Hendrick County Economic Development Partnership

Tax Abatement Guideline

Local communities may offer real and personal property tax abatement as an incentive to new and expanding businesses. Property tax abatement allows a property owner to phase in payment of property taxes over a designated period. This period may be any number of years between one and ten. The local designating body determines the period.

Property tax abatement in Indiana is authorized under Indiana Code 6-1.1-12.1 in the form of deductions from assessed valuation. Any property owner in a locally designated Economic Revitalization Area (ERA) who makes improvements described below is eligible for property tax abatement.

Real Property Tax Abatement

Buildings

New buildings constructed are eligible for real property tax abatement. Substantial improvements to existing buildings may be eligible, but it is important to note that only the value of the improvement to the existing building qualifies. It is not permissible to abate property that is already being taxed in Indiana.

Land

Land does not qualify for abatement.

Personal Property Tax Abatement

Equipment

New manufacturing equipment, new research and development equipment and/or new logistics related equipment is eligible for personal property tax abatement. Used manufacturing equipment can also qualify as long as such equipment is new to the state of Indiana. Equipment not used in direct production, such as office equipment, does not qualify for abatement.

Procedures

Property owners must apply for designation to the local governing body, the town council or county council. Information on the procedure for designation of an Economic Revitalization Area and the responsibilities of the property owner and local governing body is available by calling the Hendricks County Partnership.

An abatement deduction application must be filed in the office of the county auditor in the county in which the property is located. (Please see IC 1-6.1-12.1 and 50 IAC 4.2-13.) Failure to file the required abatement application by the due date will result in loss of the abatement.

Each community in Hendricks County has their own policies and procedures for granting tax abatement.  For information on a specific community’s policies, please contact the Hendricks County Partnership.

Real Property Tax Abatement Calculation

Real property tax abatement is a declining percentage of the increase in assessed value of the improvement based on one of the following ten time periods. For example, for a seven-year abatement, the taxpayer pays no tax in year one, 15% of the total tax in year two, 29% of the total tax in year three, etc. The local governing body determines the time period for the abatement.

Term of the Abatement

Personal Property Tax Abatement Calculation

Personal property tax abatement is a declining percentage of the assessed value of the newly installed manufacturing and/or research and development equipment. Taxes are phased in as described above. The local governing body determines the abatement period.

Term of the Abatement