[Adopted 3-26-1996 by Ord. No. 96-07; amended in its entirety 11-10-2020 by Ord. No. 20-11]
The County Real Estate Tax Abatement Program, as originally
established by Ordinance No. 86-03 and as extended by Ordinance No.
91-01, Ordinance No. 96-07, and Ordinance No. 03-06, is hereby established
and shall remain in effect unless and until rescinded by action of
the Levy Court.
In the opinion of the Levy Court of Kent County, the abatement
of Kent County real estate taxes for certain qualifying industries
and businesses, as defined herein, best promotes the public welfare
by providing incentives for them to expand or locate in Kent County,
thereby creating new employment opportunities for the citizens of
Kent County and ultimately strengthening the County's tax base.
The authority to establish the County Real Estate Tax Abatement Program, as ordained hereby, is granted to the Levy Court of Kent County by Article VIII, Section 1, of the Constitution of the State of Delaware. The County Real Estate Tax Abatement Program, as ordained hereby, is applicable only to real estate taxes imposed by Kent County.
The provisions and circumstances permitting the abatement of
Kent County real estate taxes under this article are as follows:
A.Â
Qualifying industries.
(1)Â
Any industry or business which is engaged in a qualified activity,
invests at least $1,000,000 in a new facility or expanded facility
located in Kent County, Delaware, to be utilized for a qualified activity
and hires at least 10 new permanent full-time employees with annual
earnings (excluding employer-provided benefits) of at least $40,000
per year may apply for the tax abatement benefits available under
this article.
B.Â
Tax abatement benefit. The tax abatement benefit available to any industry or business which qualifies under Subsection A above shall be and is hereby defined as an abatement of Kent County real estate taxes according to the following ten-year sliding scale:
|
Year of Operation
|
Reduction
|
|---|---|
|
1
|
90%
|
|
2
|
80%
|
|
3
|
70%
|
|
4
|
60%
|
|
5
|
50%
|
|
6
|
40%
|
|
7
|
30%
|
|
8
|
20%
|
|
9
|
10%
|
|
10
|
0%
|
As used in this article, the following terms shall have the
meanings indicated:
Ownership, directly or indirectly, of stock possessing 50%
or more of the total combined voting power of all classes of the stock
of such corporation entitled to vote; 50% or more of the stock of
such corporation entitled to vote; and 50% or more of the total number
of shares of all other classes of such corporation's stock.
Ownership, directly or indirectly, of 50% or more of the
beneficial interest in the principal or income of such trust. The
ownership of stock in a corporation, of a capital or profits interest
in a partnership or association or of a beneficial interest in a trust
shall be determined in accordance with the rules for constructive
ownership of stock provided in Article 267(c) of the Internal Revenue
Code [26 U.S.C.A. Article 267(c)].
Any qualified property (other than a new facility or a replacement
facility) resulting from the acquisition, construction, reconstruction,
installation or erection of improvements or additions to an existing
qualified property (not including any improvements or additions resulting
from repair, refurbishing, retooling, recycling or any other similar
process or procedure that merely preserves or restores the value of
an existing qualified property), if such improvements or additions
are placed in service by the taxpayer as owner, lessee or sublessee
after the effective date of this article, but only to the extent of
the taxpayer's qualified investment in such improvements or additions.
Any existing industry which increases its net assessables by 25% or
more in any twelve-month period and which otherwise qualifies is eligible
to participate in this program.
Any qualified property (other than an expanded facility or
a replacement facility) placed in service by the taxpayer as owner,
lessee or sublessee after the effective date of this article; provided,
however, that such phrase shall not include any property the original
use of which commenced prior to the time the taxpayer placed such
property in service if, at any time within one year after the date
the taxpayer placed such property in service, the taxpayer or a related
person uses such property in connection with any activity and such
property was used by any person at any time within the one-year period
ending on the date the taxpayer placed such property in service in
the same or substantially similar activity.
The meanings ascribed to such phrases under Article 167 of
the Internal Revenue Code (26 U.S.C.A. Article 167) and the regulations
promulgated thereunder.
Any activity constituting manufacturing (other than any repair,
refurbishing, retooling, or any other similar process or procedure
that merely preserves or restores the value of a product or that does
not change the inherent nature of a product or material);
Any activity engaged in business as a wholesaler;
Corporate headquarters or regional business complexes and campuses;
Any activity constituting warehousing, distribution or logistics;
Any activity constituting aviation or an aviation-related activity;
Any activity constituting health care such as offices of physicians,
health-related campuses, outpatient care facilities, nursing and community
care, and medical and diagnostic labs;
Any activity constituting business support services such as
legal services, computer programming and design, scientific, R&D
services, employment/HR services, advertising/PR, accounting services,
and building and facility services;
Any other activity approved by the Kent County Levy Court; and
Any combination of the above activities.
A person employed on a regular, permanent and full-time basis.
The value of a qualified property as of the last business
day of such taxable year. Such value during any taxable year of the
taxpayer shall be:
If the qualified property is owned by the taxpayer, the original
cost of such property to the taxpayer; or
If the qualified property is leased or subleased by the taxpayer,
eight times the net annual rent paid or incurred by the taxpayer for
such property during the taxable year, less any gross rental income
received by the taxpayer from subleases of any portion of such property
during such taxable year.
Any building or structural improvement to real property;
The real property upon which such building or structural improvement
is located; and
Any machinery, equipment or other tangible personal property
(other than inventory and property held by the taxpayer primarily
for sale to customers in the ordinary course of the taxpayer's trade
or business) located in such building or structural improvement.
If any property is owned, leased or subleased by the taxpayer
in common with any other person or persons, such property may constitute
"qualified property" only to the extent of the taxpayer's proportionate
interest.
A corporation, partnership, association or trust controlled
by the taxpayer;
An individual, corporation, partnership, association or trust
that is in control of the taxpayer; or
A corporation, partnership, association or trust controlled
by an individual, corporation, partnership, association or trust that
is in control of the taxpayer.
Any qualified property (other than a new facility or an expanded
facility) that replaces any other property located within Kent County
that the taxpayer or a related person used for more than two years
during the period of the five consecutive years ending on the date
the replacement property is placed in service by the taxpayer and
is not used by the taxpayer or a related person for a continuous period
of one year or more commencing with the date the replacement property
is placed in service by the taxpayer.
To qualify for the tax abatement benefits available under this
article, application must be made on or before the date the taxpayer
applicant receives a certificate of occupancy for the qualified property.
Notwithstanding the above, Kent County Levy Court may grant an extension
of time to apply for tax abatement benefits for a period of not greater
than 180 days from the date of issuance of the certificate of occupancy
upon the request of the applicant. Prior to taking action on any request
for property tax abatement, the Levy Court may refer any such request
to the Kent Economic Partnership for review and recommendation, but
it is not obligated to do so.
In order to apply for the tax abatement benefits available under
this article, the taxpayer applicant shall deliver a letter to the
Levy Court of Kent County specifying the exact provisions of this
article under which the taxpayer applicant qualifies and all facts
pertinent to a review of the taxpayer applicant's qualifications (i.e.,
type of industry or business, level of financial investment and new
jobs created, detailed description of ownership and control, etc.).
Property tax abatement requests submitted to the Levy Court through
the Kent Economic Partnership shall be accompanied by a signed tax
abatement certification form prepared by the Kent Economic Partnership
which demonstrates compliance with the provisions of this article
and sets forth its recommendation. An annual request for continuing
benefits under the program, together with an annual statement of compliance
with current program requirements, shall be submitted by the taxpayer
applicant to the Levy Court of Kent County no later than the 15th
day of April for each and every year during which the taxpayer applicant
seeks the tax abatement benefits available under this article.
The Levy Court of Kent County reserves the absolute right and
discretion to grant, deny or discontinue the tax abatement benefits
available to any taxpayer or taxpayer applicant under this article.
The Executive Director of the Kent Economic Partnership shall
provide to the Levy Court of Kent County, on June 30 of each year,
an annual report which summarizes the level of participation in the
tax abatement benefits available under this article, to include the
number of industries or businesses expanding or relocating in Kent
County, the number of new employment opportunities created for the
citizens of Kent County, and the identity and number of industries
or businesses taking advantage of the tax abatement benefits available
under this article.
This article is adopted pursuant to the powers conferred upon
the Levy Court of Kent County, Delaware, by Title 9 of the Delaware
Code.
