Facts relating to the City of Pinellas Park Ad Valorem Tax Abatement Program
What is the proposed tax exemption for economic development?
It is a proposed economic incentive designed to assist existing local businesses with expansion and create new job opportunities. It will also encourage new businesses to choose Pinellas Park. If approved, the program will authorize the City Council to review and grant qualifying businesses a temporary City property tax abatement for up to 10 years on new equipment and improvements to facilities. This is the same program approved for use by the PCBCC and other local municipalities.
Why would the City want to have this program in its tool box?
The economic development ad valorem tax exemption program is designed to help existing businesses expand and encourage industries that offer higher-than-average salaries to locate here. The program would enable Pinellas Park to more effectively stimulate job creation. At least 38 counties and 20 cities in Florida already have this incentive, and it will allow us to better compete for relocation projects.
Will the program create more competition for existing businesses?
The program is targeted at companies that have the majority of their customers outside of Pinellas County, not at firms that would be competing for business in the local market.
What are the advantages for existing local businesses?
This incentive would help existing businesses to expand, purchase new equipment and create new jobs.
What taxes would be eligible for exemption?
Pinellas Park property taxes on qualifying buildings and equipment would be eligible. Both the countywide millage and the Municipal Services Taxing Unit (MSTU) millage in unincorporated areas would also be eligible if approved by the PCBCC too.
Would Pinellas Park’s services be affected?
There are no anticipated impacts to the City’s existing services as a result of the program. In fact, the long-term expectation is that the economic impact to the City from increased investment will actually increase revenues at the end of the abatement period. Current tax levels on the incentivized properties will be unaffected. Only the taxes on improvements to buildings and the value of new equipment are eligible for abatement.
Are companies that apply automatically granted an exemption?
No. Companies must first meet threshold criteria required by state law. If all criteria are met, an application will be considered by the Pinellas Park City Council at a public hearing where public input is taken. The City Council will have discretion to grant or deny exemption applications and to determine the percentage and duration of the exemption. Each exemption is granted on a case by case basis.
Are existing buildings and equipment eligible for exemption?
No. Only new buildings, expansions of existing buildings and new equipment purchased by a qualifying business are eligible. Land is not eligible. Equipment purchased to replace existing equipment is not eligible.
What are the threshold criteria?
An existing business may qualify if it:
• Manufactures, processes, compounds, fabricates, or produces products at a fixed location and creates 10 or more full time jobs that are above the average wage in the area; or
• Is within a qualified target industry and creates 10 or more full-time jobs that are above the average wage in the area; or
• Creates 25 or more full-time jobs and sells 50% or more of its goods or services outside the State for each year the exemption is claimed; provided that the business increases operations on a site co-located with a commercial or industrial operation owned by the same business, resulting in a net increase in employment of at least 10% or an increase in productive output of at least 10%.
A new business may qualify if it:
• Manufactures, processes, compounds, fabricates, or produces products at a fixed location and creates 10 or more full-time jobs paying an average wage above the average wage in this area; or
• Is within a qualified target industry and creates 10 or more full-time jobs paying an average wage above the average wage in this area; or
• Sells 50% or more of its goods or services outside the state and creates 25 or more full-time jobs; or
• Owns office space on a site separate from any other commercial or industrial operations that it owns and creates 50 or more full-time jobs.
Monitoring and Enforcement - How will Pinellas Park monitor businesses that receive an ad valorem tax exemption to ensure that the business fulfills the representations made in the application?
Businesses that are granted an economic development ad valorem tax exemption will be required to file an Annual Report. This Annual Report is a status report from the business to determine if the performance requirements have been met. Reported employment gains will be compared with county and state records for accuracy.
What happens if a business that has been granted an ad valorem tax exemption fails to comply with the job creation requirements of the Economic Development Ad Valorem Tax Exemption Program?
A business that does not achieve the performance requirements or file an Annual Report as specified in the application would have the ad valorem tax exemption revoked in whole or in part.