An Analysis of State and Local Tax Incentives in Indiana

Source: Dagney Faulk, Michael J. Hicks, Ball State University, Center for Business and Economic Research, November 2013

This study provides an evaluation of economic development incentives offered by state and local governments in Indiana. The goal is to clarify the type, scale, and effectiveness of state and local tax incentives in Indiana, and to provide recommendations for policy or administrative adjustments as warranted. We conduct this analysis in two parts. The first is a descriptive analysis of state and local tax incentives in Indiana and a brief outline of selected states with which Indiana may compete for new business investment. Here we describe the tax incentives and compare and contrast the various aspects of individual systems and incentives as a whole. In the second section, we conduct a far more detailed study of tax incentives. This section is dedicated to an empirical assessment of tax incentives and includes a detailed review of recent studies on tax incentives and new analysis using data on individual projects in Indiana from 2005 through 2010. …