Sunday, January 21, 2018

Final Tax Status of Winston Plywood Should Be a "Win" for LMSD

After months of delay and legal wrangling, the property tax status of Winston Plywood should be resolved by the next meetings of the Winston County Board of Supervisors and the City of Louisville Officials. Delays in paper work and legal requirements for the settling of a “Fee in Lieu” tax status of the Winston Plywood facility in Louisville created some issues for the County, City and most significantly the Louisville Municipal School District.

The company had initially filed for a ten-year tax-exempt status on the facility, equipment and inventory. This is typical and a common practice for new industrial construction due to the added economic boost they often bring to a community. The exemption would only apply to the county and city. The school district, LMSD, would receive its full tax dollars under this status.   

That exemption has been on hold since early summer as the company filed and completed paperwork to qualify for a “Fee in Lieu of Taxes" status which is determined by the Mississippi Development Authority (MDA). To qualify for Fee in Lieu, an investment must meet certain requirements including at least $100 million of private investment. Under this arrangement, tax dollars paid to the school district could be reduced by as much as two thirds but the county and city would share in the funds. In effect, the company would reduce their tax burden but Winston County and the City of Louisville would receive significant revenue that they could not obtain under a tax-exempt status. The overall effect would be a tax dollar win for Louisville and Winston County but a significant loss for LMSD.

Local officials received notice last week that the ‘Fee In Lieu” status had not been approved and that the consideration of the ten-year tax-exempt can now be considered at the local level. Approval of the tax exemption is expected at the next meetings of county and city officials.

The result should provide a significant source of revenue to the School District of $757,026 (after collection costs) for the 2017 tax year. If Fee In Lieu had been approved that revenue would have dropped to roughly $265,000.