Marion County Industrial Tax Abatements: 2026 Phase-Outs and AV Implications

Marion County has used industrial tax abatements aggressively for two decades. The mechanics: a phased deduction on the assessed value of a new industrial investment, on a schedule of up to 10 years for most deductions. In Marion County the abatement is approved by the Metropolitan Development Commission (MDC), not the City-County Council: IC 6-1.1-12.1-1(7)(B) makes the MDC the "designating body" in a county containing a consolidated city. The County Auditor applies the deduction to the tax duplicate once the owner files a deduction application.

In 2026, abatements approved in earlier years either reach their final schedule year or step down to a lower percentage, releasing previously-deducted AV back to the tax rolls. That released AV is worth understanding for any owner, investor, or fiscal stakeholder in Marion County.

How a Marion industrial abatement works

The mechanics under IC 6-1.1-12.1:

The MDC designates the area as an Economic Revitalization Area (ERA) after reviewing the company's statement of benefits.
Company applies with details of the planned investment: new building, new equipment, expansion of existing operations.
The MDC approves the abatement and sets its schedule, specifying the deduction percentage for each year.
Assessor calculates the regular AV, and the County Auditor applies that year's deduction percentage to the increase in AV from the project to determine taxable AV.
Company files an annual CF-1 compliance form with the County Auditor and the MDC (IC 6-1.1-12.1-5.1) confirming progress on the jobs and investment it promised. If the MDC finds the owner has not made reasonable efforts to comply, it can terminate the deduction (IC 6-1.1-12.1-5.9).

There is no single standard schedule

For statements of benefits approved after June 30, 2013, IC 6-1.1-12.1-17(b) requires the designating body to set an abatement schedule for each deduction, with a percentage for each year. Most schedules can run no more than 10 years. Enhanced schedules for new business personal property can run up to 20 years (IC 6-1.1-12.1-18), and new farm equipment or agricultural improvements are capped at 5 years. Schedules approved before July 1, 2013 stay in effect until they expire under their original terms (IC 6-1.1-12.1-17(c)).

In practice, MDC approvals vary from deal to deal in both the percentage and the term. Large recent Indiana deals show the range: the real property abatements for Amazon Web Services in St. Joseph County and Meta in Lebanon were each reported as 10 years at 50%, not a phase-down that starts at 100%. The MDC's September 2026 package for Sabey Data Centers in Decatur Township paired a 10-year real property abatement with a 15-year abatement on equipment. To know where a particular facility stands, you need the schedule in its MDC resolution: how many deduction years have been used, and what percentage applies to each remaining year.

What's rolling off in 2026

Marion industrial abatements step down in 2026 in three ways:

Final schedule years

Abatements approved in the mid-2010s on 10-year schedules are reaching or finishing their final deduction years. Once the last year passes, the full AV of the improvement is taxable.

Mid-schedule step-downs

Abatements approved more recently on declining schedules step down from one year's percentage to the next. How much AV each step releases depends on that deal's schedule. Flat-percentage schedules release nothing until the term ends.

Terminations

The MDC can terminate an abatement when an owner has not made reasonable efforts to meet its statement of benefits, typically when a facility closed or fell well below its jobs commitment. Under IC 6-1.1-12.1-5.9(c), termination removes the deduction from the next tax installment and every later one, putting the full AV on the rolls.

Warning

Abatement compliance is taken seriously. Beyond terminating the deduction going forward, the city can seek repayment of past tax savings where the abatement agreement provides for it, and IC 6-1.1-12.1-12 requires repayment where the designating body has adopted that section for the area and finds the owner obtained the deduction by intentionally giving false information about plans to keep operating. The Department of Metropolitan Development brings noncompliance cases to the MDC.

AV implications for the broader tax base

When abatements roll off, the deducted AV converts to taxable AV. Because most operating levies are limited by state levy controls (the maximum levy growth quotient under IC 6-1.1-18.5-2), not by growth in the tax base, the rolloff has a specific dynamic:

Levy growth is limited, so taxing units cannot collect more operating-levy dollars just because the base grows.
AV denominator grows as abatement AV converts.
Rate drops to spread the same levy across the larger base.

The benefit flows to all property owners in the affected taxing district, including the industrial parcel itself once its abatement fully expires. Effectively, when a major manufacturer comes off abatement, the rate for everyone in that taxing district drops modestly.

For Marion County's largest taxing districts, even meaningful industrial AV rolling on doesn't change the rate dramatically because the districts are so large. In a smaller taxing district where one major industrial facility is a large share of the base, an abatement rolloff can produce a measurable rate effect.

What it means for specific stakeholders

IPS and other school districts

Districts with heavy circuit-breaker losses, like IPS, see a modest rate-effect benefit from abatement rolloffs. Homestead parcels already at the 1% cap see little change from a lower rate, so the benefit accrues more on parcels below their caps.

The City of Indianapolis

Marginal rate relief; politically, abatement rolloffs are seen as a positive signal of investment maturing.

The industrial company

The taxpayer experience follows the schedule in the MDC resolution. On a declining schedule, taxes on the improvement climb each year as the deduction percentage falls; on a flat schedule, they jump when the term ends. Companies model this in advance; rolloffs are not surprises.

Surrounding non-abated industrial

Owners of similar industrial parcels that didn't have abatements see modest rate decline as nearby abatements roll off. For a non-abated $5M industrial parcel in the same taxing district, even a 2-cent per-$100 rate decline equals $1,000 in annual tax relief.

The "abatement gap" effect

An important sub-dynamic: while an abatement is active, the abated facility pays less tax than an identical non-abated facility nearby. This creates an abatement gap: older industrial facilities (no abatement) effectively carry more of the levy than newer abated facilities. When abatements roll off, the gap closes.

In Marion County's older industrial corridors, owners of non-abated facilities should see modest tax-rate relief as nearby abatements from the last decade reach the end of their schedules.

How to read the abatement on a parcel

Look up the parcel's assessed value with the Marion County property lookup, then check the deductions section of the tax statement and the MDC resolution for the abatement. The pieces you need:

Gross AV: what the parcel would be taxed on absent any abatement
Abatement deduction: the deducted amount in the current year, shown with the parcel's deductions on the tax statement
Net taxable AV: what actually gets multiplied by the tax rate
Schedule and deduction year: from the MDC resolution, which year of the schedule the parcel is in and what percentage applies next

If the parcel is in its last scheduled year, it is rolling off. If it has years remaining on a declining schedule, it is in active phase-down. CF-1 compliance filings, including the taxpayer's name, the property, employee counts, and assessed value estimates, are public records under IC 6-1.1-12.1-5.1(c).

What to do

If you own non-abated industrial, track which abatements in your taxing district are rolling off. Each rolloff is incremental rate relief on your bill.
If you're considering an industrial site purchase, model the abatement schedule: what year it's in, what step-downs remain, and the implicit tax escalator over the hold period.
If you operate an abated facility, make sure CF-1 compliance filings are current. Termination ends the deduction and is hard to reverse.
If you're a fiscal stakeholder (school board, City-County Council member), the MDC resolutions and annual CF-1 filings set out the schedule and compliance status of each abatement.
If you're an investor, abatement rolloffs in specific taxing districts can be a tailwind for non-abated parcels in those districts.