SB 264 changesEconomic development tax credits.

What changed

+67 / −6 words · MediumConfidence: high

This bill substantially reforms Indiana's economic development tax credit program by expanding eligibility for investments in certain technology-focused companies through newly certified "qualified Indiana investment funds" and increasing credit amounts for jobs filled by new Indiana residents. The legislation establishes a new state certification process for investment funds that prioritize companies engaged in commercialization, technology transfer, or applying new technology, with preference given to companies that have received prior state funding or maintain substantial Indiana presence. The bill raises the tax credit cap for positions filled by new Indiana residents from a flat $10,000 to the incremental income tax withholdings from the position plus $10,000, potentially significantly increasing the credit value per qualifying employee. Credits may now be carried forward for five years if they exceed a taxpayer's liability, and credits certified for investments between July 2020 and June 2029 may be assigned to others subject to a $10,000 minimum per assignee and various notification and reporting requirements. The changes appear designed to stimulate venture capital investment in Indiana-connected technology companies while providing greater flexibility for credit utilization and transfer.

Change log

• SECTION 8

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  New certification process for qualified Indiana investment funds established

  This section adds a new provision authorizing the Indiana economic development corporation to certify investment funds as "qualified Indiana investment funds." Certification requires the fund to meet a definition found in section 2.5 of this chapter and additional requirements in subsection (b). The provision takes effect July 1, 2026.

• SECTION 8 > (b)

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  New requirement: IEDC certification of investment funds requires adherence to investment policy

  This new subsection establishes that the Indiana Economic Development Corporation may only certify a fund as a "qualified Indiana investment fund" if the fund operates according to a specified investment policy. The text appears incomplete as it ends with a colon, suggesting additional criteria follow in subsequent provisions not shown in this excerpt.

• SECTION 8 > (1)

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  New requirement: eligible companies must focus primarily on commercialization, technology transfer, or new technology application

  This section introduces a new eligibility criterion for companies seeking economic development tax credits. Qualifying companies must now be primarily focused on one of three activities: commercializing research and development, transferring technology, or applying new technology. This requirement did not exist in prior law.