Marshall County Economic Development Corporation Executive Director Jerry Chavez presented a proposal for a change in tax abatement guidelines to the Plymouth City Council Monday night.
Chavez explained that the bedrock of tax abatement remains. Companies can fill out an application form to discuss what type of economic development will be occurring at the facility. Real property and personal property is evaluated for capital investment. An annual report is required as to the progress of the business.
The current plan calls for a seven-year declining payment, but it was proposed last night that it be extended to 10 years. The seven-year abatement for personal property allows for 100 percent abatement the first year, 86 percent the next year, and 71 percent third year, 38 percent the next year, and so on. With a 10-year plan, the abatement is 100 percent the first year, 90 percent the second year, 80 percent the third year with a similar pattern throughout the process. He said it would give a company ease of use in terms of tax abatement.
Chavez did say that the capital investment would be on the tax rolls earlier with the seven-year abatement.
City Attorney Sean Surrisi said that the abatement can be flexible, but these guidelines give the city groundwork for the process.
When asked her opinion, Clerk-Treasurer Jeanine Xaver said that with property tax caps and funding issues, the seven-year declining payment option would be the best for the City of Plymouth.
The city council members unanimously approved a motion to approve the guidelines as submitted but keep the seven-year abatement.