MONTGOMERY COUNTY INDIANA

 January 2009

INTRODUCTION Incentives are one of the essential tools a community utilizes to retain and attract quality economic development projects. These incentives are used to enhance the quality of life for the citizens of Montgomery County and Crawfordsville.

This information is intended to be a reference guide for businesses, elected officials and entrepreneurs in Crawfordsville, Montgomery County and Incorporated Towns. Applicants are advised to seek out professional consultation before proceeding with an abatement request; this document is not intended to be a substitute for expert legal council.

The goal of this document is to provide an overview of the different development incentives available and make the application process more efficient. Promoting business expansion, entrepreneurship and business attraction are the intended outcomes of incentives and the application process should be business friendly.

In all cases, the designated local taxing authority will make the final determination to approve any incentives or the phase in of taxes.

INITIAL CONTACT AND RECOMMENDATIONS Initial contacts for new and existing incentives should be directed to MCED (765-362-6851) for consultation and impact analysis. MCED will then prepare a written recommendation for the city, town or county taxing authority. This impact study will reveal the approximate costs of the tax abatement period in comparison to the investment and actual tax increase. The information is also supplied to the state for analysis and benchmarking of local intended incentives.

The Local Economic Development Organization (LEDO) will provide the taxing authority an evaluation of the positive or negative impact on existing companies, existing workforce availability, environmental impact, and property value implications.

Preferred new projects will result in an improvement to the existing median wage levels and in conformity with local planning objectives to receive a recommendation for long term abatement.

Should the applicant not meet local investment standards for job creation, income levels, gross regional product, and business outputs, the designated taxing authority may reduce or decline to offer any incentive.

THE INCENTIVES

Tax incentives are generally described as tax abatement and are a phase in of the new personal property and/or real estate taxes as a result of investment in equipment or real property that is located in an ERA.

Tax abatements require the application to the local designating body (city council, town council, county council, etc) and annual fillings in order to maintain the deduction (for a period of up to ten years) granted.

PERSONAL PROPERTY INVESTMENT

Personal Property tax deductions are used for investments in machinery and equipment such as presses, forklifts, lathes, conveyors, etc.

Research development equipment such as computers, scanners, testing, etc

The abatement may be as much as ten years with a ten percent annual decrease in the percentage of taxes abated. 

  • For a taxpayer that is not subject to a 30% floor, the deduction will be calculated based on the depreciation schedules on Schedule A of the personal property tax return.
  • For a taxpayer that is subject to the 30% floor , the deduction is calculated based on the depreciation schedules on Schedule A of the personal property tax return (Form 103-Long) and the MVR (minimum value ratio)

REAL PROPERTY INVESTMENT

An incentive designed for new structures or the rehabilitation of a property that increases the assessed value of a property.

Industries include manufactures, warehouses and commercial service businesses. A retail business may apply (if located in an Economic Development Target Area).

Some eligible vacant buildings (SEA260) qualify for maximum two year abatement if they are zoned commercial/industrial, and have been unoccupied for at least one year.

Does not include land and cannot be an excluded facility.

  • A real property tax abatement deduction is the result of an increase in assessed value due the rehabilitation of redevelopment of real property
  • A township assessor will notify the taxpayer of the increase in assessed value of their property using form 11.
  • The deduction placed on the tax bill is the product of this increase in assessed value pursuant to a form 11 and a deduction percent (set by statute)

The real property tax may be awarded up to 10 years. 

TAX INCREMENT FINANCING (TIF)

TIF is a tool which captures increases in assessed value from a new development. TIF can be used for any capital project that is in, serving of benefiting and economic development or redevelopment area.

TIF is used to offer incentives to induce new private investment to fund infrastructure and other improvements beneficial to the investor and the community.

Districts are established by redevelopment commissions and approved by county or city officials.

NON TAX INCENTIVES

The following incentives may be presented by MCED to the granting authority with qualifying information to support the recommendation.

  • Direct loans
  • Loan Guarantees
  • Industrial Revenue Bonds
  • Workforce Assistance
  • Technical Assistance
  • Development Impact Fee Waivers
  • Land Donations
  • Infrastructure Improvement

LINKAGE AND CLAWBACK

The community may provide linkage or a clawback clause that links company performance with certain incentives and allows payback on certain upfront investments in the event a company fails to meet the performance criteria outlined in the abatement request.

STATE INCENTIVES

Your Local Economic Development Organization (MCED) has the experience and qualifications to present your project to the Indiana Economic Development Corporation for consideration of state incentives. This local recommendation is necessary to maximize state incentive responses.

A brief summary of examples of state business incentive programs is included in this manual.

HOW TO APPLY

  1. Evaluate your project for the approximate amount of capital expenditure to take place. 
  2. Enquire of the Montgomery County Economic Development about the process for abatement. Phone: 765 362-6851 or email BillHenderson@MCEDinc.com 
  3. Complete the Statement of Benefits Form SB-1. 
  4. Submit to the local designating body along with an equipment list, if applicable, and a running summary of the investment. Note that any information submitted is considered public record upon submission. 
  5. To submit an SB-1 for an Eligible Vacant Building the SB-1 must contain:
    • A description of the building
    • Number of positions created and retained, including salaries
    • Information on efforts of the owners or previous owners to sell, lease, or rent by the owner during the period unoccupied.
    • Information on the amount the vacant building was offered for sale, lease, or rent by the owner or previous owner during the unoccupied period. 
  6. Attend the County Council meeting and if the abatement is approved, request a copy of the signed paperwork for future filings.
  7. To locate and download state tax forms for applications and filings or go to www.MCEDinc.com        

            Follow the quick link Business Incentives to download printable pdf information.

 Note* It is the responsibility of the company to use the proper procedures and forms with your tax returns to receive tax phase in credit from the State of Indiana.