About 4.2 percent of gross assessed property value in Indiana-roughly $16 billion worth-is not taxed because it is in a tax-increment-financing district or covered by a tax abatement, both of which are intended to encourage economic development.
The figures, which amount to $400 million of property taxes, were discussed yesterday by the Commission on State Tax and Financing Policy, according to The Journal Gazette of Fort Wayne.
The commission will forward to the General Assembly possibilities it finds for cutting property taxes as well as for simplifying the tax and making it apply more equally.
Abatements allow companies to pay no taxes on new land, equipment and other investments, then ramp up taxes gradually. Tax-increment-financing districts earmark property taxes from new investments to repay bonds used to finance infrastructure.
Both incentives are necessary to spur companies to invest and create jobs, some local officials told the commission.