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What is JOBZ?
Job Opportunity Building Zones (JOBZ) is a
new and exciting tool to stimulate business activity in Greater Minnesota.
Eligible businesses in a zone will operate in an environment nearly free
of state and local taxes. These tax incentives will help new and
expanding companies lower their overall costs and facilitate their growth.
Who is Eligible?
To qualify for the tax exemptions, a business must start-up in the zone,
relocate from outside the zone or expand. Companies relocating from
another Minnesota site qualify by increasing employment by 20 percent
within the first year or making capital investment of at least 10 percent
of gross revenues. In addition, businesses must also meet local
business assistance goals to qualify for tax exemptions.
How long will
JOBZ last?
Exemptions are available for up to 12 years beginning in January 2004.
How do I access the program?
JOBZ-related information is available at
www.positivelyminnesota.com
This site offers access to profiles of communities with zones, specific
properties eligible for JOBZ benefits, site infrastructure, and local zone
administrators to contact for more information. The site also offers
access to a calculator on which businesses can estimate the potential
savings of locating in a JOBZ zone. Please call or e-mail
the Ortonville Economic Development Authority at 320/839-2618 or e-mail at
eda@ortonville.net to discuss
local area information!
Where are the zones located?
Ortonville is located in one of the 10 tax-free
zones. Our zone is "Upper Minnesota Valley (Region 6W) JOBZ.
How does JOBZ save money?
JOBZ tax incentives will reduce company
expenses, increase competitiveness, and help sustain further growth and
expansion in Minnesota.
Tax Exemptions:
 |
Corporate Taxes (income tax,
alternative minimum tax, minimum fee) |
|
Individual Taxes (income tax
on investment income, alternative minimum tax) |
|
Sales and Use Taxes |
|
Most Property Taxes (except
for land, general obligation bonds, and school operating levies in place
prior to zone designation) |
|
Wind Energy Production Tax |
Tax Credits:
| Job Creation Credit |
How much can
it save you?
Example 1 - Metal Fabricator
Company Profile:
|
New
Company |
|
Zone
operations located in owned space valued at $400,000 in 2004, increasing
1% annually |
|
Sales of
$425,000 in 2004, ramping up to $1.5 million by 2007, and growing 4%
thereafter |
|
Employment of 9 people in 2004, growing to 16 people in 2015.
Average wage of $33,400 grows 3% annually |
|
Taxable
purchases range from $181,000 in 2004 to $691,000 in 2015 |
|
Average Annual Tax
Savings and Credits |
|
Corporate Income Tax |
2,800 |
|
Sales and Use Tax |
33,500 |
|
Property Tax |
9,300 |
|
Job Creation Credit |
5,100 |
|
Total Average Annual Benefit |
50,600 |
Total Net Present Value of 12-year Zone to Business
(uses discount rate of 5%) |
$449,000 |
Example 2 - Plastic Manufacturer
Company Profile:
| Existing company with 30 percent
of operations in zone |
| Zone operations located in owned
space valued at $525,000 in 2004, increasing 1% annually |
| Sales of $18 million in 2004,
ramping up to $30 million by 2006, and growing 7% thereafter |
| Employment of 25 people in the
zone in 2004, growing to 69 people in 2015. Average wage of
$29,200 grows 3% annually |
| Taxable purchases range from $1.66
million in 2005 to $2.95 million in 2015 |
|
Average Annual Tax
Savings and Credits |
|
Corporate Income Tax |
16,700 |
|
Sales and Use Tax |
147,100 |
|
Property Tax |
12,700 |
|
Job Creation Credit |
4,500 |
|
Total Average Annual Benefit |
181,000 |
Total Net Present Value of 12-year Zone to Business
(uses discount rate of 5%) |
$1,631,000 |
Use the JOBZ calculator to estimate how much your
business can save by locating in a JOBZ zone. The JOBZ Calculator
can be accessed at
www.positivelyminnesota.com and selecting from their menu
options or
click here to go directly to the calculator at their site.
Why Minnesota?
| Minnesota ranks as the most livable state (7 years
straight), according to Morgan Quitno Press |
| Minnesota is one of only three states awarded
straight as for business vitality, performance and development capacity
on the Corporation for Enterprise Development's 2003 report card. |
| Minnesota businesses have the 4th lowest failure rate
in the country, according to data from the U.S. Small Business
Administration |
| In recent years, Minnesota has worked to
substantially reduce business taxes, saving businesses over $1 billion
annually. |
How can I find out more about the Ortonville
JOBZ Zone?
Please contact Kimberly Danielson at the Ortonville Economic Development
Office
e-mail:
eda@ortonville.net or
Phone: 320/839-2618
Download the official Minnesota JOBZ Zone
Brochure or visit their website at:
www.positivelyminnesota.com
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