Property tax abatement has been used for over ten years to encourage the expansion of Indiana's economy and job base. Technically known as the "Economic Revitalization Area" Deduction or "ERA" Deduction, tax abatement, when used as part of an overall economic development program, can be an important tool in securing investment and job creation. Improvements to blighted or run-down areas are but one example of the use of the ERA Deduction.
Forms are available from the State website. Forms are provided in .PDF format as well as the Microsoft Word format. You will need the Adobe Acrobat Reader installed on your computer in order to view the .PDF files. Click here to view all available forms.
What is an ERA Deduction?
The ERA Deduction is available to taxpayers who redevelop or rehabilitate real property or install new manufacturing equipment in what is known as an " Economic Revitalization Area".
With respect to real property, only a structure or building can qualify for abatement; land is not included.
Steps in the Abatement Process:
There are two basic phases in the tax abatement process. First, the local governing body must give its permission or approval to the taxpayer to receive the ERA Deduction. Then, the taxpayer must submit the required paperwork to effectuate the deduction.
Obtaining Local Approval:
The local governing body is generally the fiscal body of the county, city or town, except in a county that contains a consolidated city; the designating body is the metropolitan development commission. The decision to declare a particular area an ERA Area is the responsibility of the local governing body.
Submitting the Required Paperwork:
Even with the approval from the local governing body, the taxpayer must file a deduction application with the appropriate office in order to receive the ERA deduction. For personal property, Form 103-ERA and a Form CF-1/PP are to be filed annually with the Township Assessor as an attachment to your personal property return. These forms are due May 15 unless an extension on personal property has been filed. For real estate, a Form 322 ERA is to be filed with the County Auditor by May 10 of the year in which the assessed valuation is made except when a notice of assessment (Form 11) is not given to the property owner by April 10 of that year. In this case, the deduction application must be filed not later that thirty (30) days after the date such a notice is mailed. Form CF-1/RE must also be filed with the County Auditor each year by May 15. (IC 6-1-1-12.1)
Conclusion:
The ERA Deduction has proven to be a useful economic development tool when used as part of an overall economic development program and has been instrumental in securing investment and job creation that would otherwise not have taken place. However, the ERA deduction process can also be quite complicated. This page was intended to communicate information of a general nature. Because tax abatement can be an important component of an economic development project, taxpayers should give the ERA Deduction the attention it deserves. It is strongly recommended that taxpayers and local designating bodies consult their respective legal counsel before, during, and after each step of the process.
Because of the changing nature of legislation in this arena, taxpayers should also be ever watchful for changes in legislation affecting the ERA Deduction.
For further information please contact, Rob Schaeffer, Economic Development Specialist, Metropolitan Development at 812/436-7823 or Cindy Vaught of the County Auditor's Office at 812/435-5420.
