Salem Urban Enterprise Zone

Annual Letter to Existing Salem Urban Enterprise Zone Business Owners, Executives or Managers:

The three tax credits that were available to businesses this past year were the Employment Expense Credit, Enterprise Zone Investment Deduction and Loan Interest Credit. The Employment Expense Credit was available to all zone businesses that had zone employees. The Loan Interest Credit was available to those businesses within the zone, lending money to zone businesses. The Enterprise Zone Investment Credit is available to individuals purchasing an ownership interest in a business in the zone. I certainly hope you took advantage of these credits. Many zone resident employees were allowed a deduction from their personal Indiana state tax return for last year. Those who did not take advantage of these credits are encouraged to discuss the potential benefits with your tax advisor and possibly file an amended return.

Salem Urban Enterprise Zone was established effective January 1, 2003 and is established for a 10 year period ending December 31, 2012 unless an extensions are granted. An extension was granted again in December 2023 to extend the term of the Salem Urban Enterprise Zone to December 2028.

For those businesses who took advantage of available tax credits, enclosed is form EZB-R which is required to be completed and submitted by June 1 of each year. The instructions for completing the form are on the back. Part II of the form details the tax savings that your business received. On line 17 is the Total Tax Savings (does not include savings that your employees received with form IT-40QEC).

If your business tax savings totaled more than $1,000, you will need to remit 1% of your total tax savings (enter amount in line 18) to Indiana Economic Development Corporation. Even if your tax savings was not more than $1,000, this form MUST STILL BE FILED. The original EZB-R form and applicable Registration Fee (if any) are to be mailed to:

Indiana Economic Development Corporation
Indiana Enterprise Zone Program
One North Capitol, Suite 700
Indianapolis, IN 46204-2288

On line 19, enter the amount of Financial Compliance to the Salem Urban Enterprise Zone Association. This is calculated at 35% times the Total Tax Savings on line 17. The taxpayer must also pay a percentage (1%) Registration fee to the State Enterprise Zone Board if the zone benefits claimed exceed $1,000 (example: business saves $5,000; SUEZ participation fee is $1,750; state registration fee is $50)

This participation fee and a copy of the form EZB-R are to be mailed no later than June 1 to:

Salem Urban Enterprise Zone Association
C/O First Savings Bank
1336 South Jackson Street
Salem, IN 47167

A business must remain open and operating as a zone business for twelve (12) months of the assessment year for which the incentive is claimed.

The other 64% of your tax savings are required to have been reinvested in YOUR company either through increased zone wages or increased property or plant equipment (which most of you probably did anyway whether you had a tax credit or not). Examples include additional capital expenditures for buildings,machinery or equipment; additional inventory investment; or increase in total compensation for all zone resident employees. This compliance is shown in part III lines 20-21. Be sure to keep a copy for your records.

Below are some examples to help you understand the fee per tax savings:

Example 1: Tax savings of $500

Total Tax Savings (from Line 17) $500.00  
Registration fee to State Enterprise Zone Board (Line 18) 0.00 Must still file original EZB-R
Participation fee to Salem Urban Enterprise Zone Association 175.00 Send check with copy of EZB-R

Example 2: Tax savings of $2,000

Total Tax Savings (from Line 17) $2000.00  
Registration fee to State Enterprise Zone Board (Line 18) 20.00 Send check with original EZB-R
Participation fee to Salem Urban Enterprise Zone Association 700.00 Send check with copy of for EZB-R

Urban Enterprise Zone Map

Salem Urban Enterprise Zone

For Urban Enterprise Association membership forms please contact This email address is being protected from spambots. You need JavaScript enabled to view it. or call 812.883.8803.




Tax Abatements

Washington County Government uses tax abatement as a tool for expanding our local economy.  Tax abatement encourages new investment in our community and helps maintain and increase employment in the community. Tax abatement is also a tool used to encourage redevelopment of deteriorated areas, and/or stimulate investment in specific areas of a community.  Tax abatement is one of the primary incentives available to local government to promote economic development.  

Who is eligible for tax abatement?

Property owners in Economic Revitalization Areas (ERA) are eligible for tax abatements.  To qualify, owners must make improvements to real property, install new manufacturing equipment, logistical equipment, or equipment used in research and development activities devoted directly and exclusively to experimental or laboratory research and development. Tenants in leased facilities can benefit from tax abatement on real property; too, if the property owner applies for the abatement and all other requirements are met.  Also, tenants can benefit from abatements on manufacturing equipment, logistical equipment, information technology equipment, information technology equipment and/or research and development equipment.  

How does tax abatement work?

Property taxes are phased in based on the increased assessed value that results from a new investment.  Due to tax abatement, property taxes cannot be lower than the prior year's taxes.  The phase-in period is determined by the local governmental body (designating body) within the framework of the schedules listed in the Indiana State Statute (IC 6-1.1-12.1).

  • New real estate investment options can have abatement terms from one to a maximum of ten years.
  • New manufacturing equipment, logistical equipment, informational technology equipment and/or research and development equipment options can have abatement terms from one to a maximum of ten years.

To receive the current Washington County tax abatement forms or for more information, please contact the Washington County Economic Growth Partnership office at 812-883-8803.


Small Business Development Loan Program

Purpose of the Program

The purpose of The ONE Fund program is to provide small business loans that result in long-term job creation and increased commercial development activity throughout Clark, Floyd, Jefferson, Scott, and Washington counties. Small businesses make up nearly half of U.S. private-sector employment, and they play a vital role in supporting the overall economy as they are responsible for creating nearly two-thirds of net new jobs. In general, small businesses face much greater hurdles accessing credit to support business growth. The ONE Fund will serve as a “lender of last resort” with the goal of assisting small businesses to successfully launch, scale, and ultimately become “bankable”.

The objective of The ONE Fund is to increase the capacity of the local economy by providing small businesses a financing source to help grow, maintain, and sustain their operations, which will add value to the southern Indiana region as a whole. 

Eligible Borrowers

Eligible borrowers under the RLF Program include for-profit businesses only, and can be sole proprietorships, partnerships, corporations or LLCs with proposed activities to be located within Clark,Floyd, Jefferson, Scott, and Washington counties. Businesses may be new or established. All benefiting businesses must remain in the project area for the life of the loan, or agree to an accelerated loan repayment.

Allowable Lending Activities
The allowable lending activities for The ONE Fund RLF program include:

Land costs, including engineering, legal, grading, testing, and site mapping; and related costs associated with acquisition and preparation of land;

Building costs, including real estate, engineering, architectural, and legal; and related costs associated with acquisition, construction, and rehabilitation of buildings;

Machinery and equipment costs, including delivery, installation, and engineering, architectural, legal, insurance, and related costs;

Other costs contributing directly to the value of project’s fixed assets;

Working and start-up capital;

Purchase of a business, if the need for RLF financing is sufficiently justified and documented in the loan application materials. Acceptable justification could include acquiring a business to substantially save it from imminent closure or acquiring it to expand it with increased investment.

Prohibited Lending Activities
The following activities are not eligible uses of RLF funding:

  • Acquisition of an equity position in a private business;
  • Subsidizing interest payments on an existing RLF loan;
  • Providing a loan that would result in the relocation of jobs outside of The ONE Fund’s service area;
  • Enabling a borrower to acquire an interest in a business either through the purchase of stock or through the acquisition of assets, unless sufficient justification is provided in the loan documentation. Sufficient justification may include acquiring a business to save it from imminent closure or to acquire a business to facilitate a significant expansion or increase in investment with a significant increase in jobs. The potential economic benefits must be clearly consistent with the strategic objectives of The ONE Fund;
  • Providing funds to a borrower for the purpose of investing in interest-bearing accounts, certificates of deposit, or any investment unrelated to the RLF objectives;
  • Refinancing existing debt, unless Recipient sufficiently demonstrates in the loan documentation a “sound economic justification” for the refinancing (e.g. the refinancing will
  • support additional capital investment intended to significantly increase business activities);
  • Serving as collateral to obtain credit or any other type of financing;
  • Purchase or financing of rolling stock;
  • Providing a loan to support a business deemed as “high risk” by The ONE Fund. Examples of businesses deemed “high risk” include but are not limited to: adult entertainment products or services, drug paraphernalia, gambling, harmful products, or any service or product deemed illegal within the state of Indiana.

How much can be borrowed? 

The minimum loan amount is $2,000.  The maximum loan amount is $20,000.  All loans are at the discretion of the Loan Committee.


Repayment is to be made directly to The ONE Fund. Loan payments will be made monthly on the first of the month, and will begin one full calendar month from the date of loan disbursement (e.g. if the loan closes on 9/15, the first payment will be due 11/1). Repayment is considered late if it is received after the 15th day of each month and a late fee of 10% will be assessed.

Interest Rates
Interest rates will be determined at the time the loan is given and will be fixed for the term of the loan. The interest rate for loans from this RLF will be the U.S. Prime Rate plus 2%. The Prime Rate is the prime interest rate quoted in the Wall Street Journal at the time the loan is issued.

Minimum Credit Score
Borrower is required to have a minimum credit score of 625 to be considered for a loan from this fund.

Repayment Terms
The terms for loans will be as follows:

  • Machinery and Equipment: 5 years
  • Working Capital: 2 years
  • Brick and Mortar and Real Estate: 7 years


  • Application Fee: $100
  • Administrative Fee: 2% of loan amount
  • Late Payment Fee: A late payment will be construed as any payment which is not postmarked or
  • transferred electronically by the 15th day of each month. The penalty charge will be 10% of the current
  • scheduled payment.
  • Loan Modification Fee: $200

Equity Requirements
The ONE Fund requires all borrowers to provide at least 10% equity participation. Equity may be in the form of a cash reserve, or the documented value of fixed assets specifically purchased for use in the business.

Collateral Requirements
Collateral requirements will be based on the merit of each loan request and will vary for each loan. Examples of appropriate collateral include liens on inventory, receivables and/or fixed assets. Other additional securities may be identified by the Loan Committee to ensure that all RLF loans are well collateralized.

Personal Guarantee
A personal guarantee from all owners of the business will be required to secure a loan. 

Credit Not Otherwise Available
The ONE Fund cannot be used to substitute available private capital, and potential borrowers must demonstrate that credit is not otherwise available. RLF funds will not be disbursed until written evidence to this effect has been received. This would be in the form of a bank declination letter (or equivalent documentation), or a letter indicating that the bank can only finance a portion of the money that the borrower needs.

Job Cost Ratio
The ONE Fund’s targeted job/cost ratio is one job created or retained per every $10,000 of proceeds used. For sole proprietorships, the job/cost ratio requirement may be waived through Loan Committee approval.

The following documents are required to be submitted by the loan applicant to complete the application package. Please use this checklist as a guide when assembling your application package.

Completed Loan Application

  • Full Credit Report for all business owners (must be a full credit report from Experian, Equifax or TransUnion. All individuals residing in the US are entitled to one free credit report per year)
  • Articles of Incorporation (if applicable)
  • Bank Declination Letter (or letter stating that only a portion of the needed capital can befinanced)
  • Most recent two (2) years of tax returns (if two years of business tax returns are not available,then applicant must submit the most recent two years of personal tax returns)
  • Financial Statements for the 2 most recent fiscal years, as of the most recent month-end of the current year (does not apply to start-ups)
  • Personal financial statement for all business owners
  • A Full-Scope Business Plan including granular, 3-Year Financial Projections
  • Collateral information
  • Sources of other required funds (if applicable)
  • Budget for the use of funds:
    • If funds are being used to purchase equipment or materials, a quote or bid from reputable vendors must be provided. The ONE Fund recommends at least three quotes to ensure the best value is found.
    • If funds are being used to repair equipment, an assessed value of the equipment to be repaired must be provided along with quotes for the purchase of a new piece of equipment. If the cost to repair is higher than the cost to purchase new, a written justification for the repair must be provided.
    • If funds are being used to purchase real estate, a letter from the listing agent outlining the current status of the property, annual taxes, assessment, listing price, and appraisal must be provided.
    • If funds are being used for any form of construction or renovation project, a quote or bid from reputable contractors must be provided. The ONE Fund requires three quotes to ensure the best value contractor is hired.
    • If funds are being used for working capital, a cash flow statement from the most recent 3 years must be provided. If the business is new, a 2-year pro forma financial forecast must be provided.


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