Incentives for Business Growth

The State of Indiana and its local communities provide a variety of programs to assist business growth. These programs include tax credits, grants, and exemptions are highlighted below. The Hamilton County Alliance can assist companies with these programs.

Local Incentives

Tax Abatement
Hamilton County and its municipalities are permitted to offer tax abatement to companies meeting the local program requirement. Abatement is available to qualifying investments including real and personal property. Each municipality evaluates requests on a case-by-case basis. The main considerations are often capital investment, wages and job creation. The Alliance can assist companies with an interest in this program.

State of Indiana Incentives

Skills Enhancement Fund (SEF)
SEF provides financial assistance to new and expanding companies committed to training their Indiana resident workforce. Eligible companies can receive reimbursement of up to 50 percent of eligible training costs. Indiana continues this commitment to training by allowing companies to re-apply for additional funds to retrain employees after a two-year period.

Technical Enhancement Certification for Hoosiers (TECH) Fund
The TECH Fund provides financial assistance to companies to assist with training their information technology workers. Eligible companies may receive reimbursement of up to $50,000, $2,500 per employee, or 50 percent of training costs, whichever is less. The program is administered on a reimbursement basis.

Industrial Development Grant Fund (IDGF)
These grants help communities meet the public infrastructure needs of a new or expanding business. Assistance is available for publicly-installed infrastructure leading up to, but not onto, the company’s property, except in the case of rail spurs and fiber optic cable.

Economic Development for a Growing Economy (EDGE)
EDGE tax credits are based on the additional employee payroll withholdings for net new job creation in Indiana. The grant may be for a period of up to 10 years. Credits are applied against the company’s Indiana income tax liability and are refundable.

Industrial Recovery Site Tax Credit (Dinosaur Building)
Credits are available for rehabilitating buildings that have been empty for the previous two years that were in operation at least 20 years ago, and that have at least 250,000 square feet of interior space.

Hoosier Business Investment Tax Credit (HBI)
HBI tax credits are available to a company making a “qualified investment” in an Indiana facility. Generally speaking, a “qualified investment” includes new buildings, building improvements and equipment. The credit award may equal up to 10 percent of the qualified investment, and may be carried forward for up to nine years. The credit percentage and carry-forward term are determined by the IEDC on a case-by-case basis.

Venture Capital Investment Tax Credit (VCI)
The VCI tax credit is a non-refundable tax credit available to qualified applicants that provide investment capital to qualified Indiana businesses. The aggregate credit amount for a particular qualified business is equal to the lesser of 20 percent of the qualified investment or $500,000.

21st Century Research and Technology Fund (21 Fund)
The 21 Fund helps develop and commercialize advanced technologies in Indiana. Proposals go through a review process whereby (1) the technology or science is reviewed by experts in the field and (2) the commercial viability of the proposal is evaluated.

Small Business Development Center (SBDC)
The mission of the SBDC is to help Indiana businesses grow and create new jobs within the state. The SBDC provides free and low-cost information, management counseling, and educational services designed to support Indiana small business owners and potential entrepreneurs, including assistance with business plan development.

Certified Technology Parks
The Certified Technology Park program was created as a tool to support the attraction and growth of high technology business in Indiana. Designation as a Certified Tech Park allows for the recapture of certain state and local tax revenue which can be invested in the development of the park.

Permitting Assistance
The IEDC can assist companies by serving as a liaison between the company and communities, local economic development organizations and regulatory agencies. The IEDC can also provide permit application assistance and tracking. This service is an effort to minimize the amount of time spent on regulatory compliance.

Initiatives
In addition to the grants, tax incentives, services the IEDC offers, efforts are also focused on particular industries including: Life Sciences IT/High-Technology, Advanced Manufacturing 21st Century Logistics, Agribusiness International Development, Insurance, and Motorsports.

Latest Legislative Developments

Research and Development Tax Credit
For taxable years beginning after December 31, 2007, the qualified research expense credit will be increased from 10 percent to 15 percent on the first $1 million of investment. The research expense credit may be carried forward for 10 years.

Research and Development Sales Tax Exemption
This program provides a refund of 50 percent of the sales taxes paid on transactions involving research and development equipment acquired after June 30, 2005, and before July 1, 2007. This program will then exempt a business from 100 percent of the sales tax on research and development equipment acquired after June 30, 2007.

Automatic Property Tax Deduction Phase-In
Companies of all sizes making investments that increase their property’s assessed value can receive an automatic property tax deduction. Deductions are available for investments in real and personal property. The deduction is first available in the year in which the increase in assessed value resulting from the investment occurs and continues for the following two years.

Hoosier 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.

Single Sales Factor Corporate Income Apportionment
The five-year phase-in of a single sales factor for corporate income apportionment will eliminate the tax penalty associated with adding jobs and increasing investment in Indiana.