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Incentives - Local Incentives
A taxpayer is entitled to a credit against the taxpayer's state and local tax liability for a taxable year if the taxpayer makes a qualified investment in that year. The amount of the credit to which a taxpayer is entitled is the qualified investment made by the taxpayer during the taxable year multiplied by twenty-five percent (25%). A taxpayer may assign any part of the credit to which the taxpayer is entitled to a lessee of property redeveloped or rehabilitated.
Special incentive packages offered to private entities based on recoupment of sale tax and/or state income tax amounts.
Click here for a CRED Application
This tax credit reduces the taxpayer's state and local tax liability for a taxable year if the taxpayer makes a qualified investment in that year. Qualified investments are investments made for the redevelopment or rehabilitation of property located within a designated areas.
City of Anderson has established a Revolving Loan Fund (RLF) program that operates through the Department of Community Services and Economic Development. The major goal of the RLF is to create new permanent jobs or retain existing jobs for Anderson.
Click here for a RLF Application
Eligible applicants and projects:
Generally, any small business is eligible if they meet the definition of SBA size criteria. Exceptions are retail/commercial businesses in well developed areas, real estate development companies or construction firms. In addition, the applicant must be within the Anderson city limits or commit to locate within the city limits sixty days after the loan closing.
These are just a few examples of how the RLF can be used:
- Site Acquisition or working capital
- Plant acquisition or construction or property rehabilitation
- Equipment purchases or leases, as well as, inventory acquisition
Following a loan selection criteria, the RLF is structured as a tandem loan program that works in cooperation with the major banks in Anderson. Any loan request must have the support of at least one participating bank that will supply a minimum percent of the total loan request, negotiated under their normal loan conditions and criteria. If the bank determines it can make the loan with RLF assistance, then the bank will submit a request to the Anderson Economic Development Revolving Loan Fund Board.
The RLF program is designed such that up to 33% of the total project is lent through the RLF and at least 67% is lent by a private lender. In addition, the borrower may be required to make an equity injection of 10% of the total project cost.
The private lender’s portion of the project will be an interest rate as negotiated between the lender and the borrower. The RLF’s portion of the loan will be flexible in terms of interest rates, but in no case will the rate be lower than four percentage points below the U.S. Treasury rate.
City of Anderson has established a Revolving Loan Fund (RLF) program that offers low interest loans up to $100,000. Rates are as low as four percentage points below prime rate.
The State of Indiana permits counties, cities and towns (other than Marion County) to grant a property tax exemption for information technology equipment purchased after June 30, 2009, for facilities such as data centers that invest at least $10 Million in property in Indiana after June 30, 2009 and pay at least 125% of average wages in the county. Governor Daniels signed the Bill into law on May 13, 2009.
Procedure for Granting Property Tax Exemption:
The county council (for facilities located in the unincorporated part of a county), city common council or town council, as appropriate, completes the following steps:
- Pass a declaratory resolution (preliminarily approving the property tax exemption).
- File the declaratory resolution with the county assessor.
- Publish notice of the adoption and substance of the declaratory resolution, including notice of a public hearing.
- File the notice and the declaratory resolution with each taxing unit in the county.
- Hold hearing and adopt a final resolution, including approval of an agreement with the eligible business.
(a) Agreement must set forth duration of the property tax exemption for the particular eligible business.
(b) Final resolution must be adopted before January 1, 2013 (but exemption can continue beyond that date).
The State of Indiana allows the fiscal body of a municipality or county to adopt a resolution to exempt data centers and data storage facilities from personal property taxation on enterprise class Information Technology equipment.
The purpose of the Foreign Trade Zone is to facilitate trade and increase the global competitiveness of U.S.-based companies. There are several FTZ subzones* within the City of Anderson. Legally, a FTZ is an area within the United States that the Government considers outside the country, or at least, outside of the U.S. customs territory. Certain types of merchandise can be imported into a FTZ without going through formal Customs entry procedures or paying import duties. Some of the benefits of operating within an FTZ are:
- Imports may be admitted and held in a foreign-trade zone without paying U.S. Customs duties.
- FTZ users can pay the duty rate on component material or merchandise produced from component material, whichever is lower.
- Customs duties are not paid on merchandise exported from a zone.
- Duties are reduced or eliminated on materials subject to defect, damage, obsolescence, waste, or scrap.
- Merchandise may be exported and returned to an FTZ without duty payment.
- Spare parts may be stored, returned, or destroyed without duty payment.
- Delays in Customs clearances and duty drawback are reduced or eliminated.
- Duties are not owed on labor, overhead, or profit attributed to FTZ production operations.
- Quality control inspections can identify sub-standard goods to be destroyed or returned without duty payment.
- No duty is owed on in-bond, zone-to-zone transfer of FTZ merchandise.
* The FTZ subzones can be re-designated to accommodate project development needs.
The FTZ program helps American companies improve their competitive position versus their counterparts abroad. The FTZ program allows U.S.-based companies to defer, reduce or even eliminate Customs duties on products admitted to the zone.
Industrial Revenue Bond financing is a method of financing which the City of Anderson can help private business development and expansion by issuing low-interest tax exempt bonds. The low-interest feature of Industrial Revenue Bond financing is attributed to the fact that interest on the bonds is exempt from federal and state income tax.
Click here for Preliminary Application for Issuance of Economic Development Bonds
The Program:
The Anderson Economic Development Commission was established in 1975 with the authority to issue tax-exempt revenue bonds to help industrial and commercial development. In 1985, the Anderson Economic Development Commission (AEDC) granted final approval to more than twenty million dollars in Industrial Revenue Bonds.
The maximum bond amount available is ten million dollars per project, with maturity up to 30 years and interest rates ranging from 75% to 85% of the prevailing prime market rate. Bonds are available for 100% financing of the project with no equity injection required. Bonds may be used for the purchase, construction, renovation or improvement of manufacturing plants, industrial site development, warehouses, distribution facilities and pollution control without consideration of location within the city.
Bond application for retail and commercial facilities will be considered if they are located in the Anderson Enterprise Zone or other "Economic Development Target Areas." These bonds may also be used with other economic development programs.
The Process:
The programs of the AEDC are incentives to attract new business and retain existing business in the Anderson area. The AEDC will accept applications for a wide range of uses. However, the Commission is particularly interested in encouraging those projects that create new permanent jobs or preserve existing jobs. By law, in Indiana, the Commission also must consider any possible "Adverse Competitive Effects" upon similar existing or planned facilities.
Several of the attractive aspects of Industrial Revenue Bonds include:
- Rapid issue process
- 100% financing of projects
- Favorable interest rates and up to a 30-year term on loans.
Industrial Revenue Bond financing is a method of financing which the City of Anderson can help private business development and expansion by issuing low-interest tax exempt bonds.
With the intent to encourage the development of arts, cultural activities, and fine dining within the Central Business District, and as per the Indiana Code Sections 7.1-3-20-16 and 7.1-3-20-16.1, the City of Anderson has established a Municipal Riverfront Development Project in the downtown area. This designation allows business owners located in this area to purchase alcoholic beverage permits without regard to the quota provisions of Indiana Code 7.1-3-22. Applicants must comply with all requirements and controls imposed by Indiana statues, specifically stated in 905 1AC 1-41-2 and the City of Anderson Zoning Ordinance. Other restrictions to obtain these permits are as follows:
- If a for-profit establishment, the business must have a history of $200,000.00 annually in food receipts or projection of this amount if a new business.
- If a not-for-profit establishment,
- The proposed permit premises is located in a building or structure which is designated historical;
- The proposed permit premises is used primarily in connection with a community-based activity or event that is artistic or cultural in nature, including, but not limited to, music, including folk, contemporary, classical or jazz, theatre, including media arts, dance, including contemporary or ballet; painting, sculpture; and architecture; and which may be eligible for funding from the Indiana Arts Commission pursuant to IC-4-23-2.
In order to be considered for the permit, a completed application with the following documents must be submitted to the Alcohol and Tobacco Commission:
- A detailed map showing the definite boundaries of the entire municipal riverfront development project and the location of the proposed permit within the project.
- A copy of the local resolution of the local governing body authorizing the municipal riverfront development project;
- Detailed information concerning the expenditures of state and city funds on the municipal riverfront development project;
- A listing of the types of events being held at the proposed permit premises;
- Information concerning historical characteristics of the permit premises, if applicable.
The application is available at www.in.gov/atc. All other documents needed for the application process are available through the Economic Development Department.
Municipal Riverfront Development District Brochure
This designation allows business owners located in this area to purchase alcoholic beverage permits without regard to the quota provisions of Indiana Code 7.1-3-22. Applicants must comply with all requirements and controls imposed by Indiana statues, specifically stated in 905 1AC 1-41-2 and the City of Anderson Zoning Ordinance.
New Markets Tax Credit Enacted as part of the Community Renewal Tax Relief Act of 2000, the New Markets Tax Credit (NMTC) Program pro-motes economic development in rural and urban low-in-come communities.
Click here for a NMTC Application
The Program is a federal tax initiative de-signed to increase the amount of investment capital available to business and economic development programs in low-income communities. The NMTC is administered by the Community Development Financial Institutions (CDFI) Fund under the U.S. Department of the Treasury. The CDFI Fund was created for the sole purpose of expanding the availability of credit, investment capital, and financial services in distressed urban and rural communities. Each year, tax credits are allocated for distribution to certain qualifying entities through the CDFI Fund. These qualifying community groups are known as Community Development Entities, or CDEs.
A CDE must invest substantially all (85 percent) of the equity investments received from investors in qualified low-income communities. Qualified low-income communities include particular “population census tracts,” defined as those with a poverty rate of at least 20 percent, or with median family income of not more than 80 percent of statewide median family income. Investments may also be made in “target areas,” those within a census tract not meeting the poverty or median income guidelines, but which have demonstrated an inadequate access to investment capital in the area. Investments by community banks in CDEs are then reinvested by the CDE in low-income communities, generally in the form of business loans, lines of credit, or direct equity investments in active low-income community businesses.
The NMTC federal tax credit is worth 39 percent of the cost of the initial investment and claimed over a seven-year period. In each of the first three years, the bank receives a credit equal to 5 percent of the total amount paid for the stock or capital interest in the CDE. For the remaining four years, the value of the credit is 6 percent annually. During the seven-year tax period, if the equity investment is redeemed or if the CDE ceases to be a qualified CDE, then the community bank investment is subject to recapture of the tax credit and interest.
New Market Tax Credit (NMTC) program allows taxpayers to receive a federal tax credit for making qualified equity investment in the designated areas. The credit totals 39% over a seven-year credit allowance period.
The City of Anderson offers up to a ten (10) year partial tax abatement on increased tax assessments as a result of improvements made to real property. A ten (10) year partial tax abatement is also available for increased business personal property as a result of the installation of new manufacturing equipment. Tax abatements in each instance, are allowable only within the City’s corporate limits in areas designated as “Economic Revitalization Areas.”
Click here for a Real Property Abatement Application
Click here for a New Equipment Tax Abatement Application
Click here for a Residential Tax Abatement Application
Economic Revitalization Area designation:
Under Public Law (I.C.6-1.1-12.1-1, as amended), the Common Council of the City of Anderson is empowered to designate geographic areas of the City as Economic Revitalization Areas. An Economic Revitalization area must have “become undesirable for, or impossible of, normal development and occupancy” because of such factors as lack of development, cessation of growth, deterioration of improvements or character of occupancy, age, obsolescence, substandard buildings, or other factors that have impaired values or prevents a normal development of property. Additionally, an economic revitalization area includes an area with a facility in danger of losing either employment or tax revenues to the City as a result of impending economic or energy obsolescence.
Property tax abatement:
The taxes payable as a result of increased assessment from improvements to real property within designated economic revitalization areas are eligible for abatement.
New manufacturing equipment abatement:
Any owner of newly installed (can be used) manufacturing equipment in the designated Economic Revitalization Area is entitled to a partial abatement of the taxes payable on that equipment for a period of up to ten (10) years. This equipment must be used in the direct production, manufacture fabrication, assembly, extraction, mining, processing, refining or finishing of other tangible personal property.
Logistics/High-Tech Tax Abatement:
Along the I-69 Corridor in Anderson, Tax Abatements are available for New Logistical Distribution Equipment. New Logistical Distribution Equipment means tangible personal property that:
- Consists of: Racking equipment; Scanning or Coding equipment; Separators; Conveyors; Fork Lifts or Lifting Equipment (including “walk behinds”); Transitional Moving Equipment; Packaging equipment; Sorting an Picking equipment; or Software for Technology used in Logistical Distribution.
- Is used for the storage or distribution of goods, services, or information;
- Before being used as described in clause “C”, was never used by its owner for any purpose in Indiana
For additional information regarding the tax abatement program, the application and the procedure for getting started, contact Diana Priser in the Economic Development Department at (765) 648-6112.
The City of Anderson offers up to a ten (10) year partial tax abatement on increased tax assessments as a result of improvements made to real property. A ten (10) year partial tax abatement is also available for increased business personal property as a result of the installation of new manufacturing equipment.
Tax Increment Financing (TIF) provides for the temporary allocation to redevelopment or economic districts of increased tax proceeds in an allocation area generated by increases in assessed value. Thus, TIF permits cities, towns, or counties to use increased tax revenues stimulated by redevelopment or economic development to pay for the capital improvements needed to induce the redevelopment or economic development.
The use of TIF is initiated by the declaration of a tax allocation area by a county, city, or town Redevelopment Commission. Property tax assessments are frozen at predevelopment levels in the allocation area. Municipal bonds are then issued to finance the public improvements. As property values in the allocation areas increase as a result of new development, the increment in tax revenues is used to meet debt service on issued bonds. Once the bonds have been paid of, the taxes collected from the allocation area are distributed to the remaining taxing districts. Bonds payable from TIF may be used to finance the cost of redevelopment and the construction of public improvements in the redevelopment area or for projects that directly serve or benefit that area. Proceeds may also be used for training.
Bond amounts are determined by the size of the project and the amount of the increment available. The 1992 General Assembly passed legislation allowing depreciable personal property (machinery and equipment) to be used in computing the increment in addition to real property.
Tax Increment Financing (TIF) provides for the temporary allocation to redevelopment or economic districts of increased tax proceeds in an allocation area generated by increases in assessed value.
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