Tax Abatement is not paying Property Taxes.
Permission not to pay Property Taxes is granted from the City Council to certain (all who ask for it) businesses to excuse them from paying their taxes.
When permission is granted from the City Council for a 10-year abatement, a business does not pay any Real and/or Personal Property taxes the first year. Personal Property tax abatement is allowed on manufacturing equipment and also on research and development equipment, if it is new to the State of Indiana.
Their taxes are then gradually phased back in, using a yearly percentage for those businesses, so they end up paying their full taxes about 10 years later (depending on how long an abatement the City Council grants)
Businesses fill out CF-1 forms to track the progress of their business. The CF-1 forms are used to see if the businesses meet the goals of their expansion and number of new employees hired, along with the wages paid. These forms are to be checked and questioned by the City Council, as to the accuracy and the goals achieved.
Tax Abatements put a burden on Taxpayers because Property Tax Money is lost for the designated years of the abatements.
Similar to the TIF's services are affected.
Money that could have been used for Police and Fire Departments and other services is not there. The need for extra Police and Fire Protection is increased, but new additional money is not there, until the abatement is gradually removed.
Should Tax Abatements be considered Corporate Welfare?
How many businesses really need those abatement's?
What next?
Will Deputy Mayor Carl Malysz try to give Tax Abatements on vacant buildings downtown?
Will any of his deals be legal, since his position of Deputy Mayor was not created by Indiana State Law?
IC 36-4-9-7 : Ordinance establishing position of deputy mayor.
Sec. 7 : The city legislative body by ordinance establish the position of deputy mayor.
Source: State Board of Accounts and Indiana Association of Cities and Towns
