STATEHOUSE – A bill authored by State Rep. Sue Ellspermann (R-Ferdinand) that would allow a pilot program for rural counties to retain the state income tax of new businesses and their employees for a 5 year period up to $500,000 per year passed the House by a vote of 85-13. House Bill (HB) 1241 will now go to the Senate for further consideration.
HB 1241 would allow a rural county, one with a population of 50,000 people or less, with the approval of the Indiana Economic Development Corporation (IEDC), to designate that county as a Rural Entrepreneurship Area Development Incentives (READI) area. This would allow funds from the adjusted gross income taxes paid annually by employees working in a READI area for a new business, and the new businesses, to be transferred to the rural county for the development of new business opportunities in the rural county.
Initially, IEDC would choose one county from the proposals they receive in which to try READI areas as a pilot program.
“Supporting our entrepreneurs is vital to allowing our communities to thrive,” said Rep. Ellspermann. “My focus continues to be job creation for Indiana, especially in our rural counties.”
These funds could be used for small business services, revolving loan or venture capital funds, an incubator or business accelerator or specific incentives offered to qualifying small businesses.
Based on the 2010 population data, currently 64 counties in Indiana could qualify as READI areas if a written proposal is approved by IEDC.