(a) The mission of the Net Profit Tax Incentive Program (NPTIP) is to expand the City's tax base by recruiting new businesses to the City. Any business that relocates to, or is a newly started for profit corporation in the City of Salem will be eligible for a yearly incentive payment of the "net profits tax" that are paid to the City of Salem as set forth below. The term of this incentive shall not exceed five (5) years and shall be reviewed annually by the Program Oversight Committee to determine continuation or termination.
(b) Basic Eligibility Requirements.
(1) Only businesses that are relocating to, or starting in the City of Salem, whose employment results show positive aggregate effect on employment in the City of Salem as determined by the Program Oversight Committee are eligible for this program.
(2) The program shall be limited to employers that are subject to the City of Salem's net profit income tax.
(3) A business must relocate new jobs to the City of Salem, or create new jobs if the business is a newly formed start up pursuant to the following guidelines:
# of Jobs | Business Profits Tax Incentive Payment |
4 to 6 | 35% |
7 to 9 | 45% |
10+ | 55% |
For Downtown (C 3) District - year 1-100%, year 2-75%, year 3-50%, last two (2) years per tier table above.
(4) Applicant must apply for the incentive prior to, or within twelve (12) months of expanding the business, signing a lease, constructing a new facility, purchasing a building, or incorporating within the City of Salem.
(5) If total head count at reporting period is less than or equal to total head count at application, or if total tax collections for the tax paying entity at reporting period is determined to be less than or equal to total tax collections at application, a business may be deemed to lose eligibility for continuance in NPTIP. The test figures for this determination will be provided by the Program Oversight Committee at application reference to City Council. (Ord. 210119-01. Passed 1-19-21.)