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2014-007 - Approve amendments to the Paris Economic Development Corporation tax abatement policy.
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2014-007 - Approve amendments to the Paris Economic Development Corporation tax abatement policy.
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CITY CLERK
CITY CLERK - Date
2/10/2014
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(Updated 2- 10 -14) <br />Paris, Texas Economic Development Corporation <br />POLICY STATEMENT <br />CRITERIA AND GUIDELINES FOR TAX ABATEMENT <br />Capital Investment, Payroll and Job Creation Criteria <br />A tax abatement may be made available to employers who are increasing new capital investment and creating jobs with respect <br />to an authorized facility located anywhere within the area served by the Taxing Jurisdictions based on the following criteria. <br />1. To be eligible for any tax abatement, there must be a minimum capital investment in the authorized facility of $1,000,000 <br />and at least ten (10) new jobs added to the new employer's labor force. <br />2. Any project with a capital investment of more than twenty -five million dollars ($25,000,000), AND accompanied by a <br />newly created minimum annual payroll of two and one -half million dollars ($2,500,000), OR creating more than two <br />hundred twenty -five (225) jobs will be individually negotiated. <br />3. As specified in state law, no abatement will be granted for more than 10 years and the total abatement shall not exceed <br />100 %. <br />4. A newly created business must be (or will be) located within an enterprise zone or a designated reinvestment zone. <br />5. The taxing jurisdictions recognize a significant difference in the valuation of real property versus personal property. <br />Because of depreciation schedules, the abatement of personal property could result in a tax exemption. For this <br />reason, the abatement schedule for personal property versus real property may be different. Each industrial account is <br />looked at and valued on an individual basis by the Lamar County Appraisal District (LOAD). The typical <br />depreciation used for industrial accounts by LCAD is as follows: <br />a. Computers — 3 year life <br />b. Furniture & Fixtures — 10 year life <br />c. Vehicles — 7 to 10 year life (depending on type) <br />d. Machinery & Equipment — 15 year life (maybe longer or shorter depending on the type) <br />6. For each abatement request the Abatement Committee will evaluate the equipment (personal property) investment and <br />useful life separate from the real estate (real property) investment to determine the length of the abatement for each. <br />7. If personal property should become obsolete and be replaced while under an abatement agreement, the replacement <br />personal property is not eligible for abatement. <br />8. The charts below provide capital investment guidelines to qualify for tax abatement and the related schedule and <br />percentage of abatement. <br />For Capital Investment ($1M minimum investment AND 10 jobs for new employers.) <br />Amount of Investment <br />Year 1 <br />Year 2 <br />Year 3 <br />Year 4 <br />Year 5 <br />Year 6 <br />Year 7 <br />$1,000,000 to $5,000,000 <br />70% <br />60% <br />50% <br />40% <br />30% <br />20% <br />10% <br />$5,000,001 to $20,000,000 <br />80% <br />70% <br />60% <br />50% <br />40% <br />30% <br />20% <br />$20,000,001 to $25,000,000 <br />90% <br />80% <br />70% <br />60% <br />50% <br />40% <br />30% <br />$25,000,001 and Above <br />For projects with capital investment above $25MAND $2.5M in new annual payroll OR <br />creating more than 225 new jobs, the term and percentage of the abatement are both <br />negotiable, but cannot exceed 10 years or 100 %. <br />
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