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Posted on: February 16, 2021

Information for voters on the Economic Development Ad Valorem Tax Exemption Program

Photo of voter ballot with Economic Development Ad Valorem Tax Exemption Program

On April 20, 2021, voters in the City of Panama City will be asked to reconsider a local ballot referendum item associated with the Economic Development Ad Valorem Tax Exemption Program first approved by voters more than 30 years ago.

The program is designed to encourage job growth and additional business investment in the City of Panama City, and if reauthorized by voters, would allow the City Commission to grant property tax exemptions for expanding or new businesses that are creating good jobs and purchasing new equipment or making capital improvements as per Florida Statute 196.1995.

Florida counties and cities – including Bay County – use this exemption as an economic development tool to encourage new job creation from local companies, the relocation of new eligible businesses such as manufacturers and data centers while accelerating local equipment purchases and capital investments from targeted industry firms.

GENERAL OVERVIEW

What it Does:

  • Temporarily exempts ad valorem taxes on the improvements to land or building expansion for eligible existing and new businesses that expand facilities, purchase equipment, and create ten or more full-time jobs.
  • Encourages business investment by reducing initial start-up costs.
  • Creates good jobs in manufacturing, processing, fabricating, data centers and other target industry businesses.
  • Undergoes review by city staff, analysis by the Property Appraiser and requires a vote by the City Commission before it's provided.
  • Upholds accountability and transparency by requiring annual reporting from recipient business showing they’ve maintained the jobs and expansion related to the exemption.

What it Does NOT Do:

  • Give a cash payment.
  • Grant any automatic benefit.
  • Decrease the existing tax base.
  • Affect taxes for county, school district or any other taxing authorities.

Key Qualifying Criteria:

  • New building construction.
  • New equipment built or purchased.
  • New jobs created.
  • Must be a new business that establishes 10 or more new full-time jobs in the City with above average wages and engages in manufacturing, processing, compounding, fabricating, or producing for sale items of tangible personal property at a fixed location and which comprises an industrial or manufacturing plant; or is a target industry business as defined in s. 288.106(2)(q), Florida Statutes; or establishes 25 or more new full-time jobs in the City, the sales factor of which for the facility is less than .50 for each year the exemption is claimed; or is an office space in this City and used by a business or organization newly domiciled in this state, provided such business establishes 50 or more full-time employees and that such business first begins operation on a site clearly separate from any other operation owned by the same business. Retailers are not eligible.

BRIEF HISTORY

The Economic Development Ad Valorem Tax Exemption was last approved by voters in the City of Panama City on April 21, 2009. According to Florida Statutes, the tool must be reauthorized by voters every 10 years. The tool is currently being used by other Florida cities and counties to expand and attract manufacturing, corporate offices and warehousing and distribution centers with new jobs.

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