The Logansport City Council has approved a tax abatement for a $1.9 million investment in new equipment by Cass County By Products.
The company will buy new refrigeration, plate freezing and cold storage space for its facility in the airport industrial park.
The $30,515 abatement will run through 2014. The first year will be tax free, and each subsequent year the business will pay a rising percentage of the taxes, rising to 100 percent after five years.
The application approved at Monday’s council meeting indicates that the investment will create four new jobs while retaining the company’s 54 current employees.
As part of the agreement, Cass County By Products must keep salaries above $1.6 million throughout the duration of the abatement.
Mayor Mike Fincher spoke in favor of the abatement process as a way of creating and retaining jobs.
“Tax abatement is really a wrong use of the term,” Fincher said. “It is more like tax phasing. Several years ago, we changed the law so companies have to maintain certain wages. If they don’t maintain a certain wage level, the council can take the abatement away.”
Fincher added that the abatement was only for the equipment included in the agreement.
“It doesn’t abate the other taxes that they pay,” he said.
The Logansport-Cass County Economic Development Foundation facilitates the tax abatement process for the city. Information on the abatement process, including the number of jobs created and salary increase required to be eligible, is available on the foundation’s Web site at www.ledf.com.
President Skip Kuker says abatements are a way of encouraging businesses to locate in Logansport and Cass County.
“It is a useful tool that is used throughout the state and in many other states as well,” Kuker said.
Kuker believes that given the longevity of a building and equipment, a short-term tax abatement is a worthwhile investment for the city.
“A building may last for 100 years so they will be paying taxes eventually,” he said. “They also cannot get a second abatement on the same piece of equipment or property.”
Fincher agrees.
“If they didn’t get that piece of equipment, they may have to lay people off,” Fincher said. “It is important that people understand that it is keeping people working.”
Kevin Smith can be contacted at (574) 732-5148 or via e-mail at kevin.smith@pharostribune.com
Local News
Council approves tax break
<b>Cass County By Products gets 5-year abatement on $1.9 million investment</b>
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