The Enterprise Zone

The purpose of the Enterprise Zone program in the state of Indiana is to stimulate reinvestment within a designated disadvantaged zone and to create jobs for zone residents. An enterprise zone may consist of up to three contiguous square miles. There are 15 enterprise zones in Indiana. These include zones in Anderson, Bloomington, East Chicago, Elkhart, Evansville, Fort Wayne, Gary, Hammond, Indianapolis, Kokomo, Madison, Michigan City, Muncie, Richmond and South Bend. The Indiana Enterprise Zone Board oversees the enterprise zone programs in each locality. In order to stimulate reinvestment and create jobs with the zones, businesses located within an enterprise zone are eligible for certain tax benefits.

These tax benefits include:

• No property tax on business inventory.
• Exemption from Indiana Gross Income Tax on the increase in receipts from the base year.
• State Income Tax Credit (up to 30 percent of purchase price) for individuals purchasing an ownership interest in an enterprise zone business.
• State Income Tax Credit on lender interest income (up to 5 percent).
• State Income Tax Credit based on wages paid to qualified employees. The credit is the lesser of 10 percent of the increase in wages paid over the base year, or $1,500 times the number of qualified employees.
• Qualified employees wages are exempt from State Income Tax.