City tax exemptions to align more with state law
By Brian L. Gray
The Mandan City Commission has agreed to take a more targeted approach to its property tax breaks for new and expanding businesses, in order to better align itself with new limits set by the 2013 legislative session.
Tax breaks will now be limited to specific areas of need that the city previously cited in a 2008 retail study. Exemptions will be available for services that include restaurants, hardware and home improvement, department stores, clothing or shoe stores, movie theatres and hotels.
The exemptions will also narrow down the locations around Mandan that will allow tax breaks. Businesses seeking property tax exemptions will need to be in the areas of downtown, Interstate 94 and The Strip.
City staff was also directed by the commission to put together an ordinance that the city commission could later approve and make into law.
The action was made in order fall in line with a bill that was passed by the legislative session. The bill that the North Dakota Legislature approved, Senate Bill 2314, went into effect on Aug. 1.
The bill ties consideration of any exemption for a retail-sector business to a more targeted approach, where it must fall within a retail category lacking in the community and allows for the first of the targeted businesses in each of the major business districts to be eligible for tax exemptions. It also eliminates the consideration for speculative commercial building projects, with a possible exception for a major retail center.
Commissioners will now allow non-primary sector businesses to seek property tax breaks through at least Dec. 31 if their buildings can be completed by then.
Whether exemptions will be allowed in the future will come down to voters in the November 2014 election. The limits on the exemptions were approved over the option to disallow any exemptions of any kind until the election is held.
Under the state law, retail businesses can have property tax breaks in cities or counties with populations of 40,000 or less if voters approve them during a general election vote.
Commissioner Sandy Tibke said that with the city located on the eastern edge of the oil boom, now is a good time to place a moratorium on exemptions because the city’s development is growing on its own. “From my perspective I believe we’ve reached the tipping point,” she said.
Commissioner Dennis Rohr said he is looking forward to learning how the majority of Mandan residents feel about tax exemptions. “I admit that I don’t know the full consensus of the community on this topic. And one way to figure that out is with a vote,” he said.