South Charleston City Council working toward tax credit for manufacturing businesses
CHARLESTON, W.Va.-- South Charleston City Council is taking steps to reinvest in the area's manufacturing companies.
On Thursday, council members approved the first reading of an ordinance to amend the city code to provide a business and occupation tax credit for existing manufacturing businesses.
To get the tax break, a business would have to increase its number of employees by 20 percent and up its gross sales by 20 percent, said Mayor Frank Mullens. In turn, the business would get a 50 percent tax credit that would apply to the increase in taxable income.
So, if a company had been paying $10 million in taxes before it raised its sales and would be paying $15 million afterward, the credit would go toward that extra $5 million, Mullens explained.
There was no discussion about the ordinance during the meeting.
Mullens said after the meeting that the proposed ordinance was beneficial to the city because it required companies to contribute to South Charleston's economic development.
"We're not just handing out tax credits," he said.
Mullens explained that if a major company were shopping around for a place to relocate, having the tax credit might make South Charleston more attractive.
"Maybe this gives us a little edge," he said.
In April, the South Charleston City Council approved an ordinance to provide a business and occupation tax credit to manufacturing companies that employed at least 200 people and brought in at least $100 million a year, the Gazette previously reported.
Also during Thursday's meeting, Mullens announced that Smith Fastener Co., which currently operates in Kanawha City, is moving to South Charleston. It brings 50 jobs and the potential for more growth, he said.
Reach Alison Matas at email@example.com or 304-348-5100.