Biggins Lacy Shapiro & Company, LLC

Indiana Economic Development Incentive Programs

TAX CREDITS

Economic Development for a Growing Economy Program (EDGE): A refundable tax credit is available to companies that create and/or retain jobs and make capital investments in the state.  The EDGE credit is calculated as a percentage (up to 100%) of the projected tax withholdings that will be generated by the newly created and/or retained jobs for up to ten years.  Local government support is required for projects to be approved for state EDGE credits. As of July 1, 2019, the IEDC may include non-resident employees in the calculation of EDGE. Additionally, the IEDC may enter into a reciprocal agreement to help cover the cost of employees who live in another state but work in Indiana.

Hoosier Business Investment Tax Credit Program (HBI): Companies that create new jobs and make capital improvements to a business facility may qualify for this non-refundable tax credit.  The maximum credit is equal to 10% of qualified capital investment.  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. Unused credits may be carried forward for up to 9 years. Local government support is required for projects to be approved for state HBI credits. HBI has been expanded to include refurbished machinery, technology-integrated equipment, 3D and other digital printing used in manufacturing to be considered a qualified investment. For taxable years beginning after December 31, 2018 and before January 1, 2030, digital manufacturing equipment can qualify for a 15% credit as opposed to the standard 10% or 25% in the case of logistics investment. 

Headquarters Relocation Tax Credit: Businesses that relocate a corporate headquarters operation to Indiana, create at least 75 jobs, and have annual worldwide revenue of at least $50 million are eligible to receive a tax credit of up to 50% of business relocation costs including capital investment.  The credit is non-refundable and non-transferable; however unused credits can be carried forward for up to 9 years. Principal offices of divisions and research and centers are also eligible for the credit. The HQRTC is expanded to allow companies who have received at least $4M in venture capital within 6 months of submitting an application to the IEDC for a Small HQRTC. The company must commit to relocating either its corporate headquarters or the number of jobs that equal 80% of the total payroll to Indiana for at least 5 consecutive years after first incurring relocation expenses. This new subset of companies is subject to a $5M cap for each state fiscal year, but the credit is refundable for these companies. 

Industrial Recovery Tax Credit:  Provides an incentive for investment in former industrial facilities requiring significant rehabilitation or remodeling expenses. The credit is available to owners, developers, and certain lessees of buildings located in an industrial recovery site which was brought into service at least 15 years ago and at least 100,000 square feet. Buildings that were demolished within the 5 years preceding an application may qualify if demolished for health and safety concerns. The credit amount is between 15% and 25% of qualifying investment dependent on the age of the facility. The program sunsets on December 31, 2019. 

Redevelopment Tax Credit: The Redevelopment Tax Credit replaces the Industrial Recovery program, starting on January 1, 2020. The industrial site and square footage requirements are removed and the following changes are made:

  • Allows vacant land and brownfield sites over 50 acres to be considered a qualified redevelopment site.
  • Increases the amount of credit a taxpayer may receive if the site is within the geographical jurisdiction of a Regional Development Authority.
  • Allows for a 5% increase to the credit if the site is located in a Qualified Opportunity Zone or qualifies for a New Markets Tax Credit, subject to the IEDC’s discretion.
  • Requires repayment of any credit award exceeding $7M, except in certain circumstances.
  • Caps the program at $50M annually, with certain exceptions. 

Research and Development Tax Credit:  Provides a tax credit equal to 15% of qualified research expenses on the first $1 million of investment and 10% for the expenses exceeding $1 million.  This non-refundable credit may be carried forward for up to 10 years. 

Venture Capital Investment Tax Credit (VCI):  A transferable tax credit is available to investors making qualifying debt or equity capital investments in Indiana start-ups.  The tax credit is equivalent to 20% of the qualifying investment up to $1 million. The tax credit may be carried forward for up to five years.

GRANTS

Industrial Development Grant Fund (IDGF): This program provides assistance to municipalities and other eligible entities. The grant may be provided to reimburse up to 50 percent, of eligible off-site public infrastructure costs to support a project site over a period of two full calendar years from the commencement date of the project.

Skills Enhancement Fund (SEF): This program provides reimbursable grants to businesses for costs associated with training and upgrading skills of employees.  Grants are typically valued at up to 50% of eligible training costs over a 2-year period.

TAX EXEMPTIONS

Sales & Use Tax Exemptions: Manufacturing and research & development equipment (including computers, computer software, software-as-a-service, and testing equipment) are exempt from sales and use tax.

Data Center Tax Exemptions:  A sales tax exemption on data processing equipment and electricity used at the facility is available to data center projects investing at least $150 million over a five-year period. The sales tax exemption is awarded for 25 years and can be extended to 50 years for projects investing at least $750 million.  A negotiated exemption on personal property tax is also available at the discretion of the local government(s). 

Last updated: May 2019



 
Biggins Lacy Shapiro & Company, LLC
609-924-9775
info@blsstrategies.com