TAX ABATEMENT
A tool that allows taxes on real/and or personal property to be phased in over a period of time, usually three to 10 years. Tax abatements usually provide an almost immediate increase in the assessed value of property due to its upgraded use, resulting in an increase in the taxes collected.

TAX INCREMENT FINANCING (TIF)
A method of facilitating development or redevelopment for a business by utilizing future tax revenues to pay for necessary improvements. This technique is often used for financing a capital project from the stream of revenue that will ultimately be generated by the project, to promote business development and job creation.

STATE GRANTS & INCENTIVES (Indiana)

21st Century Research and Technology Fund
The fund stimulates the process of diversifying the state's economy by developing and commercializing advanced technologies in Indiana, and it emphasizes the creation of academic-sector/commercial-sector partnerships.

Clean Energy
Tax credit program to support Indiana's advanced agricultural industry and provide an incentive for development of renewable energy.

Economic Development for a Growing Economy (EDGE)
The Economic Development for a Growing Economy (EDGE) is a program designed to encourage companies to expand or locate operations in indiana.

EDGE is a refundable tax credit that can be offered in situations where Indiana is competing against another state or country for a company's site location investment. EDGE credits are calculated as a percentage of payroll tax withholding for net new Indiana jobs. The company must commit to maintaining operations in Indiana for at least two years beyond the term of its EDGE award.

The Hoosier Alternative Fuel Vehicle Manufacturer Tax Credit is designed to foster job creation and higher wages in Indiana; reduce dependency upon energy sources imported into the United States; and reduce air pollution as the result of the manufacture or assembly of alternative fuel vehicles in Indiana.

Under the terms of the statute, qualified business investment for the manufacture of alternative fuel vehicles means the amount of a taxpayer's expenditures in Indiana that are reasonable and necessary for the manufacture or assembly of alternative fuel vehicles. "Alternative fuel vehicle" means any passenger car or light truck with a gross weight of eight thousand five hundred (8,500) pounds or less that is designed to operate on at least one alternative fuel.

Hoosier Business Investment Tax Credit (HBITC)
The Hoosier Business Investment Tax Credit (HBITC) program encourages capital investment in Indiana by providing a credit against a company’s Indiana tax liability. The credit amount is based on a company’s qualified capital investment with the final credit amount determined by the Indiana Economic Development Corporation (IEDC), based on an analysis of the economic benefits of the proposed investment.

Headquarters Relocation Tax Credit
When a business relocates its corporate headquarters (defined as the location of the principal office of the principal executives) to Indiana, it is entitled to a credit against its state tax liability equal to half of the costs incurred in relocating the headquarters. A company must have a worldwide annual revenue of at least $100 million to qualify.

Industrial Recovery Tax Credit (Dinosaur Building)
This tax credit provides an incentive for companies to invest in facilities requiring significant rehabilitation or remodeling expense.

Media Production Expenditure Tax Credit
The Media Production Expenditure Tax Credit exempts sales tax on personal property if the taxpayer acquires the property for direct use in a qualified Indiana media production.

Effective July 1, 2008, the Media Production Expenditure Tax Credit (MPETC) provides individuals and companies a credit of up to 15 percent on the amount spent in Indiana for qualified production expenditures. The credit is available to an approved individual or entity that is engaged in the business of making qualified media productions in Indiana.

The MPETC is refundable; therefore, if the amount of the MPETC exceeds the taxpayer’s state income tax liability for that taxable year, the taxpayer is entitled to a refund of the excess of the credit amount over their state income tax liability. The total amount of tax credits certified by the IEDC for any fiscal year may not exceed $2.5 million, but there is no cap per project.

Indiana Research Expense Tax Credit
(Research & Development Credit)
The Research and Development (R&D) Tax Credit provides an incentive for business investment in Indiana by providing a credit against state tax liability for qualified company research expenses. The R&D tax credit (also known as the Research Expense tax credit) is based on the increase in Indiana R&D over the prior three-year base.

Venture Capital Tax Credit
The Venture Capital Investment Tax Credit improves access to capital to 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 income tax liability.

Industrial Development Grant Fund
This state-funded program provides assistance to local units of government for off-site  infrastructure projects in support of new business development.  Eligible uses include construction, extension or completion of sanitary sewer lines, road, streets, water lines, sidewalks, railroad spurs and siding, and fiber optics.  The grant amount is determined based on project needs and is designed to supplement local funding sources.  Application is made to the Indiana Economic Development Corporation.

Patent Income Exemption
Taxpayers are exempt from certain income derived from qualified utility and plant patents.  Qualified taxpayers are eligible for an exemption of 50 percent of patent income for each of the first five years. The exemption percentage decreases over the next five years to 10 percent in the tenth year.

The total amount of exemptions claimed by a taxpayer may not exceed $5 million per year. The Patent Income Exemption is available only to companies with 500 or fewer employees.

R&D Sales Tax Exemption
The Research and Development (R&D) sales tax exemption provides a refund of 50 percent of the Indiana sales taxes paid on purchases of eligible research and development equipment purchased after June 30, 2007. Taxpayers may also file a claim for the refund for tax paid on retail transactions that occur after June 30, 2005.

Training - Skills Enhancement Fund
The Skills Enhancement Fund (SEF) provides financial assistance to businesses committed to training their workforce. Trainees must be Indiana residents. SEF reimburses eligible training expenses over a two-year term. Companies may reapply for additional SEF funds after their initial two-year term. IEDC typically does not provide reimbursement for training that is required by law.

Training - Work Opportunities Tax Credit (WOTC)
Work Opportunity Tax Credit (WOTC)  is a federal tax credit program that offers incentive to employers who hire individuals who have consistently had difficulty in securing and retaining employment.  The credit helps offset the federal tax liability of private, for-profit employers.  The program covers only new hires that have not worked for the employer in the past.

Compliance Forms

Form SB-1 Statement of Benefits

Real Estate / Personal Property

Form CF-1 Compliance with Statement of Benefits

Real Estate / Personal Property

Form 322 ERA - Application for Deduction from Assessed Valuation of Structures in Economic Revitalization Areas

Form 103-EL - Equipment List for New Additions to ERA Deduction

Form 103-ERA - Schedule of Deduction from Assessed Valuation of Personal Property in an Economic Revitalization Area