Tax Abatement
In Indiana, tax abatement is technically referred to as an economic
revitalization area (ERA) deduction. The process begins with the
designation of a certain piece of real estate as an ERA. Subsequent
investment on that real estate, within state guidelines, is then
eligible for tax abatement. Two types of property can receive tax
abatement - real and personal.
Regarding real property, land
cannot qualify only a structure or building. Abatement is only for the
increase in assessed value. It does not apply to the value of existing
structures. Activities eligible for abatement include the construction
of new structures, additions on existing structures, and the remodeling
or repair of a structure. Deductions for real property can be approved
for a period of three, five, seven, or ten years in Jasper County.
During the abatement period new taxes are phased in. Only in the first
year is 100% of the increase in assessed value abated.
Personal
property abatements are for equipment or machinery used for the
production, manufacture, fabrication, assembly, or processing of other
personal property, as well as research and development purposes. Used
equipment can qualify for abatement if not previously taxed in Indiana.
Deductions for personal property can be for a period of three, five,
seven, or ten years in Allen County. Like the real property abatement,
new taxes are phased in during the abatement period.
The Jasper
County economic development staff uses a point system to objectively
evaluate applications for ERA designation and determine a recommendation
for the abatement period. The Jasper County Council or appropriate
fiscal body makes the final determination.
Company
representatives interested in applying for ERA designation are
encouraged to contact the economic development staff to discuss their
project and determine its eligibility. An application is available
online; however, the company should verify eligibility with staff before
applying. In addition, staff will provide information on the approval
process and the meeting schedule for the appropriate fiscal body.