Senate Bill 563 – Economic Development
Authored by Sen. Travis Holdman (R-Markle)
Makes a variety of changes to tax policy and tax incentive programs intended to promote and enhance economic development. The major components are: (1) moving to a market-based sourcing method for income apportionment for service companies; (2) a small business innovation voucher program to assist in research; (3) making the venture capital investment credit transferrable/saleable; (4) making the headquarters relocation credit available to small businesses; (5) including additional items to what qualifies for the Hoosier business investment tax credit; and (6) expanding the application of the redevelopment tax credit. Full details.
The Latest: Held for amendment by the Tax and Fiscal Policy Committee.
Chamber Position: Support
Chamber Action/Commentary: This bill embodies the Governor’s economic development package. The Indiana Chamber testified in full support referring to its components as a thoughtful, well selected collection of meaningful changes. While supportive of all the provisions, we elevated the importance and positive impact of making the venture capital investment credit transferable. This element is something that the Chamber has laid the groundwork for and promoted for many years. Persistence pays off!
Another aspect of significance is the change to how service providers’ income tax liability is determined. The change, generally speaking, will benefit companies that sell their services to out-of-state customers, avoid double taxing income and serve to remove a disincentive to companies locating in Indiana. Another notable provision will help small businesses obtain research assistance from universities. Beyond these items, the bill makes a number of additional useful refinements and modest expansions to existing tax credits – all designed to make our economic development tools more effective.