by Geoff Fox
Town officials unanimously passed a resolution to allow the town to offer new businesses a tax incentive to attract them to the downtown area and build the business district. The action came during last Wednesday’s town meeting. The vote was 3-0, with Councilman Leo Murray absent.
The resolution takes effect January 1, 2020.
Town officials had held a workshop the week prior to iron out the final details of the resolution.
The incentive program is geared toward any new business that occupies or purchases a vacant building in Hancock with the expressed interest in opening a new business.
The town will not collect taxes from qualifying businesses for one year. In year two, the town would collect 50% of applicable property taxes.
Town Manager Joe Gilbert said there would have to be observable measures showing the business is intent on opening.
If the building owner is opening the business in their own property, they’d get the property tax break. In the event that an owner leases their space to another person opening the business, the building owner would continue to pay town property tax.
According to the resolution document, the building owner would continue to “be taxed at the existing rate in accordance with the existing tax prior to or the building being rented.”
The business incentive would then be paid to the tenant, as a stipend from the town in the amount of taxes collected from the building owner, at the end of the calendar year the taxes were collected from the building owner.
If the owner of a previously vacant building can demonstrate a clear indication of opening a business within that building, they would qualify for the property tax incentive, the resolutions tates.
Those indications would include obtaining a business license, securing a building permit, and/or hiring employees.
A member of the public asked town officials to clarify that if he were to pay $1,000 in property taxes as the building owner, that tax money would go to his business tenant instead.
Councilman Tim Boyer said that was correct under the incentive program.
“You would pay your taxes because you’re not the one opening the business and that business owner would get that money,” he said. “It’s whoever opens the business.”
Mayor Ralph Salvagno said the program is based on the theory that the cost of the tax would be passed on to the renter one way or another.
“This kind of offsets that,” the mayor said.
For more information about the tax incentive program and how to apply for it, contact Hancock Town Hall at 301-678-5622.