Bill seeks to boost Indiana tourism projects through tax rebates, special districts
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Indiana Destination Development Corp. could soon have a few new tools to incentivize tourism opportunities throughout the state.
House Bill 1223, authored by Rep. Michael Karickhoff, R-Kokomo, would provide a sales tax rebate to certain businesses and allow for the creation of tourism improvement districts.
The goal of the tax rebate portion of the bill is to incentivize new builds or expanded projects that would enhance tourism opportunities. Potential projects could include cultural or historical sites, recreational or entertainment facilities, themed restaurants or lodging.
Businesses that complete projects meeting certain requirements would be eligible for a sales tax incentive that would reimburse up to 25% of approved project costs over 10 years, according to the bill. Hotels and other lodging projects could see a rebate of up to 50% over 20 years.
A business would be required to hit certain benchmarks—such as completed construction, revenue, number of open days or visitors, depending on the project type—to obtain a rebate.
The bill would also would allow for the creation of tourism improvement districts so communities can evaluate and implement new tourism projects and activities.
Under HB 1223, a local government could establish a district that would act as a vehicle to provide bonds and/or pursue a fee for existing businesses to fund improvements, which the bill defines as the construction, acquisition or maintenance of property within the district that provides a new benefit. The town or city would also need to hire a nonprofit district management association that would provide recommendations to improve tourism appeal and carry out improvement work.
A person could petition to create such a district in their city or county, if passed. A town, city or county council, could hear and pass an ordinance supporting the district. However, the council must ensure the petition includes at least 50% of business owners in the district, and those businesses must contribute more than 50% of the revenue within the determined area.
Similar funding frameworks have been implemented to develop significant projects in other areas, such as the professional sports development area, or PSDA, proposed for downtown Indianapolis last year. Under that arrangement, some state and local tax revenue generated by new developments would be placed in a fund that could be used to pay off bonds for projects.
HB 1223 was sent to the House Government and Regulatory Reform Committee. A meeting has not yet been scheduled.