New Program Allows Developers to Benefit from Sales and Use Taxes
In a bid to revitalize Detroit and attract more residents and businesses, a new program has been introduced that allows developers to benefit from post-construction sales and use taxes in addition to income taxes generated by their projects. This program, which expands on the original initiative designed for office-centric developments, aims to create more live-play communities and vibrant talent centers in the city.
The original program was primarily focused on attracting office developments, particularly during Detroit’s pursuit of Amazon’s second headquarters. It allowed developers to reinvest the income tax generated from job creation. However, this approach failed to address the need for housing, shopping, dining, nightlife, and entertainment – elements that play a crucial role in making a city attractive to young people and encouraging them to stay. According to Brian Fleisher, the Chief Development Officer of the city’s Economic Development Corporation, the program didn’t support these vital components because it did not consider the sales tax generated by these types of developments.
Fleisher believes that the new change in the program will level the playing field for all projects, regardless of their focus. It recognizes the importance of not only job creation but also the consumption and generation of sales tax in certain developments. By incorporating sales and use taxes into the formula for reinvesting in projects, the program now aligns with the goal of creating vibrant communities that attract and retain talent.
Despite the potential benefits of the new program, it has faced criticism from the Mackinac Center for Public Policy, a Midland-based think tank. The Center argues that these incentives are simply handouts to wealthy developers and that projects should rise or fall based on their own merits. However, proponents of the program argue that it is necessary to provide these incentives in order to attract private investment and jumpstart economic growth in the city.
The expansion of the program to include sales and use taxes is seen as a positive step in Detroit’s ongoing efforts to transform itself into a thriving and attractive city. By creating live-play communities with a bustling social scene and diverse amenities, the city hopes to draw in young professionals and encourage them to make Detroit their home. With this new development program, developers now have the opportunity to contribute to the city’s revitalization while benefiting from the sales and use taxes generated by their projects.
Original Story at www.crainsdetroit.com – 2023-07-18 09:45:00
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