County Commission OKs rules for tax exemptions

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The Stutsman County Commission adopted a tax exemption policy for new and expanding businesses at its meeting Tuesday.

“The guideline puts everyone on the same playing field,” said Dave Schwartz, commissioner. “Before, it was all up in the air.”

The policy, passed unanimously, applies to new and existing businesses and new and existing buildings, and only those businesses that locate within Stutsman County but outside of incorporated cities.

To apply for an exemption, a business must pay a $100 fee and publish two notices in the official newspapers that it is applying.

“A new business to the community must not gain unfair advantage with existing competitors through the use of the exemption,” the policy says. “The ‘unfair advantage’ argument should be made by a competitive business, in writing, to the Board of Commissioners within 15 days after publication of the official notice.”

Under the new guidelines, exemption amounts would vary based on two factors — the true and full value of the project, or the number of new full-time equivalent positions being created.

There are four exemption schedules:

* A, for projects valued at $350,000 to $500,000 or creating five to seven FTE positions. It gives 70 percent exemption for year one, 50 percent for year two and 20 percent for years three, four and five.

* B, for projects valued at $500,001 to $1.5 million or creating eight to 15 FTE positions. It gives 100 percent exemption for years one and two, 75 for year three and 50 percent for years four and five.

* C, for projects valued at $1.5 to $5 million or creating 16 to 26 FTE positions. It gives 100 percent exemption for years one, two and three, 80 percent for year four and 60 percent for year five.

* D, for projects valued at $5 million or more, or creating more than 26 FTE positions. It gives 100 percent exemption for four years, followed by 75 percent for year five.

“If at any point during the duration of the exemption period the applicant fails to meet the requirements … or fails to meet the criteria for which the exemption was given, i.e. job creation or taxable value, the exemption will be revoked in the subsequent tax year,” the policy states.

“I’m glad to see that we’re adopting something like this … with this, we’re laying down some parameters and some guidelines,” said Mark Klose, chairman of the commission.

County officials are investigating whether the county could potentially get exemption money back if a business did not meet its job creation or taxable value criteria. If so, the policy may be amended at a later time.

Warehousing and retail projects would not receive exemptions unless the owner could prove need.

In addition, projects manufacturing or processing agricultural commodity products may potentially receive exemptions for five more years.

The first business to apply and receive a tax exemption under the new policy was RTS Shearing, which was granted a schedule B exemption for an estimated $54,635.

RTS Shearing expects to create eight FTE positions with a $998,000 project, according to its application.

Sun reporter Kari Lucin can be reached at 701-952-8453 or by email at klucin@jamestownsun.com

Tags: local news, news, taxes