Indiana's Latest Incentive Policy Change Is Good News for Growing Businesses

When companies evaluate where to grow, incentives rarely make a bad project good—but they often make a good project possible.

Across the country, we continue to see states compete aggressively for new investment, manufacturing, headquarters operations, technology expansion, and high-quality jobs. The most successful economic development programs strike a careful balance: encouraging meaningful private investment while remaining attainable for the businesses driving economic growth.

Indiana recently took an important step toward strengthening that balance.

A Practical Change That Opens the Door for More Projects

The Indiana Economic Development Corporation (IEDC) recently updated one of its key qualification standards for discretionary incentive programs.

Previously, many projects requesting state incentives were expected to meet a wage threshold of 125% of the county average wage.

While well-intentioned, that requirement created an unintended challenge.

In counties with significant concentrations of manufacturing, headquarters operations, and other high-paying industries, including Marion County, average wages were exceptionally high. For many growing companies, the resulting wage threshold often exceeded $40-$45 per hour, placing otherwise strong expansion projects outside incentive eligibility.

The revised policy now generally evaluates projects against the county’s average wage, creating a more practical benchmark while continuing to encourage quality job creation throughout Indiana.

The result is simple: More Indiana businesses may now qualify for incentives that previously weren’t available.

Why This Matters

Companies don’t make expansion decisions based on incentives alone.

They evaluate workforce availability, logistics, operating costs, utility infrastructure, taxes, supply chains, customer access, and long-term business strategy. Incentives represent one component of a much larger investment decision.

However, when projects involve millions of dollars in capital investment and dozens or hundreds of new employees, incentives can meaningfully improve project economics.

For qualifying projects, programs such as the Indiana EDGE Tax Credit may provide an estimated $5,000 to $10,000 per qualifying net new employee, while comprehensive state and local incentive packages often offset 5% to 15% of total project investments..

Those savings can influence:

• Return on investment
• Capital allocation decisions
• Project timing
• Hiring strategies
• Site selection outcomes

Perhaps most importantly, many discretionary incentives require companies to apply before hiring begins or capital investments are made. Once a project is underway, many opportunities disappear.

Industries That Should Take Another Look

This policy change is particularly meaningful for companies operating in industries that remain strategic priorities for Indiana’s economic development efforts, including:

• Aerospace
• Defense
• Automotive
• Biosciences
• Medical manufacturing
• Corporate headquarters
• Research and development
• Technology

Businesses considering facility expansions, new manufacturing operations, headquarters investments, equipment purchases, or workforce growth should revisit whether their projects may now qualify for state incentives.

Some projects that previously fell short may now meet eligibility requirements.

Good Policy Responds to the Market

One of the strengths of Indiana’s economic development community has always been its willingness to engage with businesses and advisors who work directly with expanding companies.

At McGuire Sponsel, we have the privilege of working alongside state and local economic development organizations across the country. Because we represent growing companies evaluating real expansion opportunities every day, we also see firsthand how incentive policies influence investment decisions.

Over the past several years, our team has shared market data and practical feedback with Indiana economic development leaders regarding how wage thresholds and other program requirements affected project competitiveness.

We’re encouraged to see policymakers respond by making thoughtful adjustments that better reflect today’s business environment while maintaining Indiana’s commitment to attracting quality jobs and long-term investment.

That type of responsiveness benefits everyone—from businesses and communities to the state’s broader economy.

A Real-World Example

Recently, McGuire Sponsel advised an international clean-energy manufacturer evaluating locations for its first U.S. manufacturing facility.

The company was considering multiple states as it planned significant capital investment, advanced manufacturing operations, and long-term job creation.

Working closely with state and local economic development partners, our team helped identify and structure a comprehensive incentive package that strengthened Indiana’s competitiveness during the site selection process.

The project ultimately resulted in:

• A new U.S. manufacturing operation located in Central Indiana
• Significant private capital investment
• Creation of high-quality manufacturing jobs
• Long-term economic impact for the surrounding community
• More than $1M in incentives secured for this project

While every project is unique, the lesson is consistent: When evaluated early, incentives become another strategic tool that helps companies make informed investment decisions.

The Best Time to Explore Incentives Is Before Decisions Are Finalized

One of the most common misconceptions we encounter is that incentives can be pursued after a company has already committed to a project.

In reality, many of the most valuable discretionary programs, including Indiana EDGE, must be discussed before key business decisions are finalized.

That means conversations should begin when companies are asking questions such as:

• Should we expand?
• Where should we locate?
• How many employees will we hire?
• What capital investments are we planning?
• When should the project begin?

Waiting until construction starts—or employees have already been hired—can significantly reduce available opportunities.

Looking Ahead

Indiana has long earned a reputation as one of the country’s most business-friendly states.

This recent policy adjustment reinforces that reputation by making incentive programs more accessible while continuing to encourage meaningful private investment and the creation of quality jobs.

For businesses, the message is encouraging: If you’ve previously evaluated an Indiana expansion, or are beginning to consider one now, it may be worth taking another look.

The opportunity landscape may have changed.

At McGuire Sponsel, our Location Advisory team continues to work alongside businesses, CPA firms, commercial real estate brokers, and economic development organizations to identify opportunities that strengthen project economics and help companies invest with confidence.

Sometimes, the most valuable incentive isn’t simply the dollars available.

It’s knowing about the opportunity before making the decision.

Knowing the impact this could have on your clients, we’re offering a complimentary 30-minute Indiana Growth & Incentive Opportunity Review for businesses planning to hire, expand, relocate, or make capital investments. Schedule time to get started.