Property Tax Abatement
The City of Columbus administers a tax abatement program pursuant to Indiana Code 6-1. 1-12. 1-1 et seq.
Manufacturing-related companies are eligible for tax abatement on real property improvements (construction of a manufacturing facility or expansion of existing facility) and on personal property (the purchase of manufacturing equipment, either new or not previously owned in Indiana). The company must be located within an economic revitalization area. If not, the property owner must request designation as an economic revitalization area.
Warehousing and logistics equipment are eligible for abatement. Research and Development equipment is eligible. IT equipment that supports the manufacturing process is eligible. Certain types of retail are eligible only in an EDTA (Economic Development Target Area). Multi-family residential with an acceptable number of units available for low-to-moderate income tenants are eligible as well.
Tax abatement is an incentive program. The request should be made before construction starts and/or before the equipment is purchased. The Department of Local Government Finance will not approve tax abatement on property and/or equipment that was installed prior to the City's approval of the statement on benefits (SB-1).
The City of Columbus currently grants ten-year abatements for real property improvements and approves a ten-year abatement for personal property, with the exception being the downtown EDTA which are currently six-year abatements.
The City of Columbus currently deals with tax abatement on a case by case basis. When a company requests that its property be designated an economic revitalization area, only that property is designated. Blanket areas have been designated in the past. Companies located or locating in previously designated areas are eligible to apply for tax abatement.
The owner of the property must apply for the ERA designation. The taxpayer (usually the company) applies for the tax abatement.
In some instances a company will lease equipment or a building. If the leasing arrangement specifies that the company will pay the taxes, then the company, as taxpayer, applies for the tax abatement. In such a situation, if designation as an ERA is also necessary, the owner would apply for the designation on behalf of the company.
The City has established the following tax abatement procedures:
- Company sends letter of request to the Mayor, giving background information on the company, description of the "project" (construction, expansion, purchase of equipment), and numbers of additional jobs that will be a direct result of the project. Attached to the letter is a completed statement of benefits form (SB-1), an application for tax abatement and/or economic revitalization area designation, and an agreement of cooperation (regarding reporting requirements).
- Copies of the above package are sent to Director of Community Development and to the City Attorney.
- Communication and Program Coordinator in Community Development reviews the documents and contacts the company representative to discuss timing of Council action, clarification of items, etc. Council scheduling is approved by the Mayor.
- The City Engineer's Office prepares the ERA map with proposed area highlighted.
- Resolution is prepared by the City. Resolution, statement of benefits form, equipment list and letter to the Mayor are sent to Council members one week prior to the Council meeting at which action on the request will be taken.
- Sets of above information, plus the application and agreement, are sent to the Incentive Review Committee (IRC), which is made up of three Council members.
- Certified letter is sent to the company representative (usually its president) information of the date and time of IRC and Council meetings. A company representative is requested to attend both meetings.
- IRC meets before Council meeting to review the tax abatement request. At Council meeting, company makes presentation to Council and IRC reports the results of its review to Council. (Community Development Director or Program Manager attends IRC and Council meetings with the company representative.) If request is approved, SB-1 form is executed and abatement is effective immediately.
- For ERA designations, following Council approval, notice of public hearing is published, and P.M. sends copy of public hearing notice, resolution and SB-1 form to "each taxing unit that has authority to levy property taxes in the geographic area where the economic revitalization area or allocation area is located." Public hearing is held at a subsequent Council meeting, and resolution is ratified. ERA designation is then effective. Tax Abatement is not effective until after the public hearing and ratification of resolution. "Project" should not proceed until this process is completed.
- Following first Council meeting, maps showing proposed designation are distributed to the Auditor's office, Assessor's offices, Clerk-Treasurer, and City Attorney. One copy is posted in Council Chamber the evening of Council meeting. This copy is ultimately filed in the Community Development Office. Master copies of ERA maps are kept in the City Engineer's Office.
- Executed resolution and SB-1 forms are distributed to County Auditor, County and Columbus Township Assessors, City Attorney, and to the company. The Clerk-Treasurer retains originals, and a copy is filed in the Community Development office.