Job Growth Incentive Program
When a company pays more in income tax, one of four things has occurred:
1. Additional employees have been hired;
2. Current employees are working more hours;
3. Current employees are earning higher wages; or,
4. A combination of the three.
Avon Lake plans to foster that accomplishment by sharing in the success with the company. The Job Growth Incentive Program is very simple in its operation. It provides an incentive to each business* in the City of Avon Lake, regardless of size, in the amount of 25% of the additional income tax paid as compared to the previous year.
For example, assume that in 2011 the employees of Company X paid $10,000 in income tax to Avon Lake. Demand skyrocketed the next year and they doubled their workforce. In 2012 they pay $20,000 in income tax, resulting in an additional $10,000 to the City. The City would then return 25% of that increased amount, or $2,500, as an incentive to remain in Avon Lake and further grow its jobs. Further assume that in 2013, Company X pays $22,000 in income tax, or $2,000 over the previous year (2012). Company X’s incentive would be $500 (25% of $2,000). However, should Company X pay $20,000 or less in 2013, no incentive would be provided.
* home-based businesses do not qualify; maximum annual benefit is $100,000 per business.
The Benefits to You
Companies of differing size are treated equally. Each company is incentivized in proportion to its ability to make new hires, pay higher wages or work additional hours.
Existing and new businesses are treated the same, unlike property tax abatements. Many times, existing businesses lament the fact that a city never offers incentives for them, while rolling out the red carpet for a newly located company. This program creates an even playing field.
Talk is cheap. Every mayor and city council says their city is business-friendly. The Avon Lake Job Growth Incentive Program proves it. Not only does it show in a concrete way that Avon Lake is willing to work with its businesses giving them a reason to stay in Avon Lake, it gives them resources to grow or potentially create jobs.
CRA Tax Abatement
Avon Lake utilizes Ohio’s Community Reinvestment Area (CRA) program for tax abatements in order to incentivize development and investment in the City. This program involves real estate tax exemptions for constructing new buildings or substantial renovation to existing buildings. If you are undertaking either of these types of projects, and you are interested in a tax abatement under the CRA program, please contact Ted Esborn, Economic Development Director, at 440-930-4167 or TEsborn@avonlake.org.
Port Authority Construction Financing
The City of Avon Lake, in partnership with the Lorain Port Authority, can assist qualified developers and business owners to receive a sales tax exemption on all construction materials related to the project by having the Port Authority lease the facility to the company. This works best for projects costing $10 million or more. The borrower is the owner for federal tax purposes and acquires the project for $1.00 at the end of the lease term. The borrower retains full control of the property.