An airline is looking into coming to Idaho to set up a maintenance facility in Boise that would create 100 new jobs with salaries of close to $50,000 a year, Idaho's state commerce chief says, in part because of a new tax incentive law.
The firm, which will be named on Tuesday when the state's Economic Advisory Council considers its application, is the first to apply for the state's new economic reimbursement incentive -- a new tax break that will refund up to 30 percent of a firm's state corporate income, sales and payroll taxes for up to 15 years if they create specified numbers of new Idaho jobs.
"I think people will be pleased when they hear the name of the company," said Idaho Commerce Director Jeff Sayer. "We'll be announcing whether or not the proposal is approved. And then there may be a subsequent announcement later, we're hoping, in this particular case, where the company will be announcing they've actually chosen Idaho."
The new tax incentive law just took effect July 1. It offers the tax breaks to firms that create at least 20 new jobs in rural areas or at least 50 in urban areas, if the jobs pay at least the county average wage. It's available both to existing Idaho businesses and to out-of-state firms; Sayer said the first applicant is coming from out of state.
"We're among the final states that they're looking at, and they've asked us to fast-track this particular process so that they can make their decision and get going," he said. "If they choose Boise, it'll be a huge win for our aerospace industry sector and the airport and Boise all at the same time, so we're hopeful."
Though the new law has been on the books less than two months, Sayer said the state already has had half a dozen firms apply for it, though this is the only one to reach the final application stage thus far. "I think the state's going to see this incentive become very popular very quickly," he said.
The incentive raised questions when lawmakers debated it this year, and had to be reworked after the Attorney General's office pointed out constitutional problems with its original plan, to let the seven-member Idaho Economic Advisory Council hand out the incentives at its discretion with no appeal process. The final version of the bill includes an appeal process and rules governing how much incentive should be granted, with the credit to be set at the lowest level required to incentivize new jobs; the council still will decide, based on those standards, who gets how much.
"We're putting a lot of work into how we calibrate the quality of the projects with the incentives we're handing out," Sayer said. "Not every deal is going to be a 30 percent deal." The first applicant applied for the full 30 percent, but will be offered something "lower than that," he said.
Some proposals won't qualify for rebates on all three of the taxes, depending on the type of business and project, he said, but the first one apparently would. "This first one will involve new jobs, new construction, and it'll be for several years," Sayer said. "So this one is a really good project right from out of the chute."
Sayer modeled the proposal after a Utah program; he said Idaho's lack of this type of incentive was a disadvantage in negotiations with professional site selectors who negotiate with states on behalf of firms looking to relocate or expand. Now, he said, he's hearing from site selectors around the nation. "They are telling us they would never have considered putting Idaho on their list, and now they are," Sayer said.
"We knew that this was going to be a game changer for the state, and having that much interest so quickly is really very encouraging," he said.
The council's agenda includes plans for a closed executive session to discuss confidential business information submitted by the company. But Sayer said there also will be discussions in open session. "What you'll probably see is in the public session, we'll actually disclose the name of the company, we'll disclose the general summary of the project and our recommended proposal," he said. "We're really excited about the response we're getting and we're excited about putting this on display so that the public can see we're trying to be really careful stewards of this tool."
Copyright 2014 - The Spokesman-Review, Spokane, Wash.