INDIANAPOLIS (May 16, 2019) – The Indiana Economic
Development Corporation (IEDC) applauds efforts of Governor Eric J. Holcomb and
the Indiana General Assembly to strengthen the state’s business-friendly
environment and position Indiana for long-term economic growth and job
creation. Following the conclusion of the 2019 legislative session, Gov.
Holcomb signed multiple pieces of legislation that will modernize Indiana’s tax
code and enhance economic development tools, increasing the state’s
competitiveness, economic diversity and flexibility.
“In Indiana, we’ve spent years building a pro-growth business climate that is
now recognized as best in the Midwest and fifth in the nation,” Gov. Holcomb
said. “We must continue to lead in order to remain competitive and propel our
economy forward into the 21st century, and this legislation does just that. By
embracing innovation and technology, we will be able to attract more diverse
companies in high-growth industries, cultivate a dynamic ecosystem that will
develop new solutions, and retain and attract top talent by investing in the
vitality of Hoosier communities.”
An overview of legislation impacting economic development in Indiana is
outlined below. More information on House Enrolled Act 1001 (state
budget), Senate Enrolled Act 563 (economic
development tools) and House Enrolled Act 1405 (data
centers) is available online.
Innovation &
Entrepreneurship:
- Attracting high-growth companies to Indiana: The Headquarters Relocation Tax Credit was
expanded to better incentivize the relocation of small, high-growth
companies to the state. To be eligible, companies must maintain a
corporate headquarters outside of Indiana, have recently or will soon
close on $4 million in venture capital funding, and commit to
relocating its headquarters or a majority of its total payroll to
Indiana.
- Helping innovators start up quickly: The Venture Capital Investment (VCI) tax credit
program helps entrepreneurs and startups attract capital more quickly by
giving investors an additional incentive to invest in growing firms. A
change to the program will make the tax credits transferable starting in
2020, increasing the pool of potential investors for high-growth,
early-stage companies to utilize the program.
- Supporting Hoosier innovation: A new Innovation Voucher program will provide grants
to small businesses that partner with qualified organizations for
activities like research, technology development or commercialization.
This tool will give participating businesses access to resources that
otherwise would not be available, while fostering public-private
partnerships to propel research and development (R&D).
- Removing barriers to tech sector growth: New legislation provides local property and state
sales tax exemptions for large-scale data centers constructed in Indiana
with a significant capital investment. Indiana joins at least 25 other
states with similar incentives for data centers, which store digital data
on computer systems and hardware and increase digital infrastructure
needed by tech companies as well as large corporations.
- Cultivating an entrepreneurial ecosystem: Continued funding of the 21st Century Research & Technology Fund (21 Fund) will support the state’s efforts to propel innovation and entrepreneurship through a variety of programs and initiatives, such as making direct investments into Hoosier startups and supporting public-private partnerships to advance R&D.
Quality of Place & Talent:
- Encouraging regional development & revitalization: The new Redevelopment Tax Credit expands the current
Industrial Recovery Tax Credit program (commonly known as “DINO”), which
provides an incentive to invest in former industrial sites and improve
quality of place in Indiana communities. The Redevelopment Tax Credit removes
some of the building specifications of the DINO tax credit – eliminating
the requirements that it be an “industrial site” and that it be at least
100,000 square feet – ensuring the tool will be available in more
communities and to more investors and developers across the state.
- Supporting quality of place initiatives: Continued funding of the Business Promotion & Innovation Fund (BPI) will support the IEDC’s efforts to encourage regional development initiatives focused on enhancing quality of place. This includes opportunities to incentivize nonstop flights to key markets, advance innovation and entrepreneurship education and programming, as well as market Indiana to national and international audiences to attract and retain businesses and top talent.
Modernization:
- Modernizing Indiana’s tax code: New legislation will apply market-based sourcing for
taxing income from the sales of services, increasing Indiana’s
competitiveness by taxing service companies only for income they earn from
services sold in Indiana. Over the past decade, 19 states have adopted
this approach with more than half of states now utilizing this
market-based sourcing. With this approach, Indiana will continue to build
on its tax-friendly climate while increasing the state’s tax revenues and
leveling the playing field for Indiana-based service companies.
- Modernizing capital investment qualifications: The Hoosier Business Investment (HBI) Tax Credit provides a conditional incentive to a company making a sizeable capital investment in order to locate or grow in Indiana. Updates to the HBI tax credit expand qualified investment to capture modernized equipment used in today’s manufacturing and logistics sectors, including refurbished machinery, technology-integrated equipment, as well as 3D and other digital printing equipment.
The state has achieved two consecutive,
record-breaking years for job commitments in 2017 and 2018. In order to continue
this momentum and utilize these new, updated tools, the IEDC is strengthening
its partnerships with economic development and industry organizations across
the state to increase business attraction efforts within the U.S.
This year, the IEDC is coordinating a new grant program to further domestic
business development and enable each region to drive strategies based on its
unique industries and advantages. The state will award matching funds of up to
$100,000 to each of the state’s nine regions to support domestic business
development trips and site selector visits, increasing the frequency and
consistency of economic development professionals sharing the story of
Indiana’s pro-growth business climate across the country.
Additionally, the IEDC is strengthening its partnerships with industry
associations to target business recruitment in high-skilled, high-growth
sectors. Through this initiative, AgriNovus Indiana and TechPoint will work to
cultivate business development leads within the agbiosciences and tech sectors,
helping recruit industry startups, scaleups and established organizations to
expand or locate in Indiana.
