Urban Enterprise Zone Association Board
An Urban Enterprise Zone is an area that encourages development, or redevelopment in parts of the city in which economic growth might not otherwise occur. Urban Enterprise Zone policies generally offer tax concessions, infrastructure incentives, and reduced regulations to attract investments and private companies into the zones. These zones are also areas where companies can locate free of certain local, state, and federal taxes and restrictions. Urban Enterprise Zones are intended to encourage development in blighted neighborhoods through tax and regulatory relief to entrepreneurs and investors who launch businesses in the area.
Registration: Businesses must first register with the State Urban Enterprise Zone Board. To register, the business must file a registration form (Form EZB-R) by May 31st of each year as well as pay a participation fee. The participation fee is a percentage of the tax benefits claimed. The fee for the New Albany Urban Enterprise Association is 48% of total zone tax savings. The business must also pay 1% to the State Urban Enterprise Zone Board if the zone tax benefits claimed exceed $1,000.
It is now required by the Indiana Economic Development Corporation that businesses file their paperwork online.
Urban Enterprise Association Manager, Tonya Fischer.
The following describes the tax incentives, which serve as recruitment tools for the EZs. Note that the Employment Expense Credit and the Loan Interest Credit are applicable to three state taxes: income tax, financial institutions tax, and insurance premiums tax. The Investment Cost Credit, however, is only applicable to the state income tax.
Investment Cost Credit: This is a state tax credit for equity investment in an EZ business. The credit is equal to a maximum of 30 percent of the price of the ownership interest purchased by the taxpayer. The allowable credit percentage, up to 30 percent, varies depending upon the type of investment, the type of business, and the number of jobs created by the investment.
Employment Expense Credit: This is a state tax credit for incremental wages paid by an EZ business to employees who are EZ residents. At least 90 percent of the employee’s services must be directly related to the EZ business, and at least 50 percent of the employee’s time must be spent working at the EZ business. The credit is equal to 10 percent of the additional wages paid to qualified employees during the year, up to $1,500 per qualified employee. Click here for EZ Schedule IT 40QEC.
Loan Interest Credit: This is a state tax credit for interest income earned by a taxpayer from a loan that directly benefits an EZ business, increases EZ property values, or is used to rehabilitate, repair, or improve an EZ residence. The credit is equal to 5 percent of the loan interest received during the year. Click here for the EZ Loan Interest Tax Credit.
Property Tax Investment Deduction: This is a new deduction enacted during the 2005 legislative session, and it became effective July 1, 2005. It is a property tax deduction for the increased value of an EZ business property due to real and personal property investment by the business. The added valuation may be deducted for up to ten years. Qualified investment at an EZ location includes: (1) purchase of a building, new manufacturing or production equipment, or new computers and related office equipment; (2) costs associated with the repair, rehabilitation, or modernization of an existing building and related improvements; (3) onsite infrastructure improvements; (4) construction of a new building; and (5) costs associated with retooling existing machinery. (Link here to the attachment above Click here for the EZ Investment Deduction Application. Click here for the the EZ-2.
Additional Forms Available
Form 103-Short-Businesss Personal Prop. Return
Form 104 – Personal Prop. Return (Must file with form 102 or 103)
Schedule EZ 1, 2, 3 Instructions and Forms
Form 102 – Farmer’s Personal Property Return
Form 103-Long – Business Personal Prop. Return
Commercial Façade Improvement Program
The New Albany Urban Enterprise Association offers grants to commercial/industrial building owners within the zone for a variety of purposes. The NAUEA’s main objectives for the grant program are visual improvements, historic preservation and structural integrity. Eligible projects include: exterior painting or cleaning, historic restoration, awnings, roofs, guttering and replacement of windows. Ineligible projects include: signage. Exterior improvements must follow style approved in downtown design plan. Click here for the Commercial Façade Improvement Grant Application.
Residential Façade Improvement Program
The New Albany Urban Enterprise Zone has added a new grant program for homeowners living within the boundaries of the enterprise zone. The purpose of the Residential Facade Grant is to provide assistance for improving the condition of homes and encouraging investment in single-family homes within the Urban Enterprise Zone. Homeowners will receive matching funding up to 50% of the total project costs. Project minimums are $500 and maximum assistance is capped at $2,500. All improvements must be consistent with the residential character of the neighborhood.
To apply for the program, please fill out the application and then mail to:
New Albany Urban Enterprise Association
ATTN: Tonya Fischer
311 Hauss Square, Room 325
New Albany, IN 47150