RINGGOLD, Ga. — After a double check on whether the company held up its end of the agreement, the Development Authority of Catoosa County voted Thursday to give BMG Bakery a $40,000 tax break.
The authority and the bakery, which supplies Dunkin' Donuts, agreed in August 2017 to a property tax abatement plan, as long as the bakery hit performance goals. By July 1 of this year, the company needed to hire 28 full-time employees and eight part-time workers. It also needed to install at least $3.1 million worth of equipment into its factory, located on Rollins Industrial Boulevard off Alabama Highway.
The abatement would apply to ad valorem taxes on the factory's equipment. But when executives for the bakery asked for the tax break a couple of weeks ago, BMG President David Baumgartner said, representatives for the authority told them they didn't appear to hit their goals. Baumgartner said this was based off outdated information.
Companies have to file personal property returns with the local tax assessors' office by April 1 every year, outlining every piece of equipment and how much each piece is worth. The list supplied this year showed that the factory had about $1.6 million worth of equipment.
But that was only the equipment installed by the end of 2017. Since then, according to documents the company gave the county, the factory has installed about $2.1 million worth. He gave the authority a draft of a tax bill for 2019. He also supplied a payroll sheet from November, showing the company employs 97 full-time workers.
"We met the criteria," Baumgartner said. "We just needed to make sure we've given them the documentation to back this up."
The Authority voted to award the abatement, as previously promised, without debate during Thursday's meeting.
"They've met both their employment and capital investment goals," said Chad Young, attorney for the authority.
Like with any property in the county, the annual ad valorem tax on equipment is billed at 40 percent of its fair market value. In this case, the amount comes out to about $1.5 million.
The combined millage rate of the county government, county school system and Ringgold city government is 27.015 — or about $27.02 for every $1,000 of taxable value. For the bakery, the tax bill on equipment in 2019 would have been $39,982.
According to the agreement between the bakery and the authority, the tax cut decreases by 20 percent every year. So while the company receives a 100 percent break in 2019, it will get an 80 percent break in 2020. The abatement stops after five years.
The authority also voted Thursday to buy 46 acres in the south end of the county for $1.7 million. The property, located at 11681 U.S. Highway 41, is near the Keith community. It is currently owned by ADB Group LLC, a real estate company in Atlanta.
The authority plans to close the sale by Jan. 4 and borrow money from the county government's general fund. It will repay the money through future sales tax revenue. County Manager Alicia Vaughn said the county commissioners do not need to approve the purchase.
Contact staff writer Tyler Jett at 423-757-6476 or firstname.lastname@example.org. Follow him on Twitter @LetsJett.