Rules for business tax breaks eyed

Published 5:00 am Wednesday, July 16, 2008

A longtime Brookhaven business may receive tax help from thecity once aldermen decide the guidelines under which it and otherbusinesses would qualify.

Pending their decision on qualifications for tax breaks, theBrookhaven Board of Aldermen on Tuesday indicated it’s possiblethat Columbus Lumber may have a chance at a free port tax breakfrom the city during a time when not only their business, but theentire lumber industry is suffering.

Columbus Lumber owners Jeff Grierson and Doug Boykin spoke tothe board Tuesday night to request that the city consider theirpetition for a free port warehouse exemption that will waive taxeson goods manufactured primarily for export from the state.Currently Columbus Lumber sells more than 80 percent of itsproducts out of state.

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Alderman at-large Les Bumgarner said it is time to move forwardon the business’ request for two separate tax breaks, one of whichwould recognize them as a new enterprise since the company changedhands in 2006, and the free port exemption. Aldermen havepreviously tabled the requests, which would grant the company abreak on $58,000 in taxes – $48,000 for a new enterprise exemptionand $10,000 for a free port warehouse exemption.

Attorney General Jim Hood’s office recently issued an opinionthat cited past court rulings and similar opinions to establishthat Columbus Lumber did not qualify as a new enterprise. Griersonand Boykin had requested the exemption on the grounds the change ofownership when the company was purchased from former WorldCom CEOBernie Ebbers made the lumber mill a new enterprise.

The opinion said the mill had been in operation for more than 40years and stated officials had no authority to grant the exemption”on the sole basis of the assets of the business having changedownership, where operations of the manufacturing business did notchange.”

Thus, the Lincoln County Board of Supervisors denied therequest. The county board also denied the free port taxexemption.

Aldermen said the free port warehouse tax exemption should notbe summarily ruled out by the city simply because the board ofsupervisors turned down the usually routine allowance.

“The best way to move forward with this is to adopt a policy wecan apply to everyone, not just y’all,” Bumgarner said to thecompany owners.

Mayor Bob Massengill said a good way to begin to address thequestion is to first decide if the city is ready to develop apolicy on how the situation can be handled as a rule.

“I think we should either vote that we are agreeable to movingforward and setting parameters on this or that we are not,” hesaid. “The parameters would be ones that we would apply to ColumbusLumber and everyone else in the future.”

Aldermen discussed the length of the term of the exemption, andhow many employees would qualify a business. Bumgarner said hethought there should be at least 50 on-site employees for abusiness to qualify.

City Attorney Joe Fernald said the parameters can be written tomeet whatever criteria the aldermen come up with, but that thefinal draft must be approved by the Mississippi State TaxCommission before it is put into use.

“We have some nailing down to do, and if we have the votes to dothis you can rest assured we’ll be moving forward with it,”Massengill told Grierson and Boykin.

Once the board has voted to work on parameters, the mayor saidColumbus Lumber will be given consideration under whatever rulescity officials establish.

“We will move forward with setting these parameters to determineif they and other businesses that apply will be eligible for thefree port tax exemption,” Massengill said. “This company perhapswould qualify.”