• Job Training
• Infrastructure
• Other

• Job Training
• Infrastructure
• Other

EDGE

The primary tax credit available is the Economic Development for a Growing Economy Tax Credit (EDGE). This credit is available from the Indiana Department of Commerce.

When a company project creates new jobs for Indiana residents, the additional payroll may earn the company EDGE tax credits. The payroll taxes withheld from those new employees, effectively 3.1% in Indiana, are the basis for the credits. Tax credits can be awarded up to that amount (3.1% of eligible gross payroll) for a period not to exceed ten years. The credits awarded are first applied against any Indiana corporate income tax liability and any excess amounts withheld are refunded directly to the company.

Eligible projects are those with a competitive disparity in project costs, including incentives, between an Indiana location and a competing state. The project must also receive significant community support and compare favorably with county wage levels.

The program requires minimal paperwork. The amount of any EDGE credits is determined by the Indiana Department of Commerce, to be approved by a governing board. All terms and conditions for receipt of the credits will be by agreement between the State of Indiana and the participating company. EDGE does require a company commitment to maintain operation of the project in the state for a period at least twice as long as the duration of the tax credits. Annual verification of the amount of individual income taxes withheld will trigger release of the credits.

Infrastructure Improvements

The State of Indiana has two infrastructure programs that could be available to assist with your project. One is the Industrial Development Grant Fund and the other is the Industrial Development Infrastructure Program. Tippecanoe County uses Tax Incremental Financing to support infrastructure development. Improvements that qualify for these programs include water and sewer extensions, on-site drainage improvements and acceleration/deceleration lanes.

Skills Enhancement Fund

The Indiana Department of Commerce can make an initial grant for start-up training of new Indiana residents hired during the first two years of facility operation. There after, they may make grants for training of additional new workers as well as for retraining of existing workers - again on a two-year basis. Each T-2000 grant is limited to a maximum of 50% of the total training budget of your company. Subsequent training grants are generally limited to no more than $200,000 per company every two years.

Tax Abatements

The local governing body where your business is located must grant tax abatements. The Tippecanoe County Council, Lafayette City Council and the West Lafayette City Council have all demonstrated a willingness to help industrial companies grow through the use of tax abatement. Tax abatements are available for both manufacturing equipment (5 or 10 years) and for improvements to real estate (3, 6, or 10 years.) For new projects that offer significant job growth with good wages, a company can anticipate the 10-year abatement options for both manufacturing equipment and buildings. Please contact us for our "Understanding Tax Abatement Guide" as well as the guidelines for tax-abatement from each legislative body.

Tax Increment Financing (TIF)

Tax Increment Financing (TIF) allows cities to create special districts and to make public improvements within those districts that will promote private sector development. During the development period, taxes are frozen at the predevelopment level. As property values in the allocation area increase as a result of new development, the additional tax revenues are used to meet debt service on issued bonds or finance future growth in the district.

Tax increment financing not only permits the acquisition of property for purposes of redevelopment or economic development, but also provides another means for communities to finance infrastructure improvements in those areas.

Economic Development Income Tax (EDIT)

The cities of Lafayette and West Lafayette and Tippecanoe County are committed to the attraction of new businesses as well as the growth and retention of existing employers. To that end, each community will aggressively work to attract and retain employers who meet basic qualifications.

Businesses that are eligible for local assistance include those that sell goods or services outside of the Greater Lafayette economic region. Businesses in manufacturing, life science and information technology are specifically targeted for attraction. Investment, number of jobs created or retained, wage levels and other factors that will make Greater Lafayette a better community will influence the level of incentive support.

Lafayette Urban Enterprise Zone

The purpose of the enterprise zone program is to stimulate local community and business redevelopment in distressed areas. An enterprise zone may consist of up to four contiguous square miles. The Lafayette Urban Enterprise Association oversees the program in our area.

In order to stimulate reinvestment and create jobs within the zones, qualified businesses located within an enterprise zone are eligible for certain tax benefits. These tax benefits include:

1. A credit equal to 100% of property-tax liability on inventory.
2. State Investment Cost Credit (up to 30% of purchase price) for individuals purchasing an ownership interest in an enterprise zone business (must receive approval for credit before purchase is made).
3. State Loan Interest Credit on lender interest income (5%) from qualified loans made in an enterprise zone.
4. State Employment Expense Credit based on wages paid to qualified zone-resident employees. The credit is the lesser of 10% of the increase in wages paid over the base year, or $1,500 per qualified employee.
5. Tax deduction to qualified zone-resident employees equal to the lesser of 50% of their adjusted gross income or $7,500.