The investment deduction provides Indiana business taxpayers with a 3 year deduction from the assessed valuation of new investments in real and personal property. The intent of the deduction is to spur investment in Indiana, increase the tax base, and create and retain jobs.
Eligibility:
The deduction is available to businesses of all sizes. However, the investment deduction cannot be used with other deductions, and is not available to businesses operating in an allocation area, such as a tax increment financing (TIF) district.
Investments made between March 2, 2005 and March 1, 2009 to develop (new construction), redevelop, or rehabilitate real property that resulted in the creation or retention of employment are eligible for the deduction. Personal property, never before used by its owner in the state, that creates or retains jobs is also eligible for the deduction. The total amount of real property cannot exceed $2,000,000 in any one county.
Steps in the Investment Deduction Process:
Business property owners file a State Form RPID-1 with the township assessor to request the investment deduction for real property. Must be filed within 30 days of receiving new assessed value notice (Form 11).
Applicants seeking a personal property investment deduction must file a State Form PPID-1 with their annual personal property return.
Local assessing officials and auditor review the deduction requests to validate. To obtain this deduction, the taxpayer must show how the investment will increase assessed value, create jobs or retain employees in the taxing jurisdiction.
Upon approval, the Auditor applies the three-year deduction to the assessed valuation which is first reflected on the next year's tax bill. Those requesting the personal property investment, must file the application on the first assessment year for each deduction requested with their personal property return.
Taxpayer Impact:
The Investment Deduction benefits Hoosiers by providing simple, flexible incentives for businesses to invest in Indiana. The increased investment not only creates or retains jobs, but it also provides additional tax base in a community.
The amount of the deduction is the lesser of two million dollars (per county) for real and personal property or the increase in assessed valuation resulting from the investment multiplied by 75% the first year, 50% the second year, and 25% the third year.
For more information:
Additional investment deduction information is available from the Indiana Department of Local Government and Finance by contacting them at (317) 232-3777 or by email.
For more information, visit the State's Department of Local Government and Finance site.
In the Auditor's Office, contact Charlene Decker at 435-5464 or by email.
The investment deduction provides Indiana business taxpayers with a 3 year deduction from the assessed valuation of new investments in real and personal property. The intent of the deduction is to spur investment in Indiana, increase the tax base, and create and retain jobs.