Residents in the Village of Indiantown recently received ballots in the mail asking if they support the “Economic Development Ad Valorem Tax Exemption.”
That’s a wordy way to describe what’s basically a tool that municipalities and counties can take advantage of to help attract investment and stimulate job creation.
One of our responsibilities here at the Business Development Board is administering the exemption program for Martin County, which like many neighboring communities has offered it for at least 15 years.
Recently, I addressed the village council about the exemption, which must earn voter approval to move forward. Ballots must be returned by Aug. 18. My presentation sought to clarify what the exemption is and what it isn’t, which I’ll summarize here.
The exemption DOES:
- Temporarily reduce some local taxes for new or existing businesses seeking to expand operations (companies must add at least 10 jobs with wages equal to or higher than the county average to be eligible).
- Uphold transparency and oversight by requiring businesses to earn a majority vote of the village council to receive the exemption.
- Benefit existing businesses by enabling them to exempt up to 100 percent of the assessed value of their improvements and any tangible personal property stored onsite.
- Prompt sustained higher-wage job creation by requiring creation of jobs in manufacturing or other targeted industries.
- Hold companies accountable by enforcing annual reporting and requiring payment of any exempted taxes—plus interest—if companies fail to create or maintain the promised jobs.
The exemption does NOT:
- Make a cash payment.
- Serve as an automatic benefit, as businesses must be approved by the village council to receive it.
- Decrease the existing tax base, as it only temporarily exempts the value of new facilities or expansions of existing businesses and added tangible personal property such as equipment.
- Impact the value of raw land, which is excluded from the exemption.
- Affect taxes for the school district or other taxing authorities.
- Allow businesses to go backward and exempt any previous expansions projects.
- Last indefinitely, as it must be reapproved every 10 years via voter referendum.
How it helps
The ability of any community to build up its economy generally boils down to the business climate. The business climate encompasses such factors as geographical location, transportation options, site availability, workforce potential, regulatory environment, and quality of life issues such as affordable home inventory and good schools.
The Village of Indiantown performs well on business climate metrics. It’s also receiving appropriations from the state for utility infrastructure improvements, which will help attract a variety of employment and residential opportunities.
Even still, every community is influenced by the national economy, investor confidence, interest rates, trade agreements, and various factors beyond their control. Options such as the Economic Development Ad Valorem Tax Exemption is within a community’s control—right down to residents voting to make it available and the council determining whether businesses receive it.
These safeguards—balanced with the benefits—would only add to the Village’s appeal as a destination for businesses and entrepreneurs.
