Tax Incentives Case Study
A property Owner decides to improve its 1970’s vintage 200,000 square foot office building by gutting the space, installing a communications infrastructure, and replacing roofing and heating and ventilating systems that are original to the building. The Property Owner also decides to install substantial computers and processing equipment in this facility. It will create several hundred jobs as a result of closing other facilities and consolidating into this location.
The total cost investment is double the current tax assessment. Is there an opportunity for a benefit to the Property Owner? How can there be a tax savings given this investment?
Many taxpayers are unaware of tax incentives, abatements, exemptions, and job credits that may be offered by state, county, and local government in an effort to attract and keep business and industry in their communities.
It’s all about timing. We counsel our Clients about when to approach government about their plans to locate or improve their facilities. Announce before an incentive commitment is made by government? The benefit may be denied. Overstated costs? Then the tax basis may be too large once the exemption ends.
If PILOT (payment in lieu of tax) agreements are entered into, we make sure that our clients are paying based on the lowest possible value so that these PILOT payments are in fact less than what the assessment would have been had no exemption been given