IN HB1184

Exempts from adjusted gross income taxation income derived from inventions during the patent application period through patent issuance, if a patent is ultimately granted.

Applies only to taxable years beginning after December 31, 2014, and implements a new schedule of exemption percentages for patent-related income.

For patents issued after December 31, 2014, provides 100% exemption in the first year, declining by 10% annually through the tenth year (ending at 10% exemption).

Limits annual exemption to $5,000,000 per qualified taxpayer and allows unused exemption amounts to carry forward for up to 4 consecutive taxable years.

Requires eligible taxpayers to claim exemption on state tax returns and mandates annual reporting by the Department of Revenue to the legislative council on exemption usage.