Yes. Pursuant to M.S. 469.310, subd. 11(f), "A business is not a qualified business if, at its location or locations in the zone, the business is primarily engaged in making retail sales to purchasers who are physically present at the business's zone location."
A person other than a public utility carrying on a non-retail trade or business at a place of business located within a JOB Zone. A business is not considered to be a "qualified business" until it enters into a Business Subsidy Agreement with the local unit of government. In the case of a relocation from a location in Minnesota, a business is not a "qualified business" until it enters into a Business Subsidy Agreement with the local unit of government, AND enters into a Relocation Agreement with the State.
According to the JOBZ statute, all incentives given under the JOBZ program must be treated as a business subsidy and thus local units of government must comply with the requirements of the business subsidy law. The Zone or Subzone administrators must annually submit a Business Subsidy report to DEED for each business benefiting from JOBZ status (Minn. Business Assistance Form). Zone Administrators must also submit an annual Development report to DEED. Finally, qualified businesses must submit annual tax returns to the Department of Revenue.
Yes. DEED’s business development and marketing staff will assist zones and subzones in their marketing efforts. In addition, zones will be identified in DEED's marketing materials and listed on MNPRO. Zones are also responsible for marketing themselves as they indicate in the original zone application.
Yes. See DEED's JOBZ Zone Modification Process for further information. The process is one of many technical assistance items on the JOBZ web page.
For the duration of the zone. If a business stops meeting its employment goals required by the statute, the relocation agreement, and the Business Subsidy Agreement, they will no longer meet the definition of a "qualified business" and will thus be ineligible to receive tax exemptions. They will also need to repay the previous tax benefits in accordance with the claw back provisions outlined in the law.
Yes. Pursuant to M.S. 469.310, Subd. 11 (g), "A qualifying business must pay each employee compensation, including benefits not mandated by law, that on an annualized basis is equal to at least 110 percent of the federal poverty rate for a family of four" and that rate must be adjusted/increased annually on July 1 of each year. The current wage rate is $12.45 per hour.
Yes. Please contact the Department of Labor and Industry for Prevailing Wage questions. Contact:
Minnesota Department of Labor and Industry
443 Lafayette Road N.
St. Paul, MN 55155
Phone: (651) 284-5091
Local units of government can set goals and requirements in their business subsidy agreements. Also, the JOBZ law contains specific requirements for a company moving into a zone from another Minnesota non-zone location. By signing a Zone Agreement, JOBZ Administrators are pledging not to recruit businesses from other JOBZs.
No, this property is generally exempt from taxation and, therefore, is not included in captured tax capacity under the TIF Act. Captured tax capacity is the value that generates tax increment. Thus, exclusion from captured tax capacity prevents the generation of increment even though the property pays some debt levies. (School operating referenda, the other category of taxes that continue to apply, are calculated on market value, rather than tax capacity, and do no enter in TIF calculations at all.) In addition, if a TIF district is created within a zone, when the zone designation expires and the property becomes taxable, the value at the time of the expiration of the exemption will be included in "original tax capacity" of the TIF district. This will prevent capturing of increases in the value of the property that occur during the zone designation.
There is no strict prohibition against awarding an economic development abatement to a JOBZ parcel, but the justification for such abatements on top of substantial JOBZ benefits may be questionable. Moreover, if economic development abatements are planned to allow the reallocation of the taxes for the payment of bonds (in a fashion similar to TIF), it must be understood that the property tax exemption provided by JOBZ will substantially diminish the property taxes that may be abated. Abatements on a parcel are limited to the local tax rate multiplied by the net tax capacity of a parcel, but the net tax capacity excludes the value of the improvements that are exempt by JOBZ, even though that value is subject to general obligation debt levies. Also, if the abatements precede the JOBZ benefits, the use of JOBZ may jeopardize the bond payments by exempting amounts that can no longer be diverted to bond payments.
The Minnesota Department of Revenue. Contact: Seth Sanbower, MN Dept. of Revenue, 651-556-6185
The business can start purchasing items exempt from sales tax and upfront sales tax exemptions begin when the building is being constructed for the business who has signed a Business Subsidy Agreement and, if necessary, a relocation agreement. The contractor or qualified business can get the sales tax exemption by filling out and submitting to the vendor the Sales Tax Exemption Certificate ST3 found on the JOBZ web page.
JOBZ exemptions are not a menu. Qualified businesses are eligible for all of the tax exemptions listed in the statute. Tax exemptions, however, are based on business activity in the zone. Many businesses, trucking or construction for example, conduct most of their activities away from their main headquarters or offices. For these businesses, JOBZ benefits, particularly sales and income tax exemptions, are limited to activities that occur in the zone.
Commercial or industrial property, as defined in M.S.273.13,subdivision 24, occupied by a qualified business by July 1st of the assessment year. The Business Subsidy Agreement must by signed by July 1st. Thus, if a property is occupied by July 1 of Year 1 by a business that has signed a Business Subsidy Agreement before July 1 of Year 1, the property is exempt from property taxes payable in Year 2 and beyond. Please note that the commercial/industrial classification is a statutory tax classification, not a local zoning classification.
The property is still subject to tax on the value of the land, voter approved school operating levies approved before January 1, 2004 , general obligation bond levies, and the non-commercial/industrial portion of mixed-use properties or for buildings not occupied by a qualified business. Taxes on land value are never exempt. Only the commercial and industrial improvements occupied by a qualified business are eligible for tax exemptions.
If a business ceases to meet the definition of a "qualified business" or fails to meet its goals under a Business Subsidy Agreement, two years of taxes will have to be repaid. There is room for negotiation regarding the repayment of taxes due to extenuating circumstances. JOBZ claw back provisions are not the same as those listed in the business subsidy law. Where the two laws conflict, the JOBZ statute supersedes the business subsidy statute.