(a) Manufacturing Business.
(1) Any manufacturing business taxable under Section 737.10 which shall, after the passage of this section, commence manufacturing activities taxable within the corporate limits of the City, which constitutes a New Business as defined in Section 737.01, which commencement within the City is not merely by reason of annexation by the City, and which business is subject to the City's Business and Occupation Tax, shall be eligible to make application with the City Treasurer's office for a tax credit against the business' normal Business and Occupation Tax liability as follows:
A. 75% during the first calendar year of taxable activity,
B. 50% during the second calendar year of taxable activity and
C. 25% during the third calendar year of taxable activity.
(3) This tax credit shall apply only to income taxable under Section 737.10.
(4) Notwithstanding any of the above, a manufacturing business located in the City at the time of the passage of this section, which business is subsequently sold, would be eligible for the tax credit described above, if, in the determination of the City Treasurer, such business constitutes a New Business as defined in Section 737.01.
(5) Any manufacturing business which shall, after the passage of this section, increase its full-time average yearly work force by at least twenty-five persons over base year employment, and increase its yearly gross (Section 737.10
) taxable income by at least two million five hundred thousand dollars ($2,500,000.00) shall be eligible for a fifty percent (50%) tax credit against the increase in the tax liability derived from the above-referenced activities. However, the credit shall only apply to the tax due on that incremental portion of gross income which is greater than the average gross income generated by the business over the immediately preceding three years. This tax credit shall apply only to income taxable under Section 737.10
.
(6) "Base year employment" for the purposes of this subsection, means the average employment within the City, which the manufacturing business utilizes to conduct activity taxable under Section 737.10 during the twelve-month period immediately preceding first application for this credit.
(7) In order for a manufacturing business to qualify for this credit, the jobs created shall be located within the City and shall be utilized in the business' manufacturing activity. In addition, the jobs created shall be retained for the full term of the credit in order for the credit to be applicable. That is, if the number of qualifying jobs at any time drops below the base year employment level plus twenty-five, the credit shall be lost.
(8) The tax credit may be available for a period of up to three consecutive years from the date of commencement of taxable activity. Upon request of the taxpayer, the City Treasurer's office shall provide information regarding this tax credit section to any business which commences manufacturing activities within the City.
(9) Any taxpayer who fails to file returns and pay the City's Business and Occupation Tax, interest and penalties due under this Article within three (3) calendar months of the initial due date for such tax hereby waives and forfeits any right to apply for or receive any credit against the tax due and owing under the City's Business and Occupation Tax as authorized in this Section 737.19.
(b) Retail or Wholesale Business.
(1) Any retail or wholesale business taxable under Section 737.11, which shall, after the passage of this section, commence retailing or wholesaling activities taxable under Section 737.11 within the corporate limits of the City, which constitutes a New Business as defined in Section 737.01, and which commencement within the City is not merely by reason of annexation by the City, shall be eligible to make application with the City Treasurer's office for a tax credit against the business' normal Business and Occupation Tax liability as follows:
A. 75% during the first calendar year of taxable activity,
B. 50% during the second calendar year of taxable activity and
C. 25% during the third calendar year of taxable activity.
(3) This tax credit shall apply only to income taxable under Section 737.11.
(4) The tax credit may be available for a period of three consecutive calendar years from the date of commencement of taxable activity. Upon the request of the taxpayer, the City Treasurer's office shall provide information regarding this tax credit section to any business which commences retail or wholesale business within the City.
(5) Any taxpayer who fails to file returns and pay the City's Business and Occupation Tax, interest and penalties due under this Article within three (3) calendar months of the initial due date for such tax hereby waives and forfeits any right to apply for or receive any credit against the tax due and owing under the City’s Business and Occupation Tax as authorized in this Section 737.19.
(c) Service Business.
(1) Any service business taxable under Section 737.16 which shall locate its principal place of business within the corporate limits of the City, which constitutes a New Business as defined in Section 737.01, which location within the City is not merely by reason of annexation by the City, and which is subject to the City's Business and Occupation Tax, shall be eligible to make application with the City Treasurer's office for a tax credit against the business' normal Business and Occupation Tax liability as follows:
A. 75% during the first calendar year of taxable activity,
B. 50% during the second calendar year of taxable activity and
C. 25% during the third calendar year of taxable activity.
Provided, however, that a service business which, at the time of the passage of this section, is paying taxes to the City under the service classification for work performed within the City, although its principal place of business is without the City, shall be eligible for a credit upon location of its principal place of business within the City, such credit to be based on that incremental increase in taxable income greater than that generated by the business, within the City, during the twelve-month period immediately preceding first application for the credit.
(3) This tax credit shall apply only to income taxable under Section 737.16.
(4) The tax credit may be available for a period of three consecutive calendar years from the date of location of its principal place of business within the limits of the City. Upon the request of the taxpayer, the City Treasurer's office shall provide information regarding this tax credit section to any business which commences a service business within the City.
(5) Any taxpayer who fails to file returns and pay the City's Business and Occupation Tax, interest and penalties due under this Article within three (3) calendar months of the initial due date for such tax hereby waives and forfeits any right to apply for or receive any credit against the tax due and owing under the City's Business and Occupation Tax as authorized in this Section 737.19.
(d) Expansion.
(1) Any manufacturing, retailing, wholesaling, or service business which is taxable under Sections 737.10, 737.11 or 737.16, and which is located in the City at the time of passage of this section shall be eligible for a fifty percent (50%) tax credit against the increase of the tax liability derived from an expansion, as defined below. However, the credit shall only apply to that incremental portion of gross income which is greater than the average gross income generated by the business over the previous three years and shall be applicable in the taxing category in which the business has paid fifty percent (50%) or greater of its Business and Occupation Taxes to the City in the twelve month period immediately preceding application for the credit.
(2) "Expansion" means the purchase of certain property, as herein defined for the purpose of increasing the economic productivity of the business.
(3) "Property" means real property, and improvements thereto, and new, tangible personal property, but only if such property was constructed, or purchased, on or after the passage of this section for use as a component part of an ongoing business operation located within the City. This term includes only tangible personal property with respect to which depreciation is allowable in determining the personal income tax or corporate net income tax liability of the business taxpayer, and has a useful life at the time the property is placed in service or use in this City of four years or more. Property acquired by written lease for a primary term of five years or longer, if used as a component part of an expansion, shall be included within this definition. "Property", within the meaning of this section, shall not include:
A. Repair costs, including materials used in the repair, unless for federal income tax purposes the cost of the repair shall be capitalized and not expended;
B. Motor vehicles licensed by the Department of Motor Vehicles;
C. Airplanes;
D. Off premise transportation equipment;
E. Property which is acquired incident to the purchase of the stock or assets of an industrial taxpayer, which property was or had been used by the seller in his industrial business in the City, or which property was previously designated "property purchased for industrial expansion" or "property purchased for industrial revitalization", or "property purchased for eligible research and development project"; provided, however, the City Treasurer may waive this disqualification.
(4) Property shall be deemed to have been purchased prior to a specified date only when:
A. The physical construction, reconstruction or erection of the property was begun prior to the specified date, or such property was constructed, reconstructed, erected or acquired pursuant to a written contract as existing and binding on the purchase prior to the specified date;
B. The machinery or equipment was owned by the taxpayer prior to the specified date or was acquired by the taxpayer pursuant to a binding purchase contract which was in effect prior to such date; or,
C. In the case of leased property, there was a binding written lease or contract to lease identifiable property in effect prior to the specified date.
(5) Any tax credit made available by this subsection shall be applied for in the tax quarter in which the qualifying property was purchased, and may be available for a period of two consecutive years from the date of first application.
(6) Any retailing, wholesaling, or service business taxable under Sections 737.11 or 737.16, located in the City at the time of the passage of this section, shall be eligible for a fifty percent (50%) tax credit against the increase of the tax liability derived from an increase in gross sales as herein described.
In order for a business' increase in gross sales to qualify for this credit, the increase must be ten percent (10%) greater than the previous year's gross sales, or the average of the previous three years' gross sales, whichever is greater. The credit shall only apply to that incremental increase in gross sales above the ten percent (10%) increase mentioned herein.
The tax credit may be available for a period of two consecutive years from the date of first application. Upon request by the taxpayer, the City Treasurer shall provide information regarding this tax credit section to any business within the City.
(7) In the event that a taxpayer may simultaneously qualify for a tax credit as new business and expanded business, the taxpayer shall only be entitled to either the tax credit for new business or expanded business at the taxpayer's election with the consent of the City Treasurer's office.
(8) Any taxpayer who fails to file returns and pay the City's Business and Occupation Tax, interest and penalties due under this Article within three (3) calendar months of the initial due date for such tax hereby waives and forfeits any right to apply for or receive any credit against the tax due and owing under the City's Business and Occupation Tax as authorized in this Section 737.19.
(e) Contractors or Subcontractors. (EDITOR'S NOTE: Former subsection (e), granting a tax credit to contractors and subcontractors, was repealed by Ordinance 1709, passed April 20, 1989, which ordinance reinstated the full tax for contractors and subcontractors.)
(f) Rental Income Credit. Rental income which accrues to the owner of multi-unit or commercial building development property which shall, after the passage of this section, be constructed within the corporate limits of the City, and which location within the City is not merely by reason of annexation by the City, shall be eligible for a fifty percent (50%) tax credit from the tax liability imposed by Section 737.17
for a period of two consecutive years from the date of the first application. The City Treasurer shall provide information regarding this tax credit section to any business which commences rental business within the City and which appears to be eligible for this credit.
(g) Credits Limited to Seventy Five Percent. In no event shall any New Business be eligible for a tax credit or credits in excess of seventy five percent (75%) of total Business and Occupation tax liability due to the City for more than one calendar year and not in excess of fifty percent in any subsequent calendar year or as otherwise provided in this Article.
(h) Credits for the Purchase of Existing Businesses.
(1) Any manufacturing, retailing, wholesaling or service facility or business taxable under 737.10, 737.11 or 737.16, which is purchased by another company or proprietorship may qualify for a fifty percent (50%) tax credit against any increase in tax liability after such sale has been consummated. However, the credit shall only apply to that incremental portion of gross income which is greater than the average gross income generated by the preceding business over the previous three years. Such tax credit is available for up to three calendar years.
(2) Any current tax credit that an existing business may have is eligible for transfer to the purchasing business or proprietorship for the remaining term of the existing credit. However, any such transfer shall make such business ineligible for the credit available under subsection (h)(1) hereof.
(i) Tax Credits for Newly Annexed Areas of the City.
(1) Existing business. Calculated from the actual date of annexation, all existing businesses in a newly annexed area shall be eligible for a tax credit against the appropriate Business and Occupation tax as follows:
A. 75% during the first calendar year following annexation,
B. 50% during the second calendar year following annexation and
C. 25% during the third calendar year following annexation.
Upon request by a taxpayer, the City Treasurer's office shall provide information regarding this tax credit section to any business which exists in a newly annexed area within the City.
(2) New business. Business located within the City after the annexation date shall be eligible for any tax credit otherwise available for such business activity as provided in this Article.
(3) Any taxpayer who fails to file returns and pay the City's Business and Occupation Tax, interest and penalties due under this Article within three (3) calendar months of the initial due date for such tax hereby waives and forfeits any right to apply for or receive any credit against the tax due and owing under the City’s Business and Occupation Tax as authorized in this Section 737.19.
(j) City Treasurer Determinations and Denials. The City Treasurer, under the authority of Section 737.38
, as amended, is hereby authorized to make any necessary determinations regarding forfeiture or carryover of the tax credits authorized by this section. Further, the City Treasurer, subject to review by Council, may determine that a particular tax credit application violates the spirit and intention of this section, and deny the credit on that basis.
(Ord. 2118. Passed 4-16-09.)