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T2 Systems loses tax break over technicality

November 7, 2013

Indianapolis software firm T2 Systems Inc. has lost a tax break from the city because it moved its office last year.

The Indianapolis Metropolitan Development Commission in 2007 agreed to abate personal property taxes for T2 for eight years. The deal, valued at about $18,000 in savings for T2, was intended to anchor the parking software developer to 7835 Woodland Drive in northwest Indianapolis. The company promised to invest $2.1 million and hire 115 people.

The investment and hiring appear to be on track so far, development officials said. About 135 people work for T2, which has hired 44 people this year, according to the company.

But the firm moved to a new office at 8900 Keystone Crossing in February 2012. Because it was in another tax district, the move nullified the abatement agreement.

The commission voted to terminate the tax abatment at its meeting on Wednesday afternoon.

Even though T2 remained in Indianapolis and continued to invest in new equipment and employees, the move took tax revenue to a different township, said Ryan Hunt, senior project manager for the Department of Metropolitan Development. That affects certain local government agencies, such as schools.

The initial agreement to abate T2’s taxes was an economic development effort for a specific area, Hunt said. Regulations dictate that those tax breaks needed to remain at the Woodland address.

T2 moved to Keystone Crossing because it needed more room to put its new employees. It also changed its business model, which drove the move, said Irena Goloschokin, T2’s executive vice president of strategy and products.

The company went from being just a software provider to also producing parking garage equipment, such as ticket dispensers. The company needed a freight elevator and a loading dock to move the bulky machinery, Goloschokin said.

Losing the tax abatement won’t affect T2’s expansion plans, she said.

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