1992-06-18 Resolution 56 - Laserfiche WebLink

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Property Tax Replacement Credit Indiana Code 6-1.1-21-5 provides that each year taxpayers will receive a credit for property tax replacement, known as the "property tax replacement credit" (PTRC), in the amount of twenty percent (20%) of their tax liability for taxes as defined under IC 6-1.1-22-9 which are due and payable in May and November. of that year. The credit is applied to each installment of taxes. However, the tax liability of a taxpayer does not include the amount of any property tax owed by the taxpayer attnbutable to certain specified components of the tax levy. Among the tax levy components not receiving the PTRC are the property taxes that will be used to pay for principal and interest due on debt entered into after December 31,1983. The State Tax Board has ruled that this exclusion applies to all property taxes and incremental valuation in a tax allocation area. however, recent legislation affecting tax increment financing, under IC 36-7-1439.5(f), allows a property tax credit on incremental value to taxpayers in a tax allocation area in an amount equal to the State-paid PTRC, but such credit is not paid by the State. As a result, taxpayers receive the credit on their tax bills, and since the amount of the credit is not paid by the State, the revenues received by the allocation area are decreased by the amount of the credit. Tax Abatements The Indiana Code 6-1.1-12.1 provides a mechanism by which a governmental unit may authorize a property tax deduction for real property and for new manufacturing equipment within an economic revitalization area. The City of South Bend has chosen to use this tax abatement mechanism to encourage economic development in targeted areas. Most of the recent projects in .the Allocation Area have received tax abatements. By ordinance, the Common Council sets the standards and procedures by which petitions for tax abatements are considered by the Council and establishes eligibility criteria. Pursuant to State law, the Council may grant the tax abatement for real property for a period of (i) three, six or ten years, if the petition is filed after January 1,1986, or (ii) ten years >f filed after December 31,1978 but .before January 1,.1986. The deduction is equal to the increase in assessed value resulting from the rehabilitation or redevelopment, multiplied by the percentages prescribed in the following table. TABLE 19 Tax Abatement Deductions 3-Year 6-Year 10-Year Deduction Period Period Period 1st 100% 100% 100% 2nd 66 8S 95 3rd 33 66 80 4th 50 65 5th ~ 50 6th 17 `~ 7th ~ 8th ~ 20 ~ 10 10th S 21 ^