Industrial development is the building block of any successful community. South Hutchinson is unique in having many large industrial businesses located in the city including American Packaging, Collins Bus, Morton Salt, Stutzman's Refuse, Tyson Foods and many more. The City is committed maintaining the strong industrial base and seeking out new industry businesses.
The State of Kansas allows taxing entities to abate or exempt land and buildings from property taxes for up to ten (10) years. The City of South Hutchinson, in accordance with state guidelines, updated its Tax Abatement Policy in August 2011. According to the Kansas Constitution, to qualify a business must manufacture articles of commerce, conduct research and development relative to the manufacture of products and/or store goods traded in interstate commerce. The City's policy business must seeking rebates must show economic gains for the community. Exemptions will follow this design:
Base Exemption. A base exemption may be granted for up to twenty-five (25) percent of the affected property taxes with the expenditure of at least $100,000 of new capital investment and the creation of at least three (3) new jobs of full-time equivalency.
Incentive Exemption. The city may consider increasing the amount of tax exemption up to one hundred (100) percent by giving special consideration to the amount of capital investment and the number of new employees, based upon the following:
An additional tax exemption of up to five (5) percent may be given for each additional new full-time job above the minimum.
An additional tax exemption of up to one and one half (1.5) percent may be given for each additional $15,000 of investment in taxable property above the minimum.
Industrial Revenue Bonds
New or expanding businesses my be eligible for industrial revenue bonds (IRB). Industrial Revenue Bonds are used in Kansas to finance acquisition and construction of a broad variety of industrial, commercial and industrial properties under K.S.A. 12-1740 et seq on behalf of private businesses or non-profit agencies. IRBs are explained in the document Industrial Revenue Bonds Explained.
IRBs offer many economic benefits including the potential for a ten (10) year tax abatement and a sales tax exemption for the purchase of property and goods financed with IRBs. Exemption from tax on interest for the bonds also lowers the cost to borrowers.
Cash & Infrastructure Assistance
For industrial businesses locating in South Hutchinson, the City and Reno County can provide additional types of assistance. Direct cash incentives on a per job basis have been offered for companies that employ a minimum number of employees at a set wage level. Cash incentives are negotiated on a case-by-case basis. All city incentives must be approved by the City Council in an open meeting. Reno County involvement is governed by their incentive policy.
Industrial businesses are also eligible for infrastructure assistance. The City has adopted an Infrastructure Assistance Policy that outlines the City's position on the providing such assistance. Due to the varying size and needs of industrial projects, infrastructure assistance is negotiated on a case-by-case basis.All city incentives must be approved by the City Council in an open meeting.