DEPARTMENT OF STATE REVENUE
Information Bulletin #112
Income Tax
March 2018
(Replaces Information Bulletin #112 dated June 2016)
Effective Date: January 1, 2017 (retroactive)
SUBJECT: Income Tax Credit for Property Tax Paid by a For Profit Hospital
DISCLAIMER: Information bulletins are intended to provide nontechnical assistance to the general public. Every attempt is made to provide information that is consistent with the appropriate statutes, rules, and court decisions. Any information that is not consistent with the law, regulations, or court decisions is not binding on either the department or the taxpayer. Therefore, the information provided herein should serve only as a foundation for further investigation and study of the current law and procedures related to the subject matter covered herein.
Aside from nonsubstantive, technical changes, this bulletin is changed to reflect that, effective January 1, 2017 the credit has been increased to 20% and is now a refundable credit. In addition, the bulletin specifies that the credit is applicable to real property.
IC 6-3-3-14.6, as added by HEA 1001-2015, SECTION 83 provides an income tax credit for property taxes paid by a for-profit acute care hospital. The credit is effective for taxable years beginning after December 31, 2015. SEA 309-2016, SECTION 26 permits a carryforward of any unused credit, effective July 1, 2016. HEA 1001-2017, SECTION 65, retroactive to January 1, 2017, increases the credit to 20 percent of the property taxes paid on Indiana real property used as a hospital, and permits an unused credit to be refunded. The 2017 amendment also clarifies that the credit is based on taxes paid on real property used as a hospital.
A "hospital" means an acute care hospital that is licensed under
IC 16-21-2; is operated on a for-profit basis; is subject to the adjusted gross income tax at the corporate income tax rate; provides health care, accommodations, facilities, and equipment, in connection with the services of a physician, to individuals who need medical care or surgical services; and is not primarily providing care and treatment of patients with a cardiac condition, an orthopedic condition, or receiving a surgical procedure.
Effective for taxable years beginning in 2017 and later, a hospital is entitled to a credit against the hospital's adjusted gross income tax liability for the taxable year equal to 20 percent of the property taxes paid in Indiana for the taxable year on real property used as a hospital. For 2016, the credit was 10 percent of the property taxes paid in Indiana on property used as a hospital.
The credit generally may not exceed the taxpayer's adjusted gross income tax liability for the taxable year, reduced by the sum of all credits applied before the application of this credit for the taxable year. The amount of any unused credit for a taxable year may be carried forward to a succeeding taxable year. There is no time limitation on the credit carryforward. However, any unused credit for a taxable year may not be carried back to a preceding taxable year, or refunded. Effective for taxable years starting in 2017 and later, any unused credit may be claimed as a refund by the qualified hospital.
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Posted: 04/25/2018 by Legislative Services Agency
DIN: 20180425-IR-045180186NRA
Composed: Apr 26,2024 3:14:27PM EDT
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