Indiana’s Competitive Economic Development Programs Expand Benefit Capacity: 2022: Articles: Resources: CLA (CliftonLarsonAllen)
- Indiana has revised some of its economic development programs to be more competitive in a changing economy.
- Businesses without a physical location in Indiana are now eligible for EDGE tax credits.
- Programs have also been created or modified to better compete with mega or very large projects.
- Manufacturing innovation grants are available and timing is critical.
The 2022 legislative session has been productive in Indiana, especially when it comes to economic development. The state has taken steps to strengthen and expand existing economic development programs and has created new programs to encourage investment and expand workforce development efforts.
Relaxed qualifications to broaden eligibility
One of Indiana’s flagship economic development programs, the Economic Development for a Growing Economy (EDGE) program, received a boost from the legislature last year. The changes help broaden the program’s applicability and increase its effectiveness. Now, a recipient of an Indiana EDGE award can receive a refundable tax credit, making it much more valuable as an attraction tool.
To be eligible for EDGE, a company must commit to creating at least 50 net new jobs that pay 150% of the average state wage. In addition, credit can now be granted for a period of up to 20 years, instead of 10 years. This may allow EDGE to be used on very large economic development projects, although final policies are not complete.
Other changes to existing programs include:
- Corporate Office Relocation Credit – expands the application of the program by removing the requirement for a minimum number of employees in Indiana.
- Redevelopment Tax Credit – redefines that a qualified site includes those that are “vacant or underutilized property in Indiana, as determined by the IEDC.” This expands the possibility for additional sites to qualify for credit.
- Overall, the programs removed individual funding caps and created an aggregate cap of $300 million for the Hoosier Business Investment Tax Credit, EDGE, Corporate Office Relocation Credit, Tax Credit for combined redevelopment and venture capital credit.
New programs designed to attract businesses
In addition to expanding the Indiana EDGE to better accommodate potentially large projects, Indiana has created Innovation Development Districts (IDDs) that can provide grants, loans, or fund investments to be used on:
- Acquisition, improvement or redevelopment of land or other property
- Innovation Development District Setup Cost
- Establishment of public-private partnerships between state/local government entities, industry, higher education institutions focused on development, expansion or retention in the state
- Targeted investments in innovative high-growth companies
- Workforce training assistance
The IDD is funded by capturing additional taxes generated by businesses locating within the geographical boundaries of the district. There is a limitation on the number of districts that can be established (until June 30, 2025) in the state and can remain in place for up to 30 years.
Indiana now offers a film and media production tax credit to encourage such activities within the state. The credit is discretionary and can be up to 30% of eligible expenses incurred while making a movie, TV show, music, or digital media production. The credit is non-refundable and can be carried forward for nine years.
Manufacturers can find additional incentives
Indiana has one of the largest grant programs in the nation aimed specifically at helping Indiana manufacturers make innovative capital investments in smart manufacturing. The Manufacturing Readiness Grant program can provide a reimbursement grant of up to $200,000 (on a dollar-for-dollar basis) to support capital investment in manufacturing equipment that will transform their manufacturing process (i.e. i.e. advanced automation, technology-intensive additive manufacturing). , etc.).
There are no height restrictions for applicants; however, the program targets manufacturers with less than 500 employees. The Manufacturing Readiness Grant Program operates on a first-come, first-served basis, so it is important to apply early.
How can we help you
Our team assists companies throughout the life cycle of the incentive process. We can assess your current operations, future plans and strategic goals to identify eligible activities and help you take advantage of federal, state and local credits and incentives to potentially help reduce your tax burden and improve the return on your capital expenditure.