Wednesday, April 30, 2014

First Use of Local Business Tax Incentives

Local government promotes incentive to generate employment opportunities

Monday, April 28, 2014 was a significant day in the local economic development world. The first of what officials hope will be a long list of Mesa County businesses applied to the County Commissioners for a tax incentive. Local economic development professionals believe this incentive will generate employment opportunities right here in Mesa County.

The incentive has been available for eighteen months. Originally introduced following the passage of legislation in 2012 (C.R.S. 30-22-123) this allows Colorado counties to reimburse a company up to 100 percent of the county's share of business personal property tax revenue for up to a decade, if the business invests at least $1 million into moving into or expanding existing operations in the county.

On Monday, agreement was reached between Mesa County and Reynolds Polymer Technology, Inc. concerning Personal Property Tax Incentive Payments. Reynolds Polymer applied for the tax incentive to promote economic development activities within Mesa County and generate employment opportunities for Mesa County Residents.

The tax incentive calculation is a bit tricky to compute. It is based on mil levy and purchase price of equipment. In the case of Reynolds Polymer, the incentive will not be received until 2016, and when it is, will total $6,249.00. Incentive values for the years following 2016 will be less due to depreciation.

“A business owner considers all the cost of doing business in an area. Taxes are a part of that equation. A $6,249 incentive might not seem like a lot. However, it does make a difference. That money can be reinvested in the business, in the local labor force,” explains Diane Schwenke, Grand Junction Area Chamber of Commerce.

“Local government does not always have the opportunity to make a huge impact. Our role is to create a collaborative environment to help businesses grow,” says Mesa County Commissioner, Rose Pugliese. “In 2012, Mesa County government adopted a unique business personal property tax credit program, which is just now being used by the first Mesa County business. We are really thrilled to be able to encourage businesses to invest in our county, and to let the businesses already invested here know we appreciate and support them so that they stay, and expand operations,” states Steve Acquafresca, Mesa County Commissioner. John Justman, Chairman of the Board of Commissioners, “The State has talked about personal property tax relief for eight to ten years. I feel really good that Mesa County has a program in place for local businesses to benefit. This is good for business and good for Mesa County.”

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