundred thousand dollars ($500,000) per rail
127+31 served customer project.
128+32 Sec. 10. (a) If a pass through entity is entitled to a credit under
129+33 section 9 of this chapter but does not have state tax liability against
130+34 which the credit may be applied, a shareholder, partner, or
131+35 member of the pass through entity is entitled to a credit equal to:
132+36 (1) the credit determined for the pass through entity for the
133+37 taxable year; multiplied by
134+38 (2) the percentage of the pass through entity's distributive
135+39 income to which the shareholder, partner, or member is
136+40 entitled.
137+41 (b) The credit provided under subsection (a) is in addition to a
138+42 credit to which a shareholder, partner, or member of a pass
140139 SB 292—LS 6560/DI 120 4
141-1 credit to which a shareholder, partner, or member of a pass
142-2 through entity is otherwise entitled under this chapter. However,
143-3 a pass through entity and a shareholder, partner, or member of the
144-4 pass through entity may not claim more than one (1) credit for the
145-5 same qualified railroad expenditure or qualified new rail
146-6 infrastructure expenditure.
147-7 Sec. 11. To obtain a credit under this chapter, a taxpayer must
148-8 claim the credit on the taxpayer's annual state tax return or
149-9 returns in the manner prescribed by the department. The taxpayer
150-10 shall submit to the department all information that the department
151-11 determines is necessary for the allowance of the credit provided by
152-12 this chapter.
153-13 Sec. 12. A taxpayer is not entitled to a carryback, carryover, or
154-14 refund of any unused credit.
155-15 Sec. 13. (a) A taxpayer may assign any part of the credit that the
156-16 taxpayer may claim under this chapter. A credit that is assigned
157-17 under this section remains subject to this chapter. If a taxpayer
158-18 assigns a part of a credit during a taxable year, the assignee may
159-19 not subsequently assign all or part of the credit to another
160-20 taxpayer. A taxpayer may make only one (1) assignment of a
161-21 credit.
162-22 (b) An assignment of a credit must be in writing, and both the
163-23 taxpayer and assignee shall report the assignment on the
164-24 taxpayer's and assignee's state tax returns for the year in which the
165-25 assignment is made, in the manner prescribed by the department.
166-26 A taxpayer may not receive value in connection with an assignment
167-27 under this section that exceeds the value of the part of the credit
168-28 assigned.
169-29 (c) If the transferor is a tax exempt entity, the transfer must be
170-30 completed on or before the date that is one (1) year after the close
171-31 of the tax year for which the credit was certified. As used in this
172-32 subsection, "tax exempt entity" means a government agency or an
173-33 organization that is recognized as exempt under section 501(c)(3)
174-34 of the Internal Revenue Code.
175-35 Sec. 14. The department, on a website used by the department
176-36 to provide information to the public, shall provide the following
177-37 information:
178-38 (1) The application for the credit provided by this chapter.
179-39 (2) A timeline for receiving the credit provided by this
180-40 chapter.
181-41 (3) The total amount of credits awarded under this chapter
182-42 during the current state fiscal year.
140+1 through entity is otherwise entitled under this chapter. However,
141+2 a pass through entity and a shareholder, partner, or member of the
142+3 pass through entity may not claim more than one (1) credit for the
143+4 same qualified railroad expenditure or qualified new rail
144+5 infrastructure expenditure.
145+6 Sec. 11. To obtain a credit under this chapter, a taxpayer must
146+7 claim the credit on the taxpayer's annual state tax return or
147+8 returns in the manner prescribed by the department. The taxpayer
148+9 shall submit to the department all information that the department
149+10 determines is necessary for the allowance of the credit provided by
150+11 this chapter.
151+12 Sec. 12. (a) If the credit provided by this chapter exceeds a
152+13 taxpayer's state tax liability for the taxable year for which the
153+14 credit is first claimed, the excess may be carried over to succeeding
154+15 taxable years and used as a credit against the tax otherwise due
155+16 and payable by the taxpayer under IC 6-3 during those taxable
156+17 years. Each time that the credit is carried over to a succeeding
157+18 taxable year, the credit is to be reduced by the amount that was
158+19 used as a credit during the immediately preceding taxable year.
159+20 The credit provided by this chapter may be carried forward and
160+21 applied to succeeding taxable years for five (5) taxable years
161+22 following the unused credit year.
162+23 (b) A taxpayer is not entitled to any carryback or refund of any
163+24 unused credit.
164+25 Sec. 13. (a) A taxpayer may assign any part of the credit that the
165+26 taxpayer may claim under this chapter. A credit that is assigned
166+27 under this section remains subject to this chapter. If a taxpayer
167+28 assigns a part of a credit during a taxable year, the assignee may
168+29 not subsequently assign all or part of the credit to another
169+30 taxpayer. A taxpayer may make only one (1) assignment of a
170+31 credit.
171+32 (b) An assignment of a credit must be in writing, and both the
172+33 taxpayer and assignee shall report the assignment on the
173+34 taxpayer's and assignee's state tax returns for the year in which the
174+35 assignment is made, in the manner prescribed by the department.
175+36 A taxpayer may not receive value in connection with an assignment
176+37 under this section that exceeds the value of the part of the credit
177+38 assigned.
178+39 (c) If the transferor is a tax exempt entity, the transfer must be
179+40 completed on or before the date that is one (1) year after the close
180+41 of the tax year for which the credit was certified. As used in this
181+42 subsection, "tax exempt entity" means a government agency or an
183182 SB 292—LS 6560/DI 120 5
184-1 Sec. 15. (a) For each state fiscal year beginning after June 30,
185-2 2025, the aggregate amount of state tax credits permitted:
186-3 (1) for qualified railroad expenditures allowed under this
187-4 chapter may not exceed ten thousand dollars ($10,000); and
188-5 (2) for qualified new rail infrastructure expenditures allowed
189-6 under this chapter may not exceed ten thousand dollars
190-7 ($10,000).
191-8 (b) The department shall record the time of filing of each
192-9 application for the department's approval of a credit and shall
193-10 approve granting the credit to the taxpayer, if the taxpayer
194-11 otherwise qualifies for a credit under this chapter, in the
195-12 chronological order in which the application for the department's
196-13 approval is filed in the year.
197-14 (c) When the total credits approved under this section equal the
198-15 maximum amount allowable under this section, the department
199-16 may not thereafter approve an application for the credit.
200-17 Sec. 16. This chapter expires December 31, 2027.
201-18 SECTION 2. [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]
202-19 (a) IC 6-3.1-38.1, as added by this act, applies to taxable years
203-20 beginning after December 31, 2024.
204-21 (b) This SECTION expires December 31, 2026.
205-22 SECTION 3. An emergency is declared for this act.
183+1 organization that is recognized as exempt under section 501(c)(3)
184+2 of the Internal Revenue Code.
185+3 Sec. 14. For each state fiscal year beginning after June 30, 2025,
186+4 the aggregate amount of state tax credits permitted:
187+5 (1) for qualified railroad expenditures allowed under this
188+6 chapter may not exceed nine million five hundred thousand
189+7 dollars ($9,500,000); and
190+8 (2) for qualified new rail infrastructure expenditures allowed
191+9 under this chapter may not exceed ten million dollars
192+10 ($10,000,000).
193+11 SECTION 2. An emergency is declared for this act.
206194 SB 292—LS 6560/DI 120 6
207195 COMMITTEE REPORT
208196 Mr. President: The Senate Committee on Homeland Security and
209197 Transportation, to which was referred Senate Bill No. 292, has had the
210198 same under consideration and begs leave to report the same back to the
211199 Senate with the recommendation that said bill be AMENDED as
212200 follows:
213201 Page 1, line 1, delete "IC 6-3.1-38" and insert "IC 6-3.1-38.1".
214202 Page 1, line 4, delete "38." and insert "38.1.".
215203 and when so amended that said bill do pass and be reassigned to the
216204 Senate Committee on Tax and Fiscal Policy.
217205 (Reference is to SB 292 as introduced.)
218206 CRIDER, Chairperson
219207 Committee Vote: Yeas 9, Nays 0.
220-_____
221-COMMITTEE REPORT
222-Mr. President: The Senate Committee on Tax and Fiscal Policy, to
223-which was referred Senate Bill No. 292, has had the same under
224-consideration and begs leave to report the same back to the Senate with
225-the recommendation that said bill be AMENDED as follows:
226-Page 3, delete lines 10 through 12, begin a new paragraph and
227-insert:
228-"Sec. 9. (a) Subject to subsection (b) and section 15 of this
229-chapter, if the department certifies a taxpayer under section 8 of
230-this chapter, the taxpayer may claim a tax credit against the
231-taxpayer's state tax liability equal to:".
232-Page 3, delete lines 32 through 35, begin a new paragraph and
233-insert:
234-"Sec. 10. (a) If a pass through entity that qualifies for the credit
235-does not have state tax liability against which the credit may be
236-applied, a shareholder, partner, or member of the pass through
237-entity may claim a credit under this chapter equal to:".
238-Page 4, delete lines 12 through 24, begin a new paragraph and
239-insert:
240-"Sec. 12. A taxpayer is not entitled to a carryback, carryover, or
241-refund of any unused credit.".
242-Page 5, delete lines 3 through 10, begin a new paragraph and insert:
243-SB 292—LS 6560/DI 120 7
244-"Sec. 14. The department, on a website used by the department
245-to provide information to the public, shall provide the following
246-information:
247-(1) The application for the credit provided by this chapter.
248-(2) A timeline for receiving the credit provided by this
249-chapter.
250-(3) The total amount of credits awarded under this chapter
251-during the current state fiscal year.
252-Sec. 15. (a) For each state fiscal year beginning after June 30,
253-2025, the aggregate amount of state tax credits permitted:
254-(1) for qualified railroad expenditures allowed under this
255-chapter may not exceed ten thousand dollars ($10,000); and
256-(2) for qualified new rail infrastructure expenditures allowed
257-under this chapter may not exceed ten thousand dollars
258-($10,000).
259-(b) The department shall record the time of filing of each
260-application for the department's approval of a credit and shall
261-approve granting the credit to the taxpayer, if the taxpayer
262-otherwise qualifies for a credit under this chapter, in the
263-chronological order in which the application for the department's
264-approval is filed in the year.
265-(c) When the total credits approved under this section equal the
266-maximum amount allowable under this section, the department
267-may not thereafter approve an application for the credit.
268-Sec. 16. This chapter expires December 31, 2027.
269-SECTION 2. [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]
270-(a) IC 6-3.1-38.1, as added by this act, applies to taxable years
271-beginning after December 31, 2024.
272-(b) This SECTION expires December 31, 2026.".
273-Renumber all SECTIONS consecutively.
274-and when so amended that said bill do pass.
275-(Reference is to SB 292 as printed January 22, 2025.)
276-HOLDMAN, Chairperson
277-Committee Vote: Yeas 10, Nays 0.
278208 SB 292—LS 6560/DI 120