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Indiana EDGE Credit in Jeopardy

Posted 5:00 PM by

Indiana State Capitol Building

When it comes to the Indiana legislature, the conventional wisdom is that lawmakers are not inclined to take on too many big issues during a short legislative session (such as this year). Someone forgot to share that message with the only people who matter: Indiana legislators.

While personal property tax reform has sucked a lot of oxygen out of the chamber, with little fanfare a significant “sunset” to one of the state’s key economic development tools has taken root.

SB 367 contains a provision to put an “end date” on Indiana’s EDGE tax credit, the granddaddy of all arrows in the Indiana Economic Development Corporation’s (IEDC) economic incentive quiver. As a proposed date fluctuates—2016 and 2020 have made the rounds as potential expiration dates—the mere possibility is stunning.

With its training grant programs gutted and underfunded, EDGE, a refundable tax credit offered to companies based on their hiring plans, is the one reliable, useful economic development incentive that allows the IEDC to differentiate Indiana’s incentive packages with other states.

If this program were to go away, be phased out, or scaled back in some way, the effects on the state’s economic development efforts would be immediate and crippling. The state’s ability to fill the gap on competitive deals would be severely curtailed, and local governments would be asked to do more.

Some argue the proposed sunset is not a precursor to eventual elimination, just a means to ensure a regular review of the program as part of a periodic renewal.

About the Author
Tim Cook is the partner-in-charge of Katz, Sapper & Miller's State and Local Tax Group. Tim assists clients with complex business restructurings, negotiates settlements at both the audit and appeals level, and provides tax advocacy services. He also works closely with companies during the site selection process, helping them make data-driven location decisions while fully leveraging economic incentives. Connect with him on LinkedIn.

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