Keys to Hoosier tax haven

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Experts explain perks of moving to Indiana, benefits that support company growth

Doing business in one of the most tax friendly terrains in the country still requires a map — in the helpful hands of a financial planner.

“Indiana has historically offered a strong portfolio of economic development incentives,” said Jenny Walters, director of site selection and business incentives for Sikich, a professional services firm based in Chicago.

Indiana ranked 10th in the country for business favorable tax policy, according to the Tax Foundation’s 2026 State Tax Competitiveness Index.

“But, tax considerations and incentives need to be evaluated before signing a lease, purchasing property or equipment or making a public announcement,” Walters said.

Sikich supported rScan’s move to a larger space in the former South Bend Chocolate Co.’s production facility. The South Bend startup resells returned merchandise.

Ryan Marks, president of Alsip, Illinois’ Uesco Cranes, began deliberating a cross border leap 10 years ago. He lives in Indiana and knows the tax advantages would be worth the move.

“We had looked at building in Crete, Illinois, but the incentives Illinois was offering us were a pittance,” Marks said.

In July, 105-year-old Uesco broke ground on a new $25 million crane manufacturing facility in Hammond.

Kate Leichty, lead tax partner at South Bend-based Kruggel Lawton CPAs, said tax benefits are a big reason companies move to the Region.

“Business owners are very incentivized by big deductions, credits and write offs,” Leichty said. “That keeps more dollars in their pockets, helping cash flow and reducing the cost of borrowing when they reinvest in their company.”

Tax abatements and payroll tax credits help too.

“You spell out to the local government your plans to increase head count or investment spending and, if you meet those, you don’t pay property taxes, for as long as 10 years,” Leichty said.

Across state line

Marks had been scouting a new location for the fourth-generation family-owned manufacturer of custom engineered overhead bridge cranes.

“Ryan had looked at Schererville and Merrillville and all over Northwest Indiana trying to find the right site and the right package,” said Jack Ferrino, owner and principal of 219 Development Services of Hammond.

“He couldn’t always make the economics work on a lot of these sites. Then, about a year and a half ago, he heard about our name.”

Ferrino, who has previously developed many such enterprises, began discussions with Marks months ago about launching a new project in the heavily industrial but underused north Hammond vicinity.

“We told Ryan that Uesco would be a great fit,” Ferrino said. “We met with Hammond and everyone got super excited.”

Ferrino said they zeroed in on the 5000 block of the Calumet Street as an ideal logistics node for Uesco’s headquarters and production facility.

Uesco typically transports customers’ cranes, dozens of feet in length, on interstate highways.

“At this site, you’ve got I-90, I-94 and even Calumet Avenue is big enough for our trucks to turn on,” Marks said.

Ferrino recalls the day Ryan finally said, “You’ve got me sold on Hammond.”

“We went to the city and said we need some help with taxes,” Ferrino said.

Marks said Hammond is giving Uesco a 10-year 100-percent tax abatement.

“This was in a deeply economically distressed census tract, so it qualified for New Market Tax Credits given to attract investment in underprivileged and underserved communities,” Ferrino said.

The process was intense.

“We had to check all the right boxes to make sure we were in compliance,” Ferrino said. “It generates stacks of paperwork taller than me.”

Uesco also met with the state to obtain Economic Development for a Growing Economy payroll credits generated by the creation of Uesco’s new Indiana jobs.

“The EDGE credit is a really huge benefit for companies that increase their (Hoosier) payrolls,” Leichty said. “We have a lot of clients who own pass-through entities, partnerships or S corporations, who find it really worthwhile to do the legwork showing they met their goal of hiring more people to receive those credits — dollar-for-dollar reductions on their state tax returns.

Ferrino said it took about eight months to gain those approvals for Uesco. They also met with residents to make sure they were on board.

“(We wanted to) make sure there was all the right buy-in, so we weren’t disturbing neighbors and winning over everyone that we were doing the right thing for the community by bringing in these 100 jobs with local hiring measures,” Ferrino said.

Marks said the “long and laborious process” wouldn’t have been completed without his team of lawyers, Ferrino and Hammond Mayor Thomas McDermott Jr., among others.

Now work has begun on the 70,000-square-foot manufacturing, distribution and headquarters.

Other successes for Indiana include:

Meat by Linz, a global meat purveyor and ranching concern, moving from Calumet City, Illinois, to Hammond
Hoist Liftruck from Bedford Park, Illinois, to East Chicago
Outstanding Tradeshow Exhibit Services from Romeoville, Illinois, to North Judson

Competitive market

Heather Ennis, CEO and president of the Northwest Indiana Forum, a regional economic development organization, said finding the right location, labor force and knowing Indiana’s overall tax structure are the fundamentals of attracting prospective business investments.

“The incentives are the frosting on the cake,” she said. “They are never going to make a bad site a good site.”

However, she added Indiana isn’t afraid to get into a bidding war with rival states.

“It’s a very competitive market,” she said, “and without incentives, companies might stay put or invest somewhere else offering incentives.”

Ennis cautions there is a limit to what Indiana can offer.

“It’s good to keep these things in balance,” Ennis said. “Some taxes are good to keep to fund needed community services, like fire and police. We don’t want it to be a race to the bottom.”

Walters of Sikich said their tax advisers identify whether a company’s project is in competition for incentives, negotiate the terms with economic development officials and then hold everyone to their commitments.

“An incentive only has value if a company can qualify for it, earn it and ultimately receive it,” Walters said. “The important question is not simply whether one tax went down. It is the overall cost of doing business.”

Other perks

Nicole Fox, a policy analyst for the Tax Foundation, a Washington, D.C.-based research center, said Indiana keeps competitive through a flat individual income tax rate that is one of the lowest in the Midwest.

The state also offers a ceiling on business real estate property tax collections. The newest tax perk is raising its exemption from $80,000 to $2 million for business tangible personal property — any equipment ranging from industrial machinery to a dentist’s X-ray unit.

“On the federal side, last year, there was reinstatement of 100% bonus depreciation on business personal property,” Leichty said. “Spend $2 million on a new machine press and get a $2 million deduction on your federal return that you can take up front the first year. We have a lot of clients very excited about that coming back into play.”

The federal Qualified Business Income deduction, made permanent in 2025, is huge for businesses big and small, said Eileen Patterson, tax construction director for CliftonLarsonAllen, a nationwide CPA firm with an office in Schererville.

“Taking a 20 percent deduction off their income means money they can invest in their business or just keep it for themselves,” Patterson said. “Owners can count on them to both preserve their wealth and finance their business’ capital expenditures.

She said CLA tax consultants also help business owners align philanthropic objectives with tax-efficient planning strategies, such as whether gifts should be made by the owner personally, through the business, a donor-advised fund or a private foundation.

Not just tax preparers

Taking advantage of Indiana’s tax benefits requires more than a tax adviser.

“We recommend a team approach among us, an investment planner and an attorney, to review large estate planning decisions about what share of a business sale they want each heir to receive to reduce the heirs’ tax burdens,” said Tom Newman, a CPA with Swartz, Retson & Co. of Merrillville.

His firm also develops tax projections for clients.

“Some are good at running calculations themselves for the first three quarters of the year, but rely on us to prepare their final estimate, encompass tax law changes and discuss business planning moves they should make before year-end,” he said.

Newman said accountants aren’t just tax preparers.

“Our clients rely on us to provide service and knowledge beyond putting numbers on a tax form,” Newman said. “We send out bi-weekly newsletters on the newest tax credits available and emails to select clients who would be most impacted by the change.”

Paul Applegate, founder of Michigan City-based Applegate & Co., said part of the tax preparation process is planning for the next year.

“When we prepare a tax return, we recommend applicable safe harbor estimated tax payments for the next year in order to avoid any underpayment penalties,” Applegate said.

Marisa Smoljan, head of the tax department at Munster’s McMahon & Associates, said understanding a client’s business also is important.

“Having a good handle on the client’s income and then projecting their tax liability on a quarterly basis, is really important if their income fluctuates,” she said.

“Some of our businesses have been really thriving lately, but with that, comes increased taxes. We try to prepare them for April 15.”

Applegate said all businesses need an accountant. He said one of his clients, an ophthalmologist, initially hesitated giving up filling out his S-corporation and his personal tax returns.

Applegate told his eye care client, “Doc, you doing your own tax return would be like me trying to do cataract surgery.”

Once clients are on board, Smoljan said the work has only begun.

“The most important part is keeping in touch with clients throughout the year and knowing their business and being informed of their choices before they make a final decision,” Smoljan said. “Because after the year ends, it’s just too late.” •

Read more stories from the current issue of Northwest Indiana Business Magazine.

Bill Dolan
William Patrick “Bill” Dolan was born and raised in New Albany, where the attended and graduated from New Albany High School in 1967. He attended Indiana University Southeast in Jeffersonville and graduated at Indiana University Bloomington in 1972 with a bachelor’s degree in journalism. He was a staff writer for The Post-Tribune from 1972 to 1997, covering feature news, local government and Lake County criminal courts in Crown Point. He was a staff writer from 1997 until his retirement in 2019 at The Times of Northwest Indiana, covering Crown Point schools, U.S. District Court in Hammond and Lake County government, as well as feature and business writing. He has made his home in Northwest Indiana since 1972, with his wife, Mary Sue (Skees) Dolan, and their children Marissa (Dolan) Gale and Sean Dolan.
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