The THEDC facilitates business requests in the City of Terre Haute and Vigo County for assistance programs. All information required for qualification remains confidential. For assistance, call (812) 234-2524 or e-mail us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Local Incentives
Property Tax Abatement
The Terre Haute Common Council and the Vigo County Council may approve tax abatements on both real and depreciable personal property for manufacturing companies that make a significant investment in our community and create good-paying jobs for our citizens. Real property tax abatement is a declining percentage of the increase in assessed value of real property improvements based upon one of ten time periods and percentages. Land does not qualify for abatement. Depreciable personal property abatement is a declining percentage of the assessed value of newly-installed manufacturing equipment, based upon one of ten time periods and percentages. Used manufacturing equipment can also qualify for abatement as long as the equipment is new to the state of Indiana.
Tax Increment Financing Assistance (TIF)
Tax increment is the property tax revenues collected on the increased assessed valuation of real or personal property in an area being developed or redevelopment. Tax increment may also include property tax revenues collected on the increased assessed valuation of depreciable personal property of any designated taxpayer in an area being developed or redeveloped and all other depreciable personal property located and taxable on the designated taxpayer's site of operations in the area being developed or redeveloped.
Tax increment revenues may be used to pay the principal and interest on any bonds issued for the purpose of financing or refinancing the redevelopment or economic development of the allocation area; establish, augment or restore the debt service reserve for bonds; pay principal and interest on bonds issued by the unit to pay for local public improvements in or serving the allocation area; make payments on leases in the allocation area and provide funding for numerous other initiatives as defined by statute.
Tax-Exempt Bond Financing
- The Heartland Disaster Tax Relief Act of 2008 authorizes the issuance of a new category of tax-exempt bonds called Midwestern Disaster Area Bonds (MDA Bonds). The Governor of Indiana is given the authority to authorize $3.1 billion of MDA Bonds for the Midwestern Disaster Areas (Vigo County is one of 40 MDA Counties in Indiana) through January 1, 2013 without regard to normal volume cap limits for private activity bonds under Section 147 of the Internal Revenue Code. The Acct provides that the State of Indiana (the State) or any political subdivision of the State or any other authorized issuer may issue the MDA Bonds.
Interest on tax-exempt bonds is excluded from federal gross income, and in the case of the MDA Bonds, is not an item of tax preference for purposes of the federal alternative minimum tax and is not included in adjusted current earnings for corporations in determining federal alternative minimum taxable income. Accordingly, tax exempt interest rate of projects to be financed on a tax exempt basis that typically would not qualify, including because the size of the financing or the project is larger than would otherwise be permitted under existing rules or could fit within the existing volume cap under Section 147 of the Code.
Qualified Midwestern Disaster Area Bonds can be issued for a wide range of projects and eligibility in not limited to the confines of traditional tax restrictions, such as the $10 million limit on manufacturing facilities.
MDA Bonds may be issued to finance the cost to repair or reconnect public utility property damaged by Disaster Events. Additionally, MDA Bonds may be issued to finance the cost of acquisition, construction, reconstruction or renovation of nonresidential real property (including fixed improvements associated with such property). A person will qualify for tax exempt financing of nonresidential real property with MDA Bonds if one of the following applies:
- The person using the property suffered a loss in a trade or business attributable to the Disaster Events, or
- The person is designated by the Governor as a person carrying on a trade or business that replaces a trade or business with respect to which another person suffered such a loss.
In simple terms, this means that anyone who suffered a business loss, of any size, in the 40 MDAs is eligible to finance any other business real property or improvements on a tax exempt basis. In addition, even if a person did not suffer a business loss as a result of the Disaster Events, the Governor may designate a new business in an MDA as replacing a trade or business that suffered a business loss in the MDA from the Disaster Events and such project can be financed tax exempt. Recent guidance from the IRS gives the Governor the discretion to determine if a business "replaces a trade or business" that suffered a loss.
There are certain other tax restrictions on the MDA Bonds. For instance, one of the most significant is that movable fixtures and equipment may not be financed with the proceeds of the MDA Bonds. Factual analysis may be required to determine whether a fixture is movable. If proceeds of the MDA Bonds are used to acquire existing buildings, the borrower must make rehabilitation expenditures with respect to such buildings within two years equal to at least 50% of the portion of the acquisition cost financed with proceeds of the MDA Bonds (the normal existing requirement is for 25% rehabilitation). Not more than 25% of the proceeds of the MDA Bonds may be used to acquire land. MDA Bonds may not be used to finance any skybox or other private luxury box, health club facility, golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other gambling facility, or liquor store. Finally, depreciation on the property financed by the MDA Bonds must be deducted for federal income tax purposes on a straight-line basis. As is true with other private activity bonds, an important early step is to obtain an inducement (or official action) resolution of the issuer of the bonds to finance the project. Once obtained, any expenditures incurred by the borrower not more than 60 days prior to that resolution may be financed from the MDA Bonds at the time of issuance. Pursuant to recent actions from the IRS, in addition, any expenditure incurred after the date of the Disaster Event and prior to December 31, 2009, may also be reimbursed from the proceeds of the MDA Bonds, even though such a resolution may not have been adopted until 2010.
- Tax Exempt Revenue Bonds provide capital financing at lower rates than most conventional financing sources. Interest rates and terms are negotiated. Bonds are issued through loan, lease, or sale agreements. The bonds can finance facilities for manufacturing and certain other projects. Both the City of Terre Haute and Vigo County have successful track records of working with local manufacturers to provide tax-exempt bond financing. Volume cap is the amount of tax-exempt financing for certain types of private companies allowed in a state in a calendar year. A company must obtain an award of volume cap before it can have tax-exempt bonds issued for its project.
Certified Technology Park
A result of 2002's tax restructuring legislation, the Indiana Economic Development Corporation's Certified Technology Park program encourages the location of high-technology businesses within areas identified by local redevelopment commissions. In Terre Haute, the Rose-Hulman Institute of Technology South Campus was designated as a Certified Technology Park in 2004. Portions of tax revenues generated by tenants are reinvested into the park and used for improvements, operation and maintenance of facilities, payment of interest and principal on bonds and other business-generating activities.
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State Incentives
Workforce Training Assistance
Businesses can apply for reimbursement grants to subsidize the cost of training and retraining employees through the states' Skills 2016 program. This reimbursement program covers up to fifty-percent of eligible costs which include instructor wages, tuition, and training materials. The maximum award for retraining is $200,000. Programs included in the states' reimbursement grant program are described below:
- The Skills Enhancement Fund (SEF) provides assistance to businesses committed to training their workforce. Businesses can apply for reimbursement grants to subsidize the cost of training and retraining employees over a two-year term. Trainees must be Indiana resident. This reimbursement program covers up to fifty-percent of eligible training costs, which include instructor wages, tuition, and training materials. The maximum award for retraining is $200,000.
- The Technology Enhancement Certification for Hoosiers (TECH) Fund reimburses activities that result in a full-time employee receiving portable certification in systems administration, systems engineering, software development, a professional certification, or other certification in advanced e-business enabling applications.
Tax Credits
- The Economic Development for a Growing Economy (EDGE) is a refundable tax credit program that rewards companies creating jobs and contributing to the growth of Indiana's economy. EDGE credits are calculated as a percentage of payroll tax withholding for new Indiana jobs. EDGE may be awarded for up to 100-percent of the projected withholdings attributed to the company's Indiana project, and EDGE tax credits may be awarded for a period not to exceed ten-years.
- The Hoosier Business Investment Tax Credit (HBITC) program encourages capital investment in Indiana by providing a credit against a company's Indiana tax liability. The credit amount is based on a company's qualified capital investment with the final credit amount determined through the Indiana Economic Development Corporation, based on an analysis of the economic benefits of the proposed investment. HBITC is established by I.C.6-3.1.26.
The calculation of Credits is done through the Indiana Economic Development Corporation who certifies the amount on the qualified investment that is eligible for credit and the amount directly related to expanding the workforce in Indiana.
A company's Credit award may be up to ten-percent of the qualified capital investment and may be carried forward for nine-years. The Indiana Economic Development Corporation determines the applicable credit percentage and carry forward term on a case-by-case basis.
- The Hosier Headquarters Relocation Tax Credit (HHRTC) is for business that relocated its corporate headquarters to a location in Indiana. It is entitled to a credit against its state tax liability equal to fifth-percent of the costs incurred in relocating the headquarters. After relocation, the corporation must have 75-employees in Indiana. However, a company must have a worldwide annual revenue of at least $100 million to qualify.
- The Venture Capital Investment Tax Credit (VCTC)program is established to improve access to capital to fast growing Indiana companies by providing individual and corporate investors an additional incentive to invest early stage firms. Investors who provide qualified debt or equity to Indiana companies receive a credit against their Indiana tax liability.
Infrastructure Assistance
Industrial Development Grant Fund (IDGF) is awarded to eligible units of government to help them meet the infrastructure needs of a new or expanding business. The infrastructure project must support new business development, which is defined as either an expansion of an existing company or the location of a new manufacturing facility. Public-installed infrastructure may be improved up to, but not onto, the company's manufacturing facility. 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 include water lines, sewer lines, drainage facilities, wastewater treatment facilities, road improvements, rail spurs and fiber optical cable.
Indian Finance Authority Loan Grant Program
The Indiana Finance Authority can guarantee loans for high-growth/high-tech companies, manufacturers, rural development projects, value-added agricultural enterprises and other types of businesses that create a significant number of Hoosier jobs. To date, IFA has provided over $83 million guaranteed loans to Indiana businesses.
SBIR/STTR Initiative
After more than two decades of existence, the SBIR Program has established itself as one of the most effective technology programs administered by the federal government. SBIR/STTR programs are highly competitive and encourage small businesses to explore their technology potential. SBR/STTR funding is available from eleven participating agencies throughout the United States and focus on various technology areas.
The 21st Century Research and Technology Fund, an office of the Indiana Economic Development Corporation, oversees the mission of the program - to help Indaina businesses compete for and win federal funding. Additionally, the Indiana Economic Development Corporation SBIT/STTR initiative is committed to assisting Indiana businesses in the commercializing of their prototypes and understand the impact that these companies can have on the economy. This, coupled with the matching program, will provide Indiana companies with the fuel needed to excel in the SBIT/STTR programs.
Permit and Regulatory Assistance
The Indiana Department of Commerce's Office of Regulatory Ombudsman acts as a mediator, expediter and problem solver in areas affecting businesses, communities and economic development organization. The Ombudsman's office can assist in the permitting process, serve as a liaison with the state agencies and provide information about state regulations and requirement. The ombudsman is the secretary of commerce's proxy on three environmental rulemaking boards: the Air Pollution Control Board, the Waste Pollution Control Board, and the Solid Waste Management Board. The ombudsman establishes early communications with technical staff of the regulatory agencies that permits are efficiently processed. This service is an effort to minimize the amount of time spent on regulatory compliance.
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