Tax Abatement Information

(The following information is an overview of the tax abatement process.

 

· For a company to receive a tax abatement in the City of Richmond, the company must file a Statement of Benefits (SB-1) form and SB-1A, City of Richmond supplemental form, BEFORE new equipment is installed or improvements to real property are made.

· A non-refundable $100.00 filing fee must accompany the SB-1 and SB-1A in order for it to be processed. Checks should be made out to the City of Richmond.

· SB-1 and SB-1A forms received by noon on the Monday before a Common Council meeting (Common Council meets the 1^st & 3^rd Monday of every month) will be included on the agenda for the Common Council Meeting the following Monday. (The abatement would be on first reading at that meeting.)

· An abatement may be requested for any number of years up to 10 years in length.

· The estimated value of the project, number of jobs created or retained, employees annual salaries and other benefits will be considered by the Council when determining the length of an abatement.

 

· After a Statement of Benefits is approved, Form 322 ERA, Real Estate Improvements and/or Form 322 ERA/PP New Machinery, must be filed with the County Auditor.

· For real property, Form 322 ERA must be filed by the later of (1.) May 10; or (2.) thirty (30) days after a notice of increase in real property assessment is received from the township assessor.

· For machinery, Form 322 ERA/PP must be filed between March 1 and May 15 of the assessment year in which the new manufacturing equipment becomes assessable.

 

· All companies that have been approved for a tax abatement must file an annual compliance with statement of benefits (CF-1) form with the City of Richmond Controller's Office and County Auditor's Office to show the extent of compliance with the Statement of Benefits.

· Companies receiving real estate and improvements deductions must file form CF-1 with the initial deduction application and then annually within 60 days after the end of each year in which the deduction is applicable.

· Companies receiving deductions on new manufacturing equipment must file form CF-1 with form 322 ERA/PP between March 1 and May 15 of each year.

· It is the Common Council's policy to retract abatements that do not adhere to these compliance requirements.

 

 

 

 

 

· A company applying for a tax abatement must be located in one of the City of Richmond's designated Economic Revitalization areas.

 

· New Manufacturing Equipment may be defined as follows:

· New equipment or used equipment brought into Indiana from outside of Indiana.

· Special tooling if it used in the direct production, manufacture, fabrication, assembly, extraction, mining, processing, refining, or refinishing of other tangible personal property.

· The rebuilding or reworking of existing production equipment if the expenditures are capitalized for federal income tax purposes and substantially increase the productivity or capacity of existing equipment, substantially prolong the useful life of equipment or adapt the equipment to a substantially different use.

· Qualifying property for an abatement is defined as tangible property used in the direct production, manufacture, fabrication, assembly, extraction, mining, processing, refining, or finishing of other tangible personal property. Examples include:

· Computer equipment if used directly to control equipment directly used in the manufacturing process.

· Lab equipment if used directly to test the tangible personal property being produced.

· Examples of Personal Property that are NOT ELIGIBLE for abatements include:

· Computer equipment used for administration, bookkeeping, payroll, inventory control and etc.

· Furniture and fixtures.

· Maintenance equipment or general maintenance performed to repair or maintain production equipment.

· Licensed transportation vehicles.

· Warehouse racks, shelving, or other equipment used for storage of materials or finished goods.

 

· Tax abatements may be made available to companies that redevelop or rehabilitate real property.

· Redevelopment is defined as new construction.

· Rehabilitation is defined as the remodeling, repair, betterment, enlargement or extension of a building or structure.

· To qualify for a real property tax abatement, only a structure or building may qualify for an abatement. Land is NOT included.

· Two examples of Real Property that are NOT ELIGIBLE for abatements include: