What is tax abatement?
Tax abatement (also known as property tax phase-in) reduces the real and/or personal property tax burden of a private community investment project - typically in a graduated manner over a period of time. To qualify, properties being invested in must be located in a designated economic revitalization area (ERA) defined as an area which has become undesirable for, or impossible of, normal development and occupancy because of a lack of development, cessation of growth, deterioration of improvements or character of occupancy, age, obsolescence, substandard buildings, or other factors which have impaired values or prevent a normal development of property or use of property; the term also includes residentially distressed areas. Tax abatement is authorized under Indiana Code 6-1.1-12.1.
Tax abatement is a tool used by local governments to encourage investment in areas in need of redevelopment. In turn, the redevelopment stimulates economic growth and job creation. Tax abatement phases in a company's taxes over time, which helps ease the costs associated with start-up, the purchase of new equipment, and expansions. In Allen County in 2014, eight projects were approved for tax abatement for a total investment of just over $698 million (including $3.96 million in New Haven and $28.8 million in Woodburn) with 4,160 jobs created or retained.
Company representatives interested in applying for tax abatement should contact the Allen County Department of Planning Services to discuss prospective projects and eligibility. In general, the process for granting tax abatements involves the following steps:
The property owner submits an application for ERA designation or the Allen County Council may wish to establish at its own discretion;
The property must be designated as an ERA by the Allen County Council, a process that requires a review and recommendation by the Allen County Redevelopment Commission;
A Declaratory Resolution of the ERA designation is passed by the Allen County Council;
A Notice of Public Hearing regarding the adoption and substance of the resolution in accordance with IC 5-3-1 is published;
The Public Hearing is held;
A Confirmatory Resolution of the ERA designation is passed by the Allen County Council.