Tax Abatement

The purpose of tax abatement is to encourage investment and the development of jobs as well as to promote other community objectives, such as affordable housing, which might not otherwise take place.
  • In a global economy, tax abatement is often necessary to compete with other localities for job creation.
  • Tax abatement is an affirmation of confidence in a business by the community.
  • Tax abatement is expected to result in a larger community tax base by attracting new businesses and jobs. In the long run this will increase available tax funds for community infrastructure improvements and growth.
Dollar Impact
Abatement is only given on increases in assessed value. It cannot be used to reduce current taxes. The abatement phases in the full tax rate gradually over a time period of 1 to 10 years. If the investment does not take place as expected, there may be no increase in assessed value and no tax abatement.

Applications and Forms
Click here to access state and city forms required to apply for tax abatement.

Community Growth
Abatement of tax dollars for new business and housing activities is one way to support continued growth in our community. An abatement does not reduce the monies available for tax funded activities such as police, schools, or libraries. In a Tax Increment Finance district, abatement can increase the tax money available to the TIF fund by increasing growth.

Citizen Input
The approval process had been designed to allow several opportunities for comment by the public.

Recommendation by the Redevelopment Commission, Approval from City Council
Preliminary consideration and recommendation for a tax abatement application is made by the Redevelopment Commission. Their recommendation is then forwarded to the City Council which holds a public hearing on the abatement. The Council then considers the abatement request as well as input from the public. The City Council and Redevelopment Commission review all companies' compliance annually. Compliance is determined according to what degree a company has met its proposed benefits to the community in terms of investment, job creation, and wages as well as other factors.

Redevelopment Commission Guidelines for Economic Revitalization and Tax Abatement
Area Designation can be faxed or emailed upon request. For more information call 765-807-1090. Guidelines, applications, compliance forms, and other helpful information can be found through the links to the right under Informational Documents. 

Principles for Determining Property Tax Abatement
These principles are used in determining the guidelines for each category of project, and will also be used in determining the length of an abatement within each category.
  • Firms receiving tax abatement are expected to give local construction firms and local suppliers of goods and services the opportunity to do business.
  • Existing industry will be considered for tax abatement on the same basis as firms being recruited to the community.
  • Preference will be given to firms that diversify and fill in gaps in our local economy rather than those that compete for business in the local economy with existing firms.
  • Products that are sold outside our local community and bring value to the local economy will be given a high priority.
  • Abatement will be used to recruit and assist firms that create a technology based product or service or use advanced technology in manufacturing.
  • Location in the downtown, the urban enterprise zone, or declining area designated as an economic development area will be given a higher priority.
  • Projects that involve retail or are primarily office operations will be considered only in the locations described unless the office operations are technology related.
  • The number of jobs created per dollar of investment will be an important consideration for the warehouse distribution and manufacturing areas.
  • The level of wages and benefits will be an important consideration for all applications.
  • Housing will be evaluated in terms of percentage of units available to lower income families, mix of income levels, distance from other projects serving a similar clientele, availability of services, potential displacement of existing housing, and compatibility of design.
  • Projects will not be considered that will require variances or special exceptions unless primary review indicates that no problems will be encountered.
  • Adverse environmental impacts will negatively affect the consideration of abatement.
  • Any need for additional public infrastructure or other additional public support in the project will be considered in determining the length of the abatement.
  • Major development projects will be individually evaluated.
  • The time period of depreciation of equipment will be considered in the length of abatement for equipment.
Guidelines for Determining Property Tax Abatement
Projects will be considered for abatement only if the proposed investment is at least $250,000 and development has not begun and/or equipment has not been ordered. In addition, if the applicant is not the owner, authorization of the application must be obtained from the owner.

Length of Abatement
The length of the abatement period for real estate and equipment will be determined by the principles within the limits for each category set forth below (these are general guidelines. Special exceptions may be considered depending on local and business economic circumstances):
  • 6 to 10 years
    • Manufacturing
    • High Technology
  • 3 to 6 years
    • Warehouse / Distribution
    • Retail
    • Office
  • 1 to 3 years
    • Housing