Plan Could Mean 25 Percent Income Tax Rebate for Avon Lake Businesses
Still in its infancy stage, income tax rebate could lure businesses in, and provide incentive to new ones.
Although Avon Lake has a favorable location to I-90, an educated work force and a top-ranked library, the head of the city’s Economic Development Committee is saying a little more is needed to make the city attractive to businesses.
“With the exception of Avon Lake’s proximity to Lake Erie, many other cities are similar,” Councilman Dan Bucci told council members at an economic development Committee meeting last week.
What he wants to offer, is a local version of state’s Job Creation Tax Credit platform—but aimed for businesses.
“It has to be simple,” Bucci said.
Bucci introduced a preliminary plan as part of the “3R Proposal: Business Retention, Renewal and Recruitment” plan. The committee has been meeting with business owners over the summer to determine what steps are needed to ramp up the business community in Avon Lake.
Included in that plan is a proposal that would return 25 percent of additional income tax collected over the preceding year. As an example, in 2011, if a business doubled its workforce paying $200,000 in income tax and it paid $100,000 in 2010, the city would return 25 percent of the additional income tax, or in this case $25,000, to the company.
If that same company paid $220,000 in income tax the following year (2012), it would see a 25 percent return ($5,000) on the additional $20,000 over the preceding year’s income tax payment.
Bucci said the 25 percent was a starting point and could be adjusted, per council. He cited several advantages to the plan including minimal cost and the plans equal treatment of businesses, despite the company’s size or longevity. And unlike tax abatements, the school district would feel no financial burden.
Bucci acknowledged additional discussions would be required before the plan, which he hopes to see instituted in the next six months, goes into effect.
Several council members said they hoped the money returned would remain in Avon Lake.
Council President Greg Zilka noted that the city could possible be in a better situation without the rebates if a business was going to have a good year regardless.
“I’m looking at this as reinvesting in our town, in those businesses,” Bucci said. “In my mind the money is going to stay in Avon Lake.”
Zilka did note that it could be a good incentive for businesses.