College and University Contribution Credit
Credit for contributions to Indiana colleges and universities, limited to the lesser of $1,000, 50% of the contribution, or 10% of adjusted gross income.

Neighborhood Assistance Credit
Credit to corporate/individual taxpayers contributing to neighborhood organizations or who assist in upgrading disadvantaged areas; limited to 50% of amount invested and no more than $25,000 in any taxable year.

Drug and Alcohol Abuse Credit
Credit of $6,250 available for corporations with more than 1,000 employees, or $3,750 for corporations with less than 1,000 employees.

Research Expense Credit
Credit to corporate taxpayers who incur qualified Indiana research expenses and who are entitled to the Federal Research Expense Credit.

Teacher Summer Employment Credit
Credit to those who hire a public school teacher during summer months in a position relevant to a teaching-shortage area in which the teacher is certified. Credit is limited to lesser of $2,500 or 50% of the compensation paid.

Enterprise Zone Employment Expense Credit
Taxpayer's conducting business in an enterprise zone are entitled to a credit of up to $1,500 for each employee who is an enterprise-zone resident and employed primarily by the taxpayer.

Enterprise Zone Loan Interest Credit
For taxpayers making qualified loans in the enterprise zone, a credit equal to 5% of the lender interest income is available.

Enterprise Zone Investment Cost Credit
For individual taxpayers, a credit against state tax liability equal to a percentage multiplied by the price of qualified investment in an enterprise zone business.

Individual Recovery Tax Credit
Credit available for qualifying investments to rehabilitate vacant industrial facilities of at least 20 years old and of at least 300,000 square feet.

Personal Computer Tax Credit
Credits available for donations of computer equipment to the "Buddy-Up with Education Program", with a maximum of $125 per computer unit allowed.

Twenty-First Century Scholars Program
Credit available for contributions to this program's support fund; a maximum credit of the lesser of $1,000, 50% of the contribution made, or 10% of the adjusted gross income.

Maternity Home Credit
Credit for maternity-home owners who provided a temporary residence for pregnant women.

Prison Credit
Credit for investments in Indiana prisons to create jobs for prisoners; credit is limited to 50% of the inventory in a qualified project plus 25% of the wages paid to inmates, with a maximum of $100,000 per year.

Authorized under Indiana Code 6-1.1-12.1, property owners in a locally designated Economic revitalization Area, who make improvements to the real property or install new manufacturing equipment, are eligible for property tax abatement. Used manufacturing equipment can also qualify as long as this equipment is new to the State of Indiana. Land, as well as equipment not used in direct production, such as office equipment, does not qualify for abatement.

Real Property Tax Abatement is a declining percentage of the increase in assessed value of the improvement, based upon a 3, 6, or 10 year time period and percentages determined by the local governing body.

Personal Property Tax Abatement is a declining percentage of the assessed value of the newly installed manufacturing equipment, based upon a 5 or 10 year time period and percentages determined by the local governing body.

Property Tax Abatement requires application to the local governing body for designation, with a deduction application filed in the office of the county auditor in the county in which the property is located by the designated due date. More information is available by contacting the Indiana Department of Commerce.

The Enterprise Zone Program is designed to stimulate local community and business redevelopment in distressed areas. An enterprise zone may consist of up to three contiguous zones in Indiana, including zones in Northwest Indiana and Michigan City.

Businesses located within an enterprise zone are eligible for certain tax benefits:

• Exemption from Indiana Gross Income Tax on increase in receipts from base year.
• State Investment Cost Credit (maximum of 30% of purchase price) for individual purchasing an ownership interest in an enterprise zone business.
• State Loan Interest Credit on lender interest income (5%) from qualified loans made in an enterprise zone.
• State Employment Expense Credit based on wages paid to qualified enterprise zone-resident employees. Credit is lesser of 10% of the increase in wages paid over the base year or $1,500 per qualified employee.
• Tax deduction to qualified enterprise zone-resident employees equal to the lesser of 50% of their adjusted gross income or $7,500.

A foreign Trade Zone (or Free Trade Zone) is an enclosed secure area outside U.S. Customs territory. A company located within this zone does not pay duties or personal property tax on goods stored within the zone. Foreign and domestic goods may enter a zone to be stored, distributed, manufactured, assembled, or exhibited. Foreign Trade Zones may be general-purpose zones or special-purpose zones; sub-zones are single-use facilities for companies unable to efficiently manufacture or process within general-purpose zone sites.

One of the most well-known and successful Foreign Trade Zones in the state is the Port of Indiana, in nearby Burns Harbor. For more information on the Port of Indiana, click here.

Domestic operating cost reductions are available for business operating within a Foreign Trade Zone:

• Duty is deferred on imported goods admitted to the zone, and no U.S. duty is assessed when exporting goods from the zone, which improves business cash flow.
• Processing goods within the zone can eliminate or lower tariffs.
• Duties can be avoided on defective/damaged goods by inspection/testing within a zone.
• Inventory stored in a Foreign Trade Zone is exempt from local property tax.
• Savings may be achieved in transport insurance.

Defined as a geographical territory within Indiana Ports, including the Port of Indiana in nearby Burns Harbor, these areas allow companies located within to be eligible for special tax benefits. These benefits include new manufacturing equipment tax abatement, property tax abatement, and reductions in adjusted gross income tax. Reductions are based upon a sliding percentage scale over a 10-year timeframe. Designation of a Maritime Opportunity District is by the Indiana Port Commission and according to a defined set of requirements.

Indiana already boasts a very modest inventory tax, but the Interstate Inventory Tax Exemption provides an extra deduction for businesses. Finished goods awaiting shipment to non-Indiana destinations are normally exempt from inventory tax. In most cases, a taxpayer may determine the exemption by applying the percentage of that location's total shipments exiting the state the prior year.

For more information on the Interstate Inventory Tax Exemption or to apply, please contact the Michigan City Economic Development Corporation or the Indiana Department of Commerce.

Many large buildings once used as mills, foundries, and large manufacturing facilities are today obsolete and standing vacant, due to new production methods and technology. This program offers special tax benefits to offset the cost of adaptive reuse.

For a building to be designated as an Industrial Recovery Site, the building/complex must be at least 300,000 square feet, at least 20 years old (or at least 50% of the complex 20 years old if not a single building), and must be at least 75% vacant for at least two years. Interested counties/municipalities may apply to the Indiana Enterprise Zone Board for designation and eligible tax benefits.

Benefits are available for 10 years from the date of project approval. Available tax credits include an Investment Tax Credit (benefit applied against the cost of remodeling based upon a sliding age-based scale) and Local Option Inventory Tax Credit.

For more information on Industrial Recovery Sites or to apply, please contact the Michigan City Economic Development Corporation or the Indiana Department of Commerce.

TIF is intended for usage by cities, towns, municipalities, or counties, with benefits of property tax assessments frozen at predevelopment levels, area public improvements, and employee training. Local governments use increased tax revenues stimulated by redevelopment or economic development to pay for capital improvements needed to induce redevelopment or economic development. TIF also provides for temporary allocation to the redevelopment of economic districts of increased tax proceeds.

For more information on Tax Increment Financing, please contact the Michigan City Economic Development Corporation or the Indiana Department of Commerce.

This program provides financial assistance in the form of a grant for reimbursement of eligible training costs for new or existing employees, including instructor wages, tuition, and training materials. Up to 50% of eligible training costs are reimbursable.

Certain restrictions, limitations, requirements, and ineligibilities apply. For more information, please contact the Indiana Department of Commerce.

For businesses that expand in Indiana or are operating in the state as a result of a project, special tax credits based upon payroll are available. Indiana individual income tax withholdings from company employees can be credited against the company's Indiana corporate income tax liability, with excess withholdings refunded to the company. Credits have no impact on employee income tax liability and can be fixed annual amounts or a percentage of taxes withheld, for up to 10 years.

Certain restrictions, limitations, requirements, and ineligibilities apply. For more information, please contact the Indiana Department of Commerce.

This is a federally funded program providing assistance to eligible counties, cities, and incorporated areas for infrastructure projects (i.e., roads, water lines, sidewalks, etc) in support of job creation/retention activities for low to moderate-income citizens.

Certain restrictions, limitations, requirements, and ineligibilities apply. For more information, please contact the Indiana Department of Commerce.

This is a state funded program providing assistance to eligible counties, cities, and incorporated areas for off-site infrastructure projects (i.e., roads, water lines, sidewalks, etc.) in support of new business development.

Certain restrictions, limitations, requirements, and ineligibilities apply. For more information, please contact the Indiana Department of Commerce.

CAP helps financial institutions lend money to Indiana businesses, which do not qualify for loans under conventional lending policies, for use in commercial/industrial purposes for a project/enterprise located in Indiana fostering economic development.

Certain restrictions, limitations, requirements, and ineligibilities apply. For more information, please contact the Indiana Department of Commerce.

And great incentives like these are just the beginning. It's a proven fact: Indiana's tax base is one of the lowest in the Midwest. Look at these powerful examples to see how your business tax costs can be reduced this year, next year, and for years to come, increasing your bottom line and giving you more working capital overall.