The THEDC facilitates business requests in the City of Terre Haute and Vigo County for assistance programs. All information required for qualification remains confidential. For assistance, call (812) 234-2524 or e-mail us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Local Incentives
Property Tax Abatement
The Terre Haute Common Council and the Vigo County Council may approve tax abatements on both real and depreciable personal property for manufacturing companies that make a significant investment in our community and create good-paying jobs for our citizens. Real property tax abatement is a declining percentage of the increase in assessed value of real property improvements based upon one of ten time periods and percentages. Land does not qualify for abatement. Depreciable personal property abatement is a declining percentage of the assessed value of newly-installed manufacturing equipment, based upon one of ten time periods and percentages. Used manufacturing equipment can also qualify for abatement as long as the equipment is new to the state of Indiana.
Tax Increment Financing Assistance (TIF)
Tax increment is the property tax revenues collected on the increased assessed valuation of real or personal property in an area being developed or redevelopment. Tax increment may also include property tax revenues collected on the increased assessed valuation of depreciable personal property of any designated taxpayer in an area being developed or redeveloped and all other depreciable personal property located and taxable on the designated taxpayer's site of operations in the area being developed or redeveloped.
Tax increment revenues may be used to pay the principal and interest on any bonds issued for the purpose of financing or refinancing the redevelopment or economic development of the allocation area; establish, augment or restore the debt service reserve for bonds; pay principal and interest on bonds issued by the unit to pay for local public improvements in or serving the allocation area; make payments on leases in the allocation area and provide funding for numerous other initiatives as defined by statute.
Tax-Exempt Bond Financing
- The Heartland Disaster Tax Relief Act of 2008 authorizes the issuance of a new category of tax-exempt bonds called Midwestern Disaster Area Bonds (MDA Bonds). The Governor of Indiana is given the authority to authorize $3.1 billion of MDA Bonds for the Midwestern Disaster Areas (Vigo County is one of 40 MDA Counties in Indiana) through January 1, 2013 without regard to normal volume cap limits for private activity bonds under Section 147 of the Internal Revenue Code. The Acct provides that the State of Indiana (the State) or any political subdivision of the State or any other authorized issuer may issue the MDA Bonds.
Interest on tax-exempt bonds is excluded from federal gross income, and in the case of the MDA Bonds, is not an item of tax preference for purposes of the federal alternative minimum tax and is not included in adjusted current earnings for corporations in determining federal alternative minimum taxable income. Accordingly, tax exempt interest rate of projects to be financed on a tax exempt basis that typically would not qualify, including because the size of the financing or the project is larger than would otherwise be permitted under existing rules or could fit within the existing volume cap under Section 147 of the Code.
Qualified Midwestern Disaster Area Bonds can be issued for a wide range of projects and eligibility in not limited to the confines of traditional tax restrictions, such as the $10 million limit on manufacturing facilities.
MDA Bonds may be issued to finance the cost to repair or reconnect public utility property damaged by Disaster Events. Additionally, MDA Bonds may be issued to finance the cost of acquisition, construction, reconstruction or renovation of nonresidential real property (including fixed improvements associated with such property). A person will qualify for tax exempt financing of nonresidential real property with MDA Bonds if one of the following applies:
- The person using the property suffered a loss in a trade or business attributable to the Disaster Events, or
- The person is designated by the Governor as a person carrying on a trade or business that replaces a trade or business with respect to which another person suffered such a loss.
In simple terms, this means that anyone who suffered a business loss, of any size, in the 40 MDAs is eligible to finance any other business real property or improvements on a tax exempt basis. In addition, even if a person did not suffer a business loss as a result of the Disaster Events, the Governor may designate a new business in an MDA as replacing a trade or business that suffered a business loss in the MDA from the Disaster Events and such project can be financed tax exempt. Recent guidance from the IRS gives the Governor the discretion to determine if a business "replaces a trade or business" that suffered a loss.
There are certain other tax restrictions on the MDA Bonds. For instance, one of the most significant is that movable fixtures and equipment may not be financed with the proceeds of the MDA Bonds. Factual analysis may be required to determine whether a fixture is movable. If proceeds of the MDA Bonds are used to acquire existing buildings, the borrower must make rehabilitation expenditures with respect to such buildings within two years equal to at least 50% of the portion of the acquisition cost financed with proceeds of the MDA Bonds (the normal existing requirement is for 25% rehabilitation). Not more than 25% of the proceeds of the MDA Bonds may be used to acquire land. MDA Bonds may not be used to finance any skybox or other private luxury box, health club facility, golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other gambling facility, or liquor store. Finally, depreciation on the property financed by the MDA Bonds must be deducted for federal income tax purposes on a straight-line basis. As is true with other private activity bonds, an important early step is to obtain an inducement (or official action) resolution of the issuer of the bonds to finance the project. Once obtained, any expenditures incurred by the borrower not more than 60 days prior to that resolution may be financed from the MDA Bonds at the time of issuance. Pursuant to recent actions from the IRS, in addition, any expenditure incurred after the date of the Disaster Event and prior to December 31, 2009, may also be reimbursed from the proceeds of the MDA Bonds, even though such a resolution may not have been adopted until 2010.
- Tax Exempt Revenue Bonds provide capital financing at lower rates than most conventional financing sources. Interest rates and terms are negotiated. Bonds are issued through loan, lease, or sale agreements. The bonds can finance facilities for manufacturing and certain other projects. Boththe City of Terre Haute and Vigo County have successful track records of working with local manufacturers to provide tax-exempt bond financing. Volume cap is the amount of tax-exempt financing for certain types of private companies allowed in a state in a calendar year. A company must obtain an award of volume cap before it can have tax-exempt bonds issued for its project.
Certified Technology Park
A result of 2002's tax restructuring legislation, the Indiana Economic Development Corporation's Certified Technology Park program encourages the location of high-technology businesses within areas identified by local redevelopment commissions. In Terre Haute, the Rose-Hulman Institute of Technology South Campus was designated as a Certified Technology Park in 2004. Portions of tax revenues generated by tenants are reinvested into the park and used for improvements, operation and maintenance of facilities, payment of interest and principal on bonds and other business-generating activities.
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