Wednesday, September 4, 2013

IMA Presents "Intro to the Corporate Adjusted Gross Income Tax"

By Tim Rushenberg, VP, Governmental Affairs & Tax Policy,, 800.462.7762, ext. 232 or 317.713.5920 

A corporation doing business in Indiana is subject to the corporate adjusted gross income tax. The corporate adjusted gross income tax is generally calculated using federal taxable income; however, there are numerous deductions permitted on a federal tax return that are required under Indiana law to be "added back" to the state return for the purpose of determining state taxable income.

Examples include: 1) property for which bonus depreciation is allowed on the federal tax return under Internal Revenue Code (IRC) section 168(k); 2) the amount of "section 179 property" exceeding $25,000; and 3) the amount claimed as a deduction for qualified domestic production activities under IRC 199.

2011 Corporate Tax Rate Reduction. In 2011, Sen. Brandt Hershman (R-Buck Creek) and Rep. P. Eric Turner (R-Cicero) championed legislation to reduce the state’s corporate adjusted gross income tax rate by nearly 25 percent over a four-year period. AP–"Indiana House passes bill to cut corporate tax rates" (April 21, 2011)

The net impact of the corporate tax rate reduction was projected to reduce state tax collections by $18.4 million in 2013; $37.9 million in 2014; $58.6 million in 2015; and $80 million annually when fully phased in. Legislative Services Agency, Fiscal Impact Statement #8 (May 5, 2011)


See the full article here: