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Published: Wednesday, 09 January 2019 10:56
The former Fort Wayne Enterprise Zone was expanded on January 1, 2018, and is now known as the Summit City Entrepreneur and Enterprise District or SEED.
Tax incentives are available to property owners located in the SEED for business real estate and building improvements and the purchase of certain types of business personal property. The SEED Property Tax Investment Deduction is a property tax deduction for the increased value of a SEED business property due to investment in real and personal property by the business. The added valuation may be deducted for up to 10 years. Qualified investments are defined as follows:
- Purchase of an existing building
- Construction of a new building
- Repair/rehabilitation/modernization of an existing building
- Onsite infrastructure improvement
- Purchase of manufacturing or production equipment
- Retooling of existing machinery
- New information technology equipment
- New logistic distribution equipment
- New research and development equipment
Any qualified investment as defined above that will increase the assessed value of the property would be eligible for a Property Tax Investment Deduction on the real estate and this incentive goes to the property owner. The deduction is not on the purchase price but on the increase in the value of the real estate. The Allen County Auditor's Office and the Allen County Assessor make the final determination on assessed value and what investments will qualify. Any qualified investment in equipment and personal property as defined above would be eligible for a Property Tax Investment Deduction and this incentive goes to the owner of the equipment. Equipment purchased before 2018, follows the former Enterprise Zone Deduction qualified investment definitions.
Beginning January 1, 2018, new personal property purchases by businesses located within the district that are used by one or more employees who perform the majority of service within the district are not subject to 30% floor value limitations. This means that the personal property valuations can go below the 30% floor per the depreciation schedule.
All property taxes are paid a year in arrears. The annual assessment date is January 1 of each year. A SEED Investment Deduction Application (Form EZ-2) needs to be filed with the Allen County Auditor's Office between March 1 and May 15 of the assessment year. Businesses must refile Form EZ-2 each of the ten years to continue to receive the deduction. The taxpayer will receive a tax credit in the year following the assessment year.
In order to receive the deduction, the taxpayer must pay a participation fee of 20% of the tax savings to the Fort Wayne Urban Enterprise Association d/b/a SEED Fort Wayne. The taxpayer must also file an EZB-R form with the Fort Wayne Urban Enterprise Association by June 1 of each year. This form is a verified summary of the amount of investment and tax savings received from that investment. The statewide organization that manages the program for Indiana requires that a business pay an annual registration fee of 1% of the tax savings in excess of $1,000.
Schedule LIC - Enterprise Zone Loan Interest Tax Credit
A lending institution cannot claim an LIC credit on a loan made after December 31, 2017, but can continue to claim the LIC on loans within the 10 years preceding December 31, 2017. For example, if a loan was made in 2017, the LIC can be taken for ten years until 2027.
Abatement Deductions for Vacant Buildings
The owner of an eligible vacant building can apply to the SEED Fort Wayne Board for a deduction for the occupation of an eligible vacant building within the district. In order to be eligible, the building must be zoned for commercial or industrial purposes and unoccupied for at least one (1) year before the owner occupies the building. The Board will review all applications and statements of benefit submitted by property owners and will issue findings based on new and retained employment, annual salaries, increased tax base, or any other benefits to determine if the totality of benefits is sufficient to justify a deduction. The granting of a deduction must be approved by the City Council. Abatement on the assessed value of the building can be granted on a schedule no longer than 10 years after a vacant building deduction.
Enabling State of Indiana Entrepreneur and Enterprise District legislation can be found in Indiana Code 5-28-15.5.
