Agreement on the way for final approval of Kimoto Tech upgrade plan

Polk School Board, County Commission approve tax abatements for Kimoto Tech new equipment upgrades

Polk County’s Board of Commissioners and Board of Education both approved a memorandum of understanding for Kimoto Tech to move forward with bond sales on equipment purchased to upgrade their manufacturing capability at the Cedartownbased plant.

The Board of Education took action first last week during their combined session on Aug. 2, voting unanimously to approve the conditions of a memorandum of understanding that would allow Kimoto Tech to purchase the equipment with bonds, and only pay partial taxes for the next 8 years on a schedule of increasing percentage based on its fair market value.

Starting in 2018 after the project is set to be completed, Kimoto Tech will only be charged tax on 14 percent of the value of the total equipment investments, with that figure growing exponentially until after 2025, when full tax payments on their upgrades.

The county’s Board of Commissioners also approved of this plan unanimously dur- ing their Aug. 2 meeting an hour later.

Previously in making the announcement of the investment, the Cedartown Development Authority had also approved of the deal. The Polk County Board of Tax Assessors still have to approve the Memorandum of Understanding, as well as the City of Cedartown in a resolution they planned to pass during their Aug. 8 regular monthly meeting of the city commission following press time.

Here’s how the agreement between Kimoto Tech and the various agencies involved works: first, Kimoto Tech tells the local authorities that they want to upgrade equipment and sell bonds to pay for all the new machinery to be delivered in the spring of 2017. Companies then come in and install, contractors do work to upgrade the facilities to handle the new equipment and manufacturing process, which Kimoto Tech estimates will cost $6 million.

After they sell the bonds to get the money to pay for the new equipment, the board of tax assessors will then give a fair market value on how much the new equipment is worth, which will be what the tax assessor’s office then uses to determine how much tax is charged.

Once that is done, the agreement states the company will pay taxes on the new equipment up to a percentage of it’s value. In the first year, it starts out at 14 percent, then goes up to 20 percent in the next year and increases in between 10 and 15 percent a year until the eighth year, when 80 percent of the value of the equipment is taxed.

Thus the agreement acts as an enticement to allow existing industries the opportunity to upgrade and expand while gaining some benefit from doing so, in the form of saving some taxes over a defined period on whatever projects they undertake.

Similar agreements are made when new companies move into areas like Cedartown or Rockmart, involving the development authorities, the county commission, school board and the board of tax assessors.

The final year of savings, if the Polk County Board of Tax Assessors agree to the deal, will end in 2025. Following that, Kimoto Tech will pay the taxes on the full market value of the equipment.

Kimoto Tech has also agreed with the upgrade to maintain 50 current jobs at the plant in the memorandum of understanding.