A major factor in a business’ success is its location and Indiana happens to be one of the best places in the United States for a company to call “home.” The 2015 State Business Tax Climate Index ranked Indiana 8th in the country. This ranking is also expected to improve in the future because Indiana is reducing its corporate income tax from 7 percent to 4.9 percent by 2021 along with moderate cuts being made to individual income tax.
And our city is getting recognition, too! Fort Wayne ranked 6th on BusinessReview USA’s 2015 “Top 10 Places To Do Business” list. The city was complimented for its quality of life, low cost of living and second lowest property tax rates in the Midwest.
So what is it that makes our area such a great place for doing business? Richard E. Fox and John C. Barce, partners at Barrett McNagny LLP, gave us their thoughts on our state of business.
Are there any common issues businesses encounter with state/city law?
The state, county and city regulatory landscape typically involves:
There are others, but nearly every business will encounter or need to ensure it is complying with government regulation in these areas.
Do you have a resolution for these common issues?
It’s important to understand why there are regulations in the first place—not all government intervention is necessarily a problem. Certain agencies are there to enforce state and federal statutes that protect employees against discrimination, fair employment practices and due process in the workplace. Similarly, every level of government is going to require tax revenues in order to function.
Indiana is among the strongest states in the country because it is fiscally sound and its leadership recognizes the state’s vitality is tied to current economic development, providing good-paying jobs and safe communities. Indiana is years into strategic initiatives, while other states are either not addressing these areas at all, only addressing one or two of them, or are just getting started.
Do businesses have access to partners in government, private industry, and workforce development to get data or assistance they need swiftly?
There are a number of governmental and quasi-governmental entities that offer businesses support and expertise. At the state level, the Indiana Economic Development Corporation is the state’s lead economic development agency, whose mission it is to grow and retain businesses in Indiana and to attract new business to the state. In addition, the Indiana Small Business Development Center offers entrepreneurs expert guidance and a network of resources including one-on-one consulting, strategic planning, market research and other services.
There are also local and regional economic development organizations such as Greater Fort Wayne Inc. and the Northeast Indiana Regional Partnership, which have been established to provide assistance and to pool resources to attract new business and spur economic growth in their particular regions of the state.
Delaware is the legal home of 54 percent of public companies. Its appeal is its pro-business statutes, specifically its protections when it comes to mergers and takeovers. What draws do Indiana business statutes have for major public companies?
In the mid-1980s, in response to a series of decisions under the Delaware business corporation law in which directors of Delaware corporations became individually liable to shareholders, Indiana amended its business corporation law statute to adopt a strong, pro-director statute. The effect of this was to limit the personal liability of directors for their actions to shareholders, implement provisions that reduced the cost of litigation to directors, limit lawsuits in connection with a proposed merger or acquisition, and specify a single remedy for dissenting shareholders, which they could exercise if they disagreed with a proposed corporate transaction. For certain public companies, Indiana adopted provisions regarding acquisitions of stock that limit the acquirer’s right to exercise voting rights.
All of these changes have made Indiana a preferred state for protecting boards of directors.
Does the persistence of lucrative tax incentives signal to business owners that Indiana may be having problems drawing business to the area?
On the contrary, the availability of the various tax incentives and subsidies available to businesses in Indiana strongly suggests that Indiana is open for business and has a robust economy that can support, as well as benefit, from these incentives. There are a number of state tax credit programs available to new and expanding businesses that can make the difference as to whether a business moves, remains or expands in Indiana.
Are local and state incentives hard on the national economy?
Frankly, if these local and state incentives are good for Indiana’s economy then, a good state economy can only benefit the national economy. The better businesses are performing in Indiana, the better federal income tax revenues will be.