BLS & Co. periodically revises the state incentive pages to ensure our firm is providing the most current information on legislative and regulatory developments affecting available programs. Updates will be posted in the near future. In the interim, please call BLS & Co. with any questions at 609.924.9775 or reach out via email at info@BLSstrategies.com.
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. Local government support is required for projects to be approved for state EDGE credits. New for FY2023, awardees of EDGE awards can have their benefits accelerated at the discretion of the IEDC through awarding of direct payments from the state, rather than income tax refunds. Recent legislation also extended EDGE award terms for up to twenty years from the previous ten years.
Industrial Development Grant Fund (IDGF): This program provides grant assistance to municipalities and other eligible entities. The grant may reimburse a portion 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. Milestones will be established for the project and reimbursement is issued once the milestone is completed.
Innovation Development Districts (IDD): Indiana Economic Development Corporation (IEDC), in partnership with local governments, can designate parcels of land as “Innovation Development Districts” which provides for a dedicated state and local funding source for making grants, loans, and other investments for spurring economic development activity within a district for up to 30 years. Designated IDDs act similar to tax increment financing districts (TIF or tax allocation areas) dedicating both state and local incremental taxes generated within the IDD including personal income taxes, sales taxes, and property taxes. As part of the IDD designation, local governments can negotiate a property tax sharing of at least 12% of the total tax increment within the IDD. At the discretion of the IEDC and the local tax agreement, real and personal property improvements may be exempted from local property taxation. Through the Indiana Finance Authority, bonds can be issued payable from the projected tax increment of the IDD to pay for eligible expenses.
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 for qualified investment is 10%, unless the investment is made in digital manufacturing equipment or logistics, which increases the credit amount to 15% and 25% respectively. Businesses must commit to capital investment and create new jobs or increase payroll at location. The credit may be carried forward for nine years after investment is made. Cap is $50 million for each fiscal year except for logistics investments, which has a cap of $10 million annually.
Headquarters Relocation Tax Credit: Businesses that relocate a corporate headquarters operation to Indiana 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.
Redevelopment Tax Credit: Provides tax credits for eligible redevelopment investments made in the state. The tax credit is equal to up to 30% of qualified investment made by the taxpayer during the taxable year. An additional 5% may be added if the project qualifies for New Market Tax Credits or is located near an Opportunity Zone. The first $20 million of a redevelopment tax credit award is transferable with amounts above $20 million required to be repaid by the awardee after a period of ten years from the initial award. For projects with over $100 million in qualifying investment, the repayment provision can be waived at the discretion of the IEDC.
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 25% of the qualifying investment up to $1 million. The tax credit may be carried forward for up to five years.
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 that meet an investment threshold over a five-year period. The threshold is determined by where the data center is located. Projects located in counties with a population less than 50,000 require $25 million investment, county population between 50,000 and 100,000 requires $100 million investment, and county population of 100,000 or more requires $150 million investment. The sales tax exemption is awarded for 25 years and can be extended to 50 years for projects investing at least $750 million. Projects with investment that exceeds $750 million may have the exemption awarded for up to 50 years. A negotiated exemption on personal property tax is also available at the discretion of the local government(s).
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 Abatements: Local governments can provide tax abatements on both real and personal property provided the project is located within an Economic Revitalization Area.
Tax Increment Financing: As an alternative to tax abatements, local governments can provide Tax Increment Financing on both real and personal property. TIF proceeds can be used to finance both public and private investments.
Last Updated: April 2023