Indiana would reserve $50 million in tax credits for smaller communities

Indiana's economic development agency would set aside $50 million of its $300 million yearly tax credit limit for eligible community projects. Projects may be in the downtown of a city or town under 30,000 people, in a city or town downtown in a county under 75,000 people, or in a community center outside a city or town in such a county. Projects must preserve historic property or redevelop or repair property, with budgets of at least $15 million. Each credit certification is subject to budget committee review. The $50 million set-aside would take effect July 1, 2026; the section is set to expire December 31, 2032.

Businesses could receive credits worth 20% of project costs, while eligible nonprofits could receive credits worth 30%. The credits apply to eligible preservation or redevelopment projects in smaller community centers with budgets of at least $15 million. A nonprofit must be tax exempt, work to revive its community, and be led mainly by people from that community. The agency generally must approve spending before it occurs for that spending to count toward the project investment. The proposed credit rules would take effect July 1, 2026.

Eligible community nonprofits could count certain property costs paid before approval toward their project investment. This covers costs to buy, hold, or prepare property for eligible projects in smaller communities with budgets of at least $15 million. The nonprofit must have paid mainly to support future redevelopment and gained control of the site for a locally supported effort. The agency must find that counting the costs serves the public interest and supports early redevelopment. The costs may predate approval of the first application or certification. If included, they are treated as approved when paid.

Eligible initiative projects would be exempt from repayment requirements set by law or state agencies. This covers initiative projects in eligible smaller communities with budgets of at least $15 million. The projects must preserve historic property or redevelop or repair property. The proposed section would take effect July 1, 2026.