By Nick Nunn Staff Writer
During the Dec. 2 meeting of the Morgan County Board of Tax Assessors (BTA), County Attorney Christian Henry explained the outlined of a memorandum of understanding between the Development Authority of Morgan County (DA) and Mannington Mills, Inc.
The memorandum contains a plan to create tax incentives for Mannington Mills during expansion in exchange for creating jobs in Morgan County. Henry explained that the DA will issue bonds for a 15-year lease to buy equipment, which will be leased to Mannington Mills, and Mannington Mills will pay the bonds back over the 15-year term.
Since, according to Henry, the DA was created by a local act to be a tax-exempt entity, the DA will not have to pay taxes on the purchased equipment, which will be in use by Mannington Mills.
However, as Mannington Mills pays off the bond debt over the term of the lease, they will have to pay taxes on the percentage of the equipment they have paid for.
Similarly, Mannington will transfer ownership of the portion of the property upon which they intend to expand to the DA to take advantage of its tax-exempt status, and then will increasingly pay a higher percentage of the taxes in proportion to the payments they have made over the course of the lease.
Board Member John Artz asked Henry if the DA has money of its own for investment. Henry stated that the DA does not. It simply acts as a “vehicle” for the tax exemption, but does not have any liability for the bond debt. Morgan County Chief Appraiser Chuck Anglin stated that Newton, Clarke, and Jasper Counties all have similar entities in place for similar deals. Henry said that the deal stated in the memorandum “works out best for everybody.”
“This seems like the preferred method,” said Henry concerning the plan. Henry said that the BTA did not need to take any action during their meeting because the deal has not yet been worked out completely, but that Mannington would eventually want assurances from the BTA that they would receive the tax breaks created by the deal, should the Morgan County Board of Commissioners approve the memorandum.
Henry also stated that Mannington expressed willingness to pay the full amount for the school tax during the entire term of the lease but that, since the memorandum is not yet in its final version, they cannot know if that offer will continue to stand. The BTA has received more than 200 Conservation Use Valuation Assessment (CUVA) continuation applications and will begin to work through the applications during a work session on Monday, Dec. 16, at 9 a.m. in Suite 201 of the Morgan County Administration Building.