Authority: IC 6-5.5-9-1

Affected: IC 6-5.5-1-2

Sec. 5. (a) For purposes of the FIT, an "investment company" means a person, copartnership, association, or corporation, whether domestic or foreign, that:

1. (1) is registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.); and

2. (2) solicits or receives a payment and issues in exchange for such payment an investment contract as evidenced by:

   1. (A) a so-called bond;
   2. (B) a share;
   3. (C) a coupon;
   4. (D) a certificate of membership;
   5. (E) an agreement;
   6. (F) a pretended agreement; or
   7. (G) another evidence of obligation;
3. entitling the holder to anything of value at some future date, if the gross payments to the holder equal at least fifty percent (50%) of the sum of the company's gross payments on all investment contracts plus the company's gross income from all other sources, except dividends from subsidiaries, for the taxable year.

The term "gross payments" means the amount received during the taxable year on outstanding investment contracts, plus interest and dividends earned on those contracts. The interest and dividends earned on investment contracts are determined by prorating the total dividends and interest for the taxable year in question in the same proportion that certificate reserves, as defined by the Investment Company Act of 1940, are to total assets.

(b) To qualify as a taxpayer, the investment company must satisfy the eighty percent (80%) test under 45 IAC 17-2. Regardless of whether or not a corporation meets the definition of an investment company, a corporation which makes investments may be a taxpayer if the eighty percent (80%) test is satisfied.

(c) In the case of an investment company, adjusted gross income means the company's federal taxable income multiplied by the quotient of:

1. (1) 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
2. (2) 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.

(Department of State Revenue; 45 IAC 17-4-5; filed Jan 22, 1991, 4:55 p.m.: 14 IR 1222)