(a) Purpose. The purpose of the Income Tax Incentive Program is to encourage economic growth within the City of Warren by focusing on business expansion efforts and new business recruitment to the City. The Income Tax Incentives Program for enterprises that are expanding or starting new businesses within the City consists of an Income Tax Rebate Program and a Net Profit Tax Credit Program. This program requires new employment and a minimum investment in real property.
(b) Definitions. For the purposes of this Section the following words shall have the meanings as described to them in this Section except as and if the context clearly indicates or requires a different meaning.
(1) "New employees" means new pennanent full-time (or full time equivalent) employees hired or employed by a qualifying enterprise within the first year of operations to perfonn work or render services within the City of Warren or transferred by the qualifying enterprise from another location into the City of Warren.
(2) "Qualifying Enterprise" means a sole proprietorship, partnership, corporation, limited liability company or other entity which starts or expands a business within the City and meets the minimum investment requirements of the Income Tax Incentive Program as delineated in subsetions (e) and (f) hereof.
(3) "Qualifying Investment” means investment in real property for business purposes, and/or the purchase of industrial equipment having a useful life of at least five (5) years.
(c) Formula. The percentage of compensation under the Income Tax Rebate Program and the Percentage of Credit under the Net Profit Credit Program shall be determined by applying the employment and investment formula as shown in the following table:
(1) Number of New Employees | (2) Amount of New Payroll | ||
3-5 | 1 | $0.00 - $75,000.00 | 0 |
6-10 | 2 | $75,001.00 - $100,000.00 | 3 |
11-20 | 3 | $150,001.00 - $400,000.00 | 6 |
21-30 | 4 | $400,001.00 - $800,000.00 | 9 |
31-50 | 5 | $800,001.00 - $1,400,000.00 | 12 |
Over 50 | 6 | Over $1,400,000 | 15 |
(3) Investment in Real Property Improvements | (4) Investment in Real Property Purchase | ||
$10,001.00 - $50,000.00 | 2 | $0.00 - $75,000.00 | 0 |
$50,001.00 - $150,000.00 | 4 | $75,001.00 - $150,000.00 | 1 |
$150,001.00 - $300,000.00 | 6 | $150,001.00 - $300,000.00 | 2 |
$300,001.00 - $600,000.00 | 8 | $300,001.00 - $600,000.00 | 3 |
$600,001.00 & Over | 10 | $600,001.00 & Over | 4 |
(5) Investment in New Equipment | |
$50,001.00 - $100,000.00 | 4 |
$100,001.00 - $200,000.00 | 6 |
$200,001.00 - $400,000.00 | 8 |
$400,001.00 - $700,000.00 | 10 |
Over $700,001.00 | 12 |
This formula adds points in accordance with the number of new employees, the amount of the new payroll, the amount of investment in real property improvements, the amount of investment in real property purchase, and the amount of investment in industrial equipment.
Eligibility Requirements
(1) Enterprises must locate or expand within the City of Warren corporate limits.
(2) Enterprises must create at least three (3) net new full-time jobs.
(3) Enterprises must make minimum new investment as stated.
(4) Enterprises must apply for the Income Tax Incentive Program prior to the starting or expansion of the business
(5) Enterprise must execute an Income Tax Incentive Program Agreement within sixty (60) days of starting or expanding the business.
(d) Income Tax Rebate Program. The City of Warren shall provide a yearly rebate payment to a qualifying enterprise based on the percentage, as determined by the formula in subsection (c) of the income tax withholding of new employees paid to the City of Warren for the proceeding calendar year. The term of the compensation shall be ten (10) years, with the rebate reduced by ten percent (10%) each subsequent year following year one. The tax rebate program requires a minimum of fifty thousand dollars ($50,000) of new investment in real property, real property improvements, or new industrial equipment.
For the purposes of this credit the income tax rebate shall and does mean only that portion of the payroll that is the direct result of the new employees hired in the City of Warren
(e) Net Profit Tax Credit Program. The City of Warren shall provide a yearly credit to a qualifying enterprise based on the percentage, as determined by the formula in subsection (c) of the net profit tax liability due to the City of Warren for the proceeding calendar or fiscal year. The term of the compensation shall be ten (10) years, with the rebate reduced by ten percent (10%) each subsequent year after year one. The net profit credit program requires a minimum of one hundred fifty thousand dollars ($150,000) of new investment in real property, real property improvements, or new equipment.
For the purposes of this credit the net profit tax liability shall and does mean only that portion of the net profit tax liability that is the direct result of the qualifying investment in the City of Warren.
(f) Term, Payment, and Credit.
(1) For purposes of determining the rebate, the term for the Income Tax Incentive Program shall be the first full calendar year after beginning operations and thereafter.
(2) For purposes of determining the credit, the term for the Net Profits Tax Credit Program shall be the first full calendar year or the fiscal year after beginning operations, and thereafter.
(g) Application/Agreement Process.
(1) Prior to making a qualifying investment within the City, the enterprise must submit a complete City of Warren Income Tax Incentive program application.
(2) The application must contain an estimate of new employees to be hired, estimated payroll, and proposed new investments within the City.
(3) After approval of the application by the Review Committee, a Program agreement shall be executed between the City of Warren and the applying enterprise.
(4) The Program agreement shall set forth the number of proposed new employees, estimated new payroll, and the proposed new qualifying investments.
Final formula numbers will be based on new jobs created in the first year of the agreement, total year-one payroll, and total year- one investments only. Qualifying enterprises who fail to maintain the year-one levels of employees and payroll throughout the term of the agreement may face termination from the program.
(h) Verification and Process Reports. For an enterprise to remain in the Income Tax Incentive program they shall cooperate with the Program Oversight Committee and the City Income Tax Administrator and provide not less than the following information:
(1) An annual progress report documenting the new employees and payroll at the City site.
(2) A copy of the enterprise's City and Federal Income Tax Return.
(3) Any other relevant information requested by the Review Committee or City Income Tax Administrator.
The City of Warren reserves the right to require an independent audit of the enterprise's employment, payroll, and tax records to verify reported amounts at the enterprise's expense.
(i) Review Committee.
(1) A Review Committee shall be formed and shall include the City Treasurer, City Income Tax Administrator, and an appointee of the Mayor.
(2) The Committee shall review all Program applications, authorize all Program Agreements, review annual progress reports, recommend continuation in the program or termination thereof, and adopt rules and regulations necessary for the administration of the program consistent with this section.
(j) Appeal Process. An Enterprise may appeal a decision of the Review Committee by filing a written request to the Income Tax Board of Review within thirty (30) days of the decision. (Ord. 13356/2024. Passed 7-24-24.)