Business

Taxes & Incentives

Leaders in city and county government work to keep the local tax rates competitive—understanding that healthy businesses within the community are vital for a strong economy. Government leaders balance the need for community services that make a community attractive with the tax rate to support them.

Each of our government units can utilize incentives for qualifying projects that reward companies for making investments and creating jobs in our area.

EDC staff can provide valuable leadership in analyzing projects to determine whether they meet incentive program qualifications and can develop finance models that benefit the business and the community.

Tax Increment Financing

Tax Increment Financing (TIF) uses the increased property taxes that a new real estate development generates to finance costs of the development. In Minnesota, TIF is used for two basic purposes:

  • To induce or case a development or redevelopment that otherwise would not occur.
  • To finance public infrastructure (streets, sewer, water or parking facilities) that are related to the development.
Tax Abatement

Abatements may be a temporary forgiveness or deferral of local property tax. They can serve similar purposes as TIF in serving economic development tools, provided local government finds that public benefits exceed the costs. 

Two ways to look at Tax Abatement:
  1. With new construction and valuation:
  • New construction and value add to the tax base and will generate new taxes.
  • As long as the annual abatement doesn’t exceed the amount of new taxes generated, there is no cost to the taxpayer.
  • The City recognizes tax increased and abatement amounts, and budgets accordingly.
  • Taxes on the original value are collected.

     2.Without any new construction or valuation:

  • No add/tax generated; total levy amount decreases.
  • If expenditures remain constant, the other tax payers foot the bill due to the elevated costs.

Find the EDC’s Tax Abatement Application here.

City of Willmar Industrial Park Land Write-Down Policy

Meant to stimulate and assist economic development projects by reducing the sale price of city-owned industrial property.

Calculations: Any write-down shall use as its basis the listing price for the property offered by the city.

  • Employment Credit: A qualifying project shall be credited $10,000 off the listing price per job created. Job creation goals shall be stated and included in the formal agreement between the buyer and the city.
  • Tax Base Credit: A qualifying project shall be credited $25,000 off the listing price per million dollars of estimated market value created as determined by the office of the City Assessor. Tax base creation goals shall be stated and included in the formal agreement between the buyer and the city.

In no instance shall the amount of the land write-down credited to the buyer exceed the stated price of the property being acquired. Read the Willmar Industrial Land Pricing Write-Down Policy here.