EVERETT — In an effort to boost the local economy, city leaders are considering a tax break for companies that bring jobs to town.
Mayor Ray Stephanson is proposing a tax credit for Everett companies that create 50 or more new full-time jobs in four consecutive quarters or less. Companies would receive a break on the city business and occupation tax — $1,000 per new job up to a $500,000 cap.
“We look at this as a one-time incentive for employee growth that puts us in a position to grow revenue in the future,” Stephanson said.
The measure is particularly important in a difficult economic climate, said Louise Stanton-Masten, president and CEO of the Everett Chamber of Commerce.
“Any incentive like this goes a long way to helping us retain existing businesses and attracting new ones,” Stanton-Masten said
The measure comes before the City Council 6:30 p.m. Wednesday for a vote.
Just about every business is subject to B&O taxes, with a few exceptions. Businesses that gross less than $20,000 a year don’t pay in Everett, for instance. Local businesses also pay a state B&O tax.
More than 8,500 businesses in Everett pay taxes on gross revenues at a rate of one-tenth of one percent or $1,000 per $1 million of revenue — that’s half of what the state allows cities to charge, said Debra Bryant, Everett’s chief financial officer.
This year, the city plans to collect $15.7 million in B&O taxes. That accounts for about 14 percent of the city’s total revenue.
The proposed tax break is part of a push by city leaders to attract and keep business in Everett. The mayor said he does routine visits to area companies to see if there’s more the city could be doing.
Stephanson said he talked with one electronics firm that wanted to move 500 of its employees out of Everett to Oregon. He said the promise of the tax break convinced them to stay and add another 100 workers here.
The city doesn’t have any estimates on how many businesses may actually take advantage of the break, he said. If approved, the break would be applied retroactively to Jan. 1.
The proposal defines “new full-time employment positions” as those that are at least 35 hours a week. The employee filling the position also must work at least 51 percent of the time in Everett.
Debra Smith: 425-339-3197, dsmith@heraldnet.com.
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