Q: What is an enterprise Zone?
A: An enterprise Zone is a defined geographic area within a city that has been recognized by the State of Indiana as having high poverty and/or unemployment rates and physical blight; and has been awarded certain tax benefits for businesses and residents located within that area in order spur economic and community development over a period of 20 years. State Statute
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Q: What is an urban enterprise association?
A: The local urban enterprise association is the private, non-profit entity that is established to administer the enterprise Zone tax incentives, act as a liaison between the businesses and the local and state government regarding those tax incentives, and to manage the funds generated by the recapture of business Zone tax savings. State Statute
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Q: How is the urban enterprise association funded?
A: An urban enterprise association is funded by the state-mandated reinvestment of a percentage of each business’ tax savings claimed through Zone tax incentives. The city council sets the percentage a business is required to invest back into the community through their local urban enterprise association. In Marion, that percentage is 35%.
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Q: What kinds of activities and services is an urban enterprise association allowed to offer with those business reinvestment dollars?
A: Indiana state statute allows Zone-business reinvestment dollars to be used according to each community’s unique set of assets and needs, so long as those services provided operate within the realm of economic or community development and increased employment opportunities of enterprise Zone residents. Such activities include, but are not limited to:  aiding in the employment of Zone residents, improving the physical environment, encouraging the turnover or retention of capital in the Zone, and modification of a Zone boundary.
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Q: Who decides how the funds paid to a local urban enterprise association are spent?
A: Ten out of the twelve voting board appointments to a local urban enterprise association are made by the mayor and the city council. One appointment is made by the governor. One non-voting member is appointed by the Indiana Economic Development Council. Through their board appointments, these government entities can and often do direct local urban enterprise association dollars to support current economic and community development activities in that city. Meet the Board
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Q: Once a Zone business pays their local urban enterprise association the percentage do they just “pocket” the remaining tax savings (In Marion, 65%)?
A: Yes and no. Each business claiming a Zone tax incentive is required by Indiana statute to reinvest 100% of their tax savings. A percentage of that tax savings is “paid out” to the local urban enterprise association. With the exception of one percent being paid to the state if tax savings exceed $1,000, state statute requires the remaining tax savings be reinvested back into that business; however state statute also defines what types of reinvestments can be made with those dollars. In Marion, 97% of Zone business reinvestments have gone into taxable machinery, equipment and property improvement or expansion. The remaining has been used for inventory, increases in wages to Zone residents, security, or other eligible investments.
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Q: Wasn’t the enterprise Zone eliminated when Grant County abolished the inventory tax in 2003?
A: No. The enterprise Zone is a geographic area designated to receive certain tax benefits while generating a locally-directed funding stream to serve the needs of that community. While the inventory tax abatement was the most widely utilized tax benefit by Zone businesses and the Marion Urban Enterprise Association’s main funding stream, there remain other Zone tax incentives for Zone businesses and residents. Learn more
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Q: Has the Marion Urban Enterprise Association continued to offer services in since the elimination of the inventory tax?
A: Yes. While some high-cost programs have been cut, others have been adapted in order to offer similar benefit at little to no cost. Additionally, new programs and partnerships have been developed that have attracted grant dollars into the community. Business Assistance | Employment Assistance
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Q: Did the enterprise Zone program receive new benefits through legislative action in 2005?
A: Yes! A Zone Investment Deduction will be available to Zone businesses in 2006, which provides a local tax deduction for up to ten years on the increase in assessed value resulting from a qualified investment made into that Zone business. (link to sheet)
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Q: What happens if a business claims a Zone tax incentive and fails to meet the reinvestment requirements?
A: The State of Indiana and local urban enterprise associations monitor the state-mandated reinvestment requirements of Zone businesses claiming tax benefits. If a business fails to meet those performance requirements, the Marion Urban Enterprise Association would notify the local city council. At that time, the council may act to revoke that business’ eligibility for Zone benefits; and the State of Indiana is notified. A business may also lose enterprise Zone status by failing to pay their 1% fee to the State or by failing to meet reporting requirements. A business may appeal through their local urban enterprise association to the State for reinstatement, at which time the Indiana Economic Development Council would review their appeal and make a determination.
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Q: Can any business in the Zone claim Zone tax benefits?
A: No. Businesses defined by Indiana statute as “bars” are not eligible for enterprise Zone tax benefits. Any other business, as long as it continues to meet performance and filing requirements, may claim Zone tax benefits. (link to code)
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Q: What level of influence does local government have over how recaptured local Zone dollars are spent?
A: The level of influence local government has on the use of local enterprise Zone funds lies within the those ten out of eleven board appointments appointed by the Mayor and City Council and one board appointment made by the Governor.
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Q: Where is Marion’s Enterprise Zone and am I in it?
A: Marion’s Enterprise Zone extends north to Highland Avenue, south to 38th Street, east to Pennsylvania Avenue and west to General Motors. Because the boundaries line runs along streets, rivers and railroad tracks, the best way to determine if your business or residence is in the enterprise Zone is to view the enterprise Zone street directory or map or call our office with the property street address.
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Q: Can the Enterprise Zone boundaries be expanded to include my business or residence?
A: It is possible to modify the boundaries of an enterprise Zone; however, an enterprise Zone boundary cannot be modified for the sole inclusion or benefit of one business or individual. Indiana requires that several levels of strict threshold criteria be fulfilled before considering a city for a modification of their enterprise Zone boundaries. In addition, it must be demonstrated that the modification would significantly improve or maintain the economic health of that area. Indiana statute allows two boundary modifications within the twenty-year life span of an enterprise Zone; and Marion was awarded an expansion of the Marion enterprise Zone in 2001.
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