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Tax abatement is the reduction of the appraised value on certain
types of taxable property, thus lowering a firm's tax payments.
Tax abatement provides a stream of benefits to a firm for a period
of 5 - 10 years, which contributes toits net present value.
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Companies wishing to apply for tax abatement from the City of El
Paso must complete the "Tax Abatement Application Form" and submit
the application prior to commencement of improvements to the subject
property. Tax Abatement will not be considered until the appropriate
application fee is paid. In addition, following eligibility, policy
implemented by the city must be adhered to. The Tax Abatement Application
may be downloaded from the City of El Paso's website. For your convenience,
this
link will take you directly there.
Eligibility for Tax Abatement
In order to be eligible for tax abatement incentives, a proposed project must meet
ALL of the following criteria:
- Be located within a reinvestment zone;
- All created positions must pay a minimum hourly wage of $7.00 an above;
- Applicant must be in compliance with all federal, state and local laws;
- Provide “Added Value” to a property;
- Provide employment opportunity that meets the “Sustainable Wage Requirement”;
- Provide company-paid health insurance for all full-time employees; and
- Constitute a project, which can be demonstrated to create “added value”
in an amount of at least $2.5 million.
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Targeted Industries
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Preferred Industries
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Computer Related
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Consumer Electronics
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Back Office Industry
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Plastic Distribution Centers
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Medical Related
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Pharmaceutical Drugs Manufacturing
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Tool & Die
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Electronics & Electronic Equipment
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Advanced Technical Sector
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Environmental Services
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Motor Vechicle Production
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Food Processing
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Company Headquarters
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Metal Forging
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Retirement Community
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Engineering Management
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Resorts
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Motor Vehicle Equipment
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Plating & Polishing
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Primary Metal Industries
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Printing & Publishing
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Quality of Life Projects:
Recreational parks, soccer fields, baseball arenas, ice skating rings, amusement
parks, bowling alleys, indoor / outdoor alleys, indoor / outdoor sporting arenas
and golf complex. (Source: City of El Paso, Department of Economic Development)
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Tax Abatement General Terms:
- Terms of abatements range from 5 -10 years;
- Both personal property and improvements to real property are
eligible for abatement according to the terms derived by using the
Tax Abatement Worksheet;
- Abatement percentages will not exceed fifty percent (50%) on either
the personal property or the improvements to the real property. Eligibility
for abatement on improvements to real property is allowed only when accompanied
by a minimum improvement to real property of $250,000;
- Construction is not begun until all tax abatement agreements are signed by the taxing entities;
- For existing buildings, only improvements will be eligible for abatement;
- School District will not be asked to participate in Tax Abatement;
- Any project in the target industry group that creates a minimum of 500 new jobs in any
quality for an abatement of 50% real property and 50% personal property;
- Any new project with a minimum investment of $2.5 million or greater that
does not reach the stated number of jobs of its level of investment but
sustains a minimum of 25 jobs will receive a Level One(1) abatement of 25% real
property and 10% personal property for a 5 year term; and
- Tax abatements are not available to non-profit organizations.
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