In an effort to spur economic and business activity, Mayor Steve Bach has created a standard set of economic “accommodations” for new and expanding companies, as well as a Commercial Aeronautical Zone for the Colorado Springs Airport.
Saying the accommodations – essentially economic incentives – would be available for a “limited time only,” Bach said he felt that it was essential to have a standard set of incentives for businesses interested in moving or expanding to Colorado Springs.
“This way, we don’t address it when they come to us,” he said. “It’s standardized, it’s right there for companies to see. We have to do something to address unemployment, particularly in Southeast Colorado Springs.”
The incentives are largely tax breaks and tax credits for Colorado Springs’ share of business personal property and its sales taxes. The city’s portion of those taxes are essentially erased in the newly created Commercial Aeronautical Zone, where the city hopes to attract commercial aeronautical businesses that are engaged in the manufacture, maintenance, repair or overhaul of aircraft.
To be eligible, companies must be primary employers, must create 10 new jobs and must have $1 million in new capital investment. Retail companies must be a “unique business” to the Colorado Springs area.
City Council will approve every deal, Bach said, and the deal can be pulled at any time if the company fails to provide a promised number of jobs.
General primary employer
– Business personal property tax rebate: 50 percent on investments between $1 and $5 million, 90 percent on investments more than $5 million. (Years companies will receive the incentives package depends on how many jobs created)
– Sales-and-use tax rebate on construction materials – 50 percent of the city’s 2 percent general fund portion
– Sales-and-use tax rebates on annual business personal property taxes: 50 percent of the city’s 2 percent general fund portion (years receiving rebate depends on number of jobs created)
– Manufacturing primary employers can take advantage of an alternative rate of tax on machinery and equipment, based on a sliding scale for large purchases of manufacturing equipment . For equipment up to $5 million, there is no reduction. For $5 to $7.5 million, taxes drop to 2 percent. For $7.5 to $10 million, taxes drop to 1.5 percent. Purchases between 1$10 and $15 million pay 1 percent and purchases between $15 and $20 million pay .5 percent. Purchases higher than $20 million pay no sales taxes.
– Manufacturing primary employers can instead take the sales-and-use tax rebate on annual purchases with a decrease of 50 percent of the city’s 2 percent general fund allocation. Again, the years companies are able to take the rebate depend on the number of jobs created.
– Retail sales companies can take a 50 percent rebate of the city’s 2 percent general fund portion of sales-and-use taxes.
Commercial Aeronautical Zone
– 100 percent exemption from the city’s portion of its real and personal property taxes
– 100 percent exemption of its sales and use taxes for purchasing or leasing aircraft parts, purchasing supplies and equipment to manufacture or repair aircraft and on purchases or leases of capital equipment used to manufacture or maintain aircraft.
– 100 percent rebate of the city’s 2 percent sales-and-use tax on materials used in the construction of a new facility within the zone that will be used specifically for aeronautical businesses.