What Is A Tax Abatement?
The Commission sometimes grants a reduction in taxes, most often in property taxes, for new businesses in Finney County. This is known as a tax abatement. Before you think "wow, that's not fair!" let's talk about why the Commission does this.
We can probably all agree that economic growth for any community is a good thing. More businesses means more jobs and more things to do, which means more people living and working here, which means more tax dollars coming in to provide more public services more effectively.
But how do we get more businesses to set up shop in Finney County to start this "more" domino effect? A tax abatement helps provide an incentive.
We are not the only county who does this. In fact, it's a common governmental practice. Some municipalities (cities or counties) may offer a reduction for part or all of a businesses' taxes. The Finney County Commission, however, rarely grants tax abatements at 100%; usually they're around 20-30% of the property tax value. This means that 20% of the taxes from the actual value of the development (business or property that it sits on) is reduced, and the business only pays taxes for the remaining 80% of the value of it's property.
In order to receive this incentive, the company must go through an application process with the Finney County Economic Development Corporation and be deemed eligible according to certain criteria, such as the overall benefit to the County, whether or not the business directly competes with an existing business, and whether it creates more jobs.
Even though an abatement waives the annual amount of ad valorem property taxes (for the qualifying percentage for that business), the business still makes an initial payment up front. This amount could be anywhere between $1 million and $5 million for the 20% tax abatement.
Mies & Sons Trucking is the most recent company to receive this tax abatement incentive. They are now the sole trucking provider for DFA in Garden City.
Existing businesses may also be eligible for tax abatements when they expand their business. Other companies that have received this tax abatement include DFA, Samy's Enterprises, Wind River Grain, Garden City Co-Op, and Hi Plains Feed.