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INVENTORY
TAX ABATEMENT IC 6-1.1-20.8 |
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A
business pays no property tax on wholesale
or retail resale merchandise, raw materials,
supplies, work in process or finished goods.
To claim the inventory tax
abatement, a business must:
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Report
business inventory on an annual personal
property tax return (Form 103 and Form
104). The form must be filed by May
15 with the Township Assessor unless
an extension of up to 30 days is granted
in writing. |
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File Form
EZ-1 to obtain inventory tax abatement.
Form EZ-1 must be filed with the County
Auditor by May15. |
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The county auditor will inform the business
in writing by August 15 if the credit is allowed.
Approved credits will be applied to property
tax bills in May and November.
Contact the County Auditor where your business
is located to obtain Form EZ-1 and Forms
103 and 104.
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GROSS INCOME
TAX EXEMPTION IC 6-2.1-3-32 |
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A taxpaying business
entity pays no gross income tax on increased
receipts gained from operating in an Enterprise
Zone. The amount of the increased receipts
is determined by subtracting the receipts
of the current year from receipts of the base
year. The base year is the 12-month period
immediately preceding the designation of an
Enterprise zone. For businesses new to an
Enterprise Zone, the base year receipts are
zero.
To claim the gross income tax exemption,
a business must:
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Report
exempt receipts as "non-taxable
receipts" on tax return Form IT-20,
Schedule EZ, Part IV. |
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File form
IT-20, Schedule EZ, Part IV with annual
tax return. |
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INVESTMENT COST
CREDIT IC 6-3.1-10 |
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An individual
purchasing an ownership interest in an Enterprise
zone business may be eligible to receive a
credit of up to 30 percent of the purchase
price against his or her state tax liability.
To claim the investment cost credit, an
individual must:
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Request
that the Indiana Department of Commerce
(IDOC) determine if the purchase is
a qualified investment. This must be
done before the purchase is made. If
the purchase is a qualified investment,
the IDOC will then determine the precise
percentage of the tax credit the individual
may claim. |
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Attach
certification document to individual
tax return (IDOC will provide the taxpayer
with certification documents). |
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LOAN INTEREST
CREDIT IC 6-3.1-7 |
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An individual
or business that pays taxes in Indiana is
entitled to a 5 percent tax credit on interest
income from a loan that benefits businesses
or residents of an Enterprise Zone. To qualify,
the loan must directly benefit an Enterprise
zone business; increase the assessed value
of real property in an Enterprise Zone; or
be used to rehabilitate, repair or improve
a residence in a zone.
The loan interest credit can be applied
to reduce the gross income tax, adjusted
gross income tax, supplemental net income
tax, bank tax, savings and loan association
tax and/or the financial institutions tax.
To claim the loan interest credit, an individual
or business must:
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Indicate
the amount of credit for which they
are eligible on Schedule LIC. |
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File Schedule
LIC with an annual tax return. |
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If you
have questions, refer to Income Tax
Information bulletin #66 available from: |
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Indiana
Department of Revenue
Compliance Division
Corporate Income Tax Section
100 N. Senate Ave., Room N203
Indianapolis, IN 46204-2253
(317) 232-2189
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EMPLOYMENT EXPENSE
CREDIT IC 6-3-3-10 |
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A business may
apply a credit to its gross income tax or
adjusted gross income tax liability for wages
paid to qualified employees.
A "qualified employee" is one
who lives in the enterprise zone, works
50 percent of his or her time in the Enterprise
zone and has at least 90 percent of his
or her services directly relate to the employer's
facility in the Enterprise Zone.
The annual credit is applied after all
other Indiana credits against state income
tax liability (either gross income tax or
adjusted gross income tax). Credit earned
that exceeds tax liability may be carried
back or brought forward to other tax years.
To claim the employment expense credit,
an employer must:
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Indicate
the amount of the credit for which they
are eligible on Schedule EZ. |
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File Schedule
EZ with annual tax return. |
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If you
have questions, refer to Income Tax
Information bulletin #66 available from
the Indian Department of Revenue, Compliance
Division (see above). |
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EMPLOYEE TAX
DEDUCTION IC 6-3-2-8 |
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The employee
tax deduction means that a qualified employee's
wages, up to $7,500, are exempt from Indiana
individual income tax.
A "qualified employee" is one
who lives in the Enterprise Zone and works
50 percent of his or her time in the Enterprise
zone and has at least 90 percent of his
or her services directly related to the
employer's facility in the Enterprise zone.
For an employee to claim the employee tax
deduction:
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The employer
will provide the employee with Form
IT-40 QEC, which indicates the wages
the employee has earned in the Enterprise
Zone. |
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The employee
will attach Schedule IT-40 QEC to his
or her Indiana Individual Income Tax
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Also, there will be a list of requirements
for business to quality for Enterprise Zone
Tax Incentives. These are text descriptions
will links to further documentations and forms
that are available online. The requirements
are:
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Enterprise
Zone Business Registration (EZB-R)
Any business that accesses at least
one of the incentives must file an Enterprise
Zone Business Registration (EZB-R) form
each year. This form MUST be postmarked
no later than June 1 in the year it
is due. The information provided is
for the previous calendar year. If a
business feels it cannot complete and
submit the form on time; it can file
an Enterprise Zone Business Extension
(EZB-R) form that also MUST be postmarked
no later than June 1 in the year it
is due. If a business receives an approved
extension from the Indiana State Enterprise
Zone Board, it MUST submit their EZB-R
postmarked no later than July 16 in
the year it is due (Indiana Code does
not allow exceptions). |
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Registration
Fee
In addition to an EZB-R, any business
whose tax savings exceed $1,000 must
submit a 1% registration fee to the
Indiana State Enterprise Zone board
for administration purposes. (Example:
business saves $5,000; registration
fee is $50) (IC 4-4-6.1-2) |
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Reinvestment
Requirements
As a participant of the program, a business
is require to reinvest all of its tax
savings (Except for the registration
fee) into its property or employees
in the zone. (IC 4-4-6.1-2) |
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Remain
Open for Business
As a participant of the program, a business
must remain open and operating as a
zone Business for twelve (12) months
of the assessment year for which the
incentive is claimed. (IC 4-4-6.1-2)
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Contribute
to Local Urban Enterprise Association
The business must contribute to the
local UEA a percentage of its savings.
This percent is set by the local city
council. Please check with the UEA to
find out the percentage. (IC4-4-6.1-2)
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Other
A business located outside of Indiana
that relocates or locates in an Indiana
enterprise zone may do so and access
the incentives available. An Indiana
business that locates in a zone may
do the same. However, an Indiana business
that relocates from a non-zone area
in Indiana to a zone area must go through
a relocation hearing and provide documentation
as to why the relocation was necessary.
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The follow
is a list of Tax Incentive applications
Forms:
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EZB-R Form |
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EZ-1 Form |
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104 Form |
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103 Short
Form |
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IT-20 Form |
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103 Long
Form |
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