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Local Incentives

REAL PROPERTY TAX ABATEMENT
Phase-in of real property tax obligation from the improvements being made. The phase-in can span a one to 10 year period. Tax abatement is granted based on qualifying new investment, retained and committed jobs, wages and economic impact of project. Metropolitan Development Commission and possibly City County Council approval is required and must occur before construction permits are obtained.
 
How to Calculate:
Real property tax abatement is a declining percentage of the increase in assessed value of the improvement based on one of the following ten time periods. For example, for a seven-year abatement, the taxpayer pays no tax in year one, 15% of the total tax in year two, 29% of the total tax in year three, etc. The local governing body, the City of Indianapolis’ Metropolitan Development Commission, determines the time period for the abatement.

PERSONAL PROPERTY TAX ABATEMENT
Manufacturing, research and development, information technology and logistics/distribution equipment phase-in of personal property (used directly in production, R&D, distribution processes) tax obligation over a one- to ten-year period. Tax abatement is granted based on qualifying new investment, retained and committed jobs, wages and economic impact of project. Metropolitan Development Commission and possibly City County Council approval is required and must occur prior to the equipment being operational.

How to Calculate:
Personal property tax abatement is a declining percentage of the assessed value of the newly installed manufacturing and/or research and development equipment. Taxes are phased in as described below. The Metropolitan Development Commission determines the abatement period.

TAX EXEMPTION FOR ENTERPRISE IT EQUIPMENT
The City may grant up to a ten-year enterprise IT equipment exemption, pending City-County Council approval. The tax exemption requires a minimum investment of $10,000,000 in qualifying investment by an eligible business. The average wage of employees must be least one hundred twenty-five percent (125%) of the county average wage. Examples of non-eligible activities are call centers, back office operations, customer service operations, and credit/claims processing operations.

VACANT BUILDING ABATEMENT
Up to a two year abatement based on the occupation of a qualifying vacant building. Granted to a company according to local qualifications based on occupying a previously vacant building. Must be used for commercial or industrial purposes. Prior approval of the Metropolitan Development Commission must occur before occupying the facility.

FUNDING PROGRAMS
Several financing programs are available for companies at state and local levels. Taxable and tax exempt bonds, Tax Increment Financing (TIF) and various small business loan programs are available. Requirements are specific to each individual financing program and require government agency approval.

INDIANAPOLIS BUSINESS ACCELERATION TEAM
This free service can help expedite and streamline city permitting and regulatory processes. Businesses meet one-on-one with our in-house team leader to discuss the project and proposed changes. The Business Acceleration Team acts as your direct line of communication to city agencies involved in your project oftentimes speeding up review processes and saving money. 

State Incentives

ECONOMIC DEVELOPMENT FOR A GROWING ECONOMY TAX CREDIT
The Economic Development for a Growing Economy (EDGE) Tax Credit provides incentive to businesses to support jobs creation, capital investment and to improve the standard of living for Indiana residents. The refundable corporate income tax credit is calculated as a percentage (not to exceed 100%) of the expected increased tax withholdings generated from new jobs creation. The credit certification is phased in annually for up to 10 years based upon the employment ramp-up outlined by the business.

HEADQUARTERS RELOCATION TAX CREDIT
The Headquarters Relocation Tax Credit (HRTC) provides a tax credit to corporations that relocate their headquarters to Indiana. The credit is assessed against the corporation’s state tax liability.

HOOSIER ALTERNATIVE FUEL VEHICLE MANUFACTURER TAX CREDIT
A tax credit applied toward investment in the manufacturing of alternative fuel vehicles. The credit is assessed against the corporation’s state tax liability.

HOOSIER BUSINESS INVESTMENT TAX CREDIT
Provides incentive to businesses to support jobs creation, capital investment and to improve the standard of living for Indiana residents. The non-refundable corporate income tax credits are calculated as a percentage of the eligible capital investment to support the project. The credit may be certified annually, based on the phase-in of eligible capital investment, over a period of two full calendar years from the commencement of the project.

INDUSTRIAL DEVELOPMENT GRANT FUND
The Industrial Development Grant Fund (IDGF) provides assistance to municipalities and other eligible entities and may be provided to reimburse a portion (typically up to 50%) of eligible public infrastructure costs over a period of two full calendar years from the commencement of the project.

INDUSTRIAL RECOVERY TAX CREDIT
The Industrial Recovery Tax Credit provides an incentive for companies to invest in former industrial facilities requiring significant rehabilitation or remodeling expense.

MOTORSPORTS SALES TAX EXEMPTION
Every racecar component/part sold in Indiana is exempt from state sales tax except for tires and accessories.

PATENT INCOME TAX EXEMPTION
Certain income derived from qualified patents and earned by a taxpayer are exempt from taxation.

RESEARCH AND DEVELOPMENT SALES TAX EXEMPTION
Taxpayers may receive a 100 percent sales tax exemption for the purchase of qualified research and development equipment.

RESEARCH EXPENSE TAX CREDIT
Taxpayers may receive a credit against their Indiana state income tax liability calculated as a percentage of qualified research expenses.

SKILLS ENHANCEMENT FUND
The Skills Enhancement Fund (SEF) provides assistance to businesses to support training and upgrading skills of employees required to support new capital investment. The grant may be provided to reimburse a portion (typically 50%) of eligible training costs over a period of two full calendar years from the commencement of the project.

VENTURE CAPITAL INVESTMENT TAX CREDIT
The Venture Capital Investment Tax Credit program improves access to capital for fast growing Indiana companies by providing individual and corporate investors an additional incentive to invest in early stage firms. Investors who provide qualified debt or equity capital to Indiana companies receive a credit against their Indiana tax liability.

WORKFORCE 2.1
The Indiana Economic Development Corporation is offering Skills Enhancement Fund (SEF) assistance under a program called Workforce 2.1 for the purpose of training and providing job-specific certifications to current employees, prospective new hires, and students with plans to become employees. The grant may be provided to establish or develop training programs to fill a deficiency in the Indiana workforce. The IEDC has designated $1 million of SEF funds for the Workforce 2.1 program through the end of 2013. The IEDC will consider proposals from training providers until the $1 million is exhausted and intends to consider proposals beyond 2013 based on the program’s effectiveness.