2021 Indiana Code
Title 6. Taxation
Article 5.5. Taxation of Financial Institutions
Chapter 2. Imposition of Tax
6-5.5-2-6. Credit for Nonresident Taxpayer

Sec. 6. (a) A nonresident taxpayer is entitled to a credit against the tax due under this article for the amount of net income tax, franchise tax, or other tax measured by net income that is due to the nonresident taxpayer's domiciliary state for a taxable year if:

(1) the receipt of interest or other income from a loan or loan transaction is attributed both to the taxpayer's domiciliary state under that state's laws and also to Indiana under IC 6-5.5-4; and

(2) the principal amount of the loan is at least two million dollars ($2,000,000).

(b) The amount of the credit for each taxable year is the lesser of:

(1) the portion of the net income tax, franchise tax, or other tax measured by net income actually paid by the nonresident taxpayer to its domiciliary state that is attributable to the loan or loan transaction; or

(2) the portion of the franchise tax due to Indiana under this article that is attributable to the loan or loan transaction.

The amount determined under subdivisions (1) and (2) shall be reduced by the amount of any credit for the tax due from the nonresident taxpayer under this article (calculated without the allowance for the credit provided under this section) and that may be used by the nonresident taxpayer in calculating the income tax due under the laws of the nonresident taxpayer's domiciliary state.

(c) As used in this section:

(1) "loan" or "loan transaction" refers to an obligation created in a single transaction to pay or repay a sum of money attributed as provided in subsection (a)(1);

(2) the "principal amount" of a loan is limited to the principal amount specified in the loan documents at the time of making the loan and reasonably expected to be advanced during the term of the loan, even though there is more than one (1) advancement. If the loan is a participation loan (as defined in IC 6-5.5-4-13), the principal amount must be calculated separately for each participant and is equal to that portion of the loan committed by each participant; and

(3) a "taxpayer's domiciliary state" is the taxing jurisdiction in which its commercial domicile is located.

(d) The amount of tax attributable to a loan or loan transaction, under the laws of the taxpayer's domiciliary state or under this article, is the portion of the total tax due to each state in an amount equal to the same proportion as the receipts from the loan or loan transaction bear to the total of the taxpayer's receipts.

As added by P.L.347-1989(ss), SEC.1. Amended by P.L.21-1990, SEC.24; P.L.68-1991, SEC.7.