The Southold school board has agreed to continue allowing business owners to take advantage of a new tax exemption program that aims to promote small business expansion projects and economic growth.
The decision came after Carolyn Fahey of Suffolk County’s economic development department and Southold Town planning director Heather Lanza addressed the school board about the program during its regular meeting Wednesday night.
The county and town has been working together on the new, jointly approved law, known as the Suffolk County Industrial and Commercial Incentive Plan/Town of Southold Business Investment Exemption.
After the county OK’d its incentive plan legislation in August, the town adopted a town Business Investment Exemption program in November and identified business parcels that qualify for the program.
Businesses on those selected properties are eligible for the tax breaks if they are making more than $50,000 worth of construction, alteration, installation or other improvements.
The amount of the exemption is based on a percentage calculated by taking the increase in the assessed value of such property after construction. The incentives are offered on a declining scale during a 10-year period – starting with a 50 percent tax exemption during the first three years and dropping incrementally to a 5 percent tax exemption by year 10.
School districts were, by default, opted into the exemption after it became law.
Ms. Fahey said schools are allowed to opt-out of the program at any time and they also have the authority to reduce the amount of the exemptions granted within their boundaries. But tax exemptions approved prior to a school district opting out or reducing the amount of the exemption will be “grandfathered in,” Ms. Fahey said.
She also stressed that the program was designed to assist local municipalities in helping businesses with “a small level of investment while not taking anything off of the tax rolls.”
“[The tax exemption] only phases in the increase in assessment, so you’re not losing anything,” Ms. Fahey said.
The Greenport school board had a similar discussion at its regular meeting this month and also agreed to allow remain “opted in” to the program. Most members said they were in favor because they believed the district would be more likely to receive additional revenue in the long run if more business growth were encouraged.
One of the largest expansion projects planned for Greenport is slated at Peconic Landing, but town officials have confirmed that the life-care retirement community center doesn’t qualify for the tax incentive program because the property is zoned residential.
Ms. Lanza said although the town has identified which properties qualify for the business tax exemption, she said the law could be amended later to include other locations.
The town selected parcels it believed would rejuvenate downtown areas and promote job growth within industrial areas and marinas, she said.