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Business is made better in Northeast Indiana thanks to a strong track record of attracting and supporting new business investment and economic development through the use of competitive incentives.
Serving as a single point of contact, NEI collaborates closely with state, regional and local entities to secure a competitive incentive package to help businesses succeed.
Custom state incentive packages in ten days or fewer, a streamlined permitting process and public, private and academic collaboration further add to Northeast Indiana’s competitive edge.
Property tax abatements can be offered on a 10-year basis for new personal and real property tax investments. These abatements are typically phased over a 10-year period (e.g. Year 1: 100 percent, Year 2: 90 percent, Year 3: 80 percent…) but recent legislative changes allow the community to abate up to 100 percent over a 10-year period.
If a commercial or industrial building that has sat 100 percent vacant for a year or longer becomes occupied, the owner/occupant can apply for the eligible vacant building property tax deduction. Documentation must be provided proving that the building has been unoccupied, but actively marketed for sale or lease, for at least a year. The deduction is 100 percent of existing real property taxes for year one and a 50-percent deduction in year two.
TIF allows a community to collect the property tax revenues resulting from the increased assessed value resulting from new investments within a new or established TIF district. The additional revenues can be used to support site infrastructure improvements but can also be used on a cash basis to support new business investment. Unlike many states, Indiana legislation allows for the creative use of TIF to support new business projects.
Grants are available to support new business investments on a discretionary basis. Through the use of the local option Economic Development Income Tax (CEDIT), Tax Increment Financing (TIF), and various other pools of money, our communities have offered cash grants to support new business development.
The Community Development Corporation of Northeast Indiana facilitates five loan programs for new and existing businesses interrelated with job creation. These programs can fund a variety of business expenses including building purchase, renovation or construction, equipment and working capital, ranging in size from a few thousand dollars up to $5.5 million on the CDC portion of the project.
SEED focuses on programs that support entrepreneurship, innovation, technology development and small business development. To support these initiatives, grant money up to $1 million is available annually for five years and is funded by the Indiana Economic Development Corporation. SEED also offers tax incentives (Investment Deduction of 100 percent up to 10 years, Abatement Deductions for Vacant Buildings, and Personal Property Assessed Value Floor Exemption) to businesses locating in the SEED boundaries. The district also includes several urban corridors.
The Foreign Trade Zone (FTZ) program operates in a 12-county region in Northeast Indiana. Any company within this area can apply to be a FTZ Operator, allowing it to defer or even avoid payment of import duties, and often enjoy a lower tariff rate. Restrictions, limitations and regulations regarding how much merchandise can be brought into the country are eased or eliminated as long as the merchandise remains in the FTZ. Visit BizFTZ.com for more information.
These bonds provide financing for economic development projects. The proceeds from the bonds, which can be issued by a local government, are loaned to businesses to pay for buildings or other capital investment projects. The bonds must be paid back by the company. As the issuer of the bonds, the local government’s participation typically results in favorable interest rates and longer terms. Most often, these bonds are tax-exempt.
Many communities in Northeast Indiana have acquired property for industrial development purposes. In some cases, this land can be made available at a reduced cost or no cost to support new business development projects that are accompanied by the creation of quality jobs.
Indiana state incentives are administered by the Indiana Economic Development Corporation (IEDC). The best incentives package is determined on a project basis while the amounts of each incentive are based on a number of factors, including the number of new jobs, capital investment and average wages. The most commonly used incentives are summarized below. Find more information on state incentives by visiting the IEDC’s website.
Certain income derived from qualified patents and earned by a taxpayer are exempt from taxation. The Tax Exemption for Patent-Derived Income defines qualified patents to include only utility patents and plant patents. The total amount of exemptions claimed by a taxpayer in a taxable year may not exceed $5 million.
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.
Northeast Indiana Works connects with various state and federal agencies to offer grants and incentives to businesses to help train workers. Northeast Indiana Works can also assist with hiring a skilled workforce for companies that are expanding operations.
The refundable corporate income tax credit is calculated as a percentage (not to exceed 100 percent) 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.
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.
This grant provides money to local governments for off-site infrastructure projects associated with an expansion of an existing Indiana company or the location of a new facility in Indiana. State funding through the IDGF program must be matched by a combination of local government and company financial support.
Projects which may qualify include:
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 worldwide annual revenue of at least $100 million to qualify.
The credit equals 50 percent of a corporation’s costs of relocating its headquarters to Indiana. An eligible corporation may use the credit to offset the corporation’s Indiana personal and corporate adjusted gross income tax and financial institutions tax. A nine-year carry forward applies to any unused part of the credit.
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.
Community Revitalization Enhancement District (CReED) Tax Credits are available to taxpayers that make qualified investments for the redevelopment or rehabilitation of property located within a revitalization district. Only those projects that the IEDC expects to have a positive return on investment will be considered. Eligible costs include acquisition, rehabilitation, architectural and engineering services, environmental remediation, construction management and demolition.
Patent Tax Exemptions allow certain income derived from qualified patents to be exempt from taxation. The Tax Exemption for Patent-derived Income defines qualified patents to include only utility patents and plant patents. The total amount of exemptions claimed by a taxpayer in a taxable year may not exceed $5 million.
Research & Development credits provide a credit against state tax liability for qualified company research expenses.
Next Level Jobs is a campaign that targets working-age Hoosiers and Indiana employers with the goal of skilling up our workforce to fill the high-wage jobs available right now in every part of the state. The Employer Training Grant can provide training reimbursement of up to $5,000 for each new employee that is trained, hired and retained for six months. The Workforce Ready Grant provides free training for Hoosiers in the state’s highest-demand jobs.
The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) allowed governors to nominate certain census tracts as Opportunity Zones, subject to approval from the U.S. Department of Treasury. Up to 25 percent of a state’s low-income census tracts were eligible for designation, which permitted Indiana to nominate up to 156 census tracts as Opportunity Zones.
Opportunity Zones provide federal capital gains tax advantages for investments made in these areas. This designation is intended to attract capital investment into areas that are economically distressed.
To be eligible as an Opportunity Zone, census tracts had to qualify as “low-income”. To do so, the census tract must have met one of the following requirements:
Looking for more information about Opportunity Zones? Visit the state’s website to see a map or visit Greater Fort Wayne Inc.’s website.
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