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Local communities may offer real and personal property
tax abatement as an incentive to new and expanding businesses.
Property tax abatement allows a property owner to phase
in payment of property taxes over a designated period.
This period may be any number of years between one and
ten. The City of Indianapolis’ Metropolitan Development
Commission determines the period.
Property tax abatement in Indiana is authorized under
Indiana Code 6-1.1-12.1 in the form of deductions from
assessed valuation. Any property owner in a locally
designated Economic Revitalization Area (ERA) who makes
improvements to real property or installs new manufacturing
and/or R&D equipment may apply for property tax
abatement.
Real Property Tax Abatement
- Eligibility:
New buildings constructed are eligible for real property
tax abatement. Substantial improvements to existing
buildings may be eligible, but it is important to
note that only the value of the improvement to the
existing building qualifies. It is not permissible
to abate property that is already being taxed in Indiana.
By State law land does not qualify for abatement.
- 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.
|
Term of the Abatement |
|
1
Year
|
2
Years |
3
Years |
4
Years |
5
Years |
6
Years |
7
Years |
8
Years |
9
Years |
10
Years |
|
YR 1
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100% |
|
YR 2 |
|
50% |
66% |
75% |
80% |
85% |
85% |
88% |
88% |
95% |
|
YR 3 |
|
|
33% |
50% |
60% |
66% |
71% |
75% |
77% |
80% |
|
YR 4 |
|
|
|
25% |
40% |
50% |
57% |
63% |
66% |
65% |
|
YR 5 |
|
|
|
|
20% |
34% |
43% |
50% |
55% |
50% |
|
YR 6 |
|
|
|
|
|
17% |
29% |
38% |
44% |
40% |
|
YR 7 |
|
|
|
|
|
|
14% |
25% |
33% |
30% |
|
YR 8 |
|
|
|
|
|
|
|
13% |
22% |
20% |
|
YR 9 |
|
|
|
|
|
|
|
|
11% |
10% |
|
YR 10 |
|
|
|
|
|
|
|
|
|
5% |
|
Personal Property Tax Abatement
- Eligibility:
Manufacturing or research & development equipment
that is new to Indiana is eligible for personal property
tax abatement. It is not permissible to abate property
that is already being taxed in Indiana.
- 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.
|
Term of the Abatement |
|
1
Year
|
2
Years |
3
Years |
4
Years |
5
Years |
6
Years |
7
Years |
8
Years |
9
Years |
10
Years |
|
YR 1
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100% |
|
YR 2 |
|
50% |
66% |
75% |
80% |
85% |
85% |
88% |
88% |
90% |
|
YR 3 |
|
|
33% |
50% |
60% |
66% |
71% |
75% |
77% |
80% |
|
YR 4 |
|
|
|
25% |
40% |
50% |
57% |
63% |
66% |
70% |
|
YR 5 |
|
|
|
|
20% |
34% |
43% |
50% |
55% |
60% |
|
YR 6 |
|
|
|
|
|
17% |
29% |
38% |
44% |
50% |
|
YR 7 |
|
|
|
|
|
|
14% |
25% |
33% |
40% |
|
YR 8 |
|
|
|
|
|
|
|
13% |
22% |
30% |
|
YR 9 |
|
|
|
|
|
|
|
|
11% |
20% |
|
YR 10 |
|
|
|
|
|
|
|
|
|
10% |
|
How To Apply
Meet with an Indianapolis Economic
Development representative who can assist you in completing
the necessary applications for consideration. Call us
at 1-317-236-6262 or 1-877-236-4332, or email us at
indy@indypartnership.com
to get started.
City of Indianapolis Tax Abatement
Policy
The following factors are criteria that Indianapolis
Economic Development staff may consider in making recommendations
to the Metropolitan Development Commission and are intended
to provide guidance in making determinations. The factors
may include the extent to which the Project or the Equipment:
- Creates full-time permanent jobs (and associated
wages/salaries);
- Retains full-time permanent jobs (and associated
wages/salaries);
- Involves the hiring of employees who reside in Marion
County;
- Results in investment in real or personal property
and the level of the investment;
- Increases the property tax base;
- Avoids environmental harm or involves remediation
or removal of environmentally hazardous materials
and/or substances;
- Results in the securing, attraction, or expansion
of a Targeted Business or any other business that
constitutes a substantial benefit to the local economy
(as of the date of this Resolution, Targeted Businesses
include those in the information technology, advanced
manufacturing, and life sciences industries);
- Results in providing community benefits;
- Results in the use of local suppliers and/or services
in the construction and/or operation of the facility;
- Supports a disadvantaged business, including, but
not limited to, a minority or woman-owned business
enterprise; and/or
- Results in the securing, attraction, or expansion
of a “headquarters” facility.
Other policy factors that may be considered
include:
- The amount of other economic development incentives
previously used by, currently used by, or currently
available to the Applicant;
- The cost of the abatement to the City in terms
of necessary, governmental services versus the benefits
received by the City as a result of the Project of
Equipment;
- Whether the wages/salaries of jobs associated with
the Project exceed the Marion County minimum average
wage rate by 10% or more (excluding benefits and overtime),
as determined by Staff from time to time; and/or
- Whether the Project or Equipment lies within the
pre Uni-Gov City corporate limits.
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