Local Business Incentives
Radius Indiana and local economic development organizations work directly with businesses to provide information about local incentives.
Regional Impact Fund
Businesses in the Radius Indiana region benefit from the Regional Impact Fund (RIF), which supports area growth and expansion efforts. The RIF is a sub-organization of Radius Indiana with a sole purpose of making investments in public and private organizations that advance regional economic development strategies. The RIF is a deal-closing fund that makes such investments in the form of grants, loans, equity investments, or other such vehicles deemed to be in the best interests of Southern Indiana. The RIF gives high priority to projects that include job creation, site development and expansion. So far in 2017, the RIF has committed more than $1 million to area businesses. For example, the RIF recently supported BrightVolt, an ultra-thin, solid state, lithium-ion battery development and manufacturer.
Tax abatement is offered by local government in south central Indiana to attract private investment and job creation.
Click here to link to our partner Hoosier Energy’s tax abatement estimator, which will allow you to estimate the value of a potential tax abatement in your investment.
Abatement exempts from property tax all or part of the new assessed value or the increased assessed value of a new investment.
The exemption is for between 1 and 10 years.
In most cases, tax abatement reduces the owner’s property tax bill by about 50 percent over the full abatement period.
Tax abatement can be granted on:
- Real property
- Personal property
- New construction (only to the increase in assessed value attributed to the new construction)
- Property rehabilitation (only to the increase in assessed value attributed to the rehabilitation)
- Any new or used manufacturing equipment that has not previously been taxed in Indiana.
- Personal property such as laboratory equipment and computers used in experimental research and development laboratories.
Tax Increment Finance
Tax Increment Finance (TIF) is another tool used by local governments to help offset the cost of business growth.
Business incentives help make Southern Indiana an enticing place for your business to locate. Incentives include state tax credits and specialized local opportunities. Our regional and local economic development professionals will guide you through the possibilities and make sure your business receives every incentive it needs.
State Tax Credits
- Refundable credit
- Calculated as a percentage of the expected increase in tax withholdings generated from new jobs created
- Phased in annually for up to 10 years, based on employment ramp-up outlined by the business
- Used in the Radius region in 2018
- Non-refundable credit
- Calculated as a percentage of eligible capital investment to support the project
- Phased in annually over 2 full calendar years from the project start
- May carry forward up to 9 years
- For companies investing in vacant or underutilized buildings designated as industrial recovery sites (buildings that require significant rehabilitation or remodeling)
- Calculated as a percentage of qualified rehabilitation expenses
- Used in the Radius region in 2018
- For a business relocating its corporate headquarters to Indiana
- Credit of up to 50% of the cost incurred to relocate the headquarters
- The company must have global annual revenue of at least $100 million and employ at least 75 Indiana residents
- For qualified applicants who invest in qualified Indiana businesses
- Credit equal to $1 million or 20% of the qualified investment, whichever is less
- Income tax credit of 15% of qualified research expenses on the first $1 million of investment
- Credit eligibility is based on the increase in the company’s R&D expenditures in Indiana over the prior 3 years: Year 1 research expenses must have been at least half of the amount of year 3 (current year) research expenses
- May be carried forward 10 years
- No carry back
- Program operates under the Indiana Department of Revenue
- Uses the Internal Revenue Code definition of “qualified research expense” (which includes the cost of wages and supplies)
- Available only to companies with 500 or fewer employees
- Exemption from certain income derived from qualified utility and plant patents
- 10 years of exemptions
- Exemption may not exceed $5 million per year