Property Tax
Real and personal property is assessed at 33 1/3 percent of true cash value. Property tax rates vary among local jurisdictions. Unincorporated and township tax rates range from 4.67% to 12.0035% in Johnson County.

Property tax graph

Source:National Taxpayers Conference, Indiana Manufacturers Assoc.

A comparison of property taxes paid by a hypothetical development project using methodology developed in cooperation with the National Taxpayers Conference, shows that taxes paid in Indiana are substantially lower than in adjacent states. In 2002, the Indiana legislature enacted a tax reduction that lowered industrial property taxes by an average of 23%. This reduction is reflected in the graph above.

Tangible Personal Property Tax
All equipment, which includes manufacturing and office, is depreciated by set percentage schedules. Indiana uses the Federal Depreciating Schedule to determine the True Tax Value of Equipment. Most manufacturing equipment in Indiana falls under Federal Pool #2.

Though manufacturing equipment is depreciated quickly in Indiana, its true tax value can never fall to below 30% of its cost. Special valuation procedures apply to special tooling (molds, patterns, and dies), property not placed in service, and air and water pollution control equipment.

Personal Income Tax
State Income Tax is 3.4%, plus county optional income tax with a maximum of 1%.

Sales Tax
State sales tax is 6% on all retail sales -food products are exempt.

Employment Taxes
The overall cost of doing business is lower in Johnson County and Indiana in general than in the surrounding Midwest states. The state’s pro-business attitude, conservative fiscal management, reasonable tax rates, low unemployment insurance and workers compensation rates make Indiana an excellent location for all types of businesses.

Business Incentives
Since every company's needs are different, all incentives offered in Indiana are project specific. The focus when determining applicable incentives is on the needs of each individual customer. Listed below are incentives which might be available.

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Bonds & Finance

Capital Access Program - Small business "access to capital" program which targets high-growth/high-tech companies, minority-owned businesses and child care facilities

Volume Cap Program - Indiana's $461 million capacity to issue private activity bonds, competitively awarded based on jobs created and/or retained, wages, capital investment, project location, dedication to low-income housing and other factors

Tax-Exempt Bond Program - Industrial revenue bonds, refunding bonds and 501(c)(3) bonds issued monthly

Small Bond Program - Access to the tax-exempt market for transactions under $1 million, including manufacturing projects, agricultural bonds and certain not-for-profit organizations, such as child care facilities

Loan Guaranty Program - Flexible, principal balance guarantees which support growing manufacturing, high-technology businesses, rural development projects and value-added agricultural projects

Indiana Gives Your Project A Competitive EDGE
We want you to locate in Indiana and we're going to compete for your business! When a gap exists between the costs associated with doing business in Indiana versus another state, you may be eligible for a payroll-based tax credit - with a difference. In Indiana, if your payroll tax credits exceed your state income tax liability, you get the difference - right back to your bottom line.

General Eligibility
Your project may be eligible for EDGE tax credits if a competitive gap exists in project costs, including incentives, between an Indiana location and competing state. The project must:

Involve a substantial capital investment on the part of the company

Create a meaningful number of net new jobs for Hoosiers

Pay wages that are above the county average wage

Have local support and investment

How It Works
EDGE tax credits are based on the payroll associated with the net new jobs created by the project. The payroll taxes withheld from those new employees, effectively 3.1% in Indiana, are the basis for the credits. Tax credits can be awarded for that amount, i.e. up to 3.1% of gross payroll for those net new jobs, for a period of up to ten years. The credits awarded are applied first to any Indiana corporate income tax liability. Any excess amount earned is refunded directly to the company. So, your bottom line gets the full benefit each and every year. EDGE does require a company commitment to maintain operation of the project for a period of two times as long as the term of the tax credit.

Industrial Development Grant Funds - Infrastructure
IDGF funds are awarded to eligible units of government to help them meet the infrastructure needs of a new or expanding business. The project must be related to economic development and have job-creation potential. Public-installed infrastructure may be improved up to, but not onto, the company's property; except in the case of rail spurs which may be funded on company property.

Eligible Activities

Water lines

Sewer lines

Drainage facilities

Wastewater treatment facilities

Road improvements

Rail spurs

Fiber optic cable

The Industrial Energy Efficiency Fund (IEEF)
This is a zero-interest loan program geared to help Indiana manufacturers increase the energy efficiency of their manufacturing process. The fund is used to replace or convert existing equipment, or to purchase new equipment as part of a process/plant expansion which will lower energy use. Companies can receive as much as $250,000.

To be eligible for the IEEF, a company must have a manufacturing SIC (Standard Industrial Classification) code of 20-39. The project must have sufficient energy savings and contribute to state economic development goals.

The Distributed Generation Grant Program (DGGP) - offers grants of up to $30,000 or up to 30% of eligible costs and is designed to enable businesses and institutions to install and study alternatives to central generation such as fuel cells, micro turbines, cogeneration, combined heat & power and renewable energy sources.

All projects must occur in Indiana, be technically feasible for full-scale operation, and comply with all applicable environmental, safety and legal regulations. Commercially proven projects are preferred. Eligible projects are those that demonstrate measurable energy savings in kWh, Btu or other units of measurement.

To be considered for funding, a project must provide baseload power of at least 20 kW for the facility at which it is located and should have a thermal efficiency of 50% or greater, involved fuel cells, or take advantage of a renewable energy source. Cogeneration projects that provide more than just electricity are preferred. Photo voltaic, wind turbine, biomass, landfill and digester gas projects are considered to be Renewable Energy.

Industries of the Future.
The U.S. Department of Energy (DOE) Office of Industrial Technology (OIT) operates the national Industry of the Future (IoF) program (www.oit.doe.gov) that targets industries that are energy-intensive and have traditionally generated large volumes of material waste. In order to reduce the energy consumption levels of these industries, the Industries of the Future creates partnerships between industry, government, and supporting laboratories and institutions to accelerate technology research, development, and deployment that will lead to more energy efficient production methods and reduce or eliminate the generation of waste materials.

The Industries of the Future program focusing on nine energy and waste-intensive industries: Steel, Metal Casting, Aluminum, Chemicals, Petroleum, Mining, Agriculture, Forest Products and Glass. OIT is providing initial funding for similar programs at the state-level that the State of Indiana has used to create the Indiana Industries of the future program (INIoF). Initially, the Glass, Steel and Metal-Casting Industries will be targeted.

In addition to the partnerships formed with government and federal labs to assist companies in reducing their energy consumption, the IoF also employs energy assessments that will help a company identify areas of low energy efficiency such as inefficient motors, high loss compressed air systems and high loss steam systems.

National Industrial Competitiveness through Energy, Environment and Economics (NICE3) - This federal grant program is designed to improve energy efficiency, promote cleaner production processes and improve the competitiveness of business. In particular, grants are awarded to assist with testing, demonstrating and implementing innovative technologies that will significantly conserve energy or reduce industrial waste. Grants are awarded annually through EPD.

Skills 2016
Indiana's Skills 2016 program is composed of the State's diverse training and educational programs designed to provide financial assistance to existing and new businesses committed to offering lifelong learning and training opportunities to their workforce.

For a complete overview of business incentives available from the State of Indiana, click here for the PDF on Business Iniatives.

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