Incentives

Since every company's needs are different, all business assistance programs offered in Indiana are project specific. The focus of all incentive programs are placed on the specific needs of each individual customer.

There are local incentives for property tax abatements, tax increment financing, as well as cooperation with the state on infrastructure programs. Each local governmental unit determines the extent of their programs.

The Indiana Economic Development Corporation administers the state's incentive programs, which are identified below.

State Incentives

• Economic Development for a Growing Economy (EDGE) tax credit
• Hoosier Business Investment Tax Credit (HBITC)
• Skills Enhancement Fund (SEF)
• Industrial Development Grant Fund (IDGF)
• Headquarters Relocation Tax Credit
• Industrial Recovery Tax Credit
• Venture Capital Investment Tax Credit
• R & D Tax Credit
• Hoosier Alternative Fuel Vehicle Manufacturer Tax Credit
• Media Production Expenditure Tax Credit
• Patent Income Exemption
• R & D Sales Tax Exemption
• 21st Centure Research and Technology Fund

Local Incentives

Each local governmental entity with taxing authority also has the ability to offer tax abatement incentives for new and expansion of existing businesses. The individual project's new job creation and value of new real property and equipment are important factors.

Various other programs are used including Tax Increment Financing (TIF) and participation with the state on their infrastructure program.

Tax Abatement

Tax abatement is offered by the local governmental taxing unit on real property and equipment. Real property can qualify for a three year, seven year or ten year abatement on new buildings and improvements or increases in assessed value on remodeled or renovated structures. Land does not qualify. Manufacturing equipment (new to the State of Indiana) can qualify for a deduction from assessed value over a ten year period. Equipment not used in direct production, such as office equipment, does not qualify.

Enhancements to tax abatement:

Business Real Estate Taxes

Abatement for vacant buildings local governing bodies may now grant a 1 or 2 year tax abatement on a commercial or industrial building if the building has been vacant for at least one year and taxpayer is going to lease and/or occupy the building. The general abatement procedural rules and filing requirements apply. The taxes are abated as follows:

Year 1 - 100% of the assessed value of the building or portion of the building being occupied by the owner or tenant

Year 2 - 50% of the assessed value

Business Personal Property Taxes

Abatement for used equipment - local governing body may now grant tax abatement for property that was previously used in Indiana. The equipment must be acquired in an arm's length transaction with an unaffiliated party.

Click here to view the Tax Abatement Schedule

Tax Incremental Financing

Bonds issued by a local municipality may be used to finance infrastructure improvements and new construction areas needing growth or rehabilitation. The infrastructure pays for itself through increased tax revenues (resulting from the property valuation increases) which are pledged for repayment of the bonds.