Newly Created Indiana Motorsports Business Tax Incentives
Extension of Indiana’s Sales Tax Exemption for Professional Race Cars

The exemption previously only applied to engines, chassis, and their replacement parts. The new legislative changes expand the exemption to include much more than just engines and chassis and are intended to cover the many new technologies and electronics used within professional racing. It is expected that an average Champ Car or IRL team could save nearly $40,000 on their electronics expenditures alone.

The code change is below in italics.

Section 9. IC 6-2.5-5-37 is amended to read as follows [Effective July 1, 2005]
Sec. 37. Transactions involving tangible personal property are exempt from the state gross retail tax, if the tangible personal property:
     (1) is leased, owned, or operated by a professional racing team; and
     (2) comprises any part of a professional motor racing vehicle, excluding tires and accessories.

Professional Motorsports Businesses Added to Venture Capital Investment Credit

The Venture Capital Investment Credit is an incentive that encourages Indiana investors to invest in small Indiana high-tech companies. Now investments in Indiana motorsports companies can qualify for the VCI credit. Investors’ certified investments in qualified Indiana motorsports companies can result in a credit against their Indiana tax liability equal to the lesser of 20% of the investment or $500,000.

The code change is below in italics.
SECTION 17. IC 6-3.1-24-7, AS AMENDED BY P.L.4-2005, SECTION 98, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE FEBRUARY 9, 2005 (RETROACTIVE)]:
Sec. 7. (a) The Indiana economic development corporation shall certify that a business is a qualified Indiana business if the corporation determines that the business:
     (1) has its headquarters in Indiana;
     (2) is primarily focused on professional motor vehicle racing, commercialization of research and development, technology transfers, or the application of new technology, or is determined by the Indiana economic development corporation to have significant potential to:
          (A) bring substantial capital into Indiana;
          (B) create jobs;
          (C) diversify the business base of Indiana; or
          (D) significantly promote the purposes of this chapter in any other way;
     (3) has had average annual revenues of less than ten million dollars ($10,000,000) in the two (2) years preceding the year in which the business received qualified investment capital from a taxpayer claiming a credit under this chapter;
     (4) has:
          (A) at least fifty percent (50%) of its employees residing in Indiana; or
          (B) at least seventy-five percent (75%) of its assets located in Indiana; and
     (5) is not engaged in a business involving:
          (A) real estate;
          (B) real estate development;
          (C) insurance;
          (D) professional services provided by an accountant, a lawyer, or a physician;
          (E) retail sales, except when the primary purpose of the business is the development or support of electronic commerce using the Internet; or
          (F) oil and gas exploration. 
(b) A business shall apply to be certified as a qualified Indiana business on a form prescribed by the Indiana economic development corporation.
(c) If a business is certified as a qualified Indiana business under this section, the Indiana economic development corporation shall provide a copy of the certification to the investors in the qualified Indiana business for inclusion in tax filings.
(d) The Indiana economic development corporation may impose an application fee of not more than two hundred dollars ($200).