Council approves new tax abatement guidelines
|Kerry Craig | News-Telegram Assistant Editor|
January 9, 2004 -- Approval was given by Sulphur Springs City Council members Tuesday evening to a request from Sulphur Springs-Hopkins County Economic Development Corporation for a change in the tax abatement incentives offered to prospective new industry and commercial development.
The abatement of property taxes for a specific number of years is offered as an incentive to new industries or commercial interests to create jobs and invest in the community.
The new plan could reward companies that make bigger investments or create more jobs in the community with greater tax breaks.
EDC Executive Vice President Randy Thomas told council members the minimum required investment for the tax abatement would rise from $250,000 to $500,000 , while the minimum number of full-time jobs created would increase from 10 to 15. At that level, companies could apply for tax abatements of 100 percent for five years.
At the highest level, a company investing $10 million or creating 250 new full-time jobs could apply for a 100 percent tax abatement for 10 years.
The guidelines do not guarantee any company would be granted a tax abatement at any level; applications would be considered by the EDC on a case-by-case basis before making a recommendation.
Councilman Chris Brown asked Thomas if companies needed the proposed new abatement schedule.
"It looks good on paper, if nothing else," Thomas said. "And it gives a good impression, too."
Thomas told the council that many comparable communities already have adopted the new abatement schedule and have it listed on their websites, something he plans to add to the EDC's website.
Not having the new abatement plan in effect and listed on the Internet has caused Sulphur Springs to be eliminated from consideration by several companies, according to Thomas and Council member Lydia Bryant, who also sits on the EDC board of directors.
Councilman Larry Powers then asked Thomas if the proposed abatement limits were only an advertising effort. He was told it was, as well as an incentive for potential businesses to take a closer look at Sulphur Springs.
"The whole idea about tax abatements or any type of incentive is to bring in investment that will counter-balance the incentives that are released," Thomas explained. "Hopefully, we will be able to attract more business into the community and be more competitive."
Thomas added the EDC is looking toward becoming more competitive and to level the playing field with other cities in the state trying to lure new businesses.
Approval was given to the change in the abatement incentive program, with Powers casting the lone dissenting vote.