SB 243

           Second Regular Session of the 124th General Assembly (2026)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
  Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2025 Regular Session of the General Assembly.
    SENATE ENROLLED ACT No. 243
    AN ACT to amend the Indiana Code concerning taxation.
    Be it enacted by the General Assembly of the State of Indiana:
  SECTION 1. IC 5-36.5 IS ADDED TO THE INDIANA CODE AS
A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2027]:
  ARTICLE 36.5. PENNY PHASEOUT
  Chapter 1. Payments to State and Local Units
  Sec. 1. This chapter applies only to a cash transaction.
  Sec. 2. As used in this chapter, "local unit" means any:
    (1) county;
    (2) township;
    (3) city;
    (4) town;
    (5) school corporation; or
    (6) special taxing district.
  Sec. 3. As used in this chapter, "state" means:
    (1) the state of Indiana;
    (2) any department of the state of Indiana;
    (3) any agency of the state of Indiana;
    (4) any state or local court;
    (5) the general assembly;
    (6) any state of Indiana task force, committee, board,
    commission, or council;
    (7) any body politic and corporate of the state of Indiana; or
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      (8) any other instrumentality of the state of Indiana.
    Sec. 4. As used in this chapter, "state or local tax" means a tax,
fine, fee, or other amount required to be paid to the state or a local
unit. The term includes any interest, penalties, or other additional
fees or costs associated with a late payment or nonpayment of an
amount described in this section. The term does not include
payments for property or services sold or provided by the state or
local unit.
    Sec. 4.5. (a) For a state or local tax, if the state or local tax has
one (1), two (2), three (3), four (4), six (6), seven (7), eight (8), or
nine (9) in the second decimal place, the state or local unit must
round the state or local tax amount downward to the next amount
divisible by five cents ($0.05).
    (b) For a state or local tax payable to the state or local unit that
is less than five cents ($0.05), the state or local unit must round the
amount down to zero cents ($0.00).
    (c) For a state or local tax that is imposed on a transaction and
that is required to be remitted by a person or an entity to the state
or local unit as an agent or a trustee of the state or local unit the
state or local tax shall be computed on the total transaction
amount, as defined in IC 23-15-13-3, prior to any rounding
requirement required by IC 23-15-13.
    (d) For any state or local tax that is:
      (1) not imposed on a transaction but is required to be
      withheld by a person or entity acting as an agent or trustee
      for the state or a local unit; or
      (2) otherwise included in a total transaction amount as
      defined in IC 23-15-13-3;
the state or local tax withheld or included shall be computed
without rounding and, if applicable, the total transaction amount,
as defined in IC 23-15-13-3, shall be rounded in the manner
provided under IC 23-15-13-4.
    (e) For purposes of this section, the following apply:
      (1) The aggregate amount of a state or local tax described in
      subsection (c) or (d) remitted by a person or entity, reduced
      by any collection allowances or similar amounts permitted to
      be retained by the person or entity, shall be subject to the
      rounding provisions described in subsections (a) and (b).
      (2) If multiple state or local taxes are required to be reported
      on a single form, the rounding of a remittance under
      subsection (a) or (b) shall be applied to the total state or local
      tax amount resulting from the computation on the form and
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     the remittance period.
     (3) For state or local taxes not described in subdivision (2), the
     rounding of a state or local tax remittance described in
     subsection (a) or (b) shall be determined separately for each
     state or local tax type and for each remittance period.
     (4) If a state or local tax liability is reported in the manner
     provided under subdivision (2), but the state or local unit
     determines a separate liability from other state and local
     taxes, subdivision (3) applies to the payment of the separate
     liability.
   (f) For purposes of subsections (c) and (d), if multiple state or
local taxes are required to be paid, each state or local tax shall be
computed separately and, if applicable, the total transaction
amount as defined in IC 23-15-13-3 shall be computed including all
state or local taxes required to be paid on the total transaction
amount.
   SECTION 2. IC 6-2.5-1-5, AS AMENDED BY P.L.205-2025,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2027]: Sec. 5. (a) Except as provided in subsection (b),
"gross retail income" means the total amount of consideration,
including cash, credit, property, and services, for which tangible
personal property is sold, leased, or rented, valued in money, whether
received in money or otherwise, without any deduction for:
     (1) the seller's cost of the property sold;
     (2) the cost of materials used, labor or service cost, interest,
     losses, all costs of transportation to the seller, all taxes imposed
     on the seller, and any other expense of the seller;
     (3) charges by the seller for any services necessary to complete
     the sale, other than delivery and installation charges;
     (4) delivery charges; or
     (5) consideration received by the seller from a third party if:
        (A) the seller actually receives consideration from a party
        other than the purchaser and the consideration is directly
        related to a price reduction or discount on the sale;
        (B) the seller has an obligation to pass the price reduction or
        discount through to the purchaser;
        (C) the amount of the consideration attributable to the sale is
        fixed and determinable by the seller at the time of the sale of
        the item to the purchaser; and
        (D) the price reduction or discount is identified as a third party
        price reduction or discount on the invoice received by the
        purchaser or on a coupon, certificate, or other documentation
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          presented by the purchaser.
For purposes of subdivision (4), delivery charges are charges by the
seller for preparation and delivery of the property to a location
designated by the purchaser of property, including but not limited to
transportation, shipping, postage charges that are not separately stated
on the invoice, bill of sale, or similar document, handling, crating, and
packing. Delivery charges do not include postage charges that are
separately stated on the invoice, bill of sale, or similar document.
   (b) "Gross retail income" does not include that part of the gross
receipts attributable to:
      (1) the value of any tangible personal property received in a like
      kind exchange in the retail transaction, if the value of the property
      given in exchange is separately stated on the invoice, bill of sale,
      or similar document given to the purchaser;
      (2) the receipts received in a retail transaction which constitute
      interest, finance charges, or insurance premiums on either a
      promissory note or an installment sales contract;
      (3) discounts, including cash, terms, or coupons that are not
      reimbursed by a third party that are allowed by a seller and taken
      by a purchaser on a sale;
      (4) interest, financing, and carrying charges from credit extended
      on the sale of personal property if the amount is separately stated
      on the invoice, bill of sale, or similar document given to the
      purchaser;
      (5) any taxes legally imposed directly on the consumer that are
      separately stated on the invoice, bill of sale, or similar document
      given to the purchaser, including an excise tax imposed under
      IC 6-6-15;
      (6) installation charges that are separately stated on the invoice,
      bill of sale, or similar document given to the purchaser;
      (7) telecommunications nonrecurring charges;
      (8) postage charges that are separately stated on the invoice, bill
      of sale, or similar document; or
      (9) charges for serving or delivering food and food ingredients
      furnished, prepared, or served for consumption at a location, or on
      equipment, provided by the retail merchant, to the extent that the
      charges for the serving or delivery are stated separately from the
      price of the food and food ingredients when the purchaser pays
      the charges.
   (c) Notwithstanding subsection (b)(5):
      (1) in the case of retail sales of special fuel (as defined in
      IC 6-6-2.5-22) or kerosene (as defined in IC 16-44-2-2), the gross
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      retail income is the total sales price of the special fuel or kerosene
      minus the part of that price attributable to tax imposed under
      IC 6-6-2.5 (in the case of special fuel) or Section 4041 or Section
      4081 of the Internal Revenue Code (in the case of either special
      fuel or kerosene);
      (2) in the case of retail sales of cigarettes (as defined in
      IC 6-7-1-2), the gross retail income is the total sales price of the
      cigarettes including the tax imposed under IC 6-7-1; and
      (3) in the case of retail sales of consumable material (as defined
      in IC 6-7-4-2), vapor products (as defined in IC 6-7-4-8), and
      closed system cartridges (as defined in IC 6-7-2-0.5) under the
      closed system cartridge tax, the gross retail income received from
      selling at retail is the total sales price of the consumable material
      (as defined in IC 6-7-4-2), vapor products (as defined in
      IC 6-7-4-8), and closed system cartridges (as defined in
      IC 6-7-2-0.5) including the tax imposed under IC 6-7-4 and
      IC 6-7-2-7.5.
   (d) Gross retail income is only taxable under this article to the
extent that the income represents:
      (1) the price of the property transferred, without the rendition of
      any services; and
      (2) except as provided in subsection (b), any bona fide charges
      which are made for preparation, fabrication, alteration,
      modification, finishing, completion, delivery, or other service
      performed in respect to the property transferred before its transfer
      and which are separately stated on the transferor's records. For
      purposes of this subdivision, a transfer is considered to have
      occurred after the delivery of the property to the purchaser.
   (e) A public utility's or a power subsidiary's gross retail income
includes all gross retail income received by the public utility or power
subsidiary, including any minimum charge, flat charge, membership
fee, or any other form of charge or billing.
   (f) Amounts added or subtracted by a seller to comply with
IC 23-15-13 shall not be considered in determining gross retail
income.
   SECTION 3. IC 6-2.5-9-3, AS AMENDED BY P.L.108-2019,
SECTION 118, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 3. (a) Except as provided in
subsection (b) and the limited relief provided for marketplace
facilitators in section 3.5 of this chapter (before its expiration), an
individual who:
      (1) is an individual retail merchant or is an employee, officer, or
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      member of a corporate or partnership retail merchant; and
      (2) has a duty to remit state gross retail or use taxes (as described
      in IC 6-2.5-3-2) to the department;
holds those taxes in trust for the state and is personally liable for the
payment of those taxes, plus any penalties and interest attributable to
those taxes, to the state. If the individual knowingly fails to collect or
remit those taxes to the state, the individual commits a Level 6 felony.
    (b) For calendar years beginning after December 31, 2021, except
in cases in which the marketplace facilitator and the seller are
affiliated, a marketplace facilitator is not liable under this section or
IC 6-8.1-8-18 for failure to collect and remit gross retail and use taxes
if the marketplace facilitator demonstrates to the satisfaction of the
department that:
      (1) the marketplace facilitator has a system in place to require the
      seller to provide accurate information and has made a reasonable
      effort to obtain accurate information from the seller about a retail
      transaction;
      (2) the failure to collect and remit the correct tax was due to
      incorrect or insufficient information provided to the marketplace
      facilitator by the seller; and
      (3) the marketplace facilitator provides information showing who
      the purchaser was in each transaction for which the tax had not
      been collected.
If the marketplace facilitator is relieved of liability under this
subsection, the purchaser is liable for any amount of uncollected,
unpaid, or unremitted tax.
    SECTION 4. IC 6-2.5-9-12 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2023 (RETROACTIVE)]: Sec. 12. (a) The following apply:
      (1) There is a rebuttable presumption that the exemption
      under IC 6-2.5-5-39 does not apply if the purchaser of the
      recreational vehicle or cargo trailer (as defined in
      IC 6-2.5-5-39) is a limited liability company, partnership,
      corporation, or other closely held business organized in
      another state and a member, partner, or officer of the limited
      liability company, partnership, corporation, or other closely
      held business is a resident of Indiana or a nonreciprocal state
      (as defined in IC 6-2.5-2-5(b)).
      (2) There is a rebuttable presumption when a motor vehicle
      (as defined in IC 9-13-2-105(b)), cargo trailer (as defined in
      IC 6-2.5-5-39), aircraft, or watercraft (as defined in
      IC 9-13-2-198.5) is either:
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         (A) both:
           (i) purchased by a limited liability company, partnership,
           corporation, or other closely held business organized in
           another state in which at least one member, partner, or
           officer is a resident of Indiana; and
           (ii) titled and registered in the state in which the limited
           liability company, partnership, corporation, or other
           closely held business is organized, and that state does not
           have a gross retail tax or equivalent tax; or
         (B) purchased by an Indiana resident and:
           (i) transferred to a limited liability company,
           partnership, corporation, or other closely held business
           organized in another state and in which the resident is a
           member, partner, or officer; and
           (ii) titled and registered in the state in which the limited
           liability company, partnership, corporation, or other
           closely held business is organized, and that state does not
           have a gross retail tax or equivalent tax;
     that the purpose of such registration and titling was to evade
     paying Indiana gross retail or use tax in violation of this
     article.
   (b) The department may make any reasonable investigation
necessary to enforce subsection (a), including entering into an
agreement with another state agency or an agency from another
state and contracting with third party data service providers.
   (c) If an investigation under subsection (b) indicates that an
Indiana resident violated subsection (a), the department:
     (1) shall provide notice under IC 6-8.1-5-1 or IC 6-8.1-5-3 for
     the Indiana resident to pay any Indiana gross retail or use tax
     due, as calculated on the date of purchase of the vehicle,
     aircraft, cargo trailer, or watercraft and based on the best
     information available; and
     (2) after June 30, 2026, may impose a penalty on the Indiana
     resident of five hundred dollars ($500), which is in addition to
     any penalty assessed pursuant to IC 6-8.1-10-2.1 or
     IC 6-8.1-10-4.
   (d) A presumption under subsection (a) may be rebutted by
other evidence, such as evidence that:
     (1) the vehicle, aircraft, cargo trailer, or watercraft is insured
     for primary use at an address outside of Indiana;
     (2) the vehicle, aircraft, cargo trailer, or watercraft will be
     permanently stored or garaged at a physical address outside
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      Indiana; or
      (3) the Indiana resident owns a secondary residence in the
      state in which the vehicle, aircraft, cargo trailer, or watercraft
      is titled or registered.
    (e) Upon making a record of the department's actions, and upon
reasonable cause shown by the Indiana resident, the department
may waive, reduce, or compromise any penalty imposed under
subsection (c).
    (f) The department shall deposit money from a penalty under
subsection (c) in accordance with IC 6-2.5-10-1.
    SECTION 5. IC 6-3-1-3.5, AS AMENDED BY P.L.214-2025,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 4, 2025 (RETROACTIVE)]: Sec. 3.5. When used in this article,
the term "adjusted gross income" shall mean the following:
    (a) In the case of all individuals, "adjusted gross income" (as
defined in Section 62 of the Internal Revenue Code), modified as
follows:
      (1) Subtract income that is exempt from taxation under this article
      by the Constitution and statutes of the United States.
      (2) Except as provided in subsection (c), add an amount equal to
      any deduction or deductions allowed or allowable pursuant to
      Section 62 of the Internal Revenue Code for taxes based on or
      measured by income and levied at the state level by any state of
      the United States.
      (3) Subtract one thousand dollars ($1,000), or in the case of a
      joint return filed by a husband and wife, subtract for each spouse
      one thousand dollars ($1,000).
      (4) Subtract one thousand dollars ($1,000) for:
          (A) each of the exemptions provided by Section 151(c) of the
          Internal Revenue Code (as effective January 1, 2017);
          (B) each additional amount allowable under Section 63(f) of
          the Internal Revenue Code; and
          (C) the spouse of the taxpayer if a separate return is made by
          the taxpayer and if the spouse, for the calendar year in which
          the taxable year of the taxpayer begins, has no gross income
          and is not the dependent of another taxpayer.
      (5) Subtract each of the following:
          (A) One thousand five hundred dollars ($1,500) for each of the
          exemptions allowed under Section 151(c)(1)(B) of the Internal
          Revenue Code (as effective January 1, 2004), except that in
          the first taxable year in which a particular exemption is
          allowed under Section 151(c)(1)(B) of the Internal Revenue
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      Code (as effective January 1, 2004), subtract three thousand
      dollars ($3,000) for that exemption.
      (B) One thousand five hundred dollars ($1,500) for each
      exemption allowed under Section 151(c) of the Internal
      Revenue Code (as effective January 1, 2017) for an individual:
         (i) who is less than nineteen (19) years of age or is a
         full-time student who is less than twenty-four (24) years of
         age;
         (ii) for whom the taxpayer is the legal guardian; and
         (iii) for whom the taxpayer does not claim an exemption
         under clause (A).
      (C) Five hundred dollars ($500) for each additional amount
      allowable under Section 63(f)(1) of the Internal Revenue Code
      if the federal adjusted gross income of the taxpayer, or the
      taxpayer and the taxpayer's spouse in the case of a joint return,
      is less than forty thousand dollars ($40,000). In the case of a
      married individual filing a separate return, the qualifying
      income amount in this clause is equal to twenty thousand
      dollars ($20,000).
      (D) Three thousand dollars ($3,000) for each exemption
      allowed under Section 151(c) of the Internal Revenue Code (as
      effective January 1, 2017) for an individual who is:
         (i) an adopted child of the taxpayer; and
         (ii) less than nineteen (19) years of age or is a full-time
         student who is less than twenty-four (24) years of age.
      This amount is in addition to any amount subtracted under
      clause (A) or (B).
   This amount is in addition to the amount subtracted under
   subdivision (4).
   (6) Subtract any amounts included in federal adjusted gross
   income under Section 111 of the Internal Revenue Code as a
   recovery of items previously deducted as an itemized deduction
   from adjusted gross income.
   (7) Subtract any amounts included in federal adjusted gross
   income under the Internal Revenue Code which amounts were
   received by the individual as supplemental railroad retirement
   annuities under 45 U.S.C. 231 and which are not deductible under
   subdivision (1).
   (8) Subtract an amount equal to the amount of federal Social
   Security and Railroad Retirement benefits included in a taxpayer's
   federal gross income by Section 86 of the Internal Revenue Code.
   (9) In the case of a nonresident taxpayer or a resident taxpayer
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   residing in Indiana for a period of less than the taxpayer's entire
   taxable year, the total amount of the deductions allowed pursuant
   to subdivisions (3), (4), and (5) shall be reduced to an amount
   which bears the same ratio to the total as the taxpayer's income
   taxable in Indiana bears to the taxpayer's total income.
   (10) In the case of an individual who is a recipient of assistance
   under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
   subtract an amount equal to that portion of the individual's
   adjusted gross income with respect to which the individual is not
   allowed under federal law to retain an amount to pay state and
   local income taxes.
   (11) In the case of an eligible individual, subtract the amount of
   a Holocaust victim's settlement payment included in the
   individual's federal adjusted gross income.
   (12) Subtract an amount equal to the portion of any premiums
   paid during the taxable year by the taxpayer for a qualified long
   term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
   or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
   file a joint income tax return or the taxpayer is otherwise entitled
   to a deduction under this subdivision for the taxpayer's spouse, or
   both.
   (13) Subtract an amount equal to the lesser of:
       (A) two thousand five hundred dollars ($2,500), or one
       thousand two hundred fifty dollars ($1,250) in the case of a
       married individual filing a separate return; or
       (B) the amount of property taxes that are paid during the
       taxable year in Indiana by the individual on the individual's
       principal place of residence.
   (14) Subtract an amount equal to the amount of a September 11
   terrorist attack settlement payment included in the individual's
   federal adjusted gross income.
   (15) Add or subtract the amount necessary to make the adjusted
   gross income of any taxpayer that owns property for which bonus
   depreciation was allowed in the current taxable year or in an
   earlier taxable year equal to the amount of adjusted gross income
   that would have been computed had an election not been made
   under Section 168(k) of the Internal Revenue Code to not apply
   bonus depreciation to the property in the year that it was placed
   in service.
   (16) Add an amount equal to any deduction allowed under
   Section 172 of the Internal Revenue Code (concerning net
   operating losses).
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   (17) Add or subtract the amount necessary to make the adjusted
   gross income of any taxpayer that placed Section 179 property (as
   defined in Section 179 of the Internal Revenue Code) in service
   in the current taxable year or in an earlier taxable year equal to
   the amount of adjusted gross income that would have been
   computed had an election for federal income tax purposes not
   been made for the year in which the property was placed in
   service to take deductions under Section 179 of the Internal
   Revenue Code in a total amount exceeding the sum of:
       (A) twenty-five thousand dollars ($25,000) to the extent
       deductions under Section 179 of the Internal Revenue Code
       were not elected as provided in clause (B); and
       (B) for taxable years beginning after December 31, 2017, the
       deductions elected under Section 179 of the Internal Revenue
       Code on property acquired in an exchange if:
         (i) the exchange would have been eligible for
         nonrecognition of gain or loss under Section 1031 of the
         Internal Revenue Code in effect on January 1, 2017;
         (ii) the exchange is not eligible for nonrecognition of gain or
         loss under Section 1031 of the Internal Revenue Code; and
         (iii) the taxpayer made an election to take deductions under
         Section 179 of the Internal Revenue Code with regard to the
         acquired property in the year that the property was placed
         into service.
       The amount of deductions allowable for an item of property
       under this clause may not exceed the amount of adjusted gross
       income realized on the property that would have been deferred
       under the Internal Revenue Code in effect on January 1, 2017.
   (18) Subtract an amount equal to the amount of the taxpayer's
   qualified military income that was not excluded from the
   taxpayer's gross income for federal income tax purposes under
   Section 112 of the Internal Revenue Code.
   (19) Subtract income that is:
       (A) exempt from taxation under IC 6-3-2-21.7 (certain income
       derived from patents); and
       (B) included in the individual's federal adjusted gross income
       under the Internal Revenue Code.
   (20) Add an amount equal to any income not included in gross
   income as a result of the deferral of income arising from business
   indebtedness discharged in connection with the reacquisition after
   December 31, 2008, and before January 1, 2011, of an applicable
   debt instrument, as provided in Section 108(i) of the Internal
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   Revenue Code. Subtract the amount necessary from the adjusted
   gross income of any taxpayer that added an amount to adjusted
   gross income in a previous year to offset the amount included in
   federal gross income as a result of the deferral of income arising
   from business indebtedness discharged in connection with the
   reacquisition after December 31, 2008, and before January 1,
   2011, of an applicable debt instrument, as provided in Section
   108(i) of the Internal Revenue Code.
   (21) Add the amount excluded from federal gross income under
   Section 103 of the Internal Revenue Code for interest received on
   an obligation of a state other than Indiana, or a political
   subdivision of such a state, that is acquired by the taxpayer after
   December 31, 2011. For purposes of this subdivision:
       (A) if the taxpayer receives interest from a pass through entity,
       a regulated investment company, a hedge fund, or similar
       arrangement, the taxpayer will be considered to have acquired
       the obligation on the date the entity acquired the obligation;
       (B) if ownership of the obligation occurs by means other than
       a purchase, the date of acquisition of the obligation shall be
       the date ownership of the obligation was transferred, except to
       the extent provided in clause (A), and if a portion of the
       obligation is acquired on multiple dates, the date of acquisition
       shall be considered separately for each portion of the
       obligation; and
       (C) if ownership of the obligation occurred as the result of a
       refinancing of another obligation, the acquisition date shall be
       the date on which the obligation was refinanced.
   (22) Subtract an amount as described in Section 1341(a)(2) of the
   Internal Revenue Code to the extent, if any, that the amount was
   previously included in the taxpayer's adjusted gross income for a
   prior taxable year.
   (23) For taxable years beginning after December 25, 2016, add an
   amount equal to the deduction for deferred foreign income that
   was claimed by the taxpayer for the taxable year under Section
   965(c) of the Internal Revenue Code.
   (24) Subtract any interest expense paid or accrued in the current
   taxable year but not deducted as a result of the limitation imposed
   under Section 163(j)(1) of the Internal Revenue Code. Add any
   interest expense paid or accrued in a previous taxable year but
   allowed as a deduction under Section 163 of the Internal Revenue
   Code in the current taxable year. For purposes of this subdivision,
   an interest expense is considered paid or accrued only in the first
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   taxable year the deduction would have been allowable under
   Section 163 of the Internal Revenue Code if the limitation under
   Section 163(j)(1) of the Internal Revenue Code did not exist.
   (25) Subtract the amount that would have been excluded from
   gross income but for the enactment of Section 118(b)(2) of the
   Internal Revenue Code for taxable years ending after December
   22, 2017.
   (26) For taxable years beginning after December 31, 2019, and
   before January 1, 2021, add an amount of the deduction claimed
   under Section 62(a)(22) of the Internal Revenue Code.
   (27) For taxable years beginning after December 31, 2019, for
   payments made by an employer under an education assistance
   program after March 27, 2020:
      (A) add the amount of payments by an employer that are
      excluded from the taxpayer's federal gross income under
      Section 127(c)(1)(B) of the Internal Revenue Code; and
      (B) deduct the interest allowable under Section 221 of the
      Internal Revenue Code, if the disallowance under Section
      221(e)(1) of the Internal Revenue Code did not apply to the
      payments described in clause (A). For purposes of applying
      Section 221(b) of the Internal Revenue Code to the amount
      allowable under this clause, the amount under clause (A) shall
      not be added to adjusted gross income.
   (28) Add an amount equal to the remainder of:
      (A) the amount allowable as a deduction under Section 274(n)
      of the Internal Revenue Code; minus
      (B) the amount otherwise allowable as a deduction under
      Section 274(n) of the Internal Revenue Code, if Section
      274(n)(2)(D) of the Internal Revenue Code was not in effect
      for amounts paid or incurred after December 31, 2020.
   (29) For taxable years beginning after December 31, 2017, and
   before January 1, 2021, add an amount equal to the excess
   business loss of the taxpayer as defined in Section 461(l)(3) of the
   Internal Revenue Code. In addition:
      (A) If a taxpayer has an excess business loss under this
      subdivision and also has modifications under subdivisions (15)
      and (17) for property placed in service during the taxable year,
      the taxpayer shall treat a portion of the taxable year
      modifications for that property as occurring in the taxable year
      the property is placed in service and a portion of the
      modifications as occurring in the immediately following
      taxable year.
SEA 243 — Concur
                               14
      (B) The portion of the modifications under subdivisions (15)
      and (17) for property placed in service during the taxable year
      treated as occurring in the taxable year in which the property
      is placed in service equals:
         (i) the modification for the property otherwise determined
         under this section; minus
         (ii) the excess business loss disallowed under this
         subdivision;
      but not less than zero (0).
      (C) The portion of the modifications under subdivisions (15)
      and (17) for property placed in service during the taxable year
      treated as occurring in the taxable year immediately following
      the taxable year in which the property is placed in service
      equals the modification for the property otherwise determined
      under this section minus the amount in clause (B).
      (D) Any reallocation of modifications between taxable years
      under clauses (B) and (C) shall be first allocated to the
      modification under subdivision (15), then to the modification
      under subdivision (17).
   (30) Add For taxable years ending after December 31, 2020,
   and before January 1, 2026, add an amount equal to the amount
   excluded from federal gross income under Section 108(f)(5) of
   the Internal Revenue Code. For purposes of this subdivision:
      (A) if an amount excluded under Section 108(f)(5) of the
      Internal Revenue Code would be excludible under Section
      108(a)(1)(B) of the Internal Revenue Code, the exclusion
      under Section 108(a)(1)(B) of the Internal Revenue Code shall
      take precedence; and
      (B) if an amount would have been excludible under Section
      108(f)(5) of the Internal Revenue Code as in effect on January
      1, 2020, the amount is not required to be added back under this
      subdivision.
   (31) For taxable years ending after March 12, 2020, subtract an
   amount equal to the deduction disallowed pursuant to:
      (A) Section 2301(e) of the CARES Act (Public Law 116-136),
      as modified by Sections 206 and 207 of the Taxpayer Certainty
      and Disaster Relief Tax Act (Division EE of Public Law
      116-260); and
      (B) Section 3134(e) of the Internal Revenue Code.
   (32) Subtract the amount of an ESA annual grant amount and, as
   applicable, a CSA annual grant amount distributed to a taxpayer's
   Indiana education scholarship account under IC 20-51.4 that is
SEA 243 — Concur
                                   15
      used for an ESA or CSA qualified expense (as defined in
      IC 20-51.4-2) to the extent the distribution used for the qualified
      expense is included in the taxpayer's federal adjusted gross
      income under the Internal Revenue Code.
      (33) For taxable years beginning after December 31, 2019, and
      before January 1, 2021, add an amount equal to the amount of
      unemployment compensation excluded from federal gross income
      under Section 85(c) of the Internal Revenue Code.
      (34) For taxable years beginning after December 31, 2022,
      subtract an amount equal to the deduction disallowed under
      Section 280C(h) of the Internal Revenue Code.
      (35) For taxable years beginning after December 31, 2021, add or
      subtract amounts related to specified research or experimental
      procedures expenditures as required under IC 6-3-2-29.
      (36) Subtract any other amounts the taxpayer is entitled to deduct
      under IC 6-3-2.
      (37) Subtract the amount of a CSA annual grant amount
      distributed to a taxpayer's career scholarship account under
      IC 20-51.4-4.5 that is used for a CSA qualified expense (as
      defined in IC 20-51.4-2-3.8), to the extent the distribution used
      for the CSA qualified expense is included in the taxpayer's federal
      adjusted gross income under the Internal Revenue Code.
      (38) Add or subtract an amount equal to the modifications
      required for qualified production property under IC 6-3-2-30.
    (b) In the case of corporations, the same as "taxable income" (as
defined in Section 63 of the Internal Revenue Code) adjusted as
follows:
      (1) Subtract income that is exempt from taxation under this article
      by the Constitution and statutes of the United States.
      (2) Add an amount equal to any deduction or deductions allowed
      or allowable pursuant to Section 170 of the Internal Revenue
      Code (concerning charitable contributions).
      (3) Except as provided in subsection (c), add an amount equal to
      any deduction or deductions allowed or allowable pursuant to
      Section 63 of the Internal Revenue Code for taxes based on or
      measured by income and levied at the state level by any state of
      the United States.
      (4) Subtract an amount equal to the amount included in the
      corporation's taxable income under Section 78 of the Internal
      Revenue Code (concerning foreign tax credits).
      (5) Add or subtract the amount necessary to make the adjusted
      gross income of any taxpayer that owns property for which bonus
SEA 243 — Concur
                                 16
   depreciation was allowed in the current taxable year or in an
   earlier taxable year equal to the amount of adjusted gross income
   that would have been computed had an election not been made
   under Section 168(k) of the Internal Revenue Code to not apply
   bonus depreciation to the property in the year that it was placed
   in service.
   (6) Add an amount equal to any deduction allowed under Section
   172 of the Internal Revenue Code (concerning net operating
   losses).
   (7) Add or subtract the amount necessary to make the adjusted
   gross income of any taxpayer that placed Section 179 property (as
   defined in Section 179 of the Internal Revenue Code) in service
   in the current taxable year or in an earlier taxable year equal to
   the amount of adjusted gross income that would have been
   computed had an election for federal income tax purposes not
   been made for the year in which the property was placed in
   service to take deductions under Section 179 of the Internal
   Revenue Code in a total amount exceeding the sum of:
       (A) twenty-five thousand dollars ($25,000) to the extent
       deductions under Section 179 of the Internal Revenue Code
       were not elected as provided in clause (B); and
       (B) for taxable years beginning after December 31, 2017, the
       deductions elected under Section 179 of the Internal Revenue
       Code on property acquired in an exchange if:
         (i) the exchange would have been eligible for
         nonrecognition of gain or loss under Section 1031 of the
         Internal Revenue Code in effect on January 1, 2017;
         (ii) the exchange is not eligible for nonrecognition of gain or
         loss under Section 1031 of the Internal Revenue Code; and
         (iii) the taxpayer made an election to take deductions under
         Section 179 of the Internal Revenue Code with regard to the
         acquired property in the year that the property was placed
         into service.
       The amount of deductions allowable for an item of property
       under this clause may not exceed the amount of adjusted gross
       income realized on the property that would have been deferred
       under the Internal Revenue Code in effect on January 1, 2017.
   (8) Add to the extent required by IC 6-3-2-20:
       (A) the amount of intangible expenses (as defined in
       IC 6-3-2-20) for the taxable year that reduced the corporation's
       taxable income (as defined in Section 63 of the Internal
       Revenue Code) for federal income tax purposes; and
SEA 243 — Concur
                                 17
       (B) any directly related interest expenses (as defined in
       IC 6-3-2-20) that reduced the corporation's adjusted gross
       income (determined without regard to this subdivision). For
       purposes of this clause, any directly related interest expense
       that constitutes business interest within the meaning of Section
       163(j) of the Internal Revenue Code shall be considered to
       have reduced the taxpayer's federal taxable income only in the
       first taxable year in which the deduction otherwise would have
       been allowable under Section 163 of the Internal Revenue
       Code if the limitation under Section 163(j)(1) of the Internal
       Revenue Code did not exist.
   (9) Add an amount equal to any deduction for dividends paid (as
   defined in Section 561 of the Internal Revenue Code) to
   shareholders of a captive real estate investment trust (as defined
   in section 34.5 of this chapter).
   (10) Subtract income that is:
       (A) exempt from taxation under IC 6-3-2-21.7 (certain income
       derived from patents); and
       (B) included in the corporation's taxable income under the
       Internal Revenue Code.
   (11) Add an amount equal to any income not included in gross
   income as a result of the deferral of income arising from business
   indebtedness discharged in connection with the reacquisition after
   December 31, 2008, and before January 1, 2011, of an applicable
   debt instrument, as provided in Section 108(i) of the Internal
   Revenue Code. Subtract from the adjusted gross income of any
   taxpayer that added an amount to adjusted gross income in a
   previous year the amount necessary to offset the amount included
   in federal gross income as a result of the deferral of income
   arising from business indebtedness discharged in connection with
   the reacquisition after December 31, 2008, and before January 1,
   2011, of an applicable debt instrument, as provided in Section
   108(i) of the Internal Revenue Code.
   (12) Add the amount excluded from federal gross income under
   Section 103 of the Internal Revenue Code for interest received on
   an obligation of a state other than Indiana, or a political
   subdivision of such a state, that is acquired by the taxpayer after
   December 31, 2011. For purposes of this subdivision:
       (A) if the taxpayer receives interest from a pass through entity,
       a regulated investment company, a hedge fund, or similar
       arrangement, the taxpayer will be considered to have acquired
       the obligation on the date the entity acquired the obligation;
SEA 243 — Concur
                                 18
       (B) if ownership of the obligation occurs by means other than
       a purchase, the date of acquisition of the obligation shall be
       the date ownership of the obligation was transferred, except to
       the extent provided in clause (A), and if a portion of the
       obligation is acquired on multiple dates, the date of acquisition
       shall be considered separately for each portion of the
       obligation; and
       (C) if ownership of the obligation occurred as the result of a
       refinancing of another obligation, the acquisition date shall be
       the date on which the obligation was refinanced.
   (13) For taxable years beginning after December 25, 2016:
       (A) for a corporation other than a real estate investment trust,
       add:
         (i) an amount equal to the amount reported by the taxpayer
         on IRC 965 Transition Tax Statement, line 1; or
         (ii) if the taxpayer deducted an amount under Section 965(c)
         of the Internal Revenue Code in determining the taxpayer's
         taxable income for purposes of the federal income tax, the
         amount deducted under Section 965(c) of the Internal
         Revenue Code; and
       (B) for a real estate investment trust, add an amount equal to
       the deduction for deferred foreign income that was claimed by
       the taxpayer for the taxable year under Section 965(c) of the
       Internal Revenue Code, but only to the extent that the taxpayer
       included income pursuant to Section 965 of the Internal
       Revenue Code in its taxable income for federal income tax
       purposes or is required to add back dividends paid under
       subdivision (9).
   (14) Add an amount equal to the deduction that was claimed by
   the taxpayer for the taxable year under Section 250(a)(1)(B) of the
   Internal Revenue Code (attributable to global intangible
   low-taxed income). net CFC tested income). The taxpayer shall
   separately specify the amount of the reduction under Section
   250(a)(1)(B)(i) of the Internal Revenue Code and under Section
   250(a)(1)(B)(ii) of the Internal Revenue Code.
   (15) Subtract any interest expense paid or accrued in the current
   taxable year but not deducted as a result of the limitation imposed
   under Section 163(j)(1) of the Internal Revenue Code. Add any
   interest expense paid or accrued in a previous taxable year but
   allowed as a deduction under Section 163 of the Internal Revenue
   Code in the current taxable year. For purposes of this subdivision,
   an interest expense is considered paid or accrued only in the first
SEA 243 — Concur
                                  19
     taxable year the deduction would have been allowable under
     Section 163 of the Internal Revenue Code if the limitation under
     Section 163(j)(1) of the Internal Revenue Code did not exist.
     (16) Subtract the amount that would have been excluded from
     gross income but for the enactment of Section 118(b)(2) of the
     Internal Revenue Code for taxable years ending after December
     22, 2017.
     (17) Add an amount equal to the remainder of:
        (A) the amount allowable as a deduction under Section 274(n)
        of the Internal Revenue Code; minus
        (B) the amount otherwise allowable as a deduction under
        Section 274(n) of the Internal Revenue Code, if Section
        274(n)(2)(D) of the Internal Revenue Code was not in effect
        for amounts paid or incurred after December 31, 2020.
     (18) For taxable years ending after March 12, 2020, subtract an
     amount equal to the deduction disallowed pursuant to:
        (A) Section 2301(e) of the CARES Act (Public Law 116-136),
        as modified by Sections 206 and 207 of the Taxpayer Certainty
        and Disaster Relief Tax Act (Division EE of Public Law
        116-260); and
        (B) Section 3134(e) of the Internal Revenue Code.
     (19) For taxable years beginning after December 31, 2022,
     subtract an amount equal to the deduction disallowed under
     Section 280C(h) of the Internal Revenue Code.
     (20) For taxable years beginning after December 31, 2021,
     subtract the amount of any:
        (A) federal, state, or local grant received by the taxpayer; and
        (B) discharged federal, state, or local indebtedness incurred by
        the taxpayer;
     for purposes of providing or expanding access to broadband
     service in this state.
     (21) For taxable years beginning after December 31, 2021, add or
     subtract amounts related to specified research or experimental
     procedures expenditures as required under IC 6-3-2-29.
     (22) Add or subtract an amount equal to the modifications
     required for qualified production property under IC 6-3-2-30.
     (22) (23) Add or subtract any other amounts the taxpayer is:
        (A) required to add or subtract; or
        (B) entitled to deduct;
     under IC 6-3-2.
   (c) The following apply to taxable years beginning after December
31, 2018, for purposes of the add back of any deduction allowed on the
SEA 243 — Concur
                                   20
taxpayer's federal income tax return for wagering taxes, as provided in
subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
the taxpayer is a corporation:
      (1) For taxable years beginning after December 31, 2018, and
      before January 1, 2020, a taxpayer is required to add back under
      this section eighty-seven and five-tenths percent (87.5%) of any
      deduction allowed on the taxpayer's federal income tax return for
      wagering taxes.
      (2) For taxable years beginning after December 31, 2019, and
      before January 1, 2021, a taxpayer is required to add back under
      this section seventy-five percent (75%) of any deduction allowed
      on the taxpayer's federal income tax return for wagering taxes.
      (3) For taxable years beginning after December 31, 2020, and
      before January 1, 2022, a taxpayer is required to add back under
      this section sixty-two and five-tenths percent (62.5%) of any
      deduction allowed on the taxpayer's federal income tax return for
      wagering taxes.
      (4) For taxable years beginning after December 31, 2021, and
      before January 1, 2023, a taxpayer is required to add back under
      this section fifty percent (50%) of any deduction allowed on the
      taxpayer's federal income tax return for wagering taxes.
      (5) For taxable years beginning after December 31, 2022, and
      before January 1, 2024, a taxpayer is required to add back under
      this section thirty-seven and five-tenths percent (37.5%) of any
      deduction allowed on the taxpayer's federal income tax return for
      wagering taxes.
      (6) For taxable years beginning after December 31, 2023, and
      before January 1, 2025, a taxpayer is required to add back under
      this section twenty-five percent (25%) of any deduction allowed
      on the taxpayer's federal income tax return for wagering taxes.
      (7) For taxable years beginning after December 31, 2024, and
      before January 1, 2026, a taxpayer is required to add back under
      this section twelve and five-tenths percent (12.5%) of any
      deduction allowed on the taxpayer's federal income tax return for
      wagering taxes.
      (8) For taxable years beginning after December 31, 2025, a
      taxpayer is not required to add back under this section any amount
      of a deduction allowed on the taxpayer's federal income tax return
      for wagering taxes.
   (d) In the case of life insurance companies (as defined in Section
816(a) of the Internal Revenue Code) that are organized under Indiana
law, the same as "life insurance company taxable income" (as defined
SEA 243 — Concur
                                  21
in Section 801 of the Internal Revenue Code), adjusted as follows:
     (1) Subtract income that is exempt from taxation under this article
     by the Constitution and statutes of the United States.
     (2) Add an amount equal to any deduction allowed or allowable
     under Section 170 of the Internal Revenue Code (concerning
     charitable contributions).
     (3) Add an amount equal to a deduction allowed or allowable
     under Section 805 or Section 832(c) of the Internal Revenue Code
     for taxes based on or measured by income and levied at the state
     level by any state.
     (4) Subtract an amount equal to the amount included in the
     company's taxable income under Section 78 of the Internal
     Revenue Code (concerning foreign tax credits).
     (5) Add or subtract the amount necessary to make the adjusted
     gross income of any taxpayer that owns property for which bonus
     depreciation was allowed in the current taxable year or in an
     earlier taxable year equal to the amount of adjusted gross income
     that would have been computed had an election not been made
     under Section 168(k) of the Internal Revenue Code to not apply
     bonus depreciation to the property in the year that it was placed
     in service.
     (6) Add an amount equal to any deduction allowed under Section
     172 of the Internal Revenue Code (concerning net operating
     losses).
     (7) Add or subtract the amount necessary to make the adjusted
     gross income of any taxpayer that placed Section 179 property (as
     defined in Section 179 of the Internal Revenue Code) in service
     in the current taxable year or in an earlier taxable year equal to
     the amount of adjusted gross income that would have been
     computed had an election for federal income tax purposes not
     been made for the year in which the property was placed in
     service to take deductions under Section 179 of the Internal
     Revenue Code in a total amount exceeding the sum of:
         (A) twenty-five thousand dollars ($25,000) to the extent
         deductions under Section 179 of the Internal Revenue Code
         were not elected as provided in clause (B); and
         (B) for taxable years beginning after December 31, 2017, the
         deductions elected under Section 179 of the Internal Revenue
         Code on property acquired in an exchange if:
           (i) the exchange would have been eligible for
           nonrecognition of gain or loss under Section 1031 of the
           Internal Revenue Code in effect on January 1, 2017;
SEA 243 — Concur
                                 22
         (ii) the exchange is not eligible for nonrecognition of gain or
         loss under Section 1031 of the Internal Revenue Code; and
         (iii) the taxpayer made an election to take deductions under
         Section 179 of the Internal Revenue Code with regard to the
         acquired property in the year that the property was placed
         into service.
       The amount of deductions allowable for an item of property
       under this clause may not exceed the amount of adjusted gross
       income realized on the property that would have been deferred
       under the Internal Revenue Code in effect on January 1, 2017.
   (8) Subtract income that is:
       (A) exempt from taxation under IC 6-3-2-21.7 (certain income
       derived from patents); and
       (B) included in the insurance company's taxable income under
       the Internal Revenue Code.
   (9) Add an amount equal to any income not included in gross
   income as a result of the deferral of income arising from business
   indebtedness discharged in connection with the reacquisition after
   December 31, 2008, and before January 1, 2011, of an applicable
   debt instrument, as provided in Section 108(i) of the Internal
   Revenue Code. Subtract from the adjusted gross income of any
   taxpayer that added an amount to adjusted gross income in a
   previous year the amount necessary to offset the amount included
   in federal gross income as a result of the deferral of income
   arising from business indebtedness discharged in connection with
   the reacquisition after December 31, 2008, and before January 1,
   2011, of an applicable debt instrument, as provided in Section
   108(i) of the Internal Revenue Code.
   (10) Add an amount equal to any exempt insurance income under
   Section 953(e) of the Internal Revenue Code that is active
   financing income under Subpart F of Subtitle A, Chapter 1,
   Subchapter N of the Internal Revenue Code.
   (11) Add the amount excluded from federal gross income under
   Section 103 of the Internal Revenue Code for interest received on
   an obligation of a state other than Indiana, or a political
   subdivision of such a state, that is acquired by the taxpayer after
   December 31, 2011. For purposes of this subdivision:
       (A) if the taxpayer receives interest from a pass through entity,
       a regulated investment company, a hedge fund, or similar
       arrangement, the taxpayer will be considered to have acquired
       the obligation on the date the entity acquired the obligation;
       (B) if ownership of the obligation occurs by means other than
SEA 243 — Concur
                                 23
       a purchase, the date of acquisition of the obligation shall be
       the date ownership of the obligation was transferred, except to
       the extent provided in clause (A), and if a portion of the
       obligation is acquired on multiple dates, the date of acquisition
       shall be considered separately for each portion of the
       obligation; and
       (C) if ownership of the obligation occurred as the result of a
       refinancing of another obligation, the acquisition date shall be
       the date on which the obligation was refinanced.
   (12) For taxable years beginning after December 25, 2016, add:
       (A) an amount equal to the amount reported by the taxpayer on
       IRC 965 Transition Tax Statement, line 1; or
       (B) if the taxpayer deducted an amount under Section 965(c)
       of the Internal Revenue Code in determining the taxpayer's
       taxable income for purposes of the federal income tax, the
       amount deducted under Section 965(c) of the Internal Revenue
       Code.
   (13) Add an amount equal to the deduction that was claimed by
   the taxpayer for the taxable year under Section 250(a)(1)(B) of the
   Internal Revenue Code (attributable to global intangible
   low-taxed income). net CFC tested income). The taxpayer shall
   separately specify the amount of the reduction under Section
   250(a)(1)(B)(i) of the Internal Revenue Code and under Section
   250(a)(1)(B)(ii) of the Internal Revenue Code.
   (14) Subtract any interest expense paid or accrued in the current
   taxable year but not deducted as a result of the limitation imposed
   under Section 163(j)(1) of the Internal Revenue Code. Add any
   interest expense paid or accrued in a previous taxable year but
   allowed as a deduction under Section 163 of the Internal Revenue
   Code in the current taxable year. For purposes of this subdivision,
   an interest expense is considered paid or accrued only in the first
   taxable year the deduction would have been allowable under
   Section 163 of the Internal Revenue Code if the limitation under
   Section 163(j)(1) of the Internal Revenue Code did not exist.
   (15) Subtract the amount that would have been excluded from
   gross income but for the enactment of Section 118(b)(2) of the
   Internal Revenue Code for taxable years ending after December
   22, 2017.
   (16) Add an amount equal to the remainder of:
       (A) the amount allowable as a deduction under Section 274(n)
       of the Internal Revenue Code; minus
       (B) the amount otherwise allowable as a deduction under
SEA 243 — Concur
                                  24
         Section 274(n) of the Internal Revenue Code, if Section
         274(n)(2)(D) of the Internal Revenue Code was not in effect
         for amounts paid or incurred after December 31, 2020.
     (17) For taxable years ending after March 12, 2020, subtract an
     amount equal to the deduction disallowed pursuant to:
         (A) Section 2301(e) of the CARES Act (Public Law 116-136),
         as modified by Sections 206 and 207 of the Taxpayer Certainty
         and Disaster Relief Tax Act (Division EE of Public Law
         116-260); and
         (B) Section 3134(e) of the Internal Revenue Code.
     (18) For taxable years beginning after December 31, 2022,
     subtract an amount equal to the deduction disallowed under
     Section 280C(h) of the Internal Revenue Code.
     (19) For taxable years beginning after December 31, 2021, add or
     subtract amounts related to specified research or experimental
     procedures expenditures as required under IC 6-3-2-29.
     (20) Add or subtract an amount equal to the modifications
     required for qualified production property under IC 6-3-2-30.
     (20) (21) Add or subtract any other amounts the taxpayer is:
         (A) required to add or subtract; or
         (B) entitled to deduct;
     under IC 6-3-2.
   (e) In the case of insurance companies subject to tax under Section
831 of the Internal Revenue Code and organized under Indiana law, the
same as "taxable income" (as defined in Section 832 of the Internal
Revenue Code), adjusted as follows:
     (1) Subtract income that is exempt from taxation under this article
     by the Constitution and statutes of the United States.
     (2) Add an amount equal to any deduction allowed or allowable
     under Section 170 of the Internal Revenue Code (concerning
     charitable contributions).
     (3) Add an amount equal to a deduction allowed or allowable
     under Section 805 or Section 832(c) of the Internal Revenue Code
     for taxes based on or measured by income and levied at the state
     level by any state.
     (4) Subtract an amount equal to the amount included in the
     company's taxable income under Section 78 of the Internal
     Revenue Code (concerning foreign tax credits).
     (5) Add or subtract the amount necessary to make the adjusted
     gross income of any taxpayer that owns property for which bonus
     depreciation was allowed in the current taxable year or in an
     earlier taxable year equal to the amount of adjusted gross income
SEA 243 — Concur
                                 25
   that would have been computed had an election not been made
   under Section 168(k) of the Internal Revenue Code to not apply
   bonus depreciation to the property in the year that it was placed
   in service.
   (6) Add an amount equal to any deduction allowed under Section
   172 of the Internal Revenue Code (concerning net operating
   losses).
   (7) Add or subtract the amount necessary to make the adjusted
   gross income of any taxpayer that placed Section 179 property (as
   defined in Section 179 of the Internal Revenue Code) in service
   in the current taxable year or in an earlier taxable year equal to
   the amount of adjusted gross income that would have been
   computed had an election for federal income tax purposes not
   been made for the year in which the property was placed in
   service to take deductions under Section 179 of the Internal
   Revenue Code in a total amount exceeding the sum of:
       (A) twenty-five thousand dollars ($25,000) to the extent
       deductions under Section 179 of the Internal Revenue Code
       were not elected as provided in clause (B); and
       (B) for taxable years beginning after December 31, 2017, the
       deductions elected under Section 179 of the Internal Revenue
       Code on property acquired in an exchange if:
         (i) the exchange would have been eligible for
         nonrecognition of gain or loss under Section 1031 of the
         Internal Revenue Code in effect on January 1, 2017;
         (ii) the exchange is not eligible for nonrecognition of gain or
         loss under Section 1031 of the Internal Revenue Code; and
         (iii) the taxpayer made an election to take deductions under
         Section 179 of the Internal Revenue Code with regard to the
         acquired property in the year that the property was placed
         into service.
       The amount of deductions allowable for an item of property
       under this clause may not exceed the amount of adjusted gross
       income realized on the property that would have been deferred
       under the Internal Revenue Code in effect on January 1, 2017.
   (8) Subtract income that is:
       (A) exempt from taxation under IC 6-3-2-21.7 (certain income
       derived from patents); and
       (B) included in the insurance company's taxable income under
       the Internal Revenue Code.
   (9) Add an amount equal to any income not included in gross
   income as a result of the deferral of income arising from business
SEA 243 — Concur
                                 26
   indebtedness discharged in connection with the reacquisition after
   December 31, 2008, and before January 1, 2011, of an applicable
   debt instrument, as provided in Section 108(i) of the Internal
   Revenue Code. Subtract from the adjusted gross income of any
   taxpayer that added an amount to adjusted gross income in a
   previous year the amount necessary to offset the amount included
   in federal gross income as a result of the deferral of income
   arising from business indebtedness discharged in connection with
   the reacquisition after December 31, 2008, and before January 1,
   2011, of an applicable debt instrument, as provided in Section
   108(i) of the Internal Revenue Code.
   (10) Add an amount equal to any exempt insurance income under
   Section 953(e) of the Internal Revenue Code that is active
   financing income under Subpart F of Subtitle A, Chapter 1,
   Subchapter N of the Internal Revenue Code.
   (11) Add the amount excluded from federal gross income under
   Section 103 of the Internal Revenue Code for interest received on
   an obligation of a state other than Indiana, or a political
   subdivision of such a state, that is acquired by the taxpayer after
   December 31, 2011. For purposes of this subdivision:
       (A) if the taxpayer receives interest from a pass through entity,
       a regulated investment company, a hedge fund, or similar
       arrangement, the taxpayer will be considered to have acquired
       the obligation on the date the entity acquired the obligation;
       (B) if ownership of the obligation occurs by means other than
       a purchase, the date of acquisition of the obligation shall be
       the date ownership of the obligation was transferred, except to
       the extent provided in clause (A), and if a portion of the
       obligation is acquired on multiple dates, the date of acquisition
       shall be considered separately for each portion of the
       obligation; and
       (C) if ownership of the obligation occurred as the result of a
       refinancing of another obligation, the acquisition date shall be
       the date on which the obligation was refinanced.
   (12) For taxable years beginning after December 25, 2016, add:
       (A) an amount equal to the amount reported by the taxpayer on
       IRC 965 Transition Tax Statement, line 1; or
       (B) if the taxpayer deducted an amount under Section 965(c)
       of the Internal Revenue Code in determining the taxpayer's
       taxable income for purposes of the federal income tax, the
       amount deducted under Section 965(c) of the Internal Revenue
       Code.
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   (13) Add an amount equal to the deduction that was claimed by
   the taxpayer for the taxable year under Section 250(a)(1)(B) of the
   Internal Revenue Code (attributable to global intangible
   low-taxed income). net CFC tested income). The taxpayer shall
   separately specify the amount of the reduction under Section
   250(a)(1)(B)(i) of the Internal Revenue Code and under Section
   250(a)(1)(B)(ii) of the Internal Revenue Code.
   (14) Subtract any interest expense paid or accrued in the current
   taxable year but not deducted as a result of the limitation imposed
   under Section 163(j)(1) of the Internal Revenue Code. Add any
   interest expense paid or accrued in a previous taxable year but
   allowed as a deduction under Section 163 of the Internal Revenue
   Code in the current taxable year. For purposes of this subdivision,
   an interest expense is considered paid or accrued only in the first
   taxable year the deduction would have been allowable under
   Section 163 of the Internal Revenue Code if the limitation under
   Section 163(j)(1) of the Internal Revenue Code did not exist.
   (15) Subtract the amount that would have been excluded from
   gross income but for the enactment of Section 118(b)(2) of the
   Internal Revenue Code for taxable years ending after December
   22, 2017.
   (16) Add an amount equal to the remainder of:
       (A) the amount allowable as a deduction under Section 274(n)
       of the Internal Revenue Code; minus
       (B) the amount otherwise allowable as a deduction under
       Section 274(n) of the Internal Revenue Code, if Section
       274(n)(2)(D) of the Internal Revenue Code was not in effect
       for amounts paid or incurred after December 31, 2020.
   (17) For taxable years ending after March 12, 2020, subtract an
   amount equal to the deduction disallowed pursuant to:
       (A) Section 2301(e) of the CARES Act (Public Law 116-136),
       as modified by Sections 206 and 207 of the Taxpayer Certainty
       and Disaster Relief Tax Act (Division EE of Public Law
       116-260); and
       (B) Section 3134(e) of the Internal Revenue Code.
   (18) For taxable years beginning after December 31, 2022,
   subtract an amount equal to the deduction disallowed under
   Section 280C(h) of the Internal Revenue Code.
   (19) For taxable years beginning after December 31, 2021, add or
   subtract amounts related to specified research or experimental
   procedures expenditures as required under IC 6-3-2-29.
   (20) Add or subtract an amount equal to the modifications
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                                     28
      required for qualified production property under IC 6-3-2-30.
      (20) (21) Add or subtract any other amounts the taxpayer is:
          (A) required to add or subtract; or
          (B) entitled to deduct;
      under IC 6-3-2.
   (f) In the case of trusts and estates, "taxable income" (as defined for
trusts and estates in Section 641(b) of the Internal Revenue Code)
adjusted as follows:
      (1) Subtract income that is exempt from taxation under this article
      by the Constitution and statutes of the United States.
      (2) Subtract an amount equal to the amount of a September 11
      terrorist attack settlement payment included in the federal
      adjusted gross income of the estate of a victim of the September
      11 terrorist attack or a trust to the extent the trust benefits a victim
      of the September 11 terrorist attack.
      (3) Add or subtract the amount necessary to make the adjusted
      gross income of any taxpayer that owns property for which bonus
      depreciation was allowed in the current taxable year or in an
      earlier taxable year equal to the amount of adjusted gross income
      that would have been computed had an election not been made
      under Section 168(k) of the Internal Revenue Code to not apply
      bonus depreciation to the property in the year that it was placed
      in service.
      (4) Add an amount equal to any deduction allowed under Section
      172 of the Internal Revenue Code (concerning net operating
      losses).
      (5) Add or subtract the amount necessary to make the adjusted
      gross income of any taxpayer that placed Section 179 property (as
      defined in Section 179 of the Internal Revenue Code) in service
      in the current taxable year or in an earlier taxable year equal to
      the amount of adjusted gross income that would have been
      computed had an election for federal income tax purposes not
      been made for the year in which the property was placed in
      service to take deductions under Section 179 of the Internal
      Revenue Code in a total amount exceeding the sum of:
          (A) twenty-five thousand dollars ($25,000) to the extent
          deductions under Section 179 of the Internal Revenue Code
          were not elected as provided in clause (B); and
          (B) for taxable years beginning after December 31, 2017, the
          deductions elected under Section 179 of the Internal Revenue
          Code on property acquired in an exchange if:
            (i) the exchange would have been eligible for
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         nonrecognition of gain or loss under Section 1031 of the
         Internal Revenue Code in effect on January 1, 2017;
         (ii) the exchange is not eligible for nonrecognition of gain or
         loss under Section 1031 of the Internal Revenue Code; and
         (iii) the taxpayer made an election to take deductions under
         Section 179 of the Internal Revenue Code with regard to the
         acquired property in the year that the property was placed
         into service.
       The amount of deductions allowable for an item of property
       under this clause may not exceed the amount of adjusted gross
       income realized on the property that would have been deferred
       under the Internal Revenue Code in effect on January 1, 2017.
   (6) Subtract income that is:
       (A) exempt from taxation under IC 6-3-2-21.7 (certain income
       derived from patents); and
       (B) included in the taxpayer's taxable income under the
       Internal Revenue Code.
   (7) Add an amount equal to any income not included in gross
   income as a result of the deferral of income arising from business
   indebtedness discharged in connection with the reacquisition after
   December 31, 2008, and before January 1, 2011, of an applicable
   debt instrument, as provided in Section 108(i) of the Internal
   Revenue Code. Subtract from the adjusted gross income of any
   taxpayer that added an amount to adjusted gross income in a
   previous year the amount necessary to offset the amount included
   in federal gross income as a result of the deferral of income
   arising from business indebtedness discharged in connection with
   the reacquisition after December 31, 2008, and before January 1,
   2011, of an applicable debt instrument, as provided in Section
   108(i) of the Internal Revenue Code.
   (8) Add the amount excluded from federal gross income under
   Section 103 of the Internal Revenue Code for interest received on
   an obligation of a state other than Indiana, or a political
   subdivision of such a state, that is acquired by the taxpayer after
   December 31, 2011. For purposes of this subdivision:
       (A) if the taxpayer receives interest from a pass through entity,
       a regulated investment company, a hedge fund, or similar
       arrangement, the taxpayer will be considered to have acquired
       the obligation on the date the entity acquired the obligation;
       (B) if ownership of the obligation occurs by means other than
       a purchase, the date of acquisition of the obligation shall be
       the date ownership of the obligation was transferred, except to
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                                 30
       the extent provided in clause (A), and if a portion of the
       obligation is acquired on multiple dates, the date of acquisition
       shall be considered separately for each portion of the
       obligation; and
       (C) if ownership of the obligation occurred as the result of a
       refinancing of another obligation, the acquisition date shall be
       the date on which the obligation was refinanced.
   (9) For taxable years beginning after December 25, 2016, add an
   amount equal to:
       (A) the amount reported by the taxpayer on IRC 965
       Transition Tax Statement, line 1;
       (B) if the taxpayer deducted an amount under Section 965(c)
       of the Internal Revenue Code in determining the taxpayer's
       taxable income for purposes of the federal income tax, the
       amount deducted under Section 965(c) of the Internal Revenue
       Code; and
       (C) with regard to any amounts of income under Section 965
       of the Internal Revenue Code distributed by the taxpayer, the
       deduction under Section 965(c) of the Internal Revenue Code
       attributable to such distributed amounts and not reported to the
       beneficiary.
   For purposes of this article, the amount required to be added back
   under clause (B) is not considered to be distributed or
   distributable to a beneficiary of the estate or trust for purposes of
   Sections 651 and 661 of the Internal Revenue Code.
   (10) Subtract any interest expense paid or accrued in the current
   taxable year but not deducted as a result of the limitation imposed
   under Section 163(j)(1) of the Internal Revenue Code. Add any
   interest expense paid or accrued in a previous taxable year but
   allowed as a deduction under Section 163 of the Internal Revenue
   Code in the current taxable year. For purposes of this subdivision,
   an interest expense is considered paid or accrued only in the first
   taxable year the deduction would have been allowable under
   Section 163 of the Internal Revenue Code if the limitation under
   Section 163(j)(1) of the Internal Revenue Code did not exist.
   (11) Add an amount equal to the deduction for qualified business
   income that was claimed by the taxpayer for the taxable year
   under Section 199A of the Internal Revenue Code.
   (12) Subtract the amount that would have been excluded from
   gross income but for the enactment of Section 118(b)(2) of the
   Internal Revenue Code for taxable years ending after December
   22, 2017.
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   (13) Add an amount equal to the remainder of:
      (A) the amount allowable as a deduction under Section 274(n)
      of the Internal Revenue Code; minus
      (B) the amount otherwise allowable as a deduction under
      Section 274(n) of the Internal Revenue Code, if Section
      274(n)(2)(D) of the Internal Revenue Code was not in effect
      for amounts paid or incurred after December 31, 2020.
   (14) For taxable years beginning after December 31, 2017, and
   before January 1, 2021, add an amount equal to the excess
   business loss of the taxpayer as defined in Section 461(l)(3) of the
   Internal Revenue Code. In addition:
      (A) If a taxpayer has an excess business loss under this
      subdivision and also has modifications under subdivisions (3)
      and (5) for property placed in service during the taxable year,
      the taxpayer shall treat a portion of the taxable year
      modifications for that property as occurring in the taxable year
      the property is placed in service and a portion of the
      modifications as occurring in the immediately following
      taxable year.
      (B) The portion of the modifications under subdivisions (3)
      and (5) for property placed in service during the taxable year
      treated as occurring in the taxable year in which the property
      is placed in service equals:
         (i) the modification for the property otherwise determined
         under this section; minus
         (ii) the excess business loss disallowed under this
         subdivision;
      but not less than zero (0).
      (C) The portion of the modifications under subdivisions (3)
      and (5) for property placed in service during the taxable year
      treated as occurring in the taxable year immediately following
      the taxable year in which the property is placed in service
      equals the modification for the property otherwise determined
      under this section minus the amount in clause (B).
      (D) Any reallocation of modifications between taxable years
      under clauses (B) and (C) shall be first allocated to the
      modification under subdivision (3), then to the modification
      under subdivision (5).
   (15) For taxable years ending after March 12, 2020, subtract an
   amount equal to the deduction disallowed pursuant to:
      (A) Section 2301(e) of the CARES Act (Public Law 116-136),
      as modified by Sections 206 and 207 of the Taxpayer Certainty
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        and Disaster Relief Tax Act (Division EE of Public Law
        116-260); and
        (B) Section 3134(e) of the Internal Revenue Code.
     (16) For taxable years beginning after December 31, 2022,
     subtract an amount equal to the deduction disallowed under
     Section 280C(h) of the Internal Revenue Code.
     (17) Except as provided in subsection (c), for taxable years
     beginning after December 31, 2022, add an amount equal to any
     deduction or deductions allowed or allowable in determining
     taxable income under Section 641(b) of the Internal Revenue
     Code for taxes based on or measured by income and levied at the
     state level by any state of the United States.
     (18) For taxable years beginning after December 31, 2021, add or
     subtract amounts related to specified research or experimental
     procedures expenditures as required under IC 6-3-2-29.
     (19) Add or subtract an amount equal to the modifications
     required for qualified production property under IC 6-3-2-30.
     (19) (20) Add or subtract any other amounts the taxpayer is:
        (A) required to add or subtract; or
        (B) entitled to deduct;
     under IC 6-3-2.
   (g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
IC 6-3-4-15 for taxable years beginning after December 31, 2022,
"adjusted gross income" of a pass through entity means the items of
ordinary income and loss in the case of a partnership or a corporation
described in IC 6-3-2-2.8(2), or distributions subject to tax for state and
federal income tax for beneficiaries in the case of a trust or estate,
whichever is applicable, for the taxable year modified as follows:
     (1) Add the separately stated items of income and gains, or the
     equivalent items that must be considered separately by a
     beneficiary, as determined for federal purposes, attributed to the
     partners, shareholders, or beneficiaries of the pass through entity,
     determined without regard to whether the owner is permitted to
     exclude all or part of the income or gain or deduct any amount
     against the income or gain.
     (2) Subtract the separately stated items of deductions or losses or
     items that must be considered separately by beneficiaries, as
     determined for federal purposes, attributed to partners,
     shareholders, or beneficiaries of the pass through entity and that
     are deductible by an individual in determining adjusted gross
     income as defined under Section 62 of the Internal Revenue
     Code:
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                                   33
           (A) limited as if the partners, shareholders, and beneficiaries
           deducted the maximum allowable loss or deduction allowable
           for the taxable year prior to any amount deductible from the
           pass through entity; but
           (B) not considering any disallowance of deductions resulting
           from federal basis limitations for the partner, shareholder, or
           beneficiary.
       (3) Add or subtract any modifications to adjusted gross income
       that would be required both for individuals under subsection (a)
       and corporations under subsection (b) to the extent otherwise
       provided in those subsections, including amounts that are
       allowable for which such modifications are necessary to account
       for separately stated items in subdivision (1) or (2).
    (h) Subsections (a)(36), (b)(22), (b)(23), (d)(20), (d)(21), (e)(20),
(e)(21), or (f)(19) (f)(20) may not be construed to require an add back
or allow a deduction or exemption more than once for a particular add
back, deduction, or exemption.
    (i) For taxable years beginning after December 25, 2016, if:
       (1) a taxpayer is a shareholder, either directly or indirectly, in a
       corporation that is an E&P deficit foreign corporation as defined
       in Section 965(b)(3)(B) of the Internal Revenue Code, and the
       earnings and profit deficit, or a portion of the earnings and profit
       deficit, of the E&P deficit foreign corporation is permitted to
       reduce the federal adjusted gross income or federal taxable
       income of the taxpayer, the deficit, or the portion of the deficit,
       shall also reduce the amount taxable under this section to the
       extent permitted under the Internal Revenue Code, however, in no
       case shall this permit a reduction in the amount taxable under
       Section 965 of the Internal Revenue Code for purposes of this
       section to be less than zero (0); and
       (2) the Internal Revenue Service issues guidance that such an
       income or deduction is not reported directly on a federal tax
       return or is to be reported in a manner different than specified in
       this section, this section shall be construed as if federal adjusted
       gross income or federal taxable income included the income or
       deduction.
    (j) If a partner is required to include an item of income, a deduction,
or another tax attribute in the partner's adjusted gross income tax return
pursuant to IC 6-3-4.5, such item shall be considered to be includible
in the partner's federal adjusted gross income or federal taxable
income, regardless of whether such item is actually required to be
reported by the partner for federal income tax purposes. For purposes
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                                   34
of this subsection:
      (1) items for which a valid election is made under IC 6-3-4.5-6,
      IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
      in the partner's adjusted gross income or taxable income; and
      (2) items for which the partnership did not make an election under
      IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
      partnership is required to remit tax pursuant to IC 6-3-4.5-18,
      shall be included in the partner's adjusted gross income or taxable
      income.
    (k) The following apply for purposes of this section:
      (1) For purposes of subsections (b) and (f), if a taxpayer is an
      organization that has more than one (1) trade or business subject
      to the provisions of Section 512(a)(6) of the Internal Revenue
      Code, the following rules apply for taxable years beginning after
      December 31, 2017:
          (A) If a trade or business has federal unrelated business
          taxable income of zero (0) or greater for a taxable year, the
          unrelated business taxable income and modifications required
          under this section shall be combined in determining the
          adjusted gross income of the taxpayer and shall not be treated
          as being subject to the provisions of Section 512(a)(6) of the
          Internal Revenue Code if one (1) or more trades or businesses
          have negative Indiana adjusted gross income after
          adjustments.
          (B) If a trade or business has federal unrelated business
          taxable income of less than zero (0) for a taxable year, the
          taxpayer shall apply the modifications under this section for
          the taxable year against the net operating loss in the manner
          required under IC 6-3-2-2.5 and IC 6-3-2-2.6 for separately
          stated net operating losses. However, if the application of
          modifications required under IC 6-3-2-2.5 or IC 6-3-2-2.6
          results in the separately stated net operating loss for the trade
          or business being zero (0), the modifications that increase
          adjusted gross income under this section and remain after the
          calculations to adjust the separately stated net operating loss
          to zero (0) that result from the trade or business must be
          treated as modifications to which clause (A) applies for the
          taxable year.
          (C) If a trade or business otherwise described in Section
          512(a)(6) of the Internal Revenue Code incurred a net
          operating loss for a taxable year beginning after December 31,
          2017, and before January 1, 2021, and the net operating loss
SEA 243 — Concur
                                  35
       was carried back for federal tax purposes:
         (i) if the loss was carried back to a taxable year for which
         the requirements under Section 512(a)(6) of the Internal
         Revenue Code did not apply, the portion of the loss and
         modifications attributable to the loss shall be treated as
         adjusted gross income of the taxpayer for the first taxable
         year of the taxpayer beginning after December 31, 2022, and
         shall be treated as part of the adjusted gross income
         attributable to clause (A), unless, and to the extent, the loss
         and modifications were applied to adjusted gross income for
         a previous taxable year, as determined under this article; and
         (ii) if the loss was carried back to a taxable year for which
         the requirements under Section 512(a)(6) of the Internal
         Revenue Code applied, the portion of the loss and
         modifications attributable to the loss shall be treated as
         adjusted gross income of the taxpayer for the first taxable
         year of the taxpayer beginning after December 31, 2022, and
         for purposes of this clause, the inclusion of losses and
         modifications shall be in the same manner as provided in
         clause (B), unless, and to the extent, the loss and
         modifications were applied to adjusted gross income for a
         previous taxable year, as determined under this article.
       (D) Notwithstanding any provision in this subdivision, if a
       taxpayer computed its adjusted gross income for a taxable year
       beginning before January 1, 2023, based on a reasonable
       interpretation of this article, the taxpayer shall be permitted to
       compute its adjusted gross income for those taxable years
       based on that interpretation. However, a taxpayer must
       continue to report any tax attributes for taxable years
       beginning after December 31, 2022, in a manner consistent
       with its previous interpretation.
   (2) In the case of a corporation, other than a captive real estate
   investment trust, for which the adjusted gross income under this
   article is determined after a deduction for dividends paid under
   the Internal Revenue Code, the modifications required under this
   section shall be applied in ratio to the corporation's taxable
   income (as defined in Section 63 of the Internal Revenue Code)
   after deductions for dividends paid under the Internal Revenue
   Code compared to the corporation's taxable income (as defined in
   Section 63 of the Internal Revenue Code) before the deduction for
   dividends paid under the Internal Revenue Code.
   (3) In the case of a trust or estate, the trust or estate is required to
SEA 243 — Concur
                                   36
      include only the portion of the modifications not passed through
      to beneficiaries.
      (4) In the case of a taxpayer for which modifications are required
      to be applied against a separately stated net operating loss under
      IC 6-3-2-2.5 or IC 6-3-2-2.6, the modifications required under this
      section must be adjusted to reflect the required application of the
      modifications against a separately stated net operating loss, in
      order to avoid the application of a particular modification
      multiple times.
    SECTION 6. IC 6-3-1-11, AS AMENDED BY SEA 212-2026,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 11. (a) Except as
provided in subsection (e), the term "Internal Revenue Code" means
the Internal Revenue Code of 1986 of the United States as amended
and in effect on January 1, 2023. 2026.
    (b) Whenever the Internal Revenue Code is mentioned in this
article, or in another provision of the Indiana Code that cites the
definition of "Internal Revenue Code" provided in this section, the
particular provisions that are referred to, together with all the other
provisions of the Internal Revenue Code in effect on January 1, 2023,
2026, that pertain to the provisions specifically mentioned, shall be
regarded as incorporated in this article by reference and have the same
force and effect as though fully set forth in this article. To the extent
that a federal statute in the United States Code is enacted or amended
in a title other than the Internal Revenue Code on or before January 1,
2023, 2026, and affects federal adjusted gross income, federal taxable
income, federal tax credits, or other federal tax attributes, the federal
statute shall be considered to be part of the Internal Revenue Code as
amended and in effect on January 1, 2023. 2026. To the extent:
      (1) the provisions of the Internal Revenue Code apply to this
      article, regulations adopted under Section 7805(a) of the Internal
      Revenue Code, and in effect on January 1, 2023; 2026; and
      (2) a federal statute in the United States Code that is enacted or
      amended in a title other than the Internal Revenue Code on or
      before January 1, 2023, 2026, and affects federal adjusted gross
      income, federal taxable income, federal tax credits, or other
      federal tax attributes applies to this article, regulations adopted
      under the federal statute of the United States Code and in effect
      on January 1, 2023; 2026;
shall be regarded as rules adopted by the department under this article,
unless the department adopts specific rules that supersede the
regulation.
SEA 243 — Concur
                                   37
    (c) An amendment to the Internal Revenue Code made by an act
passed by Congress before January 1, 2023, 2026, other than the
federal 21st Century Cures Act (P.L. 114-255) and the federal Disaster
Tax Relief and Airport and Airway Extension Act of 2017 (P.L.
115-63), that is effective for any taxable year that began before January
1, 2023, 2026, and that affects:
      (1) individual adjusted gross income (as defined in Section 62 of
      the Internal Revenue Code);
      (2) corporate taxable income (as defined in Section 63 of the
      Internal Revenue Code);
      (3) trust and estate taxable income (as defined in Section 641(b)
      of the Internal Revenue Code);
      (4) life insurance company taxable income (as defined in Section
      801(b) of the Internal Revenue Code);
      (5) mutual insurance company taxable income (as defined in
      Section 821(b) of the Internal Revenue Code); or
      (6) taxable income (as defined in Section 832 of the Internal
      Revenue Code);
is also effective for that same taxable year for purposes of determining
adjusted gross income under section 3.5 of this chapter and
IC 6-5.5-1-2.
    (d) This subsection applies to a taxable year ending before January
1, 2013. The following provisions of the Internal Revenue Code that
were amended by the Tax Relief Act, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010 (P.L. 111-312) are
treated as though they were not amended by the Tax Relief Act,
Unemployment Insurance Reauthorization, and Job Creation Act of
2010 (P.L. 111-312):
      (1) Section 1367(a)(2) of the Internal Revenue Code pertaining to
      an adjustment of basis of the stock of shareholders.
      (2) Section 871(k)(1)(C) and 871(k)(2)(C) of the Internal
      Revenue Code pertaining the treatment of certain dividends of
      regulated investment companies.
      (3) Section 897(h)(4)(A)(ii) of the Internal Revenue Code
      pertaining to regulated investment companies qualified entity
      treatment.
      (4) Section 512(b)(13)(E)(iv) of the Internal Revenue Code
      pertaining to the modification of tax treatment of certain
      payments to controlling exempt organizations.
      (5) Section 613A(c)(6)(H)(ii) of the Internal Revenue Code
      pertaining to the limitations on percentage depletion in the case
      of oil and gas wells.
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                                   38
       (6) Section 451(i)(3) of the Internal Revenue Code pertaining to
       special rule for sales or dispositions to implement Federal Energy
       Regulatory Commission or state electric restructuring policy for
       qualified electric utilities.
       (7) Section 954(c)(6) of the Internal Revenue Code pertaining to
       the look-through treatment of payments between related
       controlled foreign corporation under foreign personal holding
       company rules.
The department shall develop forms and adopt any necessary rules
under IC 4-22-2 to implement this subsection.
    (e) Solely for purposes of the provisions specified in subsection (f),
the term "Internal Revenue Code" shall mean the Internal Revenue
Code as in effect on July 4, 2025, and any reference to January 1, 2023,
2026, in this section shall be applied as if the reference is to July 4,
2025.
    (f) The provisions to which subsection (e) is to be applied are as
follows:
       (1) Section 23 of the Internal Revenue Code.
       (2) Section 168(e)(3)(B)(vi) of the Internal Revenue Code.
       (3) Section 223(c)(2)(E) of the Internal Revenue Code.
    SECTION 7. IC 6-3-2-2.5, AS AMENDED BY P.L.194-2023,
SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 4, 2025 (RETROACTIVE)]: Sec. 2.5. (a) This section applies to
a resident person.
    (b) Resident persons are entitled to a net operating loss deduction.
The amount of the deduction taken in a taxable year may not exceed
the taxpayer's unused Indiana net operating losses carried over to that
year. A taxpayer is not entitled to carryback any net operating losses
after December 31, 2011.
    (c) An Indiana net operating loss equals the sum of the following:
       (1) Subject to subsection (j), any separately stated net operating
       loss, plus each of the following, as applicable:
          (A) In the case of an individual, any deductions allowable in
          determining the separately stated net operating loss for the
          taxable year, but not allowable in determining federal adjusted
          gross income.
          (B) In the case of a separately stated net operating loss that
          results from an excess business loss (as defined in Section
          461(l) of the Internal Revenue Code) for a taxable year
          beginning after December 31, 2022, the modifications
          required by IC 6-3-1-3.5, as set forth in subsection (d), that
          result in an increase of the taxpayer's Indiana adjusted gross
SEA 243 — Concur
                                   39
         income and that arise from federal deductions that resulted in
         the excess business loss.
         (C) In the case of a separately stated net operating loss not
         described in clause (B), the modifications required by
         IC 6-3-1-3.5, as set forth in subsection (d). For purposes of this
         clause, a modification that results in an increase to a taxpayer's
         adjusted gross income is considered an addition, and a
         modification that results in a decrease to a taxpayer's adjusted
         gross income is considered a subtraction.
     If the amount determined under this subdivision is less than zero
     (0), the amount is an Indiana net operating loss.
     (2) Subject to subsection (j), the taxpayer's preliminary federal net
     operating loss for a taxable year plus the sum of the following:
         (A) The application of certain modifications required by
         IC 6-3-1-3.5 as set forth in subsection (d). For purposes of this
         clause, a modification that results in an increase to a taxpayer's
         adjusted gross income is considered an addition, and a
         modification that results in a decrease to a taxpayer's adjusted
         gross income is considered a subtraction.
         (B) In the case of an individual, any deductions allowable in
         determining the preliminary federal net operating loss for the
         taxable year, but not allowable in determining federal adjusted
         gross income.
     If the amount determined under this subdivision is less than zero
     (0), the amount is an Indiana net operating loss. If the amount
     determined under this subdivision is equal to or greater than zero
     (0), the Indiana net operating loss under this subdivision is zero
     (0).
     (3) The excess business loss deduction disallowed under
     IC 6-3-1-3.5(a)(29) and IC 6-3-1-3.5(f)(14).
   (d) For purposes of subsection (c), the modifications that are to be
applied are those modifications required under IC 6-3-1-3.5 for the
same taxable year in which each net operating loss was incurred,
except that the modifications do not include the modifications required
under:
     (1) IC 6-3-1-3.5(a)(3);
     (2) IC 6-3-1-3.5(a)(4);
     (3) IC 6-3-1-3.5(a)(5);
     (4) IC 6-3-1-3.5(a)(36);
     (5) IC 6-3-1-3.5(f)(19); IC 6-3-1-3.5(f)(20); and
     (6) any modification required under Section 172(d) or Section
     512(b) of the Internal Revenue Code that is also required under
SEA 243 — Concur
                                    40
       IC 6-3-1-3.5 in determining Indiana adjusted gross income.
    (e) Subject to the limitations contained in subsections (g), (h), and
(i), an Indiana net operating loss carryover shall be available as a
deduction from the taxpayer's adjusted gross income (as defined in
IC 6-3-1-3.5) in the carryover year provided in subsection (f), but not
in excess of the taxpayer's adjusted gross income (as defined in
IC 6-3-1-3.5) in the carryover year determined without regard to this
section.
    (f) Carryovers shall be determined under this subsection as follows:
       (1) An Indiana net operating loss shall be an Indiana net operating
       loss carryover to each of the carryover years following the taxable
       year of the loss.
       (2) An Indiana net operating loss may not be carried over for
       more than twenty (20) taxable years after the taxable year of the
       loss.
    (g) Except as provided in subsection (h), the entire amount of the
Indiana net operating loss for any taxable year shall be carried to the
earliest of the taxable years to which (as determined under subsection
(f)) the loss may be carried. The amount of the Indiana net operating
loss remaining after the deduction is taken under this section in a
taxable year may be carried over as provided in subsection (f). The
amount of the Indiana net operating loss carried over from year to year
shall be reduced to the extent that the Indiana net operating loss
carryover is used by the taxpayer to obtain a deduction in a taxable
year, or as required by subsection (i), until the occurrence of the earlier
of the following:
       (1) The entire amount of the Indiana net operating loss has been
       used as a deduction or reduced as required by subsection (i).
       (2) The Indiana net operating loss has been carried over to each
       of the carryover years provided by subsection (f).
    (h) An Indiana net operating loss that arises after the application of
Section 512(a)(6) of the Internal Revenue Code shall be allowable
only:
       (1) in a taxable year in which the trade or business that generated
       the federal net operating loss has an adjusted gross income greater
       than zero (0) as determined under IC 6-3-1-3.5; and
       (2) against the trade's or business's adjusted gross income;
until the federal net operating loss from the trade or business has been
exhausted. When the federal net operating loss from the trade or
business has been exhausted, and subject to the limitations of this
section, any remaining Indiana net operating loss shall be allowable
against any trade or business of the taxpayer.
SEA 243 — Concur
                                   41
   (i) The following rules apply to an Indiana net operating loss:
      (1) If the taxpayer had a discharge of indebtedness that is
      excluded from gross income under Section 108(a)(1)(A), Section
      108(a)(1)(B), or Section 108(a)(1)(C) of the Internal Revenue
      Code, the Indiana net operating loss shall be reduced by the
      remainder of:
         (A) the amount of discharge of indebtedness excluded from
         federal gross income; minus
         (B) the amount of discharge of indebtedness that reduced the
         tax attributes under Section 108(b)(2)(D), Section
         108(b)(2)(E), or Section 108(b)(2)(F) of the Internal Revenue
         Code or was applied for federal tax purposes under Section
         108(b)(5) of the Internal Revenue Code.
      (2) Any reduction in an Indiana net operating loss shall be first
      applied to the Indiana net operating loss for the taxable year of the
      discharge, and then to any Indiana net operating loss carryovers.
      (3) The provisions of Section 108(d)(6) and Section 108(d)(7) of
      the Internal Revenue Code shall apply to any discharge of
      indebtedness for purposes of determining the reduction of net
      operating losses under this section.
   (j) The following apply for purposes of calculating an Indiana net
operating loss under subsection (c):
      (1) An itemized deduction shall be applied first under subsection
      (c)(1), and any amount not applied under subsection (c)(1) to
      make the net operating loss equal to zero (0) shall be applied
      under subsection (c)(2).
      (2) In the case of a modification under IC 6-3-1-3.5 required to
      modify a separately stated net operating loss or a preliminary
      federal net operating loss, the amount of the modification may not
      exceed the amount prescribed under IC 6-3-1-3.5 and must be
      applied in the following order:
         (A) Against a separately stated net operating loss under
         subsection (c)(1)(B), but only to the extent necessary to
         increase the separately stated net operating loss, after
         application of subsection (c)(1)(A) and (c)(1)(B), to an amount
         not greater than zero (0).
         (B) Against a separately stated net operating loss under
         subsection (c)(1)(C), but only to the extent necessary to
         increase the separately stated net operating loss to an amount
         not greater than zero (0).
         (C) To compute a modification to a preliminary federal net
         operating loss under subsection (c)(2).
SEA 243 — Concur
                                   42
   SECTION 8. IC 6-3-2-2.6, AS AMENDED BY P.L.194-2023,
SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 4, 2025 (RETROACTIVE)]: Sec. 2.6. (a) This section applies to
a corporation or a nonresident person.
   (b) Corporations and nonresident persons are entitled to a net
operating loss deduction. The amount of the deduction taken in a
taxable year may not exceed the taxpayer's unused Indiana net
operating losses carried over to that year. A taxpayer is not entitled to
carryback any net operating losses after December 31, 2011.
   (c) An Indiana net operating loss equals the sum of the following:
     (1) Subject to subsection (m), any separately stated net operating
     loss derived from sources within Indiana, plus each of the
     following, as applicable:
         (A) In the case of an individual, any deductions allowable in
         determining the separately stated net operating loss for the
         taxable year that are derived from sources within Indiana but
         not allowable in determining federal adjusted gross income.
         (B) In the case of a separately stated net operating loss that
         results from an excess business loss (as defined in Section
         461(l) of the Internal Revenue Code) for a taxable year
         beginning after December 31, 2022, the modifications
         required by IC 6-3-1-3.5, as set forth in subsection (d)(1), that
         result in an increase of the taxpayer's Indiana adjusted gross
         income and that arise from federal deductions that resulted in
         the excess business loss.
         (C) In the case of a separately stated net operating loss not
         described in clause (B), the modifications required by
         IC 6-3-1-3.5, as set forth in subsection (d)(1). For purposes of
         this clause, a modification that results in an increase to a
         taxpayer's adjusted gross income is considered an addition,
         and a modification that results in a decrease to a taxpayer's
         adjusted gross income is considered a subtraction.
     If the amount determined under this subdivision is less than zero
     (0), the amount is an Indiana net operating loss.
     (2) Subject to subsection (m), the taxpayer's preliminary federal
     net operating loss for a taxable year derived from sources within
     Indiana plus the sum of the following:
         (A) The application of certain modifications required by
         IC 6-3-1-3.5 as set forth in subsection (d)(1). For purposes of
         this clause, a modification that results in an increase to a
         taxpayer's adjusted gross income is considered an addition,
         and a modification that results in a decrease to a taxpayer's
SEA 243 — Concur
                                   43
          adjusted gross income is considered a subtraction.
          (B) In the case of an individual, any deductions derived from
          sources within Indiana and allowable in determining the
          preliminary federal net operating loss for the taxable year but
          not allowable in determining federal adjusted gross income.
      If the amount determined under this subdivision is less than zero
      (0), the amount is an Indiana net operating loss. If the amount
      determined under this subdivision is equal to or greater than zero
      (0), the Indiana net operating loss under this subdivision is zero
      (0).
      (3) The excess business loss deduction disallowed under
      IC 6-3-1-3.5(a)(29) and IC 6-3-1-3.5(f)(14) and incurred from
      Indiana sources.
    (d) The following provisions apply for purposes of subsection (c):
      (1) The modifications that are to be applied are those
      modifications required under IC 6-3-1-3.5 for the same taxable
      year in which each net operating loss was incurred, except that the
      modifications do not include the modifications required under:
          (A) IC 6-3-1-3.5(a)(3);
          (B) IC 6-3-1-3.5(a)(4);
          (C) IC 6-3-1-3.5(a)(5);
          (D) IC 6-3-1-3.5(a)(36);
          (E) IC 6-3-1-3.5(b)(22); IC 6-3-1-3.5(b)(23);
          (F) IC 6-3-1-3.5(d)(20); IC 6-3-1-3.5(d)(21);
          (G) IC 6-3-1-3.5(e)(20); IC 6-3-1-3.5(e)(21);
          (H) IC 6-3-1-3.5(f)(19); IC 6-3-1-3.5(f)(20); and
          (I) any modification required under Section 172(d) or Section
          512(b) of the Internal Revenue Code that is also required
          under IC 6-3-1-3.5 in determining Indiana adjusted gross
          income.
      (2) The amount of the taxpayer's net operating loss that is derived
      from sources within Indiana shall be determined in the same
      manner that the amount of the taxpayer's adjusted gross income
      derived from sources within Indiana is determined under section
      2 of this chapter for the same taxable year during which each loss
      was incurred.
    (e) Subject to the limitations contained in subsections (g) through
(l), an Indiana net operating loss carryover shall be available as a
deduction from the taxpayer's adjusted gross income derived from
sources within Indiana (as defined in section 2 of this chapter) in the
carryover year provided in subsection (f), but not in excess of the
taxpayer's adjusted gross income (as defined in IC 6-3-1-3.5) in the
SEA 243 — Concur
                                   44
carryover year determined without regard to the deduction allowable
under this section.
    (f) Carryovers shall be determined under this subsection as follows:
       (1) An Indiana net operating loss shall be an Indiana net operating
       loss carryover to each of the carryover years following the taxable
       year of the loss.
       (2) An Indiana net operating loss may not be carried over for
       more than twenty (20) taxable years after the taxable year of the
       loss.
    (g) The entire amount of the Indiana net operating loss for any
taxable year shall be carried to the earliest of the taxable years to which
(as determined under subsection (f)) the loss may be carried. The
amount of the Indiana net operating loss remaining after the deduction
is taken under this section in a taxable year may be carried over as
provided in subsection (f). The amount of the Indiana net operating loss
carried over from year to year shall be reduced to the extent that the
Indiana net operating loss carryover is used by the taxpayer to obtain
a deduction in a taxable year, or as required by subsection (i), until the
occurrence of the earlier of the following:
       (1) The entire amount of the Indiana net operating loss has been
       used as a deduction or reduced as required by subsection (i).
       (2) The Indiana net operating loss has been carried over to each
       of the carryover years provided by subsection (f).
    (h) An Indiana net operating loss deduction determined under this
section shall be allowed notwithstanding the fact that in the year the
taxpayer incurred the net operating loss the taxpayer was not subject to
the tax imposed under section 1 of this chapter because the taxpayer
was:
       (1) a life insurance company (as defined in Section 816(a) of the
       Internal Revenue Code); or
       (2) an insurance company subject to tax under Section 831 of the
       Internal Revenue Code.
    (i) Notwithstanding subsection (g), the following apply to an Indiana
net operating loss:
       (1) An Indiana net operating loss that arises after the application
       of Section 512(a)(6) of the Internal Revenue Code shall be
       allowable only:
           (A) in a taxable year in which the trade or business that
           generated the federal net operating loss has an adjusted gross
           income derived from sources within Indiana greater than zero
           (0) as determined under IC 6-3-1-3.5; and
           (B) against the trade's or business's adjusted gross income;
SEA 243 — Concur
                                    45
       until the federal net operating loss from the trade or business has
       been exhausted. When the federal net operating loss from the
       trade or business has been exhausted, and subject to the
       limitations of this section, any remaining Indiana net operating
       loss shall be allowable against any trade or business of the
       taxpayer.
       (2) In the case of a corporation described in section 2.8(2) of this
       chapter, an Indiana net operating loss deduction that is
       attributable to a preconversion year may not be greater than any
       net recognized built-in gain of the corporation as defined in
       Section 1374(d)(2) of the Internal Revenue Code derived from
       sources within Indiana.
    (j) The following rules apply to an Indiana net operating loss:
       (1) If the taxpayer had a discharge of indebtedness derived from
       Indiana sources that is excluded from gross income under Section
       108(a)(1)(A), Section 108(a)(1)(B), or Section 108(a)(1)(C) of the
       Internal Revenue Code, the Indiana net operating loss shall be
       reduced by the remainder of:
           (A) the amount of discharge of indebtedness excluded from
           federal gross income derived from Indiana sources; minus
           (B) the amount of discharge of indebtedness derived from
           Indiana sources that reduced the tax attributes under Section
           108(b)(2)(D), Section 108(b)(2)(E), or Section 108(b)(2)(F) of
           the Internal Revenue Code or was applied for federal tax
           purposes under Section 108(b)(5) of the Internal Revenue
           Code.
       (2) Any reduction in an Indiana net operating loss shall be first
       applied to the Indiana net operating loss for the taxable year of the
       discharge, and then to any Indiana net operating loss carryovers.
       (3) The provisions of Section 108(d)(6) and Section 108(d)(7) of
       the Internal Revenue Code shall apply to any discharge of
       indebtedness for purposes of determining the reduction of net
       operating losses under this section.
    (k) If a taxpayer has an ownership change for which the limitations
of net operating losses under Section 382 of the Internal Revenue Code
apply, the following shall apply:
       (1) The amount a taxpayer may claim as an Indiana net operating
       loss deduction for a taxable year beginning after December 31,
       2022, shall not exceed the limitation imposed by Section
       382(b)(1) of the Internal Revenue Code multiplied by the
       apportionment percentage determined under section 2 of this
       chapter for the year in which the net operating loss is being
SEA 243 — Concur
                                  46
     claimed, unless otherwise provided by this subsection. The
     following apply:
         (A) The limitation under this subdivision does not apply to
         adjusted gross income accrued in the portion of the taxable
         year on or before the change date (as defined in Section 382(j)
         of the Internal Revenue Code). For purposes of this
         subdivision, the adjusted gross income of the taxpayer shall be
         multiplied by the number of days in the taxable year on or
         before the change date to the number of days in the taxable
         year.
         (B) For the portion of the taxable year after the change date (as
         defined in Section 382(j) of the Internal Revenue Code), the
         limitation under this subdivision shall be the limitation
         otherwise computed in this subdivision multiplied by the
         number of days in the taxable year after the change date to the
         number of days in the taxable year.
     (2) If a taxpayer's Indiana net operating loss determined under this
     subsection is not fully deductible as a result of subsection (e) for
     a taxable year, the limitation under this subsection for the
     following taxable year shall be increased by the net operating loss
     determined but not allowable as a deduction for the taxable year.
     (3) If the continuity of business requirements under Section
     382(c) of the Internal Revenue Code are not met, the Indiana net
     operating loss available for carryforward shall be zero (0) except
     to the extent of recognized built in gains derived from Indiana
     sources and amounts allowable under subdivision (2).
     (4) If the limitation under Section 382(b) of the Internal Revenue
     Code is increased for a taxable year under Section 382(h) of the
     Internal Revenue Code, the limitation under subdivision (1) for
     that taxable year shall be increased by the federal increase in the
     net operating loss limitation for the taxable year multiplied by the
     Indiana apportionment percentage for that taxable year.
     (5) For purposes of any other matters not provided for in
     subdivisions (1) through (4), the taxpayer and the department are
     required to apply the limitations and rules under Section 382 of
     the Internal Revenue Code in a manner consistent with this
     subsection.
     (6) This subsection applies to a taxpayer regardless of whether the
     taxpayer actually has a federal net operating loss subject to
     Section 382 of the Internal Revenue Code or whether any federal
     net operating losses have been exhausted.
  (l) If two (2) or more corporations file a consolidated return under
SEA 243 — Concur
                                  47
IC 6-3-4-14 or a combined return under this chapter and have an
Indiana net operating loss on a consolidated or combined basis for a
taxable year:
     (1) the Indiana net operating loss attributable to each corporation
     included in the consolidated or combined return shall be
     determined in a manner consistent with the attribution of federal
     net operating losses for consolidated groups as provided under the
     Internal Revenue Code and regulations promulgated thereunder;
     (2) the application of Indiana net operating losses and reduction
     of losses attributable to each member shall be in a manner
     consistent with the application and reduction of federal net
     operating losses for consolidated groups as provided under the
     Internal Revenue Code and regulations promulgated thereunder;
     and
     (3) the availability of net operating losses to each corporation
     upon an ownership change or change in filing status shall be in a
     manner consistent with the availability and use of federal net
     operating losses for consolidated groups as provided under the
     Internal Revenue Code and regulations promulgated thereunder.
   (m) The following apply for purposes of calculating an Indiana net
operating loss under subsection (c):
     (1) An itemized deduction shall be applied first under subsection
     (c)(1), and any amount not applied under subsection (c)(1) to
     make the net operating loss equal to zero (0) shall be applied
     under subsection (c)(2).
     (2) In the case of a modification under IC 6-3-1-3.5 required to
     modify a separately stated net operating loss or a preliminary
     federal net operating loss, the amount of the modification may not
     exceed the amount prescribed under IC 6-3-1-3.5 and must be
     applied in the following order:
        (A) Against a separately stated net operating loss under
        subsection (c)(1)(B), but only to the extent necessary to
        increase the separately stated net operating loss, after
        application of subsection (c)(1)(A) and (c)(1)(B), to an amount
        not greater than zero (0).
        (B) Against a separately stated net operating loss under
        subsection (c)(1)(C), but only to the extent necessary to
        increase the separately stated net operating loss to an amount
        not greater than zero (0).
        (C) To compute a modification to a preliminary federal net
        operating loss under subsection (c)(2).
   SECTION 9. IC 6-3-2-29, AS ADDED BY P.L.194-2023,
SEA 243 — Concur
                                   48
SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2025 (RETROACTIVE)]: Sec. 29. (a) As used in this
section, "specified research or experimental expenditures" means:
     (1) for taxable years beginning before January 1, 2025,
     specified research or experimental expenditures (as defined in
     Section 174(b) of the Internal Revenue Code) Code as in effect
     December 31, 2024) that the taxpayer is required to charge to
     capital account under Section 174(a)(2) of the Internal Revenue
     Code. The term does not include expenditures for which a
     deduction is disallowed as a result of Section 280C(c) of the
     Internal Revenue Code;
     (2) for taxable years beginning after December 31, 2024,
     foreign research or experimental expenditures (as defined in
     Section 174(b) of the Internal Revenue Code); and
     (3) for taxable years beginning after December 31, 2024,
     domestic research or experimental expenditures (as defined
     in Section 174A(b) of the Internal Revenue Code).
   (b) Except as otherwise provided in this section, for taxable years
beginning after December 31, 2021, a taxpayer, in determining the
taxpayer's adjusted gross income for a particular taxable year, shall:
     (1) deduct from the taxpayer's adjusted gross income an amount
     equal to the specified research or experimental expenditures
     charged to capital account under Section 174(a)(2)(A) of the
     Internal Revenue Code for the taxable year; and
     (2) add to the taxpayer's adjusted gross income the amount
     deducted under Section 174(a)(2)(B) of the Internal Revenue
     Code or deducted pursuant to P.L.119-21, Section 70302(f)(2)
     for the taxable year.
   (c) In the case of a taxpayer that owns an interest in a partnership or
corporation described in section 2.8(2) of this chapter, the amount that
must be deducted under subsection (b)(1) for a particular taxable year
may not exceed the sum of:
     (1) the taxpayer's adjusted basis in the partnership or corporation
     for federal tax purposes, as determined at the end of the taxpayer's
     taxable year and after application of any expenses, deductions, or
     losses; plus
     (2) the amount of any specified research or experimental
     expenditures claimed as a deduction under Section 174 of the
     Internal Revenue Code in determining the taxpayer's federal
     adjusted gross income for the taxable year.
   (d) A deduction or part of a deduction that is disallowed under
subsection (c) must be:
SEA 243 — Concur
                                   49
       (1) carried forward to the subsequent taxable year;
       (2) treated as a specified research or experimental expenditure
       that is paid or incurred in the subsequent taxable year; and
       (3) applied under subsection (c) against the adjusted basis of the
       partnership or corporation for the subsequent taxable year.
    (e) If a taxpayer is eligible for a deduction under subsection (b)(1),
but the deduction would be treated as a passive deduction under
Section 469 of the Internal Revenue Code, the amount that may be
deducted under subsection (b)(1) for a particular taxable year may not
exceed the sum of:
       (1) the amount of the taxpayer's passive income, as determined for
       federal tax purposes, after application of any passive losses or
       deductions for the taxable year and after application of any
       passive loss carryovers for the taxable year, but not less than zero
       (0); plus
       (2) the amount of any specified research or experimental
       expenditures claimed as a deduction under Section 174 of the
       Internal Revenue Code in determining the taxpayer's federal
       adjusted gross income for the taxable year.
The requirements under this subsection must be applied after
application of subsections (c) and (d). Any deduction or part of a
deduction that is disallowed under this subsection must be carried
forward to the subsequent taxable year and treated as a specified
research or experimental expenditure that is paid or incurred in the
subsequent taxable year from a trade or business that is a passive
activity for the taxpayer.
    (f) If, before the effective date of this section, a taxpayer:
       (1) is a pass through entity; and
       (2) filed a return either:
           (A) for a taxable year beginning before January 1, 2023, that
           reported tax under IC 6-3-2.1 as an electing entity; or
           (B) for a taxable year beginning before January 1, 2023,
           passing through the tax paid under IC 6-3-2.1 by another entity
           on the taxpayer's behalf as pass through entity to its owners;
the taxpayer shall report the adjusted gross income subject to pass
through entity tax for purposes of IC 6-3-2.1 as if the modification
under this section was not in effect for taxable years beginning before
January 1, 2023. The taxpayer shall report the modifications otherwise
required under this section to its partners, shareholders, or beneficiaries
for the taxable year in the manner prescribed under this article.
    (g) The modifications required under this section are not applicable
if a taxpayer is not required under federal law to charge specified
SEA 243 — Concur
                                  50
research or experimental expenditures to capital account in determining
federal adjusted gross income, regardless of whether the taxpayer elects
to charge specified research or experimental expenditures to capital
account. For purposes of this section:
      (1) if the taxpayer is an eligible taxpayer permitted to
      retroactively deduct certain specified research or
      experimental expenditures as provided in P.L.119-21, Section
      70302(f)(1); and
      (2) does not make a retroactive election under this section;
the taxpayer shall be treated as if the taxpayer was required under
federal law to charge specified research or experimental
expenditures to capital account.
    (h) If a taxpayer makes an election to retroactively deduct
certain specified research or experimental expenditures as
provided in P.L.119-21, Section 70302(f)(1):
      (1) the taxpayer and the department shall treat the specified
      research or experimental expenditures in the same manner as
      elected for federal income tax purposes;
      (2) the taxpayer shall be required to amend all tax returns
      filed under this article or IC 6-5.5 for which the taxpayer
      reported modifications under this section or filed an amended
      return with the Internal Revenue Service; and
      (3) any amended return filed with the Internal Revenue
      Service shall be treated as being a final adjustment made by
      the Internal Revenue Service on the date the amended return
      is filed with the Internal Revenue Service or October 31, 2025,
      whichever is later.
    SECTION 10. IC 6-3-2-30 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
4, 2025 (RETROACTIVE)]: Sec. 30. (a) For purposes of this section,
"qualified production property" has the meaning provided in
Section 168(n)(2) of the Internal Revenue Code.
    (b) Except as otherwise provided in this section, if a taxpayer
makes an election to claim the special depreciation allowance
under Section 168(n) of the Internal Revenue Code with regard to
qualified production property used by the taxpayer and placed in
service during the current taxable year or a previous taxable year,
the taxpayer shall add or subtract the amount required to make the
taxpayer's adjusted gross income (as defined in IC 6-3-1-3.5 or
IC 6-5.5-1-2) equal to the amount of adjusted gross income
determined as if an election had not been made under Section
168(n) of the Internal Revenue Code.
SEA 243 — Concur
                                 51
   (c) If a taxpayer:
      (1) makes an election under Section 168(n) of the Internal
      Revenue Code to claim the special depreciation allowance
      under that section; and
      (2) the taxpayer is considered to have elected to not claim
      other special depreciation allowances under Section 168 of the
      Internal Revenue Code as a result of that election;
the taxpayer will be considered to have made an election to not
claim the special depreciation allowances described in subdivision
(2) for purposes of computing adjusted gross income under this
article or IC 6-5.5.
   (d) If a taxpayer is subject to recapture of the special
depreciation allowance pursuant to Section 168(n)(5) of the
Internal Revenue Code, the taxpayer:
      (1) will be considered to have made an election under Section
      168(n) of the Internal Revenue Code;
      (2) will be considered for purposes of this article and IC 6-5.5
      to have disposed of the qualified production property on the
      date specified in Section 168(n)(5) of the Internal Revenue
      Code and shall report any income from the property for that
      taxable year, subject to the modifications required under this
      section; and
      (3) will be required to report any depreciation, gain, or loss
      from the qualified production property after the recapture of
      the special depreciation allowance in the same manner as
      otherwise provided by the Internal Revenue Code.
   SECTION 11. IC 6-3-2-31 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 31. (a) This section
applies to the taxable year beginning after December 31, 2025, and
ending before January 1, 2027.
   (b) A taxpayer is entitled to a deduction from the taxpayer's
adjusted gross income in an amount equal to the amount associated
with qualified tips that is deducted from a taxpayer's federal
adjusted gross income under Section 224 of the Internal Revenue
Code.
   (c) If a taxpayer has both qualified tips that are included in the
taxpayer's adjusted gross income and qualified tips that are not
included in the taxpayer's adjusted gross income, the deduction for
purposes of this article and IC 6-3.6 shall be equal to the qualified
tips deducted from the taxpayer's federal adjusted gross income
under Section 224 of the Internal Revenue Code multiplied by the
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quotient of:
      (1) the qualified tips included in the taxpayer's adjusted gross
      income after the application of any other exemption,
      deduction, or exclusion of qualified tips from the taxpayer's
      adjusted gross income under this article or IC 6-3.6; divided
      by
      (2) the qualified tips included in the taxpayer's federal
      adjusted gross income.
This subsection shall be applied separately to this article and
IC 6-3.6 to the extent that the taxpayer's adjusted gross income is
determined separately for each article.
    SECTION 12. IC 6-3-2-32 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 32. (a) This section
applies to the taxable year beginning after December 31, 2025, and
ending before January 1, 2027.
    (b) A taxpayer is entitled to a deduction from the taxpayer's
adjusted gross income in an amount equal to the amount associated
with qualified overtime compensation that is deducted from a
taxpayer's federal adjusted gross income under Section 225 of the
Internal Revenue Code.
    (c) If a taxpayer has both qualified overtime compensation that
is included in the taxpayer's adjusted gross income and qualified
overtime compensation that is not included in the taxpayer's
adjusted gross income, the deduction for purposes of this article
and IC 6-3.6 shall be equal to the qualified overtime compensation
deducted from the taxpayer's federal adjusted gross income under
Section 225 of the Internal Revenue Code multiplied by the
quotient of:
      (1) the qualified overtime compensation included in the
      taxpayer's adjusted gross income after the application of any
      other exemption, deduction, or exclusion of qualified tips from
      the taxpayer's adjusted gross income under this article or
      IC 6-3.6; divided by
      (2) the qualified overtime compensation included in the
      taxpayer's federal adjusted gross income.
This subsection shall be applied separately to this article and
IC 6-3.6 to the extent that the taxpayer's adjusted gross income is
determined separately for each article.
    SECTION 13. IC 6-3-2-33 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 33. (a) This section
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applies to the taxable year beginning after December 31, 2025, and
ending before January 1, 2027.
    (b) A taxpayer is entitled to a deduction from the taxpayer's
adjusted gross income in an amount equal to the amount associated
with qualified passenger vehicle loan interest that is deducted from
a taxpayer's federal adjusted gross income under Section 163 of the
Internal Revenue Code and attributable to the exception under
Section 163(h)(4) of the Internal Revenue Code.
    (c) The deduction under this section shall be allowable only if
the taxpayer is a resident of this state at the time the interest is
paid or accrued. In the case of a married couple filing a joint
return under this article, the taxpayer shall be the individual who
would be treated as paying the interest if the couple were not
married.
    (d) The deduction under this section shall not be permitted
against the adjusted gross income of an estate or trust.
    SECTION 14. IC 6-3-2.1-5, AS AMENDED BY P.L.230-2025,
SECTION 71, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2025 (RETROACTIVE)]: Sec. 5. (a) Each electing
entity shall compute each direct owner's share of the tax imposed by
section 4 of this chapter and reflect that amount in the form and manner
prescribed by the department.
    (b) Each entity owner shall be entitled to a refundable credit in an
amount equal to the amount of tax under this chapter credited to the
entity owner.
    (c) An electing entity or pass through entity shall be permitted to
claim a credit for taxes withheld or paid on the entity's behalf.
    (d) An electing entity that has direct owners that would be permitted
to claim a credit under IC 6-3-3-3 for taxes paid to another state with
regard to a taxable year may elect to claim a credit under this chapter
for:
      (1) an amount equal to the income of a resident direct owner
      attributable to a state other than Indiana multiplied by the rate
      imposed by IC 6-3-2-1(a) (before July 1, 2025) or IC 6-3-2-1(b)
      (after June 30, 2025) or maximum individual income tax rate
      imposed by that other state, whichever rate is less, if:
          (A) the electing entity makes an election to tax resident direct
          owners in the manner prescribed in section 4(a)(2)(A) of this
          chapter; and
          (B) the other state grants a credit to the Indiana its residents
          substantially similar to the credit as provided under
          IC 6-3-3-3; IC 6-3-3-3(a); and
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                                    54
      (2) an amount equal to the income attributable to Indiana
      multiplied by the rate imposed by IC 6-3-2-1(a) (before July 1,
      2025) or IC 6-3-2-1(b) (after June 30, 2025) or the maximum
      individual income tax rate by the nonresident direct owner's state
      of residence, whichever rate is less, if the nonresident direct
      owner would be permitted a credit under IC 6-3-3-3(b) for the
      income attributable to Indiana and derived from the electing
      entity.
   (e) An electing entity may elect to claim a credit for any credit under
IC 6-3-3 or IC 6-3.1, other than the credits under subsections (b)
through (d), and arising from the operations of the electing entity, or
which are passed through to or assigned to the electing entity for the
taxable year. For purposes of this subsection, the following apply:
      (1) The credit must be allowable to pass through to the direct
      owners of the electing entity under the provisions of the credit.
      (2) The credit must be first allowable to the direct owners of the
      pass through entity in a taxable year ending on or after the taxable
      year of the electing entity.
      (3) The amount of the credit that the entity may claim against the
      tax attributable to any direct owner under subsection (a) may not
      exceed the credit that is available to be passed through to the
      direct owner.
   (f) For purposes of subsections (d) and (e), the following apply:
      (1) The elections under subsections (d) and (e) are separate
      elections to which the following apply:
         (A) An election under subsection (e) applies to all credits
         other than the credits described in subsections (b) through (d).
         No allowance for an election to apply to one (1) or more
         credits and to not apply to one (1) or more credits is permitted.
         (B) The election to claim the credits under subsections (d) and
         (e) must be made on the original return filed by the electing
         entity. A failure to claim a credit shall be treated as if the
         credit was not allowable to the electing entity.
         (C) An election to apply a credit applies to the tax for all direct
         owners of the electing entity, provided that an election under
         subsection (d) applies only to direct owners that are
         individuals, estates, or trusts.
      (2) If an electing entity claims credits under both subsections (d)
      and (e), the electing entity shall apply the credit under subsection
      (d) first, then any amount allowable under subsection (e).
      (3) The sum of the credits attributable to a direct owner of an
      electing entity shall not exceed the tax computed by the electing
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                                   55
       entity for the direct owner under this chapter.
       (4) A provision under IC 6-3-3 or IC 6-3.1 requiring a credit to be
       passed through shall not prevent an electing entity from applying
       the credit against the tax imposed under this chapter.
       (5) An entity owner shall be permitted to claim any credit
       otherwise allowable to the owner to the extent otherwise
       permitted by IC 6-3-3 or IC 6-3.1.
    SECTION 15. IC 6-3-3-12.1, AS AMENDED BY P.L.205-2025,
SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 12.1. (a) As used in this
section, "ABLE account" has the meaning set forth in IC 12-11-14-1.
    (b) As used in this section, "contribution" means the amount of
money directly provided to an Indiana ABLE 529A savings plan
account by a taxpayer. A contribution does not include any of the
following:
       (1) Money credited to an ABLE account as a result of bonus
       points or other forms of consideration earned by the taxpayer that
       result in a transfer of money to the ABLE account.
       (2) Money transferred from any qualified ABLE program under
       Section 529A of the Internal Revenue Code or from any other
       similar plan.
       (3) Money transferred from any qualified tuition program under
       Section 529 of the Internal Revenue Code or from any other
       similar plan.
       (4) Money transferred in a qualified ABLE rollover
       contribution described in Section 530A(d)(4)(B) of the
       Internal Revenue Code.
    (c) As used in this section, "designated beneficiary" has the meaning
set forth in IC 12-11-14-5.
    (d) As used in this section, "Indiana ABLE 529A savings plan"
refers to the Achieving a Better Life Experience (ABLE) 529A plan
established under IC 12-11.
    (e) As used in this section, "nonqualified withdrawal" means a
withdrawal or distribution from an Indiana ABLE 529A savings plan
that is not a qualified withdrawal.
    (f) As used in this section, "qualified disability expense" has the
meaning set forth in IC 12-11-14-8.
    (g) As used in this section, "qualified withdrawal" means a
withdrawal or distribution from an Indiana ABLE 529A savings plan
that is made:
       (1) to pay for qualified disability expenses, excluding any
       withdrawals or distributions used to pay for qualified disability
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                                   56
       expenses, if the withdrawals or distributions are made from an
       Indiana ABLE 529A savings plan that is terminated within twelve
       (12) months after the ABLE account is opened;
       (2) as a result of the death of a designated beneficiary; or
       (3) by an Indiana ABLE 529A savings plan as the result of a
       transfer of funds by an Indiana ABLE 529A savings plan from
       one (1) third party custodian to another.
A qualified withdrawal does not include a rollover distribution or
transfer of assets from an Indiana ABLE 529A savings plan to any
other qualified ABLE program under Section 529A of the Internal
Revenue Code, or to any qualified tuition program under Section 529
of the Internal Revenue Code other than an Indiana529 plan established
under IC 21-9, or to any other similar plan.
    (h) As used in this section, "taxpayer" means:
       (1) an individual filing a single return;
       (2) a married couple filing a joint return; or
       (3) a married individual filing a separate return.
    (i) A taxpayer is entitled to a credit against the taxpayer's adjusted
gross income tax imposed by IC 6-3-1 through IC 6-3-7 for a taxable
year equal to the least of the following:
       (1) Twenty percent (20%) of the amount of the total contributions
       made by the taxpayer to an ABLE account or accounts of an
       Indiana ABLE 529A savings plan during the taxable year.
       (2) Five hundred dollars ($500).
       (3) The amount of the taxpayer's adjusted gross income tax
       imposed by IC 6-3-1 through IC 6-3-7 for the taxable year,
       reduced by the sum of all credits (as determined without regard to
       this section) allowed by IC 6-3-1 through IC 6-3-7.
    (j) A taxpayer is not entitled to a carryback, carryover, or refund of
an unused credit.
    (k) A taxpayer may not sell, assign, convey, or otherwise transfer the
tax credit provided by this section.
    (l) To receive the credit provided by this section, a taxpayer must
claim the credit on the taxpayer's annual state tax return or returns in
the manner prescribed by the department. The taxpayer shall submit to
the department all information that the department determines is
necessary for the calculation of the credit provided by this section.
    (m) An owner of an ABLE account of an Indiana ABLE 529A
savings plan must repay all or a part of the credit in a taxable year in
which any nonqualified withdrawal is made from the ABLE account.
The amount the taxpayer must repay is equal to the lesser of:
       (1) twenty percent (20%) of the total amount of nonqualified
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                                   57
      withdrawals made during the taxable year from the ABLE
      account; or
      (2) the excess of:
          (A) the cumulative amount of all credits provided by this
          section that are claimed by any taxpayer with respect to the
          taxpayer's contributions to the ABLE account for all prior
          taxable years; over
          (B) the cumulative amount of repayments paid by the owner of
          the ABLE account under this subsection for all prior taxable
          years.
   (n) Any required repayment under subsection (m) must be reported
by the owner of the ABLE account on the owner's annual state income
tax return for any taxable year in which a nonqualified withdrawal is
made.
   (o) A nonresident owner of an ABLE account who is not required
to file an annual income tax return for a taxable year in which a
nonqualified withdrawal is made shall make any required repayment on
the form required under IC 6-3-4-1(2). If the nonresident owner of the
ABLE account does not make the required repayment, the department
shall issue a demand notice in accordance with IC 6-8.1-5-1.
   (p) The executive director of the Indiana ABLE authority shall
submit or cause to be submitted to the department a copy of all
information returns or statements issued to ABLE account owners,
designated beneficiaries, and other taxpayers for each taxable year with
respect to:
      (1) nonqualified withdrawals made from ABLE accounts for the
      taxable year; or
      (2) ABLE account closings for the taxable year.
   (q) The following apply to contributions made after December 31,
2023:
      (1) For purposes of this section, all or part of a contribution made
      after the end of a taxable year, and not later than the due date of
      the taxpayer's adjusted gross income tax return for the taxable
      year under this article (as determined without regard to any
      allowable extensions), shall be considered as having been made
      during the taxable year preceding the contribution if:
          (A) the taxpayer elects to treat all or part of a contribution as
          occurring in the taxable year preceding the contribution;
          (B) the taxpayer designates the amounts of the contribution to
          be treated as occurring in each taxable year, in the case of a
          single contribution that is to be allowable under this section in
          two (2) separate years; and
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                                   58
         (C) the taxpayer irrevocably waives the right to claim the
         contribution claimed in the taxable year preceding the
         contribution as occurring in the taxable year of the
         contribution.
      (2) An irrevocable election under this subsection must be made
      in writing at the time the contribution is made.
      (3) The Indiana ABLE authority may prescribe any forms
      necessary for purposes of this subsection.
   SECTION 16. IC 6-3-3-13, AS AMENDED BY P.L.180-2022(ss),
SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2022 (RETROACTIVE)]: Sec. 13. (a) This section
applies only to taxable years beginning after December 31, 2014.
   (b) Each taxable year, an individual who is a resident of Indiana
during the taxable year and who is eligible to claim the credit
provided by Section 23 of the Internal Revenue Code on the
individual's federal return for the taxable year is entitled to a credit
against the individual's adjusted gross income tax liability for the
taxable year equal to the lesser of:
      (1) the amount of the credit allowable under Section 23 of the
      Internal Revenue Code for each eligible child on the individual's
      federal return for the taxable year multiplied by twenty percent
      (20%); or
      (2) two thousand five hundred dollars ($2,500) for each eligible
      child.
   (c) If the amount of the credit under this section exceeds the
taxpayer's state income tax liability for the taxable year, the excess
shall be refunded to the taxpayer.
   (d) If all or part of the credit allowed under Section 23 of the
Internal Revenue Code for a taxable year beginning after December 31,
2014, is required to be claimed in, or carried forward to, a taxable year
after the taxable year in which the credit is first allowed, the part
carried forward and allowed to be claimed as a credit shall be treated
as allowable under subsection (b), however, to the extent that a portion
of a taxpayer's federal credit under Section 23 of the Internal Revenue
Code is carried forward to a subsequent taxable year, the aggregate
sum of credits claimed by the taxpayer under this section over the
applicable taxable years may not exceed two thousand five hundred
dollars ($2,500). A credit first allowed under Section 23 of the Internal
Revenue Code for a taxable year beginning before January 1, 2015, and
required to be claimed in, or carried forward to, a taxable year after the
taxable year in which the credit is first allowed shall not be treated as
allowable under subsection (b).
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                                   59
   (e) If an individual is a resident of Indiana for part of the
taxable year and a nonresident of Indiana for part of the taxable
year, the credit allowable under Section 23 of the Internal Revenue
Code for purposes of subsection (b) shall be:
     (1) the credit allowable under Section 23 of the Internal
     Revenue Code;
     (2) multiplied by the number of days the individual was a
     resident of Indiana; and
     (3) divided by the number of days the individual was a
     resident of all states.
   (f) If an individual and the individual's spouse file a joint return
under this article for a taxable year, the calculation under
subsection (e) for the taxable year shall be made based on the
combined resident and nonresident days of the individual and the
individual's spouse.
   SECTION 17. IC 6-3-4-4.1, AS AMENDED BY P.L.205-2025,
SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 4.1. (a) Any individual required by the Internal
Revenue Code or this section to file estimated tax returns and to make
payments on account of such estimated tax shall file estimated tax
returns and make payments of the tax imposed by this article to the
department at the time or times and in the installments as provided by
Section 6654 of the Internal Revenue Code. However, the following
apply to estimated tax returns filed and payments made under this
subsection:
     (1) In applying Section 6654 of the Internal Revenue Code for the
     purposes of this article, "estimated tax" means the amount which
     the individual estimates as the sum of the amount of the adjusted
     gross income tax imposed by this article for the taxable year and
     the sum of the amount of local income tax under IC 6-3.6,
     including any amounts of credits required to be recaptured under
     IC 6-3-3 and IC 6-3.1, minus the amount which the individual
     estimates as the sum of any credits against the tax provided by
     IC 6-3-3, IC 6-3.1, and IC 6-3.6, other than the amounts of tax
     withheld under this chapter.
     (2) Estimated tax for a nonresident alien (as defined in Section
     7701 of the Internal Revenue Code) must be computed by
     applying not more than one (1) exclusion under IC 6-3-1-3.5(a)(3)
     and IC 6-3-1-3.5(a)(4), regardless of the total number of
     exclusions that IC 6-3-1-3.5(a)(3) and IC 6-3-1-3.5(a)(4) permit
     the taxpayer to apply on the taxpayer's final return for the taxable
     year.
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                                    60
      (3) If an individual does not file a return for the preceding taxable
      year and the individual can establish that the individual did not
      have a liability under IC 6-3 and IC 6-3.6, Section 6654 of the
      Internal Revenue Code shall be applied as if the tax liability for
      the preceding taxable year under IC 6-3 and IC 6-3.6 was zero
      dollars ($0).
   (b) Every individual who has adjusted gross income subject to the
tax imposed by this article and from which tax is not withheld under
the requirements of this chapter or for which tax is not remitted on
behalf of the individual under IC 6-3-2.1 shall make a declaration of
estimated tax for the taxable year. However, no such declaration shall
be required if the estimated tax can reasonably be expected to be less
than one thousand dollars ($1,000). In the case of an underpayment of
the estimated tax as provided in Section 6654 of the Internal Revenue
Code, there shall be added to the tax a penalty in an amount at the rate
prescribed by IC 6-8.1-10-2.1(b).
   (c) An individual filing an estimated tax return and making an
estimated tax payment under this section must designate:
      (1) the portion of the estimated tax payment that represents
      estimated state adjusted gross income tax liability; and
      (2) the portion of the estimated tax payment that represents
      estimated local income tax liability under IC 6-3.6.
The department shall adopt guidelines and issue instructions as
necessary to assist individuals in making the designations required by
this subsection.
   SECTION 18. IC 6-3-4-4.2, AS ADDED BY P.L.205-2025,
SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 4.2. (a) The following apply for purposes of this
section:
      (1) "Final tax liability" for a taxable year means the reported tax
      liability of a taxpayer, except that:
          (A) for purposes of determining the final tax liability for a
          previous taxable year of less than twelve (12) months, the final
          tax liability shall be:
            (i) the reported adjusted gross income tax liability; divided
            by
            (ii) the number of estimated payments otherwise required
            under this chapter; multiplied by
            (iii) four (4);
          (B) if the taxpayer does not have a reported tax liability for the
          previous year and properly does not file an adjusted gross
          income tax return under IC 6-3 or financial institutions tax
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                                   61
          under IC 6-5.5, the taxpayer's final tax liability shall be
          considered to be zero dollars ($0); and
          (C) if the taxpayer has a reported tax liability of zero dollars
          ($0) for the previous taxable year, the taxpayer shall be treated
          as having a tax liability of zero dollars ($0).
      (2) "Reported tax liability" means the adjusted gross income tax
      under IC 6-3 or financial institutions tax under IC 6-5.5 as
      reported by the taxpayer for the taxable year on the taxpayer's
      return after application of any credits allowable to the taxpayer
      under IC 6-3-3, IC 6-3.1, or IC 6-5.5 other than credits for:
          (A) estimated taxes paid under this section or IC 6-5.5-6-3;
          (B) taxes withheld on behalf of the taxpayer under this chapter
          or IC 6-5.5-2-8; or
          (C) taxes paid by a pass through entity on behalf of the
          taxpayer under IC 6-3-2.1.
      The term reported tax liability includes the recapture of any tax
      credits under IC 6-3-3 or IC 6-3.1 reported on the tax return for
      the taxable year. If the taxpayer fails to file a tax return for a
      taxable year under IC 6-3 or IC 6-5.5, and the department
      determines that the taxpayer owes adjusted gross income tax
      under IC 6-3 or financial institutions tax under IC 6-5.5, the
      reported tax liability shall be the greater of the amount for the
      taxable year under IC 6-3 or IC 6-5.5 as determined by the
      department or the amount for the immediately following taxable
      year under IC 6-3 or IC 6-5.5.
   (b) Except as otherwise provided in this section, every corporation
subject to the adjusted gross income tax liability imposed by this article
shall be required to report and pay an estimated tax equal to twenty-five
percent (25%) of such corporation's estimated adjusted gross income
tax liability for the taxable year. The following apply:
      (1) A taxpayer who uses a taxable year that ends on December 31
      shall file the taxpayer's estimated adjusted gross income tax
      returns and pay the tax to the department on or before April 20,
      June 20, September 20, and December 20 of the taxable year.
      (2) If a taxpayer uses a taxable year that does not end on
      December 31, the due dates for filing estimated adjusted gross
      income tax returns and paying the tax are on or before the
      twentieth day of the fourth, sixth, ninth, and twelfth months of the
      taxpayer's taxable year. The department shall prescribe the
      manner and forms for such reporting and payment.
      (3) Any taxes withheld on behalf of the corporation under this
      chapter or IC 6-5.5-2-8, and any taxes remitted on behalf of the
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                                   62
       corporation under IC 6-3-2.1, shall be treated as estimated tax
       payments on behalf of the corporation for purposes of this section.
       Such taxes shall be attributed to each required payment in the
       manner the underlying income is attributed under Section 6655 of
       the Internal Revenue Code.
       (4) If the taxpayer has a taxable year that is less than twelve (12)
       months, the estimated payments under this section shall be
       adjusted in the manner prescribed by Section 6655 of the Internal
       Revenue Code and applicable regulations.
    (c) If a corporation determines that its estimated tax payment using
an annualized method under Section 6655(e) of the Internal Revenue
Code is lower than the amount required under subsection (b), the
corporation shall be permitted to use an annualized method under
Section 6655(e) of the Internal Revenue Code to determine its
estimated tax payment under subsection (b), and shall recapture any
reduction in the estimated tax payment in the manner prescribed by
Section 6655(e) of the Internal Revenue Code. The corporation may not
use an annualized method under this section that would not be
allowable to the corporation under Section 6655 of the Internal
Revenue Code.
    (d) The penalty in the amount at the rate prescribed by
IC 6-8.1-10-2.1(b) shall be assessed by the department on corporations
failing to make payments as required in subsection (b). However, no
penalty shall be assessed as to any estimated payments of adjusted
gross income tax which equal or exceed:
       (1) the amount calculated under subsection (b); or
       (2) twenty-five percent (25%) of the final tax liability for the
       taxpayer's previous taxable year.
In addition, the penalty as to any underpayment of tax on an estimated
return shall only be assessed on the difference between the actual
amount paid by the corporation on such estimated return and the
amount determined under subsection (b).
    (e) The provisions of subsection (b) requiring the reporting and
estimated payment of adjusted gross income tax shall be applicable
only to corporations having an adjusted gross income tax liability
which exceeds two thousand five hundred dollars ($2,500) for its
taxable year.
    (f) If the department determines that a corporation's:
       (1) estimated quarterly adjusted gross income tax liability for the
       current year; or
       (2) average estimated quarterly adjusted gross income tax liability
       for the preceding year;
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                                    63
exceeds five thousand dollars ($5,000), the corporation shall pay the
estimated adjusted gross income taxes due by electronic funds transfer
(as defined in IC 4-8.1-2-7) or by delivering in person or overnight by
courier a payment by cashier's check, certified check, or money order
to the department. The transfer or payment shall be made on or before
the date the tax is due. A failure to make a payment in the manner
prescribed under this subsection shall be subject to penalty as provided
in IC 6-8.1-10-2.1(b)(5).
    (g) In the case of corporations that switch filing status, the final tax
liability shall be determined in the manner consistent with Section
1502 of the Internal Revenue Code and regulations thereunder.
    SECTION 19. IC 6-3-4-6, AS AMENDED BY P.L.159-2021,
SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 6. (a) Any taxpayer, upon
request by the department, shall furnish to the department a true and
correct copy of any tax return which the taxpayer has filed with the
United States Internal Revenue Service which copy shall be certified
to by the taxpayer under penalties of perjury.
    (b) Each taxpayer shall notify the department of any modification as
provided in subsection (c) of:
      (1) a federal income tax return filed by the taxpayer after January
      1, 1978; or
      (2) the taxpayer's federal income tax liability for a taxable year
      which begins after December 31, 1977.
The taxpayer shall file the notice on the form in the form and manner
prescribed by the department within one hundred twenty (120) days
after the modification is made if the modification was made before
January 1, 2011, and one hundred eighty (180) days after the
modification is made if the modification is made after December 31,
2010, but before January 1, 2026, and one (1) year after the
modification is made if the modification is made after December
31, 2025.
    (c) For purposes of subsection (b), a modification occurs on the date
on which a:
      (1) taxpayer files an amended federal income tax return;
      (2) final determination is made concerning an assessment of
      deficiency;
      (3) final determination is made concerning a claim for a refund;
      (4) taxpayer waives the restrictions on assessment and collection
      of all, or any part, of an underpayment of federal income tax by
      signing a federal Form 870, or any other Form prescribed by the
      Internal Revenue Service for that purpose. For purposes of this
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      subdivision:
          (A) a final determination does not occur with respect to any
          part of the underpayment that is not covered by the waiver;
          and
          (B) if the signature of an authorized representative of the
          Internal Revenue Service is required to execute a waiver, the
          date of the final determination is the date of signing by the
          authorized representative of the Internal Revenue Service or
          by the taxpayer, whichever is later;
      (5) taxpayer enters into a closing agreement with the Internal
      Revenue Service concerning the taxpayer's tax liability under
      Section 7121 of the Internal Revenue Code that is a final
      determination. The date the taxpayer enters into a closing
      agreement under this subdivision is the date the closing
      agreement is signed by an authorized representative of the
      Internal Revenue Service or by the taxpayer, whichever is later;
      or
      (6) modification or alteration in an amount of tax, adjusted gross
      income, taxable income, credit, or other tax attribute is otherwise
      made that is a final determination;
for a taxable year, regardless of whether a modification results in an
underpayment or overpayment of tax. In the case of a taxpayer that files
a consolidated return under section 14 of this chapter or either files or
is required to be included by the department in a combined return
under IC 6-3-2-2, the date on which the alteration or modification is
made shall be considered to be the last day on which an alteration or
modification occurs for any entity filing as part of the consolidated or
combined return.
    (d) For purposes of subsection (c)(2) through (c)(6), a final
determination means an action or decision by a taxpayer, the Internal
Revenue Service (including the Appeals Division), the United States
Tax Court, or any other United States federal court concerning any
disputed tax issue that:
      (1) is final and conclusive; and
      (2) cannot be reopened or appealed by a taxpayer or the Internal
      Revenue Service as a matter of law.
    (e) If the federal modification results in a change in the taxpayer's
federal or Indiana adjusted gross income, the taxpayer shall file an
Indiana amended return within one hundred twenty (120) days after the
modification is made if the modification was made before January 1,
2011, and one hundred eighty (180) days after the modification is made
if the modification is made after December 31, 2010, but before
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January 1, 2026, and one (1) year after the modification is made if
the modification is made after December 31, 2025.
    SECTION 20. IC 6-3-4-8.2, AS AMENDED BY P.L.58-2019,
SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 8.2. (a) Each person in
Indiana who is required under the Internal Revenue Code to withhold
federal tax from winnings shall deduct and retain adjusted gross
income tax at the time and in the amount described in withholding
instructions issued by the department.
    (b) In addition to amounts withheld under subsection (a), every
person engaged in a gambling operation (as defined in IC 4-33-2-10)
or a gambling game (as defined in IC 4-35-2-5) and making a payment
in the course of the gambling operation (as defined in IC 4-33-2-10) or
a gambling game (as defined in IC 4-35-2-5) of:
      (1) winnings (not reduced by the wager) valued at one thousand
      two hundred dollars ($1,200) two thousand dollars ($2,000) or
      more from slot machine play; or
      (2) winnings (reduced by the wager) valued at one thousand five
      hundred dollars ($1,500) two thousand dollars ($2,000) or more
      from a keno game;
shall deduct and retain adjusted gross income tax at the time and in the
amount described in withholding instructions issued by the department.
The department's instructions must provide that amounts withheld shall
be paid to the department on the twenty-fourth calendar day of each
month. Any taxes collected during the month but after the day on which
the taxes are required to be paid shall be paid to the department at the
same time the following month's taxes are due. Slot machine and keno
winnings from a gambling operation (as defined in IC 4-33-2-10) or a
gambling game (as defined in IC 4-35-2-5) that are reportable for
federal income tax purposes shall be treated as subject to withholding
under this section, even if federal tax withholding is not required.
    (c) The adjusted gross income tax due on prize money or prizes:
      (1) received from a winning lottery ticket purchased under
      IC 4-30; and
      (2) exceeding one thousand two hundred dollars ($1,200) two
      thousand dollars ($2,000) in value;
shall be deducted and retained at the time and in the amount described
in withholding instructions issued by the department, even if federal
withholding is not required.
    (d) In addition to the amounts withheld under subsection (a), a
qualified organization (as defined in IC 4-32.3-2-31(a)) that awards a
prize under IC 4-32.3 exceeding one thousand two hundred dollars
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($1,200) two thousand dollars ($2,000) in value shall deduct and
retain adjusted gross income tax at the time and in the amount
described in withholding instructions issued by the department. The
department's instructions must provide that amounts withheld shall be
paid to the department before the close of the business day following
the day the winnings are paid, actually or constructively.
   (e) For 2027 and later, if the amount for which a payor is
required to provide a statement to a recipient under Section 6041
of the Internal Revenue Code is increased to reflect inflation as
provided in Section 6041(h) of the Internal Revenue Code, the
amounts under subsections (b), (c), and (d) shall be the amount
increased to reflect inflation.
   SECTION 21. IC 6-3-4.5-2, AS AMENDED BY P.L.137-2022,
SECTION 42, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 2. The following apply
for purposes of this chapter:
      (1) If a taxpayer has not filed a return under IC 6-3 or IC 6-5.5 for
      a taxable year, review year, or adjustment year, any reference to
      an amended return shall be a reference to an original return that
      includes any adjustments under this chapter.
      (2) If a taxpayer is a partnership or pass through entity and has not
      issued a statement to its owners or beneficiaries, any reference to
      an amended statement shall be a reference to an original
      statement that includes any adjustment under this chapter.
      (3) Any reference to tax shall include interest under IC 6-8.1-10-1
      and penalties under IC 6-8.1.
      (4) In the case of a final federal adjustment for a review year that
      is required, the adjustment shall be treated as:
          (A) occurring in the review year, if and to the extent the
          adjustment:
             (i) results in an imputed underpayment for federal purposes
             to the partnership;
             (ii) would result in an imputed underpayment for federal
             purposes to the partnership for the review year except that
             the adjustment is reported by the partners of the partnership
             in the manner provided under Section 6225(c)(2) of the
             Internal Revenue Code; or
             (iii) results in an adjustment that is passed through to the
             review year partners for federal tax purposes, in the case of
             a partnership that makes a valid election pursuant to Section
             6226 of the Internal Revenue Code; or
          (B) occurring in the adjustment year, to the extent a tax
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       attribute is taken into account by the partnership as provided
       under Section 6225(a)(2) of the Internal Revenue Code and
       regardless of whether the item is a separately stated item for
       partners for federal income tax purposes.
       (C) For purposes of clauses (A) and (B):
          (i) a federal adjustment netted against another federal
          adjustment for purposes of determining an imputed
          underpayment for federal purposes to the partnership, or for
          purposes of determining a partner's federal tax due with
          respect to a review year, is considered to occur in the review
          year;
          (ii) a federal adjustment permitted to reduce the imputed
          underpayment for federal purposes for a partnership, or
          permitted for purposes of determining a partner's federal tax
          due or federal tax attributes with respect to a review year,
          and not otherwise described in item (i), is considered to
          occur in the review year; and
          (iii) if an adjustment related to a review year affects a tax
          attribute of a partner such that the partner is required to
          change one (1) or more tax attributes for federal purposes
          for a year other than the review year, the partner shall treat
          the change in the tax attribute as occurring for Indiana
          purposes in the same year as the change is required for
          federal purposes.
   (5) In the case of a state adjustment, the change shall be treated
   as occurring in the taxable year to which the state adjustment
   relates, unless the adjustment is treated as occurring in a different
   year as a result of subdivision (4).
   (6) For taxable years beginning before January 1, 2017, any
   reference to IC 6-3.6 shall be construed to include IC 6-3.5-1.1,
   IC 6-3.5-6, and IC 6-3.5-7, prior to their repeal.
   (7) With respect to partnerships and tiered partners:
       (A) a partner that is a partnership that receives a report of
       partnership adjustments, receives a final federal adjustment, or
       files an amended return is considered a tier one (1) entity;
       (B) a tiered partner that is a direct partner of a tier one (1)
       entity is considered a tier two (2) entity; and
       (C) each tiered partner that is an owner, beneficiary, or partner
       of an entity that is a tier two (2) entity or higher shall be
       assigned a tier number that is one (1) tier higher and is
       considered an entity in that tier.
   If, after application of this subdivision, a tiered partner is assigned
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   to more than one (1) tier, the tiered partner shall be treated as
   being assigned to the highest numerical tier to which the tiered
   partner could be assigned.
   (8) In the case of a partnership or tiered partner that is assigned a
   numerical tier, the applicable deadline for purposes of this chapter
   is:
       (A) in the case of a tier one (1) entity receiving a report of
       partnership adjustments, ninety (90) days from the date the
       report of partnership adjustments is final;
       (B) in the case of a tier one (1) entity that has received a final
       federal adjustment, one hundred eighty (180) days from the
       final determination date for a final determination date
       before January 1, 2026, and one (1) year from the final
       determination date for a final determination date after
       December 31, 2025;
       (C) in the case of a tier one (1) entity that has filed an
       amended return under this chapter other than an amended
       return resulting from a final federal adjustment, zero (0) days;
       and
       (D) in the case of a tiered partner that has received
       adjustments resulting from a tier one (1) partnership, a number
       of days equal to:
         (i) the number of days described in clauses (A) through (C),
         as applicable; plus
         (ii) thirty (30) multiplied by the tier number assigned to the
         tiered partner; minus
         (iii) thirty (30).
   However, if a tiered partner receives an adjustment reported on a
   partnership audit tracking report under Section 6226 of the
   Internal Revenue Code, the time period applicable for the tiered
   partner is the longer of the time period described in clause (D) or
   ninety (90) days from the date prescribed in Section
   6226(b)(4)(B) of the Internal Revenue Code, and any other
   applicable deadlines under this subdivision or subdivision (9).
   (9) Any reference to an election under section 9(c) of this chapter
   includes an election under sections 6(d) and 8(c) of this chapter.
   (10) In the case of a direct partner or indirect partner that is not a
   tiered partner, the applicable deadline for purposes of this chapter
   is ninety (90) days after the applicable deadline that is determined
   for the partnership or tiered partner under subdivision (8). If a
   direct partner or indirect partner described in this subdivision is
   subject to more than one (1) applicable deadline, the applicable
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                                    69
      deadline is the latest date determined under this subdivision.
   SECTION 22. IC 6-3-4.5-14, AS AMENDED BY P.L.137-2022,
SECTION 47, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 14. For purposes of this
chapter and IC 6-8.1-5-2, an assessment may not be issued against a
direct or indirect partner or partnership with regard to changes related
to a report of final partnership adjustments if the report of proposed
partnership adjustments is issued by the department to a partnership
after the latest of:
      (1) three (3) years after the due date of the partnership's return,
      including any valid extension granted under IC 6-8.1-6-1;
      (2) three (3) years after the date the partnership's return is filed
      with the department;
      (3) in the case of the partnership's underreporting of its adjusted
      gross income by more than twenty-five percent (25%), the periods
      provided in subdivisions (1) and (2) shall be six (6) years;
      (4) if the partnership fails to file a return required under
      IC 6-3-4-10, files a fraudulent return, or files a substantially blank
      return, no time limit;
      (5) in the case of a report of proposed partnership adjustments
      arising from final federal adjustments:
          (A) one hundred eighty (180) days one (1) year after the date
          on which the department receives the final federal adjustments
          from the partnership in the manner prescribed by the
          department; or
          (B) December 31, 2021;
      whichever is later; or
      (6) in the case of a report of proposed partnership adjustments
      issued to a tiered partner that is a partnership as a direct or
      indirect result of another partnership's report of final partnership
      adjustments, final federal adjustments, or an amended return, one
      hundred eighty (180) days one (1) year after the applicable
      deadline for the tiered partner or the date otherwise determined
      under this section for the partnership, whichever is later.
   SECTION 23. IC 6-5.5-1-2, AS AMENDED BY P.L.194-2023,
SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 4, 2025 (RETROACTIVE)]: Sec. 2. (a) Except as provided in
subsections (b) through (d), "adjusted gross income" means taxable
income as defined in Section 63 of the Internal Revenue Code, adjusted
as follows:
      (1) Add the following amounts:
          (A) An amount equal to a deduction allowed or allowable
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                                70
      under Section 166, Section 585, or Section 593 of the Internal
      Revenue Code.
      (B) An amount equal to a deduction allowed or allowable
      under Section 170 of the Internal Revenue Code.
      (C) An amount equal to a deduction or deductions allowed or
      allowable under Section 63 of the Internal Revenue Code for
      taxes based on or measured by income and levied at the state
      level by a state of the United States or levied at the local level
      by any subdivision of a state of the United States.
      (D) The amount of interest excluded under Section 103 of the
      Internal Revenue Code or under any other federal law, minus
      the associated expenses disallowed in the computation of
      taxable income under Section 265 of the Internal Revenue
      Code.
      (E) An amount equal to the deduction allowed under Section
      172 or 1212 of the Internal Revenue Code for net operating
      losses or net capital losses.
      (F) For a taxpayer that is not a large bank (as defined in
      Section 585(c)(2) of the Internal Revenue Code), an amount
      equal to the recovery of a debt, or part of a debt, that becomes
      worthless to the extent a deduction was allowed from gross
      income in a prior taxable year under Section 166(a) of the
      Internal Revenue Code.
      (G) Add the amount necessary to make the adjusted gross
      income of any taxpayer that owns property for which bonus
      depreciation was allowed in the current taxable year or in an
      earlier taxable year equal to the amount of adjusted gross
      income that would have been computed had an election not
      been made under Section 168(k) of the Internal Revenue Code
      to not apply bonus depreciation to the property in the year that
      it was placed in service.
      (H) Add the amount necessary to make the adjusted gross
      income of any taxpayer that placed Section 179 property (as
      defined in Section 179 of the Internal Revenue Code) in
      service in the current taxable year or in an earlier taxable year
      equal to the amount of adjusted gross income that would have
      been computed had an election for federal income tax
      purposes not been made for the year in which the property was
      placed in service to take deductions under Section 179 of the
      Internal Revenue Code in a total amount exceeding the sum of:
         (i) twenty-five thousand dollars ($25,000) to the extent
         deductions under Section 179 of the Internal Revenue Code
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                                71
         were not elected as provided in item (ii); and
         (ii) for taxable years beginning after December 31, 2017, the
         deductions elected under Section 179 of the Internal
         Revenue Code on property acquired in an exchange if the
         exchange would have been eligible for nonrecognition of
         gain or loss under Section 1031 of the Internal Revenue
         Code in effect on January 1, 2017, the exchange is not
         eligible for nonrecognition of gain or loss under Section
         1031 of the Internal Revenue Code, and the taxpayer made
         an election to take deductions under Section 179 of the
         Internal Revenue Code with regard to the acquired property
         in the year that the property was placed into service. The
         amount of deductions allowable for an item of property
         under this item may not exceed the amount of adjusted gross
         income realized on the property that would have been
         deferred under the Internal Revenue Code in effect on
         January 1, 2017.
      (I) Add an amount equal to any income not included in gross
      income as a result of the deferral of income arising from
      business indebtedness discharged in connection with the
      reacquisition after December 31, 2008, and before January 1,
      2011, of an applicable debt instrument, as provided in Section
      108(i) of the Internal Revenue Code. Subtract from the
      adjusted gross income of any taxpayer that added an amount
      to adjusted gross income in a previous year the amount
      necessary to offset the amount included in federal gross
      income as a result of the deferral of income arising from
      business indebtedness discharged in connection with the
      reacquisition after December 31, 2008, and before January 1,
      2011, of an applicable debt instrument, as provided in Section
      108(i) of the Internal Revenue Code.
      (J) Add an amount equal to any exempt insurance income
      under Section 953(e) of the Internal Revenue Code for active
      financing income under Subpart F, Subtitle A, Chapter 1,
      Subchapter N of the Internal Revenue Code.
      (K) Add an amount equal to the remainder of:
         (i) the amount allowable as a deduction under Section
         274(n) of the Internal Revenue Code; minus
         (ii) the amount otherwise allowable as a deduction under
         Section 274(n) of the Internal Revenue Code, if Section
         274(n)(2)(D) of the Internal Revenue Code was not in effect
         for amounts paid or incurred after December 31, 2020.
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                               72
   (2) Subtract the following amounts:
      (A) Income that the United States Constitution or any statute
      of the United States prohibits from being used to measure the
      tax imposed by this chapter.
      (B) Income that is derived from sources outside the United
      States, as defined by the Internal Revenue Code.
      (C) An amount equal to a debt or part of a debt that becomes
      worthless, as permitted under Section 166(a) of the Internal
      Revenue Code.
      (D) An amount equal to any bad debt reserves that are
      included in federal income because of accounting method
      changes required by Section 585(c)(3)(A) or Section 593 of
      the Internal Revenue Code.
      (E) The amount necessary to make the adjusted gross income
      of any taxpayer that owns property for which bonus
      depreciation was allowed in the current taxable year or in an
      earlier taxable year equal to the amount of adjusted gross
      income that would have been computed had an election not
      been made under Section 168(k) of the Internal Revenue Code
      to not apply bonus depreciation.
      (F) The amount necessary to make the adjusted gross income
      of any taxpayer that placed Section 179 property (as defined
      in Section 179 of the Internal Revenue Code) in service in the
      current taxable year or in an earlier taxable year equal to the
      amount of adjusted gross income that would have been
      computed had an election for federal income tax purposes not
      been made for the year in which the property was placed in
      service to take deductions under Section 179 of the Internal
      Revenue Code in a total amount exceeding the sum of:
        (i) twenty-five thousand dollars ($25,000) to the extent
        deductions under Section 179 of the Internal Revenue Code
        were not elected as provided in item (ii); and
        (ii) for taxable years beginning after December 31, 2017, the
        deductions elected under Section 179 of the Internal
        Revenue Code on property acquired in an exchange if the
        exchange would have been eligible for nonrecognition of
        gain or loss under Section 1031 of the Internal Revenue
        Code in effect on January 1, 2017, the exchange is not
        eligible for nonrecognition of gain or loss under Section
        1031 of the Internal Revenue Code, and the taxpayer made
        an election to take deductions under Section 179 of the
        Internal Revenue Code with regard to the acquired property
SEA 243 — Concur
                                73
         in the year that the property was placed into service. The
         amount of deductions allowable for an item of property
         under this item may not exceed the amount of adjusted gross
         income realized on the property that would have been
         deferred under the Internal Revenue Code in effect on
         January 1, 2017.
      (G) Income that is:
         (i) exempt from taxation under IC 6-3-2-21.7; and
         (ii) included in the taxpayer's taxable income under the
         Internal Revenue Code.
      (H) The amount that would have been excluded from gross
      income but for the enactment of Section 118(b)(2) of the
      Internal Revenue Code for taxable years ending after
      December 22, 2017.
      (I) For taxable years ending after March 12, 2020, an amount
      equal to the deduction disallowed pursuant to:
         (i) Section 2301(e) of the CARES Act (Public Law
         116-136), as modified by Sections 206 and 207 of the
         Taxpayer Certainty and Disaster Relief Tax Act (Division
         EE of Public Law 116-260); and
         (ii) Section 3134(e) of the Internal Revenue Code.
      (J) Subtract an amount equal to the deduction disallowed
      under Section 280C(h) of the Internal Revenue Code.
   (3) Make the following adjustments:
      (A) Subtract the amount of any interest expense paid or
      accrued in the current taxable year but not deducted as a result
      of the limitation imposed under Section 163(j)(1) of the
      Internal Revenue Code.
      (B) Add any interest expense paid or accrued in a previous
      taxable year but allowed as a deduction under Section 163 of
      the Internal Revenue Code in the current taxable year.
      (C) For taxable years beginning after December 31, 2021, add
      or subtract amounts related to specified research or
      experimental procedures expenditures as required under
      IC 6-3-2-29.
      (D) Add or subtract an amount equal to the modifications
      required for qualified production property under
      IC 6-3-2-30.
   For purposes of this subdivision, an interest expense is considered
   paid or accrued only in the first taxable year the deduction would
   have been allowable under Section 163 of the Internal Revenue
   Code if the limitation under Section 163(j)(1) of the Internal
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                                   74
     Revenue Code did not exist.
   (b) In the case of a credit union, "adjusted gross income" for a
taxable year means the total transfers to undivided earnings minus
dividends for that taxable year after statutory reserves are set aside
under IC 28-7-1-24.
   (c) In the case of an investment company, "adjusted gross income"
means the company's federal taxable income adjusted as follows:
     (1) Add the amount excluded from federal gross income under
     Section 103 of the Internal Revenue Code for interest received on
     an obligation of a state other than Indiana, or a political
     subdivision of such a state, that is acquired by the taxpayer after
     December 31, 2011.
     (2) Make the following adjustments:
         (A) Subtract the amount of any interest expense paid or
         accrued in the current taxable year but not deducted as a result
         of the limitation imposed under Section 163(j)(1) of the
         Internal Revenue Code.
         (B) Add any interest expense paid or accrued in a previous
         taxable year but allowed as a deduction under Section 163 of
         the Internal Revenue Code in the current taxable year.
     For purposes of this subdivision, an interest expense is considered
     paid or accrued only in the first taxable year the deduction would
     have been allowable under Section 163 of the Internal Revenue
     Code if the limitation under Section 163(j)(1) of the Internal
     Revenue Code did not exist.
     (3) Multiply the amount determined after the adjustments in
     subdivisions (1) and (2) by the quotient of:
         (A) the aggregate of the gross payments collected by the
         company during the taxable year from old and new business
         upon investment contracts issued by the company and held by
         residents of Indiana; divided by
         (B) the total amount of gross payments collected during the
         taxable year by the company from the business upon
         investment contracts issued by the company and held by
         persons residing within Indiana and elsewhere.
   (d) As used in subsection (c), "investment company" means a
person, copartnership, association, limited liability company, or
corporation, whether domestic or foreign, that:
     (1) is registered under the Investment Company Act of 1940 (15
     U.S.C. 80a-1 et seq.); and
     (2) solicits or receives a payment to be made to itself and issues
     in exchange for the payment:
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                                   75
           (A) a so-called bond;
           (B) a share;
           (C) a coupon;
           (D) a certificate of membership;
           (E) an agreement;
           (F) a pretended agreement; or
           (G) other evidences of obligation;
      entitling the holder to anything of value at some future date, if the
      gross payments received by the company during the taxable year
      on outstanding investment contracts, plus interest and dividends
      earned on those contracts (by prorating the interest and dividends
      earned on investment contracts by the same proportion that
      certificate reserves (as defined by the Investment Company Act
      of 1940) is to the company's total assets) is at least fifty percent
      (50%) of the company's gross payments upon investment
      contracts plus gross income from all other sources except
      dividends from subsidiaries for the taxable year. The term
      "investment contract" means an instrument listed in clauses (A)
      through (G).
    (e) If a partner is required to include an item of income, a deduction,
or another tax attribute in the partner's adjusted gross income tax return
pursuant to IC 6-3-4.5, such item shall be considered to be includible
in the partner's federal adjusted gross income or federal taxable
income, regardless of whether such item is actually required to be
reported by the partner for federal income tax purposes. For purposes
of this subsection:
      (1) items for which a valid election is made under IC 6-3-4.5-6,
      IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
      in the partner's adjusted gross income or taxable income; and
      (2) items for which the partnership did not make an election under
      IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
      partnership is required to remit tax pursuant to IC 6-3-4.5-18,
      shall be included in the partner's adjusted gross income or taxable
      income.
    SECTION 24. IC 6-5.5-6-6, AS AMENDED BY P.L.159-2021,
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 6. (a) Each taxpayer shall
notify the department in writing of any alteration or modification of a
federal income tax return filed with the United States Internal Revenue
Service for a taxable year that begins after December 31, 1988,
including any modification or alteration in the amount of tax,
regardless of whether the modification or assessment results from an
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                                   76
assessment.
    (b) The taxpayer shall file the notice in the form required by the
department within one hundred eighty (180) days one (1) year after the
alteration or modification is made. In the case of a taxpayer that files
a combined return under this article, the date on which the alteration or
modification is made shall be considered to be the last day on which an
alteration or modification occurs for any entity filing as part of the
combined return.
    (c) For purposes of this section, a modification or alteration occurs
on the date on which a:
      (1) taxpayer files an amended federal income tax return;
      (2) final determination is made concerning an assessment of
      deficiency;
      (3) final determination is made concerning a claim for refund;
      (4) taxpayer waives the restrictions on assessment and collection
      of all, or any part, of an underpayment of federal income tax by
      signing a federal Form 870, or any other Form prescribed by the
      Internal Revenue Service for that purpose. For purposes of this
      subdivision:
         (A) a final determination does not occur with respect to any
         part of the underpayment that is not covered by the waiver;
         and
         (B) if the signature of an authorized representative of the
         Internal Revenue Service is required to execute a waiver, the
         date of the final determination is the date of signing by the
         authorized representative of the Internal Revenue Service or
         by the taxpayer, whichever is later;
      (5) taxpayer enters into a closing agreement with the Internal
      Revenue Service concerning the taxpayer's tax liability under
      Section 7121 of the Internal Revenue Code that is a final
      determination. The date the taxpayer enters into a closing
      agreement under this subdivision is the date the closing
      agreement is signed by an authorized representative of the
      Internal Revenue Service or by the taxpayer, whichever is later;
      or
      (6) modification or alteration in an amount of tax, adjusted gross
      income, taxable income, credit, or other tax attribute is otherwise
      made that is a final determination;
for a taxable year, regardless of whether a modification or alteration
results in an underpayment or overpayment of tax.
    (d) For purposes of subsection (c)(2) through (c)(6), a final
determination means an action or decision by a taxpayer, the Internal
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Revenue Service (including the Appeals Division), the United States
Tax Court, or any other United States federal court concerning any
disputed tax issue that:
       (1) is final and conclusive; and
       (2) cannot be reopened or appealed by a taxpayer or the Internal
       Revenue Service as a matter of law.
    (e) If the federal modification or alteration results in a change in the
taxpayer's federal adjusted gross income or income within Indiana, the
taxpayer shall file an amended Indiana financial institutions tax return
(as required by the department) and a copy of the taxpayer's amended
federal income tax return with the department not later than the date
that is one hundred eighty (180) days after the modification or
alteration is made, if the modification or alteration occurs before
January 1, 2026, and one (1) year if the modification or alteration
occurs after December 31, 2025.
    (f) The taxpayer shall pay an additional tax or penalty due under this
article upon notice or demand from the department.
    SECTION 25. IC 6-5.5-7-1, AS AMENDED BY P.L.205-2025,
SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 1. (a) For purposes of this section, "final tax
liability" has the meaning set forth in IC 6-3-4-4.2(a)(1).
    (b) The penalty in the amount at the rate prescribed by
IC 6-8.1-10-2.1(b) shall be assessed by the department on a taxpayer
who fails to make payments as required in IC 6-5.5-6. However, no
penalty shall be assessed for a quarterly payment if the payment equals
or exceeds:
       (1) twenty percent (20%) of the final tax liability for the taxable
       year; or
       (2) twenty-five percent (25%) of the final tax liability for the
       taxpayer's previous taxable year.
    (c) The penalty for an underpayment of tax on a quarterly return
shall only be assessed on the difference between the actual amount paid
by the taxpayer on the quarterly return and the lesser of:
       (1) twenty percent (20%) of the taxpayer's final tax liability for
       the taxable year; or
       (2) twenty-five percent (25%) of the taxpayer's final tax liability
       for the taxpayer's previous taxable year.
A payment required to be made in the manner prescribed in
IC 6-5.5-6-3(c), but not paid in such a prescribed manner, shall be
subject to the penalty provided in IC 6-8.1-10-2.1(b)(5).
    (d) For a corporation required to make estimated payments under
this section:
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      (1) if a corporation has a current taxable year that is less than
      twelve (12) months, the amounts under subsections (b) and (c)
      shall be adjusted in the same manner as an estimated payment
      required under IC 6-3-4-4.2; and
      (2) any taxes withheld on behalf of the corporation under IC 6-3-4
      or IC 6-5.5-2-8, and any taxes remitted on behalf of the
      corporation under IC 6-3-2.1, shall be treated as estimated tax
      payments on behalf of the corporation for purposes of this section.
      Such taxes shall be attributed to each required payment in the
      manner the underlying income is attributed under Section 6655 of
      the Internal Revenue Code.
   SECTION 26. IC 6-6-6.5-9, AS AMENDED BY P.L.214-2019,
SECTION 27, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 9. (a) The provisions of this chapter pertaining to
registration and taxation shall not apply to any of the following:
      (1) An aircraft owned by and used exclusively in the service of:
          (A) the United States government;
          (B) a state (except Indiana), territory, or possession of the
          United States;
          (C) the District of Columbia; or
          (D) a political subdivision of an entity listed in clause (A), (B),
          or (C).
      (2) An aircraft owned by a resident of another state and registered
      in accordance with the laws of that state. However, the aircraft
      shall not be exempt under this subdivision if a nonresident
      establishes a base for the aircraft inside this state and the base is
      used for a period of sixty (60) days or more.
      (3) An aircraft which this state is prohibited from taxing under
      this chapter by the Constitution or the laws of the United States.
      (4) An aircraft owned or operated by a person who is either an air
      carrier certificated under Federal Air Regulation Part 121 or a
      scheduled air taxi operator certified under Federal Air Regulation
      Part 135, unless such person is a corporation incorporated under
      the laws of the state of Indiana, an individual who is a resident of
      Indiana, or a domestic corporation having a physical presence in
      Indiana that results in Indiana being the regular or principal place
      of business of its chief executive, operating, and financial
      officers.
      (5) An aircraft which has been scrapped, dismantled, or
      destroyed, and for which the airworthiness certificate and federal
      certificate of registration have been surrendered to the Federal
      Aviation Administration by the owner.
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      (6) An aircraft owned by a resident of this state that is not a dealer
      and that is not based in this state at any time, if the owner files the
      required form not later than thirty-one (31) days after the date of
      purchase; and furnishes the department with evidence,
      satisfactory to the department, verifying where the that aircraft is
      not based during the year. in this state.
      (7) An aircraft owned by a dealer for not more than five (5) days
      if the ownership is part of an ultimate sale or transfer of an
      aircraft that will not be based in this state at any time. However,
      the dealer described in this subdivision is required to file a report
      of the transaction within thirty-one (31) days after the ultimate
      sale or transfer of ownership of the aircraft. The report is not
      required to identify the seller or purchaser but must list the
      aircraft's origin, destination, N number, date of each transaction,
      and ultimate sales price.
      (8) An aircraft owned by a registered nonprofit museum, if the
      owner furnishes the department with evidence satisfactory to the
      department not later than thirty-one (31) days after the purchase
      date. The aircraft must be reported for registration, but the
      department shall issue the registration without charge.
    (b) The provisions of this chapter pertaining to taxation shall not
apply to an aircraft owned by and used exclusively in the service of
Indiana or a political subdivision of Indiana or any university or college
supported in part by state funds. That aircraft must be reported for
registration, but the department will issue the registration without
charge.
    SECTION 27. IC 6-6-6.5-13, AS AMENDED BY P.L.230-2025,
SECTION 89, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 13. (a) As the basis for measuring the tax imposed
by this chapter, the department shall classify every taxable aircraft in
its proper class according to the following classification plan:
              CLASS  DESCRIPTION
                  A  Piston-driven
                  B  Piston-driven,
                                      and Pressurized
                  C  Turbine driven
                                      or other Powered
                  D  Homebuilt, Gliders, or
                                      Hot Air Balloons
    (b) The tax imposed under this chapter is based on the age, class,
and maximum landing weight of the taxable aircraft. The amount of tax
imposed on the taxable aircraft is based on the following table:
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   Age  Class A        Class B  Class C     Class D
   0-4  $.04/lb        $.065/lb        $.09/lb     $.0175/lb
   5-8  $.035/lb       $.055/lb        $.08/lb     $.015/lb
   9-12  $.03/lb        $.05/lb  $.07/lb     $.0125/lb
   13-16  $.025/lb       $.025/lb        $.025/lb    $.01/lb
   17-25  $.02/lb        $.02/lb  $.02/lb     $.0075/lb
   over 25       $.01/lb        $.01/lb  $.01/lb     $.005/lb
   (c) An aircraft owner, who sells an aircraft on which the owner has
paid the tax imposed under this chapter, is entitled to a credit for the
tax paid. The credit equals excise tax paid on the aircraft that was sold,
times the lesser of:
      (1) ninety percent (90%); or
      (2) ten percent (10%) times the number of months remaining in
      the registration year after the sale of the aircraft.
The credit may only be used to reduce the tax imposed under this
chapter on another aircraft purchased by that owner during the
registration year in which the credit accrues. A person may not receive
a refund for a credit under this subsection.
   (d) A person who is entitled to a property tax deduction under
IC 6-1.1-12-13 or IC 6-1.1-12-14 is entitled to a credit against the tax
imposed on the person's aircraft under this chapter. The credit equals
the amount of the property tax deduction to which the person is entitled
under IC 6-1.1-12-13 and IC 6-1.1-12-14 minus the amount of that
deduction used to offset the person's property taxes or vehicle excise
taxes, times seven hundredths (.07). The credit Additionally, a person
entitled to a property tax deduction under IC 6-1.1-51-10 is also
entitled to a credit against the tax imposed on the person's aircraft
under this chapter. Such credit equals the amount of the property
tax deduction to which the person is entitled under IC 6-1.1-51-10
minus the amount of that deduction used to offset the person's
property taxes (unless the aircraft is subject to both the aircraft
excise tax and personal property tax, in which case the deduction
shall apply to both property taxes and excise taxes). The credits in
this subsection may not exceed the amount of the tax due under this
chapter. The county auditor shall, upon the person's request, furnish a
certified statement showing the credit allowable under this subsection.
The department may not allow a credit under this subsection until the
auditor's statement has been filed in the department's office.
   SECTION 28. IC 6-7-1-0.3 IS REPEALED [EFFECTIVE JULY 1,
2026]. Sec. 0.3. Notwithstanding section 14 of this chapter, revenue
stamps paid for before July 1, 2002, and in the possession of a
distributor may be used after June 30, 2002, only if the full amount of
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the tax imposed by section 12 of this chapter, as effective after June 30,
2002, and as amended by P.L.192-2002(ss), is remitted to the
department under the procedures prescribed by the department.
    SECTION 29. IC 6-7-1-0.4 IS REPEALED [EFFECTIVE JULY 1,
2026]. Sec. 0.4. (a) Notwithstanding section 14 of this chapter, revenue
stamps paid for before July 1, 2007, and in the possession of a
distributor may be used after June 30, 2007, only if the full amount of
the tax imposed by section 12 of this chapter, as effective after June 30,
2007, and as amended by P.L.218-2007, is remitted to the department
under the procedures prescribed by the department.
    (b) Notwithstanding section 14 of this chapter, revenue stamps paid
for before July 1, 2025, and in the possession of a distributor may be
used after June 30, 2025, only if the full amount of the tax imposed by
section 12 of this chapter, as amended and effective after June 30,
2025, is remitted to the department under the procedures prescribed by
the department.
    SECTION 30. IC 6-7-1-1 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 1. (a) It is the intent and purpose of
this chapter to levy impose a tax on all cigarettes sold, used, consumed,
handled, or distributed within this state, and to collect the tax which
shall be collected from the person who first sells, uses, consumes,
handles, or distributes the cigarettes.
    (b) It is further the intent and purpose of this chapter that whenever
any cigarettes are given for advertising or any purpose whatsoever, they
shall be taxed in the same manner as if they were sold, used, consumed,
handled, or distributed in this state. Notwithstanding any other
provisions contained in this chapter, the liability for the excise taxes
imposed by this chapter shall be conclusively presumed to be on the
retail purchaser or ultimate consumer, precollected for convenience
and facility only. When such taxes are paid by any other person, such
payment shall be considered as an advance payment and shall be added
to the price of the cigarettes and recovered from the ultimate consumer
or user. Distributors, wholesalers, or retailers may state the amount of
the tax separately from the price of such cigarettes on all price display
signs, sales or delivery slips, bills, and statements which advertise or
indicate the price of such cigarettes.
    SECTION 31. IC 6-7-1-2, AS AMENDED BY P.L.137-2022,
SECTION 57, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 2. (a) Unless the context requires otherwise,
Except as provided in subsection (b), as used in this chapter,
"cigarette" shall mean and include means and includes any roll for
smoking or heating made wholly or in part of tobacco, irrespective of
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size or shape and irrespective of tobacco being flavored, adulterated,
or mixed with any other ingredient, where such roll has a wrapper or
cover made of paper or any other material not containing tobacco.
Provided the definition in this section shall not be construed to
   (b) The definition does not include cigars (as defined in
IC 6-7-2-0.3). Excepting where context clearly shows that cigarettes
alone are intended,
   (c) For purposes of this chapter, the term "cigarettes" shall mean
and include means and includes cigarettes upon which a tax is
imposed by sections section 12 and 13 of this chapter, except where
context clearly shows that cigarettes alone are intended.
   SECTION 32. IC 6-7-1-3, AS AMENDED BY P.L.191-2016,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 3. Unless the context requires otherwise, As used
in this chapter, "individual package" shall mean and include means
and includes every individual packet, box, or other container used to
contain or to convey cigarettes to the consumer.
   SECTION 33. IC 6-7-1-4 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 4. Unless the context hereof
requires otherwise, As used in this chapter, the term "person" or the
term "company," herein used interchangeably, means and includes any
individual, assignee, receiver, commissioner, fiduciary, trustee,
executor, administrator, institution, national bank, bank, consignee,
firm, partnership, limited liability company, joint venture, pool,
syndicate, bureau, association, cooperative association, society, club,
fraternity, sorority, lodge, corporation, municipal corporation or any
other Indiana political subdivision of the state engaged in private or
proprietary activities or business, estate, trust, or any other group or
combination acting as a unit. and the plural as well as the singular
number, unless the intention to give a more limited meaning is
disclosed by the context. For purposes of this chapter, the term
"company" may be used interchangeably with the term "person".
   SECTION 34. IC 6-7-1-5 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 5. Unless the context hereof
requires otherwise, As used in this chapter, "department" shall mean
means the Indiana department of state revenue and its duly authorized
assistants and employees.
   SECTION 35. IC 6-7-1-6 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 6. Unless the context requires
otherwise, As used in this chapter, "distributor" shall mean and
include means and includes every person who sells, barters,
exchanges, or distributes cigarettes in the state of Indiana to retail
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dealers for the purpose of resale, or who purchases cigarettes directly
from a manufacturer of cigarettes, or who purchases for resale
cigarettes directly from a manufacturer of cigarettes, or from a
wholesaler, jobber, or distributor outside of the state of Indiana who is
not a distributor holding a registration certificate issued under this
chapter.
    SECTION 36. IC 6-7-1-7 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 7. Unless the context hereof
requires otherwise, As used in this chapter, "retailer" shall mean
means every person, other than a distributor, who purchases, sells,
offers for sale, or distributes cigarettes, to consumers or to any person
for any purpose other than resale, irrespective of quantity or amount,
or the number of sales.
    SECTION 37. IC 6-7-1-7.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 7.5. As used in this chapter, "consumer" means a
person using a cigarette or cigarettes for the purpose of smoking.
    SECTION 38. IC 6-7-1-8 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 8. Unless the context hereof
requires otherwise, As used in this chapter, "consumption" shall mean
or "consume" means the possession for use or the use of a cigarette
or cigarettes for the purpose of smoking. the same; the term
"consumer" shall mean the person so using the same; and the term
"consume" shall mean so to use the same.
    SECTION 39. IC 6-7-1-9, AS AMENDED BY P.L.191-2016,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 9. Unless the context requires otherwise, As used
in this chapter, "stamps" shall mean means the stamps printed,
manufactured, or made by authority of the department, as provided in
this chapter, and issued, sold, or circulated by it and by the use of
which the tax levied under this chapter is paid. or The term also
means any impression, indicium, or character imprinted upon
individual packages of cigarettes by a metered stamping machine or
other device such as may be authorized by the department for use by
the holder of a certificate under the provisions of this chapter and by
the use of which the tax levied under this chapter shall be paid.
    SECTION 40. IC 6-7-1-10 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 10. Unless the context
requires otherwise, As used in this chapter, "counterfeit stamp" shall
mean means any stamp, label, print, indicium, or character which
evidences, or purports to evidence the payment of any tax levied by this
chapter, and which stamp, label, print, indicium, or character has not
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been printed, manufactured, or made by authority of the department as
provided in this chapter, and issued, sold, or circulated by it.
    SECTION 41. IC 6-7-1-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 11. Unless the context
hereof requires otherwise, As used in this chapter, "drop shipment"
shall mean means any shipment billed to one other than the person
receiving such shipment.
    SECTION 42. IC 6-7-1-13 IS REPEALED [EFFECTIVE JULY 1,
2026]. Sec. 13. There is levied, assessed, and imposed, and shall be
collected and paid as provided in this chapter, upon the use,
consumption, or possession for use of cigarettes within the state of
Indiana, taxes at the rates set forth and in the manner provided in
section 12 of this chapter. Provided, that the tax levied, assessed, and
imposed by this section shall not be applicable to the use, consumption,
or possession for use of cigarettes upon which the tax levied, assessed,
and imposed by the provisions of section 12 of this chapter has been
paid.
    SECTION 43. IC 6-7-1-14, AS AMENDED BY P.L.191-2016,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 14. (a) All A tax is levied, assessed, and
imposed upon the use, consumption, or possession for use of
cigarettes within Indiana at the rates set forth and in the manner
provided in section 12 of this chapter.
    (b) Payment of the taxes levied, assessed, and imposed by this
chapter shall be paid and the payment thereof is evidenced by the
purchase of stamps purchasing and by affixing the same stamps to the
individual packages and duly cancelling these stamps, of cigarettes, or
otherwise by canceling the stamps, as provided in this chapter. but
there shall be Except as provided in subsection (e), a distributor
shall firmly and securely affix each individual package of cigarettes
(even those contained within a carton or larger containers of
cigarettes) with the requisite denomination and amount of stamps
upon the receipt of cigarettes taxed under this chapter.
    (c) Once a stamp has been affixed to an individual package of
cigarettes, no further tax may be assessed, imposed, or collected by
virtue of this chapter upon the sale or use of any the package of
cigarettes. upon which these stamps have been previously affixed as
provided by this chapter. If a retailer receives cigarettes that do not
have the proper amount of stamps firmly affixed to each individual
package by a distributor, the retailer shall:
      (1) stamp or firmly affix stamps immediately on each
      individual package if the retailer is also a licensed distributor;
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                                  85
      or
      (2) if the retailer is not a licensed distributor, return the
      stamps to the distributor from whom the stamps that were to
      have been firmly affixed were purchased.
   (d) The payment and affixing of a stamp on an individual
package of cigarettes shall be considered as an advance payment,
precollected for convenience and facility only, and shall be added
to the price of the cigarettes and recovered from the ultimate
consumer or user. Notwithstanding any other provisions contained
in this chapter, the liability for the tax imposed by this chapter
shall be conclusively presumed to be on the retail purchaser or
ultimate consumer.
   (e) A distributor engaged in interstate business shall be
permitted to set aside part of the distributor's stock of individual
packages as may be necessary for the conduct of such interstate
business without affixing the stamps required by this chapter.
   (f) Distributors, wholesalers, or retailers may state the amount
of the tax separately from the price of such cigarettes on all price
display signs, sales or delivery slips, bills, and statements which
advertise or indicate the price of such cigarettes.
   (g) Sample packages of cigarettes may not be distributed in this
state without stamps of the proper denomination affixed to the
package.
   SECTION 44. IC 6-7-1-15, AS AMENDED BY P.L.137-2022,
SECTION 58, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 15. (a) The department is the official agent of the
state for the administration and enforcement of this chapter. A
sufficient sum to pay salaries and expenses is appropriated to the
department out of the monies received by virtue of this chapter.
   (b) The department may issue registration certificates, upon the
terms and conditions provided in this chapter, and may revoke or
suspend the same upon the violation of this chapter or a violation of
IC 24-3-5.4-17 by the holder of such a certificate.
   (c) The department may apply for membership in the National
Tobacco Tax Association.
   (d) The department may design and have printed or manufactured
stamps of sizes and denominations to be affixed to each individual
package. The stamps shall be firmly affixed on each individual package
in such a manner that the stamps can not be removed without being
mutilated or destroyed; however, the department may by regulation
designate some other manner for cancellation of stamps. In addition to
the stamps, the
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    (e) The department may by rules and regulations authorize
distributors to use metered stamping machines or other devices which
will imprint distinctive indicia evidencing the payment of the tax upon
each individual package. The machines shall be constructed in such a
manner as will accurately record or meter the number of impressions
or tax stamps made. The tax meter machines or other devices shall be
kept available at all reasonable times for inspection by the department,
and the machines shall be maintained in proper operating condition.
    (f) A person who knowingly tampers with the printing or recording
mechanism of such a machine commits a Class B misdemeanor.
    SECTION 45. IC 6-7-1-16.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 16.5. (a) The department may institute a suit upon a
distributor's bond or letter of credit for the entire amount of the
liability and costs under any of the following circumstances:
      (1) A registrant is convicted of a violation of any of the
      provisions of this chapter.
      (2) The registrant's certificate is revoked and no review is
      requested of the order of the revocation under section 17.2 of
      this chapter.
      (3) If on review of a revocation, the decision is adverse to the
      registrant, and the registrant refuses to pay any taxes,
      damages, fines, penalties, or costs adjudged against the
      registrant by reason of a violation of any of the provisions of
      this chapter.
    (b) Any suit upon the bond shall be in addition to any other
remedy provided for in this chapter.
    SECTION 46. IC 6-7-1-17, AS AMENDED BY P.L.201-2023,
SECTION 109, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 17. (a) Distributors who hold
certificates and retailers shall be agents of the state in the collection of
the taxes imposed by this chapter and the amount of the tax levied,
assessed, and imposed by this chapter on cigarettes sold, exchanged,
bartered, furnished, given away, or otherwise disposed of by
distributors or to retailers. Distributors who hold certificates shall be
agents of the department to affix the required stamps and shall be
entitled to purchase the stamps from the department at a discount of
two cents ($0.02) per individual package of cigarettes as compensation
for their labor and expense.
    (b) The department may permit distributors who hold certificates
and who are admitted to do business in Indiana to pay for revenue
stamps within thirty (30) days after the date of purchase. However, the
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                                    87
privilege is extended upon the express condition that:
      (1) except as provided in subsection (c), a bond or letter of credit
      satisfactory to the department, in an amount not less than the sales
      price of the stamps, is filed with the department;
      (2) proof of payment is made of all property taxes, excise taxes,
      and listed taxes (as defined in IC 6-8.1-1-1) for which any such
      distributor may be liable; and
      (3) payment for the revenue stamps must be made by electronic
      funds transfer (as defined in IC 4-8.1-2-7).
If payment is not received by the due date, the discount will be
disallowed and penalty and interest will be charged. Additionally,
no further stamps will be sold to the distributor until full payment
is made.
    (c) The bond or letter of credit, conditioned to secure payment for
the stamps, shall be executed by the distributor as principal and by a
corporation duly authorized to engage in business as a surety company
or financial institution in Indiana.
    (c) (d) If a distributor has at least five (5) consecutive years of good
credit standing with the state, the distributor shall not be required to
post a bond or letter of credit under subsection (b).
    (e) The department shall not sell tax stamps to anyone except
distributors holding active and valid registration certificates and
such others who established their need for tax stamps by written
statement satisfactory to the department.
    SECTION 47. IC 6-7-1-17.2 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 17.2. (a) The department may, after fifteen (15) days
written notice, revoke or suspend the registration certificate of any
distributor for any violation of, or noncompliance with, the
provisions of this chapter, or for noncompliance with any lawful
rule or regulation promulgated by the department. Any such action
shall be subject to judicial review.
    (b) The distributor may appear at the time and place given in
the notice to show cause at a hearing as to why the distributor's
registration certificate should not be revoked or suspended.
Hearings shall be held at the place and before the personnel as the
department may designate.
    (c) If a certificate is revoked or suspended, no refund of
registration fees will be allowed.
    (d) If a distributor's certificate is suspended, the suspension
shall mean the loss of all rights under the license for the period of
the suspension.
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    (e) The length of revocation or suspension will be at the
department's discretion.
    (f) The department's administrative hearing procedures are
otherwise governed by IC 6-8.1-3. In the conduct of any
investigation or hearing under this section, neither the department
nor any officer or employee of the department shall be bound by
the technical rules of evidence, and no informality in the
proceedings, or in the manner of taking testimony, shall invalidate
the department's order or decision. The department may examine
books, papers, or memoranda bearing upon the sale or other
disposition of cigarettes by the distributor, and may require the
attendance of the distributor, or any officer or employee of the
distributor, or any person having knowledge of the facts, and may
take testimony and require proof.
    SECTION 48. IC 6-7-1-18 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 18. Every distributor,
upon the receipt of cigarettes taxed under this chapter, shall cause each
individual package to have the requisite denomination and amount of
stamps firmly affixed. Every retailer, upon receipt of cigarettes not
having the proper amount of stamps firmly affixed, to each individual
package, or stamped by a meter stamping machine, by a distributor
shall stamp or firmly affix stamps immediately on each individual
package. Provided, however, that any distributor engaged in interstate
business, shall be permitted to set aside such part of his stock as may
be necessary for the conduct of such interstate business without
affixing the stamps required by this chapter.
    (a) Every A distributor shall include with each shipment or
delivery of cigarettes an invoice showing complete details of the
transactions. A distributor at the time of shipping or delivering any
cigarettes, shall also make a duplicate invoice at the time of shipping
or delivering any cigarettes, showing complete details of each
transaction, and shall retain the duplicate subject to the inspection by
the department or its agent. Every distributor shall include with each
shipment or delivery of cigarettes an invoice showing complete details
of the transactions.
    (b) Every A retailer shall retain for not less than two (2) weeks the
invoice included with each shipment or delivery of cigarettes subject
to inspection by the department or its agent.
    (c) A retailer may request a duplicate invoice from a distributor.
    SECTION 49. IC 6-7-1-18.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 18.5. (a) The tax imposed under this chapter does not
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apply to the following types of sales or other dispositions:
      (1) Except as provided in subsection (b), sales or other
      dispositions of cigarettes to the United States government or
      its agencies and instrumentalities.
      (2) Cigarettes that are shipped from within Indiana to a point
      outside Indiana, not to be returned to Indiana.
    (b) Sales or other dispositions of cigarettes within Indiana to
individuals, private stores, or concessionaires located upon federal
areas and engaged in the business of selling cigarettes are subject
to the tax imposed under this chapter. In these situations, the
distributor must affix tax stamps to each individual package of
cigarettes sold or dispositioned to individuals, private stores, or
concessionaires located upon federal areas as required by section
14 of this chapter before delivery pursuant to a sale or other
disposition.
    (c) Distributors do not need to affix tax stamps to the individual
packages of cigarettes that are sold or dispositioned that qualify
under subsection (a). The burden of proof, however, is at all times
upon the Indiana distributor to show that such cigarettes actually
were:
      (1) sold or dispositioned to the United States government or
      its agencies and instrumentalities; or
      (2) sold and shipped outside Indiana and did not return to
      Indiana.
    SECTION 50. IC 6-7-1-19 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 19. (a) Every A
distributor of cigarettes shall keep and preserve for three (3) years
complete and accurate books, records, and invoices, showing the
purchase and sale of all cigarettes Such distributors shall also keep
separate invoices, held, purchased, sold, disposed of, manufactured,
brought in, or caused to be brought in from outside Indiana, and
records as well as the purchase of stamps. purchased. All the
aforementioned
    (b) A distributor's books, records, invoices, and stocks of
cigarettes and unused stamps on hand shall be open to inspection by
the department at all reasonable times, and shall be kept at the
location of the registered certificate unless approval is given by the
department in writing to have such records kept at another
location. Provided, however, that all distributors, within fifteen (15)
days after the first
    (c) Every Indiana registered distributor shall, on or before the
fifteenth day of each calendar month following the transaction, file
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a return with the department.
    (d) Before the fifteenth day of each month, each distributor shall
file with the department a report of all drop shipment sales made by
them to other distributors within this state during the preceding month,
which report shall give including the name and address of the
distributor, the kind and quantity of the sales, and their dates of
delivery. Provided, further, however, that every
    (e) Before the tenth day of each month, each distributor engaged
in interstate business shall within ten (10) days after the first day of
each month, file with the department a report of all such interstate sales
made during the preceding month, which report shall give including
the name and address of the person to whom sold, the kind and quantity
of the sales, and their dates of delivery.
    (f) The reports required under this section shall be made upon
forms furnished and prescribed by the department and shall
contain such other information as the department may reasonably
require.
    (b) (g) All drop shipments made by manufacturers of cigarettes
within the state of Indiana must be shipped and billed through a
regularly licensed distributor licensed by the state of Indiana (as
defined in section 6 of this chapter).
    SECTION 51. IC 6-7-1-21, AS AMENDED BY P.L.158-2013,
SECTION 101, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 21. (a) A distributor or other person
who knowingly sells or offers for sale an individual package having
affixed thereto any that has been affixed with a fraudulent, spurious,
imitation, or counterfeit stamp, or stamp which has been previously
affixed, commits a Level 5 felony.
    (b) A person who knowingly affixes to an individual package either
a fraudulent, spurious, imitation, or counterfeit stamp or a stamp which
has previously been affixed to an individual package commits a Level
5 felony.
    SECTION 52. IC 6-7-1-27 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 27. Where (a)
Distributors shall notify the department when stamps or individual
packages to which stamps have been affixed have become mutilated,
or otherwise unfit for use. distributors shall notify the department, and,
if an investigation discloses that said stamps have not evidenced a
taxable transaction, The department shall issue replacement stamps
shall be supplied to the distributor without cost if the department
determines that the stamps have not evidenced a taxable
transaction.
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    (b) Any unused stamps may be returned to the department by the
distributor who purchased such stamps, and the department shall then
refund to such distributor an amount equal to that paid therefor.
    (c) Sales and transfers of stamps by one (1) registered cigarette
distributor to another registered cigarette distributor are not
permitted unless authorization is given in writing by the
department.
    (d) Cigarettes sold by registered distributors to other registered
distributors must not be accompanied by loose stamps.
    SECTION 53. IC 6-8-1-1 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 1. As used in this chapter, "person"
means any individual, assignee, receiver, commissioner, fiduciary,
trustee, executor, administrator, institution, national bank, bank,
consignee, firm, partnership, joint venture, pool, syndicate, bureau,
association, corporation, limited liability company, estate, trust, or any
other group or combination acting as a unit.
    SECTION 54. IC 6-8-1-5.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 5.5. As used in this chapter, "petroleum gatherer"
means the following:
      (1) A person that purchases petroleum products.
      (2) A person that gathers and transports petroleum products
      in which the person does not have the right, title, or interest.
      (3) A person that possesses petroleum products upon which
      the petroleum severance tax has not been paid.
    SECTION 55. IC 6-8-1-6 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 6. As used in this chapter,
"producer" means a person engaged in severing petroleum directly
from the land. direct.
    SECTION 56. IC 6-8-1-6.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 6.5. As used in this chapter, "purchaser" means any
person engaged in the purchase of petroleum products. The term
includes pipelines, refineries, and any other form of petroleum
purchasers for resale or use.
    SECTION 57. IC 6-8-1-7 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 7. As used in this chapter, "owner"
means a person receiving or entitled to receive a proportionate share of
petroleum or a proportionate share of the proceeds of the sale of
petroleum after production by an operator. and without limitation of the
foregoing, The term includes, but is not limited to, the owners of
royalties, excess royalty, overriding royalty, mineral rights, or working
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interest.
    SECTION 58. IC 6-8-1-8 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 8. (a) A tax Except as provided in
subsection (f), a tax is imposed on the privilege of severing
petroleum from the land and producing petroleum from a well.
    (b) The tax described in subsection (a) is imposed at a rate equal
to the greater of:
      (1) one percent (1%) of the value of the petroleum; or
      (2) three cents ($0.03) per one thousand (1,000) cubic feet (MCF)
      for natural gas; and or
      (3) twenty-four cents ($0.24) per barrel for oil;
is hereby imposed as of at the time of the severance of such petroleum
from the land upon all producers and owners thereof as an excise for
the privilege of severing the same from the land and producing the
same from the well, except when the gas from any well is used to pump
or treat the same or when such gas is of such petroleum.
    (c) The person purchasing petroleum products or having
petroleum products in the person's possession is responsible for
reporting and remitting the tax at the time of sale or delivery from
the place of production. The responsibility is imposed upon all
purchasers and those having possession of petroleum products
after severance from the ground, including petroleum gatherers.
    (d) Each purchaser or petroleum gatherer shall file a report on
or before the last day of the month immediately following the
preceding monthly period. The person shall remit the tax due
under this section in conjunction with the filing of the monthly
report. The reporting and remittance is to be made upon forms
prescribed by the department.
    (e) The purchaser or petroleum gatherer must report the
severance of petroleum products from the land and the payment of
the tax. The report must show:
      (1) the total monthly amount of petroleum products severed
      from the land;
      (2) the amount and computation of the tax;
      (3) the names and addresses of all owners or producers or
      interest holders participating in the production of petroleum
      products;
      (4) the amounts paid to the various owners or producers as
      their interest may be; and
      (5) any other information the department may reasonably
      require.
    (f) The following shall not be considered taxable events under
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this section:
      (1) Petroleum produced from any well that is used to pump or
      treat petroleum.
      (2) Petroleum piped to a landowner's private buildings for the
      landowner's own use.
    SECTION 59. IC 6-8-1-9 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 9. (a) The tax imposed by section
8 of under this chapter is a lien upon such petroleum from the time of
its severance from the land until such tax, and all plus any penalties
and interest accruing by reason of nonpayment of the tax are
attributable to those taxes, is fully paid. The responsibility for the
lien follows such petroleum products in the hands of the purchaser
or the petroleum gatherer.
    (b) Any person purchasing or receiving possession of petroleum
upon which tax (including any penalties and interest attributable
to the tax) has not been paid becomes personally liable for the lien
from the time of its severance from the land and must report and
pay the tax imposed under this chapter, plus any penalties and
interest attributable to the tax, to the state.
    (c) If the purchaser or the person having possession of
petroleum products pays the amount of the petroleum severance
tax, the purchaser or person shall be entitled to reimbursement
from the owners or producers. By paying the petroleum severance
tax, these purchasers or possessors of petroleum products are not
subject to any suit or action for recovery by the owners or
producers of petroleum products. Any remedy of such owners or
producers is exclusively by way of claim for refund and litigation
upon such claim for refund with the department.
    (d) If a person responsible for paying this tax fails to do so in a
timely fashion, that person shall be subject to standard penalties
and interest under IC 6-8.1-10.
    SECTION 60. IC 6-8-1-10 IS REPEALED [EFFECTIVE JULY 1,
2026]. Sec. 10. Any person purchasing or receiving possession of such
petroleum prior to the discharge of such lien shall then and there be,
become and remain personally liable to report and pay the amount of
such lien until the same be paid.
    SECTION 61. IC 6-8-1-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 11. A person reporting
and paying a tax levied under this chapter is entitled to be reimbursed
by the owner or owners immediately upon such payment of the tax and
shall deduct the amount of the payment from anything due to the
owners. A person paying and deducting such the tax is not subject to
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any suit or action for recovery by any person, but the remedy of such
that person shall be exclusively by claim or suit for refund under the
terms of this chapter.
    SECTION 62. IC 6-8-1-12 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 12. The department
shall administer and collect the tax imposed under this chapter. and
shall adopt rules fixing the time and manner of reporting, and paying,
at monthly intervals the tax imposed under this chapter. Any forms,
returns, or reports required to be filed under this chapter shall
contain the information as the department may reasonably require
for the administration of this chapter.
    SECTION 63. IC 6-8-1-19, AS AMENDED BY P.L.158-2013,
SECTION 104, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 19. Any person charging against or
deducting from any payment due to any other person any amount being
or represented as being a tax levied by this chapter or receiving money
or credits as or purporting to be such a tax is a trustee of the amounts
so charged, deducted, or received. A trustee who fails to pay any of
those amounts to the department when due, with intent to evade
payment of the tax, commits a Level 6 felony.
    SECTION 64. IC 6-8-1-19.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 19.5. A taxpayer may apply for a refund on forms
prescribed by the department by identifying the amount and date
of the alleged overpayment and the area in which the petroleum
products were produced. The application for refund must include
any supporting documentation as is reasonably requested by the
department.
    SECTION 65. IC 6-8-1-23 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 23. (a) Every taxpayer
shall keep and maintain proper books and records sufficient to
adequately reflect the severance of all petroleum products and
their value for a period of three (3) years from the date of the filing
of the return and the payment of the tax for each taxable period.
    (b) It is a Class C infraction for a person subject to taxation under
this chapter to fail to keep and preserve such records, books, or
accounts as may be necessary to determine the amount for which he the
person is liable. It is a Class C infraction for such a person to fail to
keep and preserve such records for a period of three (3) years, or to fail
to keep them open for examination at any time by the department or its
authorized agents.
    (b) (c) It is a Class B misdemeanor for a person to make false entries
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in his the person's books, or to keep more than one (1) set of books,
with intent to defraud the state or evade the payment of the tax, or any
part thereof, imposed by this chapter.
    SECTION 66. IC 6-8.1-1-4.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 4.7. "Taxes held in trust" means
a listed tax:
      (1) that is collected or received by a taxpayer from the
      taxpayer's customer;
      (2) withheld by the taxpayer for amounts paid or credited to
      an individual or other entity pursuant to IC 6-3 or IC 6-5.5;
      or
      (3) held in trust or as an agent of the state under the
      applicable listed tax;
which upon receipt or accrual becomes property of the state. The
term includes, but is not limited to, the following listed taxes: the
state gross retail and use taxes (IC 6-2.5); withholding for the
adjusted gross income tax (IC 6-3); withholding for the local
income tax (IC 6-3.6); withholding for the financial institutions tax
(IC 6-5.5); the gasoline tax (IC 6-6-1.1); the special fuel tax
(IC 6-6-2.5); the auto rental excise tax (IC 6-6-9); the aviation fuel
excise tax (IC 6-6-13); the heavy equipment rental excise tax
(IC 6-6-15); the vehicle sharing excise tax (IC 6-6-16); the
electronic cigarette tax (IC 6-7-4); the various innkeeper's taxes
(IC 6-9); and the various food and beverage taxes (IC 6-9).
    SECTION 67. IC 6-8.1-1-11 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 11. (a) Except as provided in 6-8.1-18, "responsible
person" means a person that:
      (1) is an individual conducting business as a sole proprietor or
      an employee, contractor, officer, or member of an applicable
      business entity; and
      (2) has a duty to remit listed taxes held in trust for the
      department or a political subdivision.
    (b) For purposes of this section, "applicable business entity"
means a partnership, corporation, limited liability company, trust,
estate, or other combination of individuals or entities that is
required to collect, withhold, or remit a tax held in trust.
    (c) The determination that a person is a responsible person for
a tax held in trust shall be made separately for each tax.
    SECTION 68. IC 6-8.1-3-11, AS AMENDED BY P.L.257-2019,
SECTION 75, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
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                                  96
UPON PASSAGE]: Sec. 11. (a) As used in this section, "secure
electronic delivery service" means a service that:
      (1) employs security procedures to provide, send, deliver, or
      otherwise communicate electronic records to the intended
      recipient using:
         (A) security methods such as passwords, encryption, and
         matching electronic addresses to United States postal
         addresses; or
         (B) other security methods that are consistent with applicable
         law or industry standards; and
      (2) operates subject to the applicable requirements of the
      Electronic Signatures in Global and National Commerce Act (15
      U.S.C. 7001 et seq.).
   (b) When a statute specifies that the department is required to send
a document by mail, and the particular statute is silent as to the class
or type of mailing to be used, the department satisfies the mailing
requirement by mailing the document through any of the following
methods:
      (1) United States first-class mail;
      (2) United States registered mail, return receipt requested;
      (3) United States certified mail;
      (4) a certificate of mailing; or
      (5) electronically through the department's online tax system
      or a secure electronic delivery service, if the use of the secure
      electronic delivery service is authorized under IC 6-8.1-6-7(b).
Subject to IC 6-8.1-6-7(b), the choice of the method is at the
department's discretion.
   (c) The department may use any form of mailing in cases Where a
mailing is not required by statute, the department may send the
document:
      (1) electronically through its online tax system if the taxpayer
      has a registered account in the system; or
      (2) by using any form of mailing.
   (d) Notwithstanding subsection (b) or (c), a taxpayer may
affirmatively request to receive all documents from the department
electronically through the department's online tax system in lieu of
receiving such notifications and issuances through the mail.
   (d) (e) The department shall adopt rules, guidelines, or other
instructions that set forth the procedures that department employees are
required to follow in sending a document that provides notice to a
taxpayer by mail under any of the methods described in subsection (b).
The procedures must include at least the following instructions:
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                                   97
      (1) The date contained in the document must not precede the date
      of the mailing.
      (2) Each mailing of a document must be recorded in department
      records, noting the date and time of the mailing.
    SECTION 69. IC 6-8.1-3-17, AS AMENDED BY P.L.213-2025,
SECTION 92, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 17. (a) Before an original tax appeal is filed
with the tax court under IC 33-26, the commissioner, or the taxpayer
rights advocate office to the extent granted the authority by the
commissioner, may settle any tax liability dispute if a substantial doubt
exists as to:
      (1) the constitutionality of the tax under the Constitution of the
      State of Indiana;
      (2) the right to impose the tax;
      (3) the correct amount of tax due;
      (4) the collectability of the tax; or
      (5) whether the taxpayer is a resident or nonresident of Indiana.
    (b) After an original tax appeal is filed with the tax court under
IC 33-26, and notwithstanding IC 4-6-2-11, the commissioner may
settle a tax liability dispute with an amount in contention of twenty-five
thousand dollars ($25,000) or less. Notwithstanding IC 6-8.1-7-1(a),
the terms of a settlement under this subsection are available for public
inspection.
    (c) The department shall establish an amnesty program for taxpayers
having an unpaid tax liability for a listed tax that was due and payable
for a tax period ending before January 1, 2023. 2024. A taxpayer is not
eligible for the amnesty program:
      (1) for any tax liability resulting from the taxpayer's failure to
      comply with IC 6-3-1-3.5(b)(3) with regard to the wagering
      taxes; tax imposed by IC 4-33-13, or IC 4-35-8; or
      (2) if the taxpayer participated in any previous amnesty program
      under:
          (A) this section (as in effect on December 31, 2024); or
          (B) IC 6-2.5-14.
The time in which a voluntary payment of tax liability may be made (or
the taxpayer may enter into a payment program acceptable to the
department for the payment of the unpaid listed taxes in full in the
manner and time established in a written payment program agreement
between the department and the taxpayer) under the amnesty program
is limited to the period determined by the department, not to exceed
eight (8) regular business weeks ending before the earlier of the date
set by the department or January 1, 2027.
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                                   98
    (d) The amnesty program must provide that, upon payment by a
taxpayer to the department of all listed taxes due from the taxpayer for
a tax period (or payment of the unpaid listed taxes in full in the manner
and time established in a written payment program agreement between
the department and the taxpayer), entry into an agreement that the
taxpayer is not eligible for any other amnesty program that may be
established and waives any part of interest and penalties on the same
type of listed tax that is being granted amnesty in the current amnesty
program, and compliance with all other amnesty conditions adopted
under a rule of the department in effect on the date the voluntary
payment is made, the department:
      (1) shall abate and not seek to collect any interest, penalties,
      collection fees, or costs that would otherwise be applicable;
      (2) shall release any liens imposed;
      (3) shall not seek civil or criminal prosecution against any
      individual or entity; and
      (4) shall not issue, or, if issued, shall withdraw, an assessment, a
      demand notice, or a warrant for payment under IC 6-8.1-5-1,
      IC 6-8.1-5-3, IC 6-8.1-8-2, or another law against any individual
      or entity;
for listed taxes due from the taxpayer for the tax period for which
amnesty has been granted to the taxpayer. Amnesty granted under
subsection (c) is binding on the state and its agents. However, failure
to pay to the department all listed taxes due for a tax period invalidates
any amnesty granted under subsection (c) for that tax period. The
department shall conduct an assessment of the impact of the tax
amnesty program on tax collections and an analysis of the costs of
administering the tax amnesty program. As soon as practicable after the
end of the tax amnesty period, the department shall submit a copy of
the assessment and analysis to the legislative council in an electronic
format under IC 5-14-6. The department shall enforce an agreement
with a taxpayer that prohibits the taxpayer from receiving amnesty in
another amnesty program.
    (e) For purposes of subsection (c), a liability for a listed tax is due
and payable if:
      (1) the department has issued:
         (A) an assessment of the listed tax under IC 6-8.1-5-1;
         (B) a demand for payment under IC 6-8.1-5-3; or
         (C) a demand notice for payment of the listed tax under
         IC 6-8.1-8-2;
      (2) the taxpayer has filed a return or an amended return in which
      the taxpayer has reported a liability for the listed tax; or
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                                   99
       (3) the taxpayer has filed a written statement of liability for the
       listed tax in a form that is satisfactory to the department.
    (f) The department may waive interest and penalties if the general
assembly enacts a change in a listed tax for a tax period that increases
a taxpayer's tax liability for that listed tax after the due date for that
listed tax and tax period. However, such a waiver shall apply only to
the extent of the increase in tax liability and only for a period not
exceeding sixty (60) days after the change is enacted. The department
may adopt rules under IC 4-22-2 or issue guidelines to carry out this
subsection.
    SECTION 70. IC 6-8.1-3-25, AS AMENDED BY P.L.213-2025,
SECTION 94, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 25. Notwithstanding any other law, the
department shall deposit the amounts collected under a tax amnesty
program carried out under section 17 of this chapter after June 30,
2025, as follows: in the same manner as a payment of the listed tax
occurring during the fiscal year in which the amnesty program
ends.
       (1) County income tax collected under IC 6-3.5-1.1, IC 6-3.5-6,
       or IC 6-3.5-7 (all repealed January 1, 2017) shall be distributed to
       counties in the same manner as otherwise provided by the
       appropriate chapter of the Indiana Code.
       (2) Eight percent (8%) of inheritance tax collected for resident
       decedents shall be distributed to counties in the manner provided
       under IC 6-4.1-9-6.
       (3) County innkeeper's tax collected shall be deposited as required
       by IC 6-9.
       (4) County and municipal food and beverage tax collected shall
       be deposited as required by IC 6-9.
       (5) County admissions taxes collected shall be deposited as
       required by IC 6-9-13 and IC 6-9-28.
       (6) Aircraft license excise tax collected shall be deposited as
       required by IC 6-6-6.5-21.
       (7) Auto rental excise tax collected shall be deposited as required
       by IC 6-6-9-11.
       (8) Supplemental auto rental excise tax shall be deposited as
       otherwise required by the appropriate chapter of the Indiana
       Code.
       (9) Financial institutions tax collected shall be deposited as
       required by IC 6-5.5-8-2.
       (10) After making the deposits in subdivisions (1) through (9),
       any remaining amounts collected must be deposited into the state
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                                   100
       general fund.
    SECTION 71. IC 6-8.1-4-5, AS ADDED BY P.L.242-2015,
SECTION 34, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 5. (a) The department may deny an
application under section 4(c) of this chapter if the applicant has had
a registration revoked under section 4(f) of this chapter or any other
applicable statute.
    (b) The department may deny an application described in section
4(c) of this chapter if the applicant's business is operated, managed, or
otherwise controlled by or affiliated with a person, including the
applicant, a relative, family member, responsible officer, person, or
shareholder, whom the department has determined is covered by any
of the following:
       (1) Failed to file all tax returns or information reports with the
       department required under IC 6, IC 8, or IC 9.
       (2) Failed to pay all taxes, penalties, and interest required to the
       department under IC 6, IC 8, or IC 9.
       (3) Failed to pay any registration or license plate fees for vehicles
       that were at any point owned or operated by the person or for
       which the person was responsible for payment.
       (4) Failed to return a license plate described in subdivision (3) to
       the department.
       (5) Has an unsatisfactory safety rating under 49 CFR Part 385.
       (6) Has multiple violations of IC 9 or a rule adopted under IC 9.
    (c) The department may deny any application described in section
4(c) of this chapter if the applicant is a motor carrier whose business is
operated, managed, or otherwise controlled by or affiliated with a
person, including an owner, relative, family member, responsible
officer, person, or shareholder, whom the department has determined
is covered by any item listed in subsection (b).
    (d) If the applicant has altered a cab card or permit, the department
shall bill the carrier automatically for the violation.
    SECTION 72. IC 6-8.1-5-2, AS AMENDED BY P.L.118-2024,
SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 2. (a) Except as
otherwise provided in this section and section 2.5 of this chapter, the
department may not issue a proposed assessment under section 1 of this
chapter more than three (3) years after the latest of the date the return
is filed, or the following:
       (1) The due date of the return.
       (2) In the case of a return filed for a periodic tax, thirty-one (31)
       days after the end of the calendar year which contains the taxable
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       period for which the return is filed.
       (3) In the case of the use tax, three (3) years and thirty-one (31)
       days from the end of the calendar year in which the first taxable
       use, other than an incidental nonexempt use, of the property
       occurred.
    (b) If a person files a return for the utility receipts tax (IC 6-2.3)
(repealed), adjusted gross income tax (IC 6-3), pass through entity tax
(IC 6-3-2.1), supplemental net income tax (IC 6-3-8) (repealed), county
adjusted gross income tax (IC 6-3.5-1.1) (repealed), county option
income tax (IC 6-3.5-6) (repealed), local income tax (IC 6-3.6), or
financial institutions tax (IC 6-5.5) that understates the person's
income, as that term is defined in the particular income tax law, by at
least twenty-five percent (25%), the proposed assessment limitation is
six (6) years instead of the three (3) years provided in subsection (a).
    (c) In the case of the vehicle excise tax (IC 6-6-5), the tax shall be
assessed as provided in IC 6-6-5 and shall include the penalties and
interest due on all listed taxes not paid by the due date. A person that
fails to properly register a vehicle as required by IC 9-18 (before its
expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5 is
considered to have failed to file a return for purposes of this article.
    (d) In the case of the commercial vehicle excise tax imposed under
IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5 and shall
include the penalties and interest due on all listed taxes not paid by the
due date. A person that fails to properly register a commercial vehicle
as required by IC 9-18 (before its expiration) or IC 9-18.1 and pay the
tax due under IC 6-6-5.5 is considered to have failed to file a return for
purposes of this article.
    (e) In the case of the excise tax imposed on recreational vehicles
and truck campers under IC 6-6-5.1, the tax shall be assessed as
provided in IC 6-6-5.1 and must include the penalties and interest due
on all listed taxes not paid by the due date. A person that fails to
properly register a recreational vehicle as required by IC 9-18 (before
its expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5.1 is
considered to have failed to file a return for purposes of this article. A
person that fails to pay the tax due under IC 6-6-5.1 on a truck camper
is considered to have failed to file a return for purposes of this article.
    (f) In the case of a credit against a listed tax based on payments of
taxes to a state or local jurisdiction outside Indiana or payments of
amounts that are subsequently refunded or returned, a proposed
assessment for the refunded or returned credit must be issued by the
later of:
       (1) the date by which a proposed assessment must be issued under
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       this section; or
       (2) one hundred eighty (180) days from the date the taxpayer
       notifies the department of the refund or return of payment.
For purposes of this subsection, if a taxpayer receives a refund of an
amount paid by or on behalf of the taxpayer for a listed tax, that refund
shall not be considered the payment of an amount that is subsequently
refunded or returned.
    (g) If a person files a fraudulent, unsigned, or substantially blank
return, or if a person does not file a return, there is no time limit within
which the department must issue its proposed assessment, except as
provided in subsection (l).
    (h) If any part of a listed tax has been erroneously refunded by the
department, the erroneous refund may be recovered through the
assessment procedures established in this chapter. An assessment
issued for an erroneous refund must be issued within the later of:
       (1) the period for which an assessment could otherwise be issued
       under this section; or
       (2) whichever is applicable:
           (A) within two (2) years after making the refund; or
           (B) within five (5) years after making the refund if the refund
           was induced by fraud or misrepresentation.
    (i) If, before the end of the time within which the department may
make an assessment, the department and the person agree to extend
that assessment period, the period may be extended according to the
terms of a written agreement signed by both the department and the
person. The agreement must contain:
       (1) the date to which the extension is made; and
       (2) a statement that the person agrees to preserve the person's
       records until the extension terminates.
The department and a person may agree to more than one (1) extension
under this subsection.
    (j) Except as otherwise provided in subsection (k), if a taxpayer's
federal taxable income, federal adjusted gross income, or federal
income tax liability for a taxable year is modified due to a modification
as provided under IC 6-3-4-6(c) and IC 6-3-4-6(d) (for the adjusted
gross income tax), or a modification or alteration as provided under
IC 6-5.5-6-6(c) and IC 6-5.5-6-6(e) (for the financial institutions tax),
then the date by which the department must issue a proposed
assessment under section 1 of this chapter for tax imposed under IC 6-3
is extended to six (6) months one (1) year after the date on which the
notice of modification is filed with the department by the taxpayer.
    (k) The following apply:
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   (1) This subsection applies to partnerships whose taxable year:
       (A) begins after December 31, 2017;
       (B) ends after August 12, 2018; or
       (C) begins after November 2, 2015, and before January 1,
       2018, and for which a valid election under United States
       Treasury Regulation 301.9100-22 is in effect;
   and to the partners of such partnerships, including any partners,
   shareholders, or beneficiaries of a pass through entity that is a
   partner in such partnership.
   (2) Notwithstanding any other provision of this article, if a
   partnership is subject to federal income tax liability or a federal
   tax adjustment at the partnership level as the result of a
   modification under Sections 6221 through 6241 of the Internal
   Revenue Code, the date on which the department must issue a
   proposed assessment to either the partners or the partnership shall
   be the later of:
       (A) the date on which a proposed assessment must otherwise
       be issued to the partner or the partnership under this section or
       IC 6-3-4.5 with regard to the taxable year of the partnership to
       which the modification is taxed at the partnership level; or
       (B) December 31, 2021.
   (3) For purposes of this section and IC 6-8.1-9-1, a modification
   under this subsection shall be considered a modification to the
   federal taxable income, federal adjusted gross income, or federal
   income tax liability of both the partners and the partnership within
   the meaning of IC 6-3-4-6 and IC 6-5.5-6-6, and shall be
   considered to be included in the federal taxable income or federal
   adjusted gross income of both the partners and partnerships for
   purposes of this article and IC 6-5.5.
   (4) If a modification made to a partnership for federal income tax
   purposes is reported to the partners to determine the partners'
   respective federal taxable income, federal adjusted gross income,
   or federal income tax liability, including reporting to partners as
   the result of an election made under Section 6226 of the Internal
   Revenue Code, subdivision (2) shall not apply, and those
   modifications shall be treated as modifications to the partners'
   federal taxable income, federal adjusted gross income, or federal
   income tax liability for purposes of the following:
       (A) This section.
       (B) IC 6-3-4-6.
       (C) IC 6-5.5-6-6.
       (D) IC 6-8.1-9-1.
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   (l) Notwithstanding any other provision, a nonresident individual is
considered to have filed a return for purposes of this section for a
taxable year if the individual does not file a return otherwise required
under IC 6-3-4-1 for a taxable year and all of the following apply:
      (1) the:
          (A) individual did not have income from sources within
          Indiana; or
          (B) only income derived from sources within Indiana and
          includible in the individual's adjusted gross income is
          distributive share income from one (1) or more pass through
          entities (as defined by IC 6-3-1-35);
      (2) the individual is not a resident of Indiana for any portion of
      the taxable year;
      (3) the individual does not request a reduction in tax withholding
      for a pass through entity under IC 6-3-4-12, IC 6-3-4-13, or
      IC 6-3-4-15 for the taxable year; and
      (4) all pass through entities from which the individual derives
      income from Indiana sources:
          (A) file a composite return required under IC 6-3-4-12,
          IC 6-3-4-13, or IC 6-3-4-15; and
          (B) include the individual on the composite return.
   (m) The following provisions apply to subsection (l):
      (1) If an individual is married and files a joint federal tax return
      with the individual's spouse, the individual is considered to have
      filed a return for purposes of this section only if both the
      individual and the individual's spouse meet the conditions under
      subsection (l)(1) through (l)(4).
      (2) If an individual does not file a return, the last date for
      assessment with regard to the individual's share of income from
      a pass through entity shall be determined at the pass through
      entity and shall be determined separately for each pass through
      entity.
      (3) In the event the individual files a return, the period for
      assessment shall be determined based on the individual's filing
      unless a different period for assessment is prescribed under this
      title.
      (4) The individual is required to file a return to request a refund
      or carryforward of an overpayment for a taxable year.
      (5) If the individual has a net operating loss deduction under
      IC 6-3-2-2.5 or IC 6-3-2-2.6, or a credit carryforward allowable
      under IC 6-3-3 or IC 6-3.1 for the taxable year, the amount of net
      operating loss or credit carryforward shall be reduced to reflect
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      the amount of net operating loss or credit carryforward that
      otherwise would have been allowable for the taxable year.
    SECTION 73. IC 6-8.1-6-7, AS AMENDED BY P.L.293-2013(ts),
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 7. (a) Notwithstanding any other provisions
of this title, the commissioner may permit the filing of any return or
document by electronic data submission.
    (b) This subsection applies to a taxpayer required to report and remit
state gross retail taxes or amounts withheld under IC 6-3-4-8
electronically. If the taxpayer provides written consent to the
department, the department may provide the taxpayer with any
documents that would otherwise require delivery by mail either
providing the documents electronically through the department's
online tax system or by using a secure electronic delivery service
developed by the department under IC 6-8.1-3-11.
    (c) The department may adopt rules to establish procedures to
implement this section.
    SECTION 74. IC 6-8.1-7-1, AS AMENDED BY P.L.126-2025,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 1. (a) This subsection does not apply to the
disclosure of information concerning a conviction on a tax evasion
charge. Unless in accordance with a judicial order or as otherwise
provided in this chapter, the department, its employees, former
employees, counsel, agents, or any other person may not divulge the
amount of tax paid by any taxpayer, terms of a settlement agreement
executed between a taxpayer and the department, investigation records,
investigation reports, or any other information disclosed by the reports
filed under the provisions of the law relating to any of the listed taxes,
including required information derived from a federal return, except to
any of the following when it is agreed that the information is to be
confidential and to be used solely for official purposes:
      (1) Members and employees of the department.
      (2) The governor, including the governor's designee within the
      governor's office.
      (3) A member of the general assembly or an employee of the
      house of representatives or the senate when acting on behalf of a
      taxpayer located in the member's legislative district who has
      provided sufficient information to the member or employee for
      the department to determine that the member or employee is
      acting on behalf of the taxpayer.
      (4) An employee of the legislative services agency to carry out the
      responsibilities of the legislative services agency under
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     IC 2-5-1.1-7 or another law.
     (5) The attorney general or any other legal representative of the
     state in any action in respect to the amount of tax due under the
     provisions of the law relating to any of the listed taxes.
     (6) Any authorized officers of the United States.
   (b) The information described in subsection (a) may be revealed
upon the receipt of a certified written request from any of any the
following:
     (1) Any designated officer of the state tax department of any other
     state, district, territory, or possession of the United States when:
         (1) (A) the state, district, territory, or possession permits the
         exchange of like information with the taxing officials of the
         state; and
         (2) (B) it is agreed that the information is to be confidential
         and to be used solely for tax collection purposes.
     (2) The administrative head of a state agency of Indiana
     when:
         (A) the state agency shows an official need for the
         information; and
         (B) the administrative head of the state agency agrees that
         any information released will be kept confidential and will
         be used solely for official purposes.
     (3) The chief law enforcement officer of a state or local law
     enforcement agency in Indiana when it is agreed that the
     information is to be confidential and to be used solely for
     official purposes.
The department may also proactively provide to the entities listed
in this subsection the name, address, and federal identification
number or other identification number assigned by the department
for a taxpayer in order to facilitate the investigation of a taxpayer
suspected of a criminal matter in connection with a listed tax, so
long as it is agreed that any further information provided is to be
kept confidential and used solely for official purposes.
   (c) The information described in subsection (a) relating to a person
on public welfare or a person who has made application for public
welfare may be revealed to the office of the secretary of family and
social services for purposes of IC 12-15-1-24, the director of the
division of family resources, and to any director of a county office of
the division of family resources located in Indiana, upon receipt of a
written request from either director for the information. The
information shall be treated as confidential by the office and the
directors. In addition, the information described in subsection (a)
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                                  107
relating to a person who has been designated as an absent parent by the
state Title IV-D agency shall be made available to the state Title IV-D
agency upon request. The information shall be subject to the
information safeguarding provisions of the state and federal Title IV-D
programs.
   (d) The following taxpayer information may be revealed in
connection with a taxpayer's tax or other delinquency:
      (1) All information relating to the delinquency or evasion of
      an innkeeper's tax shall be provided to the appropriate
      innkeeper's tax board, bureau, or commission that a taxpayer
      is delinquent in remitting innkeeper's taxes under IC 6-9.
      (2) All information relating to the delinquency or evasion of
      the vehicle excise tax may be disclosed to the bureau of motor
      vehicles in Indiana and may be disclosed to another state, if
      the information is disclosed for the purpose of the
      enforcement and collection of the taxes imposed by IC 6-6-5.
      (3) All information relating to the delinquency or evasion of
      commercial vehicle excise taxes payable to the bureau of
      motor vehicles in Indiana may be disclosed to the bureau and
      may be disclosed to another state, if the information is
      disclosed for the purpose of the enforcement and collection of
      the taxes imposed under IC 6-6-5.5.
      (4) All information relating to the delinquency or evasion of
      commercial vehicle excise taxes payable under the
      International Registration Plan may be disclosed to another
      state, if the information is disclosed for the purpose of the
      enforcement and collection of the taxes imposed by IC 6-6-5.5.
      (5) All information relating to the delinquency or evasion of
      the excise taxes imposed on recreational vehicles and truck
      campers that are payable to the bureau of motor vehicles in
      Indiana may be disclosed to the bureau and may be disclosed
      to another state if the information is disclosed for the purpose
      of the enforcement and collection of the taxes imposed by
      IC 6-6-5.1.
      (6) The name, address, Social Security number, and place of
      employment relating to any individual who is delinquent in
      paying educational loans owed to a postsecondary educational
      institution may be revealed to that institution if it provides proof
      to the department that the individual is delinquent in paying for
      educational loans. This information shall be provided free of
      charge to approved postsecondary educational institutions (as
      defined by IC 21-7-13-6(a)). The department shall establish fees
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      that all other institutions must pay to the department to obtain
      information under this subsection. However, these fees may not
      exceed the department's administrative costs in providing the
      information to the institution.
   (e) The information described in subsection (a) relating to reports
submitted under IC 6-6-1.1-502 concerning the number of gallons of
gasoline sold by a distributor and IC 6-6-2.5 concerning the number of
gallons of special fuel sold by a supplier and the number of gallons of
special fuel exported by a licensed exporter or imported by a licensed
transporter may be released by the commissioner upon receipt of a
written request for the information.
   (f) The information described in subsection (a) may be revealed
upon the receipt of a written request from the administrative head of a
state agency of Indiana when:
      (1) the state agency shows an official need for the information;
      and
      (2) the administrative head of the state agency agrees that any
      information released will be kept confidential and will be used
      solely for official purposes.
   (g) The information described in subsection (a) may be revealed
upon the receipt of a written request from the chief law enforcement
officer of a state or local law enforcement agency in Indiana when it is
agreed that the information is to be confidential and to be used solely
for official purposes.
   (h) (e) The name and address of retail a taxpayer may be released
under the following circumstances:
      (1) Retail merchants, including township, as specified in
      IC 6-2.5-8-1(k) may be released solely for tax collection purposes
      to township assessors and county assessors.
      (2) Retail merchants within each county that sell tobacco
      products, solely for the purpose of the list prepared under
      IC 6-2.5-6-14.2 to the division of mental health and addiction
      and the alcohol and tobacco commission.
      (3) A person licensed by the department under IC 6-6 or
      IC 6-7, or issued a registered retail merchant's certificate
      under IC 6-2.5, for the purpose of reporting the status of the
      person's license or certificate.
      (4) All persons, corporations, or other entities that qualify or
      have qualified for an exemption from sales tax under
      IC 6-2.5-5-16, IC 6-2.5-5-25, or IC 6-2.5-5-26, or otherwise
      provide information regarding a person's, corporation's, or
      entity's exemption status under IC 6-2.5-5-16, IC 6-2.5-5-25,
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                                 109
      or IC 6-2.5-5-26. Such information may be published as a list
      by the department. In addition to the name and address of the
      entity, information that may be published also includes:
         (A) any federal identification number or other
         identification number for the entity assigned by the
         department;
         (B) any expiration date of an exemption under
         IC 6-2.5-5-25;
         (C) whether any sales tax exemption has expired or has
         been revoked by the department; and
         (D) any other information reasonably necessary for a
         recipient of an exemption certificate to determine if an
         exemption certificate is valid.
      (5) A taxpayer where the department suspects that a
      fraudulent return has been filed on their behalf and that the
      system of a taxpayer's previous year tax preparer or tax
      preparation software provider has been breached for the
      purposes of sharing with the tax preparer or tax preparation
      software provider in such cases. Additionally, any reasonable
      information needed to identify the taxpayer may be shared.
      (6) A person that submits a request related to a vehicle
      registered with the department under the International
      Registration Plan or IC 9-18.1-13-3, as long as the use of the
      information will be strictly limited to at least one (1) of the
      reasons listed in IC 9-14-13-7.
   (i) The department shall notify the appropriate innkeeper's tax
board, bureau, or commission that a taxpayer is delinquent in remitting
innkeepers' taxes under IC 6-9.
   (j) All information relating to the delinquency or evasion of the
vehicle excise tax may be disclosed to the bureau of motor vehicles in
Indiana and may be disclosed to another state, if the information is
disclosed for the purpose of the enforcement and collection of the taxes
imposed by IC 6-6-5.
   (k) All information relating to the delinquency or evasion of
commercial vehicle excise taxes payable to the bureau of motor
vehicles in Indiana may be disclosed to the bureau and may be
disclosed to another state, if the information is disclosed for the
purpose of the enforcement and collection of the taxes imposed by
IC 6-6-5.5.
   (l) All information relating to the delinquency or evasion of
commercial vehicle excise taxes payable under the International
Registration Plan may be disclosed to another state, if the information
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is disclosed for the purpose of the enforcement and collection of the
taxes imposed by IC 6-6-5.5.
    (m) All information relating to the delinquency or evasion of the
excise taxes imposed on recreational vehicles and truck campers that
are payable to the bureau of motor vehicles in Indiana may be disclosed
to the bureau and may be disclosed to another state if the information
is disclosed for the purpose of the enforcement and collection of the
taxes imposed by IC 6-6-5.1.
    (n) (f) This section does not apply to:
      (1) the beer excise tax, including brand and packaged type
      (IC 7.1-4-2);
      (2) the liquor excise tax (IC 7.1-4-3);
      (3) the wine excise tax (IC 7.1-4-4);
      (4) the hard cider excise tax (IC 7.1-4-4.5);
      (5) the vehicle excise tax (IC 6-6-5);
      (6) the commercial vehicle excise tax (IC 6-6-5.5); and
      (7) the fees under IC 13-23.
    (o) The name and business address of retail merchants within each
county that sell tobacco products may be released to the division of
mental health and addiction and the alcohol and tobacco commission
solely for the purpose of the list prepared under IC 6-2.5-6-14.2.
    (p) The name and business address of a person licensed by the
department under IC 6-6 or IC 6-7, or issued a registered retail
merchant's certificate under IC 6-2.5, may be released for the purpose
of reporting the status of the person's license or certificate.
    (q) (g) The department may release compiled tax information
concerning under the following circumstances:
      (1) Information reports submitted under IC 6-6-1.1-502
      concerning the number of gallons of gasoline sold by a
      distributor, and IC 6-6-2.5 concerning the number of gallons
      of special fuel sold by a supplier, the number of gallons of
      special fuel exported by a licensed exporter, or the number of
      gallons imported by a licensed transporter, may be released
      by the commissioner upon receipt of a written request for the
      information.
      (2) The total incremental tax amounts under:
          (1) (A) IC 5-28-26;
          (2) (B) IC 36-7-13;
          (3) (C) IC 36-7-26;
          (4) (D) IC 36-7-27;
          (5) (E) IC 36-7-31;
          (6) (F) IC 36-7-31.3; or
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                                    111
          (7) (G) any other statute providing for the calculation of
          incremental state taxes that will be distributed to or retained by
          a political subdivision or other entity;
      to the fiscal officer of the political subdivision or other entity that
      established the district or area from which the incremental taxes
      were received if that fiscal officer enters into an agreement with
      the department specifying that the political subdivision or other
      entity will use the information solely for official purposes.
      (3) The aggregate amounts of any of the listed taxes collected
      on a particular date or within a date range may be released
      upon written request.
   (r) (h) The department may release the following information as
required in by statute:
      (1) Information pursuant to IC 6-8.1-3-7.1 concerning:
          (1) (A) an innkeeper's tax, a food and beverage tax, or an
          admissions tax under IC 6-9;
          (2) (B) the supplemental auto rental excise tax under
          IC 6-6-9.7; and
          (3) (C) the covered taxes allocated to a professional sports
          development area fund, sports and convention facilities
          operating fund, or other fund under IC 36-7-31 and
          IC 36-7-31.3.
      (s) (2) Information concerning state gross retail tax exemption
      certificates that relate to a person who is exempt from the state
      gross retail tax under IC 6-2.5-4-5 may be disclosed to a power
      subsidiary (as defined in IC 6-2.5-1-22.5) or a person selling the
      services or commodities listed in IC 6-2.5-4-5 for the purpose of
      enforcing and collecting the state gross retail and use taxes under
      IC 6-2.5.
   (t) (i) The department may release a statement of tax withholding or
other tax information statement provided on behalf of a taxpayer to the
department to:
      (1) the taxpayer on whose behalf the tax withholding or other tax
      information statement was provided to the department;
      (2) the taxpayer's spouse, if:
          (A) the taxpayer is deceased or incapacitated; and
          (B) the taxpayer's spouse is filing a joint income tax return
          with the taxpayer; or
      (3) an administrator, executor, trustee, or other fiduciary acting on
      behalf of the taxpayer if the taxpayer is deceased.
   (u) (j) Information related to a listed tax regarding a taxpayer may
be disclosed to an individual without a power of attorney under
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                                  112
IC 6-8.1-3-8(a)(2) if:
      (1) the individual is authorized to file returns and remit payments
      for one (1) or more listed taxes on behalf of the taxpayer through
      the department's online tax system before September 8, 2020;
      (2) the information relates to a listed tax described in subdivision
      (1) for which the individual is authorized to file returns and remit
      payments;
      (3) the taxpayer has been notified by the department of the
      individual's ability to access the taxpayer's information for the
      listed taxes described in subdivision (1) and the taxpayer has not
      objected to the individual's access;
      (4) the individual's authorization or right to access the taxpayer's
      information for a listed tax described in subdivision (1) has not
      been withdrawn by the taxpayer; and
      (5) disclosure of the information to the individual is not
      prohibited by federal law.
Except as otherwise provided by this article, this subsection does not
authorize the disclosure of any correspondence from the department
that is mailed or otherwise delivered to the taxpayer relating to the
specified listed taxes for which the individual was given authorization
by the taxpayer. The department shall establish a date, which may be
earlier but not later than September 1, 2023, after which a taxpayer's
information concerning returns and remittances for a listed tax may not
be disclosed to an individual without a power of attorney under
IC 6-8.1-3-8(a)(2) by providing notice to the affected taxpayers and
previously authorized individuals, including notification published on
the department's website. After the earlier of the date established by the
department or September 1, 2023, the department may not disclose a
taxpayer's information concerning returns and remittances for a listed
tax to an individual unless the individual has a power of attorney under
IC 6-8.1-3-8(a)(2) or the disclosure is otherwise allowed under this
article.
    (v) The department may publish a list of persons, corporations, or
other entities that qualify or have qualified for an exemption for sales
tax under IC 6-2.5-5-16, IC 6-2.5-5-25, or IC 6-2.5-5-26, or otherwise
provide information regarding a person's, corporation's, or entity's
exemption status under IC 6-2.5-5-16, IC 6-2.5-5-25, or IC 6-2.5-5-26.
For purposes of this subsection, information that may be disclosed
includes:
      (1) any federal identification number or other identification
      number for the entity assigned by the department;
      (2) any expiration date of an exemption under IC 6-2.5-5-25;
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      (3) whether any sales tax exemption has expired or has been
      revoked by the department; and
      (4) any other information reasonably necessary for a recipient of
      an exemption certificate to determine if an exemption certificate
      is valid.
    (w) The department may share a taxpayer's name and other personal
identification information with a tax preparer or tax preparation
software provider in cases where the department suspects that a
fraudulent return has been filed on behalf of a taxpayer and the
department suspects that the system of a taxpayer's previous year tax
preparer or tax preparation software provider has been breached.
    SECTION 75. IC 6-8.1-8-2, AS AMENDED BY P.L.234-2019,
SECTION 34, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 2. (a) Except as provided in IC 6-8.1-5-3 and
sections 16 and 17 of this chapter, the department must issue a demand
notice for the payment of a tax and any interest or penalties accrued on
the tax, if a person files a tax return without including full payment of
the tax or if the department, after ruling on a protest, finds that a person
owes the tax before the department issues a tax warrant. The demand
notice must state the following:
      (1) That the person has twenty (20) days from the date the
      department mails the notice to either pay the amount demanded
      or show reasonable cause for not paying the amount demanded.
      (2) The statutory authority of the department for the issuance of
      a tax warrant.
      (3) The earliest date on which a tax warrant may be filed and
      recorded.
      (4) The statutory authority for the department to levy against a
      person's property that is held by a financial institution.
      (5) The remedies available to the taxpayer to prevent the filing
      and recording of the judgment.
If the department files a tax warrant in more than one (1) county, the
department is not required to issue more than one (1) demand notice.
The department may not issue a demand notice for a liability more than
nine (9) years after the first date the department is permitted to issue a
demand notice under this chapter.
    (b) If the person does not pay the amount demanded or show
reasonable cause for not paying the amount demanded within the
twenty (20) day period, the department may issue a tax warrant for the
amount of the tax, interest, penalties, collection fee, sheriff's costs,
clerk's costs, and fees established under section 4(b) of this chapter
when applicable. When the department issues a tax warrant, a
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collection fee of ten percent (10%) of the unpaid tax is added to the
total amount due.
    (c) When the department issues a tax warrant, it may not file the
warrant with the circuit court clerk of any county in which the person
resides, is domiciled, or owns property until at least twenty (20) days
after the date the demand notice was mailed to the taxpayer. If a
taxpayer does not own property in Indiana, or if the department is
unable to determine whether the taxpayer owns property in Indiana, the
taxpayer does not reside and is not domiciled in Indiana, or the
department is unable to determine the taxpayer's residence or
domicile, the department may file the tax warrant with the circuit court
clerk of Marion County. The department may also send the warrant to
the sheriff of any county in which the person resides, is domiciled, or
owns property and direct the sheriff to file the warrant with the circuit
court clerk:
       (1) at least twenty (20) days after the date the demand notice was
       mailed to the taxpayer; and
       (2) no later than five (5) days after the date the department issues
       the warrant.
    (d) When the circuit court clerk receives a tax warrant from the
department or the sheriff, the clerk shall record the warrant by making
an entry in the judgment debtor's column of the judgment record,
listing the following:
       (1) The name of the person owing the tax.
       (2) The amount of the tax, interest, penalties, collection fee,
       sheriff's costs, clerk's costs, and fees established under section
       4(b) of this chapter when applicable.
       (3) The date the warrant was filed with the clerk.
    (e) When the entry is made, the total amount of the tax warrant
becomes a judgment against the person owing the tax. The judgment
creates a lien in favor of the state that attaches to all the person's
interest in any:
       (1) chose in action in the county; state; and
       (2) real or personal property in the county; state;
excepting only negotiable instruments not yet due. The department may
domesticate a valid tax warrant in one (1) or more other states or
countries, or in the political subunits of other states or countries, in the
manner that any other civil judgment may be domesticated in that
jurisdiction. The department shall be permitted all rights and remedies
permitted in a jurisdiction in which a judgment is domesticated, even
if the rights or remedies would not be permitted under Indiana law.
    (f) The following apply to a judgment on a tax warrant:
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      (1) A judgment on a tax warrant must be filed in at least one (1)
      Indiana county not later than ten (10) years after the first date on
      which a demand notice could be issued under this chapter.
      (2) Except as provided in subdivision (3), if a judgment on a tax
      warrant is entered in at least one (1) Indiana county, the
      department may file an additional tax warrant in one (1) or more
      Indiana counties during the period in which one (1) or more tax
      warrants are valid under this section.
      (3) A judgment obtained under this section is valid for ten (10)
      years from the date the judgment is filed. The department may
      renew the judgment for additional ten (10) year periods by filing
      an alias tax warrant with the circuit court clerk of the county in
      which the judgment previously existed. An amended tax warrant
      under this section or section 4 of this chapter shall not constitute
      an alias tax warrant. The failure to renew a tax warrant in a
      particular county shall preclude the issuance of a new tax warrant
      under subdivision (2).
      (4) If the department does not:
         (A) issue a timely demand notice under subsection (a);
         (B) file a timely tax warrant under subdivision (1); or
         (C) renew all tax warrants under subdivision (3);
      the department shall extinguish the tax liability from which the
      demand notice or judgment arose, and no state agency shall treat
      the tax liability as a delinquency for purposes of Indiana law.
   (g) A judgment arising from a tax warrant in a county shall be
released by the department:
      (1) after the judgment, including all accrued interest to the date of
      payment, has been fully satisfied; or
      (2) if the department determines that the tax assessment or the
      issuance of the tax warrant was in error.
   (h) Subject to subsections (p) and (q), if the department determines
that the filing of a tax warrant was in error or if the commissioner
determines that the release of the judgment and expungement of the tax
warrant are in the best interest of the state, the department shall mail a
release of the judgment to the taxpayer and the circuit court clerk of
each county where the warrant was filed. The circuit court clerk of each
county where the warrant was filed shall expunge the warrant from the
judgment debtor's column of the judgment record. The department shall
mail the release and the order for the warrant to be expunged as soon
as possible but no later than seven (7) days after:
      (1) the determination by the department that the filing of the
      warrant was in error; and
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       (2) the receipt of information by the department that the judgment
       has been recorded under subsection (d).
    (i) If the department determines that a judgment described in
subsection (h) is obstructing a lawful transaction, the department shall
immediately upon making the determination mail:
       (1) a release of the judgment to the taxpayer; and
       (2) an order requiring the circuit court clerk of each county where
       the judgment was filed to expunge the warrant.
    (j) A release issued under subsection (h) or (i) must state that the
filing of the tax warrant was in error. Upon the request of the taxpayer,
the department shall mail a copy of a release and the order for the
warrant to be expunged issued under subsection (h) or (i) to each major
credit reporting company located in each county where the judgment
was filed.
    (k) The commissioner shall notify each state agency or officer
supplied with a tax warrant list of the issuance of a release under
subsection (h) or (i).
    (l) If the sheriff collects the full amount of a tax warrant, the sheriff
shall disburse the money collected in the manner provided in section
3(c) of this chapter. If a judgment has been partially or fully satisfied
by a person's surety, the surety becomes subrogated to the department's
rights under the judgment. If a sheriff releases a judgment:
       (1) before the judgment is fully satisfied;
       (2) before the sheriff has properly disbursed the amount collected;
       or
       (3) after the sheriff has returned the tax warrant to the department;
the sheriff commits a Class B misdemeanor and is personally liable for
the part of the judgment not remitted to the department.
    (m) A lien on real property described in subsection (e)(2) is void if
both of the following occur:
       (1) The person owing the tax provides written notice to the
       department to file an action to foreclose the lien.
       (2) The department fails to file an action to foreclose the lien not
       later than one hundred eighty (180) days after receiving the
       notice.
    (n) A person who gives notice under subsection (m) by registered
or certified mail to the department may file an affidavit of service of the
notice to file an action to foreclose the lien with the circuit court clerk
in the county in which the property is located. the warrant was filed.
The affidavit must state the following:
       (1) The facts of the notice.
       (2) That more than one hundred eighty (180) days have passed
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      since the notice was received by the department.
      (3) That no action for foreclosure of the lien is pending.
      (4) That no unsatisfied judgment has been rendered on the lien.
If a taxpayer has tax warrants in multiple counties, the taxpayer
must file a separate affidavit for each county. If a taxpayer fails to
file an affidavit in each county in which a warrant is filed, the
affidavit is effective only for property in the counties in which the
taxpayer files the affidavit.
    (o) Upon receipt of the affidavit described in subsection (n), the
circuit court clerk shall make an entry showing the release of the
judgment lien in the judgment records for tax warrants.
    (p) The department shall adopt rules to define the circumstances
under which a release and expungement may be granted based on a
finding that the release and expungement would be in the best interest
of the state. The rules may allow the commissioner to expunge a tax
warrant in other circumstances not inconsistent with subsection (q) that
the commissioner determines are appropriate. Any releases or
expungements granted by the commissioner must be consistent with
these rules.
    (q) (p) The commissioner or the commissioner's designee may
expunge a tax warrant if the taxpayer requests an expungement in
the following circumstances:
      (1) If the taxpayer has timely and fully filed and paid all of the
      taxpayer's state taxes, or has otherwise resolved any outstanding
      state tax issues, for the preceding five (5) years.
      (2) If the tax warrant was issued more than ten (10) years prior to
      the expungement.
      (3) If the tax warrant is not subject to pending litigation.
      (4) If the tax warrant is for one (1) or more tax liabilities that
      have been resolved through the department. Other
      circumstances not inconsistent with subdivisions (1) through (3)
      that are specified in the rules adopted under subsection (p).
    (q) Taxpayers must complete the form prescribed by the
department and submit any documentation that may support a
request under subsection (p). The department will grant requests
for tax warrant expungement if:
      (1) the department determines the filing of the tax warrant
      was in error;
      (2) the department determines the release of the judgment
      and expungement of the tax warrant are in the best interest of
      the state; or
      (3) the department determines that the expungement
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     facilitates the collection of outstanding tax liabilities owed by
     the taxpayer as provided in subsection (r).
   (r) The release of a judgment and an expungement of a tax
warrant are in the best interest of the state if the release and
expungement facilitates the collection of outstanding liabilities
owed by the taxpayer, including interest and penalties accrued to
the date of payment, which is demonstrated if each of the following
are true:
     (1) The taxpayer has satisfied all the outstanding liabilities
     owed, including penalties and interest accrued to the date of
     payment, associated with the judgment and warrant.
     (2) The taxpayer has filed the outstanding required returns
     for each listed tax associated with the judgment and warrant.
     (3) The taxpayer is, at the time of making the determination,
     in compliance regarding the filing of any other individual,
     business, and informational returns, and current on payments
     associated with those returns.
     (4) The judgment or warrant is not the subject of pending
     litigation.
   (s) The department's determination that the release of a
judgment and an expungement of a warrant are in the best interest
of the state includes any of the following factors:
     (1) The age and amount of the underlying tax liability.
     (2) The taxpayer's history of compliance with respect to
     voluntarily paying taxes.
     (3) Other tax warrants or outstanding liabilities of the
     taxpayer.
     (4) Whether notice of the underlying liability was received by
     the taxpayer before the issuance of the tax warrant.
     (5) The taxpayer's attempts, if any, to communicate with the
     department and resolve the liability before the issuance of the
     warrant.
     (6) Whether delays in paying or posting tax payments
     associated with the underlying liability that caused the tax
     warrant are attributable to the fault or negligence of the
     taxpayer.
     (7) If the taxpayer did not owe the underlying tax for which
     the warrant was issued.
     (8) If the warrant was not issued under, or authorized by,
     statute.
     (9) If the filing of the tax warrant was premature or otherwise
     not in compliance with the department's procedures.
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      (10) Other required tax filings are on file.
   (t) The department shall issue the letter granting or denying the
expungement request to the taxpayer.
   (r) (u) Notwithstanding any other provision in this section, the
commissioner may decline to release a judgment or expunge a warrant
upon a finding that the warrant was issued based on the taxpayer's
fraudulent, intentional, or reckless conduct.
   (s) The rules required under subsection (p) shall specify the process
for requesting that the commissioner release and expunge a tax
warrant.
   SECTION 76. IC 6-8.1-8-2.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 2.1. (a) A warrant filed by the
department under section 2 of this chapter must be filed using the
department's designated direct electronic interface.
   (b) For purposes of section 3 of this chapter, the jurisdiction of
the sheriff of the county in which a warrant is filed is limited to the
taxpayer's choses in action and real and tangible personal property
located in that county.
   SECTION 77. IC 6-8.1-8-18 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 18. (a) Except as provided in the limited relief
provided for marketplace facilitators in IC 6-2.5-9-3.5 (before its
expiration), a responsible person that holds taxes in trust for the
state is personally liable for the payment of those taxes, plus any
penalties and interest attributable to those taxes, to the state. If the
individual knowingly fails to collect or remit those taxes to the
state, the individual commits a Level 6 felony.
   (b) A business and each responsible person for a particular tax
held in trust for a period are jointly and severally liable for that
tax, including interest and penalties.
   (c) If a business and one (1) or more responsible persons remit
more than the amount due, including penalties and interest, for a
tax held in trust, the following apply to refunding any
overpayment:
      (1) If the business remitted the amount due or more than the
      amount due, then any amounts paid by a responsible person
      shall be refunded to the responsible person, and any excess
      remaining refunded to the business.
      (2) If the business remitted less than the amount due, then any
      amounts paid by a responsible person shall be refunded upon
      a refund request by a responsible person as determined in the
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    following STEPS:
       STEP ONE: Determine the amount remitted by each
       responsible person.
       STEP TWO: Determine the total amount due, including
       interest and penalties, less the amount remitted by the
       business.
       STEP THREE: Determine the total amount remitted by all
       responsible persons in STEP ONE minus the STEP TWO
       amount.
       STEP FOUR: Determine the STEP ONE amount for each
       responsible person divided by the total amount under
       STEP ONE for all responsible persons.
       STEP FIVE: The amount of the refund for the responsible
       person is the amount determined under STEP THREE
       multiplied by the ratio for that person determined under
       STEP FOUR.
    (3) If the amount remitted by a business or responsible person
    includes amounts added pursuant to this chapter, those
    amounts shall not be considered for purposes of determining
    an overpayment under this subsection.
    (4) Any amount of overpayment shall be considered to be the
    overpayment of the business or person that remitted the tax.
    (5) Any state or federal law permitting application or offset of
    an overpayment shall apply to an overpayment under this
    subsection.
    (6) A refund under this subsection must be filed under
    IC 6-8.1-9-1 separately by the business and each responsible
    person, and the determination under this subsection shall be
    made separately for the business and each responsible person.
    (7) Notwithstanding this subsection, the business and one (1)
    or more responsible persons may agree to allocate or assign
    any overpayment between themselves, provided that:
       (A) the total amount allocated under the agreement does
       not exceed the amounts that are attributable to the
       business and responsible persons who are parties to the
       agreement under subdivisions (1) and (2); and
       (B) the amount of refund allocated to any party does not
       exceed the amount actually paid by that party.
  SECTION 78. IC 6-8.1-9-1, AS AMENDED BY P.L.118-2024,
SECTION 23, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026 (RETROACTIVE)]: Sec. 1. (a) If a person has paid
more tax than the person determines is legally due for a particular
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taxable period, the person may file a claim for a refund with the
department. Except as provided in subsections (j), (k), (l), (m), and (n),
in order to obtain the refund, the person must file the claim with the
department within three (3) years after the later of the following:
       (1) The due date of the return.
       (2) The date of payment.
For purposes of this section, the due date for a return filed for a
periodic tax is thirty-one (31) days after the end of the calendar year
which contains the taxable period for which the return is filed. The
claim must set forth the amount of the refund to which the person is
entitled and the reasons that the person is entitled to the refund.
    (b) After considering the claim and all evidence relevant to the
claim, the department shall issue a decision on the claim, stating the
part, if any, of the refund allowed and containing a statement of the
reasons for any part of the refund that is denied. The department shall
mail a copy of the decision to the person that filed the claim. If the
person disagrees with a part of the decision on the claim, the person
may file a protest and request a hearing with the department. If the
department allows the full amount of the refund claim, a warrant for the
payment of the claim is sufficient notice of the decision.
    (c) The tax court shall hear the appeal de novo and without a jury,
and after the hearing may order or deny any part of the appealed
refund. The court may assess the court costs in any manner that it feels
is equitable. The court may enjoin the collection of any of the listed
taxes under IC 33-26-6-2. The court may also allow a refund of taxes,
interest, and penalties that have been paid to and collected by the
department.
    (d) The decision on the claim must state that the person has sixty
(60) days from the date the decision is mailed to file a written protest.
If the person files a protest and requests a hearing on the protest, the
department shall:
       (1) set the hearing at the department's earliest convenient time;
       and
       (2) notify the person by United States mail of the time, date, and
       location of the hearing.
    (e) The department may hold the hearing at the location of its choice
within Indiana if that location complies with IC 6-8.1-3-8.5.
    (f) After conducting a hearing on a protest, or after making a
decision on a protest when no hearing is requested, the department
shall issue a memorandum of decision or order denying a refund and
shall send a copy of the decision through the United States mail to the
person that filed the protest. If the department allows the full amount
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of the refund claim, a warrant for the payment of the claim is sufficient
notice of the decision. The department may continue the hearing until
a later date if the taxpayer presents additional information at the
hearing or the taxpayer requests an opportunity to present additional
information after the hearing.
    (g) A person that disagrees with any part of the department's
determination in a memorandum of decision or order denying a refund
may request a rehearing not more than thirty (30) days after the date on
which the memorandum of decision or order denying a refund is issued
by the department. The department shall consider the request and may
grant the rehearing if the department reasonably believes that a
rehearing would be in the best interests of the taxpayer and the state.
If the department grants the rehearing, the department shall issue a
supplemental order denying a refund or a supplemental memorandum
of decision based on the rehearing, whichever is applicable.
    (h) If the person disagrees with any part of the department's
determination, the person may appeal the determination, regardless of
whether or not the person protested the tax payment or whether or not
the person has accepted a refund. The person must file the appeal with
the tax court. The tax court does not have jurisdiction to hear a refund
appeal if:
      (1) the appeal is filed more than ninety (90) days after the latest
      of the dates on which:
          (A) the memorandum of decision or order denying a refund is
          issued by the department, if the person does not make a timely
          request for a rehearing under subsection (g) on the
          memorandum of decision or order denying a refund;
          (B) the department issues a denial of the person's timely
          request for a rehearing under subsection (g) on the
          memorandum of decision or order denying a refund; or
          (C) the department issues a supplemental memorandum of
          decision or supplemental order denying a refund following a
          rehearing granted under subsection (g); or
      (2) the appeal is filed both before the decision is issued and
      before the one hundred eighty-first day after the date the person
      files the claim for a refund with the department.
The ninety (90) day period may be extended according to the terms of
a written agreement signed by both the department and the person. The
agreement must specify a date upon which the extension will terminate
and include a statement that the person agrees to preserve the person's
records until that specified termination date. The specified termination
date agreed upon under this subsection may not be more than ninety
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(90) days after the expiration of the period otherwise specified by this
subsection.
    (i) With respect to the vehicle excise tax, this section applies only
to penalties and interest paid on assessments of the vehicle excise tax.
Any other overpayment of the vehicle excise tax is subject to IC 6-6-5.
    (j) If a taxpayer's federal taxable income, federal adjusted gross
income, or federal income tax liability for a taxable year is modified by
the Internal Revenue Service, and the modification would result in a
reduction of the tax legally due, the due date by which the taxpayer
must file a claim for refund with the department is the latest of:
       (1) the date determined under subsection (a);
       (2) the date that is one hundred eighty (180) days one (1) year
       after the date of the modification by the Internal Revenue Service
       as provided under:
          (A) IC 6-3-4-6(c) and IC 6-3-4-6(d) (for the adjusted gross
          income tax); or
          (B) IC 6-5.5-6-6(c) and IC 6-5.5-6-6(d) (for the financial
          institutions tax); or
       (3) in the case of a modification described in IC 6-8.1-5-2(k)(1)
       through IC 6-8.1-5-2(k)(3), the date provided in IC 6-3-4.5 for
       such refunds or December 31, 2021, whichever is later.
    (k) Notwithstanding any other provision of this section, if an
individual received a severance payment described in Section
3(a)(1)(A) of the Combat-Injured Veterans Tax Fairness Act of 2016
(P.L. 114-292) and upon which the United States Secretary of Defense
withheld tax under IC 6-3, IC 6-3.5-1.1 (before its repeal), IC 6-3.5-6
(before its repeal), IC 6-3.5-7 (before its repeal), or IC 6-3.6, the
individual must file a claim for refund for taxes that were overpaid and
attributable to the severance payment not later than December 31,
2020. Any refund under this subsection shall be computed without
regard to subsection (a)(2). The department may establish procedures
to provide standard refund amounts if a standard refund amount is
requested from the Internal Revenue Service.
    (l) Notwithstanding any other provision of this section, a taxpayer
may file a claim for refund for any taxes under IC 6-3 or IC 6-5.5 that
the taxpayer expected to be due as a result of an Internal Revenue
Service audit not later than the date otherwise prescribed in this section
or one hundred eighty (180) days one (1) year after the date the
taxpayer is notified that the audit resulted in no change or, if the audit
resulted in a modification, the date of the modification as provided
under:
       (1) IC 6-3-4-6(c) and IC 6-3-4-6(d) (for adjusted gross income
SEA 243 — Concur
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      tax); or
      (2) IC 6-5.5-6-6(c) and IC 6-5.5-6-6(d) (for the financial
      institutions tax);
whichever is later.
   (m) If a taxpayer has an overpayment for a listed tax as a result of
a credit of taxes paid to another state, country, or local jurisdiction in
another state or country, and those taxes were assessed by the state,
country, or local jurisdiction after the period for which a refund could
have been claimed for that listed tax under this section, the period for
requesting the refund under this section is extended to one hundred
eighty (180) days after payment of the tax to the state, country, or local
jurisdiction.
   (n) If an agreement to extend the assessment time period is entered
into under IC 6-8.1-5-2(i), the period during which a person may file
a claim for a refund under subsection (a) is extended to the same date
to which the assessment time period is extended.
   SECTION 79. IC 6-8.1-10-9.5, AS ADDED BY P.L.194-2023,
SECTION 33, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 9.5. (a) As used in this section, the following
terms have the following meanings:
      (1) "Successor in liability" means a person that directly or
      indirectly purchases, acquires, is gifted, or succeeds to ownership
      of more than one-half (1/2) of all tangible personal property of a
      business, by value, including inventory, at all locations combined,
      as measured by the value of the property at the time of the
      transfer. "Successor in liability" does not include a personal
      representative or beneficiary of an estate, a trustee in bankruptcy,
      a debtor in possession, a receiver, a secured party, a mortgagee,
      an assignee of rents, or any other lienholder. A person shall only
      be considered a successor in liability to the extent that:
         (A) a department lien or liens exist on tangible personal
         property transferred to the person;
         (B) all tax due by the transferring business to the extent that
         notice was not provided to the department as required by
         subsection (b); or
         (C) any tax due was included in the summary mailed to the
         successor in liability by the department pursuant to subsection
         (c).
      (2) "Purchase price" means the consideration paid or to be paid by
      the successor in liability to the transferring business for the
      transfer of tangible personal property. "Purchase price" also
      includes debts assumed or forgiven by the successor in liability,
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      or real or personal property conveyed or to be conveyed by the
      successor in liability to the transferring business.
      (3) "Arm's-length transaction" means a transfer for adequate
      consideration between independent parties both acting in their
      own best interests. If the parties are related to each other, a
      rebuttable presumption arises that the transaction is not at arm's
      length.
      (4) "Transfer" means every mode, direct or indirect, absolute or
      conditional, voluntary or involuntary, of disposing of or parting
      with a business or an interest in a business, or a stock of goods,
      whether by gift or for consideration. "Transfer" includes a change
      in the type of business entity or the name of the business, where
      one (1) business is discontinued and a new business is started.
      "Transfer" also includes the acquisition by a new corporation of
      the assets of a prior business in exchange for the stock of the new
      corporation. "Transfer" does not include an assignment for the
      benefit of creditors, foreclosure or enforcement of a mortgage,
      assignment of rents, security interest or lien, sale or disposition in
      a bankruptcy proceeding, or sale or disposition by a receiver.
      (5) "Transfer in bulk" means a transfer, other than in the ordinary
      course of the transferor's trade or business, of more than one-half
      (1/2) of all the tangible personal property of a business, by value,
      including inventory, at all locations combined, as measured by the
      value of the property at the time of the transfer.
      (6) "Tax" means the gross retail tax imposed by IC 6-2.5-2-1, the
      use tax imposed by IC 6-2.5-3-2, and any county innkeepers tax
      or food and beverage tax imposed by IC 6-9.
      (7) "Good cause" means the inability to comply with the statutory
      requirements of this section due to force majeure, fraud, failure of
      delivery by a carrier, or similar circumstances beyond the control
      of the successor. Lack of knowledge by the successor in liability
      of the requirements of this section shall not be considered good
      cause. Failure of a transferee or third party to provide the notice
      required by subsection (b) pursuant to a contractual obligation or
      informal understanding shall not be considered to be good cause.
   (b) Whenever a business engages in a transfer in bulk, at least
forty-five (45) days before taking possession of the assets or paying the
purchase price, the potential successor in liability or the transferring
business shall notify the department of the transfer and the terms and
conditions related to the transfer on a form prescribed by the
department. The notice must include the tax identification number of
the transferring business and the potential successor in liability.
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   (c) The following apply:
      (1) If the notice is not provided to the department as required in
      subsection (b), the potential successor in liability becomes the
      successor in liability and becomes liable for any unpaid taxes,
      interest, and penalties due from the transferring business to the
      extent of the purchase price.
      (2) If the notice is provided as required in subsection (b) and,
      within twenty (20) days after receipt of the notice, the department
      places a summary in the United States mail addressed to the
      successor in liability specifying that tax liabilities exist in addition
      to those subject to a department lien or there are tax returns due
      but not filed, the successor in liability is liable for all taxes,
      interest, and penalties as stated in the department's summary to
      the extent of the purchase price if the successor in liability pays
      the purchase price or takes possession of the assets without
      withholding and remitting the liability to the department. The
      successor in liability is liable whether the purchase price is paid
      or the assets are transferred prior to or after notification from the
      department.
      (3) If the department does not find any tax is due from the
      transferring business or that the transferring business has failed
      to file any returns that are due, the department must place a tax
      clearance letter in the United States mail addressed to the
      potential successor in liability within twenty (20) days after
      receipt of the notice required by subsection (b) specifying that no
      tax liabilities exist and that the transferee is not a successor in
      liability. The department shall issue the tax clearance letter even
      if the department determines that the transfer at issue does not
      constitute a transfer in bulk pursuant to subsection (a).
   (d) If, based upon the information available, the department
determines that a transfer in bulk was not at arm's length or was a gift,
the successor's liability under this section equals the value of the
tangible personal property transferred. Upon such a determination, the
department may require that the successor in liability provide a third
party valuation of the tangible personal property transferred.
   (e) In the case of a gift resulting in successor liability under this
section, the return of the gifted property by the donee to the donor
releases the donee's successor liability.
   (f) A potential successor in liability that complies with the
requirements of subsections (b) and (c) is not liable for any
assessments of taxes of the transferring business made after the
department provides a summary to the potential successor in liability
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under subsection (c), except for taxes assessed on returns filed to
comply with the summary. If the department fails to place the required
summary in the United States mail within the twenty (20) day period,
the potential successor in liability is not liable for any taxes of the
transferring business, except with regard to transfers subject to
subsection (d), if the purchase price is paid and the potential successor
in liability takes possession of the assets within sixty (60) days of the
mailing date the notice required pursuant to subsection (b). If the
purchase price is not paid or the potential successor in liability does not
take possession of the assets within sixty (60) days of the mailing date
of the notice required pursuant to subsection (b), the potential
successor in liability or the transferring business must submit a new
notice pursuant to subsection (b).
    (g) If the required notice under subsection (b) is not filed or any tax
liability included in a summary mailed by the department pursuant to
subsection (c)(2) remains due after the purchase price is paid or the
successor in liability takes possession of the assets, the department
must issue a notice of proposed assessment to the successor in liability
for any such tax due.
    (h) A successor in liability may protest the underlying tax unless the
transferring business has already exhausted its protest rights with
regard to the underlying tax. A successor in liability may also protest
whether they qualify as a successor in liability with regard to the tax.
In addition, the successor in liability may protest by submitting
evidence showing good cause for not submitting the required notice or
completing the purchase before receiving a clearance letter from the
department. In the event that the transferring business has protested any
taxes identified in the department's notice mailed pursuant to
subsection (c)(2), the potential successor in liability shall not be
considered a successor in liability with respect to such taxes if the
potential successor in liability places an amount in escrow sufficient to
satisfy such taxes pending resolution of the transferring business's
administrative and legal process protesting such taxes.
    (i) A transfer in bulk shall not constitute a retail transaction except
for any inventory, motor vehicles, watercraft, aircraft, or rental property
transferred.
    (j) A transferor in bulk and any responsible officer person thereof
shall not be relieved of liability for any tax, interest, or penalties when
a successor in interest also becomes liable for the tax, interest, and
penalties. No owner, shareholder, director, officer, or employee of a
successor in liability shall be considered to be a responsible officer
person relative to any tax, interest or penalties owed by the purchaser
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as a successor.
    (k) The department has discretion in assessing and collecting the tax
due from any liable party, but the department cannot collect more than
the total tax, interest, and penalties imposed. The ability of the
department to impose collections fees on the liable parties as otherwise
allowed by this article shall not be impacted by this section.
    SECTION 80. IC 6-8.1-10-12, AS AMENDED BY P.L.213-2025,
SECTION 95, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 12. (a) This section applies to a penalty
related to a tax liability to the extent that the:
      (1) tax liability is for a listed tax;
      (2) tax liability was due and payable, as determined under
      IC 6-8.1-3-17(e), for a tax period ending before January 1, 2023;
      (3) department establishes an amnesty program for the tax
      liability under IC 6-8.1-3-17(c);
      (4) individual or entity from which the tax liability is due was
      eligible to participate in the amnesty program described in
      subdivision (3); and
      (5) tax liability is not paid:
          (A) in conformity with a payment program acceptable to the
          department that provides for payment of the unpaid listed
          taxes in full in the manner and time established in a written
          payment program agreement entered into between the
          department and the taxpayer under IC 6-8.1-3-17(c); or
          (B) if clause (A) does not apply, before the end of the amnesty
          period established by the department.
    (b) Subject to subsection (c), if a penalty is imposed or otherwise
calculated under any combination of:
      (1) IC 6-8.1-1-8;
      (2) section 2.1 of this chapter;
      (3) section 3 of this chapter;
      (4) section 3.5 of this chapter;
      (5) section 4 of this chapter;
      (6) section 5 of this chapter;
      (7) section 6 of this chapter;
      (8) section 7 of this chapter;
      (9) section 9 of this chapter; or
      (10) IC 6-6;
an additional penalty is imposed under this section. The amount of the
additional penalty imposed under this section is equal to the sum of the
penalties imposed or otherwise calculated under the provisions listed
in subdivisions (1) through (10).
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    (c) The additional penalty provided by subsection (b) does not apply
if all of the following apply:
       (1) The department imposes a penalty on a taxpayer or otherwise
       calculates the penalty under the provisions described in
       subsection (b)(1) through (b)(10).
       (2) The taxpayer against whom the penalty is imposed:
           (A) timely files an original tax appeal in the tax court under
           IC 6-8.1-5-1; and
           (B) contests the department's imposition of the penalty or the
           tax on which the penalty is based.
       (3) The taxpayer meets all other jurisdictional requirements to
       initiate the original tax appeal.
       (4) Either the:
           (A) tax court enjoins collection of the penalty or the tax on
           which the penalty is based under IC 33-26-6-2; or
           (B) department consents to an injunction against collection of
           the penalty or tax without entry of an order by the tax court.
    (d) The additional penalty provided by subsection (b) does not apply
if the taxpayer:
       (1) has a legitimate hold on making the payment as a result of an
       audit, bankruptcy, protest, taxpayer advocate action, or another
       reason permitted by the department;
       (2) had established a payment plan with the department before
       May 15, 2025; April 1, 2026; or
       (3) verifies with reasonable particularity that is satisfactory to the
       commissioner that the taxpayer did not ever receive notice of the
       outstanding tax liability; or
       (4) has a liability that consists only of a penalty imposed with
       regard to a listed tax for a tax period or has a liability for
       penalties that is greater than one hundred percent (100%) of
       the total liabilities for listed taxes eligible for participation in
       the tax amnesty program.
    SECTION 81. IC 7.1-4-2-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 1. An excise tax,
referred to known as the beer excise tax, is imposed at the rate of
eleven and one-half cents ($.115) a gallon is imposed upon the sale of
beer or flavored malt beverage within Indiana.
    SECTION 82. IC 7.1-4-2-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 7. Copy of Invoice. A
brewer or beer wholesaler in this state when he delivers beer to a
person, shall make a true duplicate copy of each invoice when
delivering beer to a person, showing the date of delivery, the amount
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and value of the shipment and the name of the purchaser. The brewer
or wholesaler shall give one (1) copy of the invoice to the purchaser,
and he also shall retain one (1) copy for the use and inspection of the
commission and the department, for a period of two (2) years. A beer
wholesaler shall keep, also keep and retain for a period of two (2)
years, a copy of all invoices for beer purchased or received by him.
them.
   SECTION 83. IC 7.1-4-2-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 8. A beer wholesaler
within Indiana who receives beer or flavored malt beverage upon which
the beer excise tax has been paid shall be entitled to a refund of the
amount of the tax on all tax-paid beer or flavored malt beverage
shipped from Indiana by the wholesaler for sale outside Indiana. or sold
within Indiana under circumstances exempting the beer or flavored
malt beverage from the excise tax. The department shall promulgate
rules and regulations governing the form of application for and the
evidence required to establish the right to a refund.
   SECTION 84. IC 7.1-4-3-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 1. Rate of Tax. An
excise tax, known as the liquor excise tax, is imposed at the rate of
two dollars and sixty-eight cents ($2.68) a gallon is imposed upon the
sale, gift, or the withdrawal for sale or gift, of liquor and wine that
contains twenty-one percent (21%), or more, of absolute alcohol
reckoned by volume.
   SECTION 85. IC 7.1-4-3-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 5. Transactions Exempt
from Tax. The liquor excise tax shall not apply to the following
transactions:
      (1) The sale for delivery outside this state, or the withdrawal for
      sale for delivery outside this state, of liquor and wine that
      contains more than twenty-one percent (21%) of absolute alcohol
      reckoned by volume.
      (2) The liquor excise tax shall not apply to the sale or withdrawal
      for sale of wine to a pastor, rabbi, or priest for sacramental or
      religious purposes only.
   SECTION 86. IC 7.1-4-4-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 1. An excise tax,
known as the wine excise tax, is imposed at the rate of forty-seven
cents ($0.47) a gallon is imposed upon the manufacture and sale or gift,
or withdrawal for sale or gift, of wine, except hard cider, within this
state.
   SECTION 87. IC 7.1-4-4-2 IS AMENDED TO READ AS
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FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 2. (a) Beverages to
Which Tax is Applicable. The wine excise tax shall apply to the
following beverages:
      (1) Wine that contains containing less than twenty-one percent
      (21%), of absolute alcohol reckoned by volume. The wine excise
      tax also shall apply to an alcoholic beverage that contains
      (2) Alcoholic beverages containing fifteen percent (15%), or
      less, of absolute alcohol reckoned by volume, mixed with either
      carbonated water or other potable ingredients, or both, by either
      the manufacturer or the bottler, or both of them, and sold in a
      container filled by the manufacturer or bottler, and which is
      suitable for immediate consumption directly from the original
      container.
    (b) An alcoholic beverage that is subject to the wine excise tax shall
not be also subject to the liquor excise tax.
    SECTION 88. IC 7.1-4-4-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 5. Power of
Commission and Department. The commission and the department
shall have the power to prescribe regulations and maintain gauges in a
winery, farm winery, or a wholesaler's premises for the proper gauging
of the alcoholic beverages to which the wine excise tax is applicable
and the assessment of that tax.
    SECTION 89. IC 7.1-4-4-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 6. Transactions Exempt
from Tax. The wine excise tax shall not apply to the sale or withdrawal
for sale of wine to a pastor, rabbi, or priest for sacramental or religious
purposes only.
    SECTION 90. IC 7.1-4-4.5-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 1. An excise tax,
known as the hard cider excise tax, is imposed at the rate of eleven
and one-half cents ($0.115) a gallon is imposed upon the manufacture
and sale or gift, or withdrawal for sale or gift, of hard cider within
Indiana.
    SECTION 91. IC 7.1-4-6-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 2. (a) The presence on
the owner, possessor, or person in control of premises of, or the
possession by, a person of where there is the presence of alcoholic
beverages or other articles subject to excise taxes or other fees
imposed under this article, but that have not been paid, and upon
which the taxes and fees have not been paid shall impose upon the
possessor, or the owner, or person in control, of the premises, the duty
to pay be liable for all the taxes and fees due and unpaid, even though
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the presence or the possession is unlawful under this title. In addition,
penalties for unpaid fees shall be assessed as follows:
      (1) In the case of fraud the department shall assess and collect a
      penalty in an amount equal to the unpaid fees.
      (2) In the case of mistake, inadvertence, or negligence, not
      amounting to fraud, the department shall assess and collect a
      penalty in an amount equal to ten percent (10%) of the unpaid
      fees.
   (b) A person that is liable for the payment of any tax or other fee
under this article is subject to the penalty imposed under
subsection (a) if the person fails to:
      (1) timely remit the full tax or fee; or
      (2) timely submit an alcoholic beverage excise tax return,
      including an information return or report, or a return
      showing no tax liability, and all required attachments.
   (c) With regard to unpaid taxes described under subsection (a),
penalties shall be assessed under IC 6-8.1.
   (d) If a person fails to pay the full amount of tax due on or
before the due date, the discount for timely payment will be
disallowed.
   SECTION 92. IC 7.1-4-6-2.1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 2.1. (a) The department
shall adopt rules under IC 4-22-2 to govern the assessment and
collection of penalties provided in section 2 of this chapter.
   (b) The commission may adopt rules under IC 4-22-2 to coordinate
compliance with the laws, rules, and administrative policies governing
the assessment and collection of sales taxes.
   SECTION 93. IC 7.1-4-6-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 3. (a) Collection of
Excise Taxes. The department shall collect the excise taxes imposed by
this title.
   (b) An alcoholic beverage subject to a tax under this article shall
be taxed only once, at the first sale or withdrawal for sale, in the
following manner:
      (1) When a primary source of supply located within Indiana
      sells, or withdraws for sale, alcohol to a person in Indiana, the
      primary source of alcohol is responsible for paying the tax.
      (2) When a wholesaler located within Indiana receives alcohol
      from a primary source of supply not located in Indiana, the
      wholesaler located within Indiana is responsible for paying
      the tax.
      (3) When a permit holder sells, or withdraws for sale, alcohol
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      directly to a retailer or consumer, the permit holder is
      responsible for paying the tax.
   SECTION 94. IC 7.1-4-6-3.6 IS REPEALED [EFFECTIVE JULY
1, 2026]. Sec. 3.6. Rules and Regulations. The department, in
consultation with the commission, shall have the power to promulgate
rules and regulations governing the use of a unified system of reporting
alcoholic beverage excise tax liability and the form of the returns.
   SECTION 95. IC 7.1-4-6-3.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 3.7. (a) A person may claim a
deduction on the monthly return under the following
circumstances:
      (1) the person made an exempt sale or withdrawal for sale of
      an alcoholic beverage under section 5.5 of this chapter.
      (2) an alcoholic beverage was damaged or destroyed while in
      the person's possession; or
      (2) an alcoholic beverage was returned by the person to the
      primary source of supply.
   (b) In order to claim a deduction or receive a refund of an
alcoholic beverage excise tax, the following proof must be retained:
      (1) For an exempt sale under section 5.5 of this chapter, the
      following:
         (A) If the sale is to the United States government, its
         agencies, or its instrumentalities, copies of the invoice
         stating the regular selling price less the excise tax.
         (B) If the sale is to a person other than the United States
         government, its agencies, or its instrumentalities, copies of
         the invoice showing:
            (i) the purchaser's name;
            (ii) the address;
            (iii) the date;
            (iv) the amount of beer sold; and
            (v) any other information reasonably required by the
            department.
      (2) For returned alcoholic beverages, copies of the invoice or
      invoices showing the following:
         (A) Name of the primary source of supply.
         (B) Credit invoice number.
         (C) Date returned.
         (D) Date excise tax was paid.
         (E) Gallons returned.
      (3) For alcoholic beverages that have been damaged or
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      destroyed, any information reasonably required by the
      department.
   (c) If this deduction exceeds the liabilities owed to the state on
that monthly return, the department shall refund the tax to the
person.
   (d) If the person does not claim the deduction on the monthly
return, the refund procedures under IC 6-8.1-9-1 will apply.
   (e) The tax paid on alcoholic beverages subsequently lost or
stolen cannot be deducted, refunded, or credited.
   SECTION 96. IC 7.1-4-6-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 4. Discount for Timely
Payment. The department shall allow a taxpayer a discount of one and
one-half percent (1 1/2%) of the amount of excise taxes otherwise due
for the accurate reporting and timely remitting of the excise taxes
imposed by this title.
   SECTION 97. IC 7.1-4-6-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 5. When Sale is Made.
For alcoholic beverage excise tax purposes, a sale shall not be deemed
to have been made until the goods leave the custody of the seller.
   SECTION 98. IC 7.1-4-6-5.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 5.5. (a) Sales or withdrawals from
sale of alcoholic beverages intended for export to a state outside
Indiana are exempt from alcoholic beverage excise tax.
   (b) Sales or withdrawals of alcoholic beverages for sale to the
United States government, its agencies, and instrumentalities,
including military facilities, are exempt from alcoholic beverage
excise tax. However, sales to individuals, private stores, or
concessionaires located upon federal areas are not exempt.
   (c) Sales or withdrawals for sale of wine to a pastor, rabbi, or
priest for sacramental or religious purposes are exempt only from
the liquor excise tax (IC 7.1-4-3) and the wine excise tax
(IC 7.1-4-4).
   (d) Lost or stolen alcoholic beverages are not exempt from the
alcoholic beverage excise tax.
   SECTION 99. IC 7.1-4-6-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 6. Floor Stock Tax Not
Imposed. The provisions of this article shall not be construed as
imposing a floor stock tax on the goods held by a permittee of any type
under this title.
   SECTION 100. IC 7.1-4-6-7, AS AMENDED BY P.L.9-2024,
SECTION 272, IS AMENDED TO READ AS FOLLOWS
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                                   135
[EFFECTIVE JULY 1, 2026]: Sec. 7. Appropriation for
Administration. There shall be an annual appropriation, from the sum
of money allocated to the general fund by this title, of a sum of money
necessary for the purpose of carrying out the provisions of this title.
The claims for operating expenses incurred under the provisions of this
title shall be filed with and paid by the state comptroller. Equipment
shall be purchased only upon a requisition approved by the department
of administration.
    SECTION 101. IC 7.1-4-6-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 8. (a) Duty of Attorney
General and Local Prosecutor. If a person who holds a permit under
this title:
       (1) fails to account for, or pay over to the chairman or the
       department, or both, an annual license fee, or excise tax, or other
       levy imposed by this title; or
       (2) defaults in a condition of his the person's bond; or if a person,
       licensed under this title or not,
       (3) fails or refuses to pay to the chairman or the department an
       obligation, liability, forfeiture, or penalty imposed upon him the
       person by this title, whether the person is licensed under this
       title or not;
the chairman or the department shall report that fact to the attorney
general of Indiana who shall immediately institute the necessary action
for the recovery of the sum due the state by reason of this title.
    (b) The state shall be entitled to all liens and remedies allowed by
law for the collection of the sum due the state.
    (c) It is the duty of the prosecuting attorney of the proper county to
assist the attorney general in these matters whenever the attorney
general requests his assistance.
    SECTION 102. IC 7.1-4-9-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 8. Basis of Distribution
and Use. The monies in the excise fund that is distributed to a county,
city or town shall be distributed in direct proportion to the amount of
retailer's or dealer's annual license fees paid in respect to licensed
premises situated in a city or town, or situated within a county but
outside the corporate limits of a city or town. The money distributed
shall be credited to the general fund of the county, city or town and the
funds shall be budgeted according to law.
    SECTION 103. IC 7.1-4-9-9, AS AMENDED BY P.L.9-2024,
SECTION 275, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 9. Time of Distribution. The
distribution of the excise fund to be paid into the general fund of a
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                                  136
county, city or town shall be distributed by the state treasurer
semi-annually on the first day of June and the first day of December of
each year. The state comptroller is authorized to draw the state
comptroller's warrants to the treasurers of the several governmental
subdivisions when the distribution is presented to the state comptroller.
   SECTION 104. IC 7.1-4-9-10, AS AMENDED BY P.L.9-2024,
SECTION 276, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 10. Appropriation from General
Fund. There is appropriated from the monies allocated to the general
fund under this title, a necessary sum of money to make up any
deficiency between the sums from the excise fund actually paid over to
the treasuries of the several governmental subdivisions during their
respective current fiscal years, and the estimate of funds to be
distributed to them during the current fiscal year as computed by the
state board of accounts and as considered by the governmental unit in
preparation of its budget for the current fiscal year. The state board of
accounts shall determine whether a deficiency exists at the close of the
current fiscal year of each governmental unit. The amount of a
deficiency so determined shall be paid to the governmental unit on
warrant issued by the state comptroller not later than one (1) month
after the close of the respective current fiscal year.
   SECTION 105. IC 7.1-4-10-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 2. Use of Funds. The
monies in the enforcement and administration fund shall be used and
disbursed solely for the enforcement and administration of this title,
and for no other purpose. Any unexpended balance remaining in the
fund at the end of a fiscal year shall not lapse but shall remain
exclusively appropriated and available only for the purpose of the
enforcement and administration of this title.
   SECTION 106. IC 23-15-13 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
   Chapter 13. Payments to Business Entities
   Sec. 1. This chapter applies only to a cash transaction.
   Sec. 2. As used in this chapter, "business entity" means any:
      (1) bank;
      (2) hospital;
      (3) health care provider;
      (4) sole proprietorship;
      (5) corporation;
      (6) limited liability company;
      (7) association;
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                                 137
     (8) partnership;
     (9) joint stock company;
     (10) joint venture;
     (11) mutual fund;
     (12) trust;
     (13) estate;
     (14) joint tenancy;
     (15) other form of business organization; or
     (16) state or local unit, for transactions that include a state or
     local unit selling or otherwise providing property or services
     for consideration.
   Sec. 3. For purposes of this chapter, "total transaction amount"
means the amount of the transaction prior to any tax imposed in
addition to any tax imposed on the transaction and paid to the
business entity, regardless of whether the tax is required to be
separately stated or whether the business entity is an agent or
trustee of a governmental entity. A tax under this section includes
state or local taxes as defined in IC 5-36.5-1-4 and any amounts
imposed by any other governmental entity other than a state or
local unit.
   Sec. 4. (a) For a total transaction amount payable to a business
entity, except as provided in subsection (b), the business entity
must round the total transaction amount for all transactions with
a number other than zero (0) or five (5) in the second decimal place
by either:
     (1) rounding the total transaction amount downward to the
     next amount divisible by five cents ($0.05);
     (2) round the total transaction amount upward to the next
     amount divisible by five cents ($0.05); or
     (3) to the nearest five cent ($0.05) increment by:
         (A) for a total transaction amount with one (1), two (2), six
         (6), or seven (7) in the second decimal place, rounding the
         total transaction amount downward to the next amount
         divisible by five cents ($0.05); or
         (B) for a total transaction amount with three (3), four (4),
         eight (8), or nine (9) in the second decimal place, rounding
         the total transaction amount upward to the next amount
         divisible by five cents ($0.05).
   (b) For a total transaction amount that is less than five cents
($0.05), the business entity may round the amount downward or
upward to either zero cents ($0.00) or five cents ($0.05).
   SECTION 107. IC 35-52-6-62.5 IS ADDED TO THE INDIANA
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CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 62.5. IC 6-8.1-8-18 defines a
crime concerning taxes.
   SECTION 108. [EFFECTIVE JULY 1, 2023 (RETROACTIVE)] (a)
IC 6-2.5-9-12, as added by this act, is effective for transactions
occurring after June 30, 2023.
   (b) For purposes of IC 6-2.5-9-12, as added by this act, all
transactions shall be considered as having occurred after June 30,
2023, to the extent that delivery of the vehicle, aircraft, cargo
trailer, or watercraft constituting selling at retail is made after that
date to the purchaser or to the place of delivery designated by the
purchaser. However, a transaction shall be considered as having
occurred before July 1, 2023, to the extent that the agreement of
the parties to the transaction was entered into before July 1, 2023,
and payment for the vehicle, aircraft, cargo trailer, or watercraft
furnished in the transaction is made before July 1, 2023,
notwithstanding the delivery of the vehicle after June 30, 2023.
   (c) This SECTION expires July 1, 2029.
   SECTION 109. [EFFECTIVE JULY 4, 2025 (RETROACTIVE)] (a)
IC 6-3-1-3.5, IC 6-3-2-2.5, IC 6-3-2-2.6, and IC 6-5.5-1-2, all as
amended by this act, apply to taxable years ending after July 4,
2025.
   (b) IC 6-3-2-30, as added by this act, applies to qualified
production property placed in service after July 4, 2025.
   (c) This SECTION expires July 1, 2030.
   SECTION 110. [EFFECTIVE JANUARY 1, 2026
(RETROACTIVE)] (a) IC 6-3-4.5-14 and IC 6-8.1-5-2, as amended
by this act, are effective for final adjustments and modifications
received by the department after December 31, 2025.
   (b) IC 6-8.1-9-1, as amended by this act, is effective for
modifications issued by the Internal Revenue Service after
December 31, 2025.
   (c) This SECTION expires July 1, 2029.
   SECTION 111. [EFFECTIVE JULY 1, 2026] (a) IC 6-8.1-8-2, as
amended by this act, is effective for tax warrants filed after June
30, 2026.
   (b) For purposes of a tax warrant renewal filed under
IC 6-8.1-8-2(f)(3), the extension of the tax warrant to all choses in
action in the state or real or tangible personal property in this state
apply to renewals filed with a county after June 30, 2026.
   (c) If the department wishes to extend a tax warrant filed before
July 1, 2026, to the entire state, the department must amend the tax
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warrant with one (1) or more counties in which the department
previously has filed the tax warrant, or file an additional tax
warrant in one (1) or more counties in which the department would
be permitted to file a tax warrant, after June 30, 2026.
   (d) This SECTION expires July 1, 2029.
   SECTION 112. [EFFECTIVE JANUARY 1, 2027] (a) IC 6-2.5-2-2,
as amended by this act, and IC 5-36.5 and IC 23-15-13, both as
added by this act, apply only to cash transactions occurring after
December 31, 2026.
   (b) Except as provided in subsection (c), a retail transaction is
considered to have occurred after December 31, 2026, if the
property whose transfer constitutes selling at retail is delivered to
the purchaser or to the place of delivery designated by the
purchaser after December 31, 2026.
   (c) Notwithstanding the delivery of the property constituting
selling at retail after December 31, 2026, a transaction is
considered to have occurred before January 1, 2027, to the extent
that:
      (1) the agreement of the parties to the transaction is entered
      into before January 1, 2027; and
      (2) payment for the property furnished in the transaction is
      made before January 1, 2027.
   (d) This SECTION expires January 1, 2030.
   SECTION 113. An emergency is declared for this act.
SEA 243 — Concur
President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date:  Time:
SEA 243 — Concur