The Chamber and other economic development organizations advocated to councilmembers that today's economic climate forces some business, to act against their intentions and wishes, to reduce staff.
The City offers businesses a credit on their B&O tax for hiring and employing for five years jobs at family-wage compensation levels. Due to the current recessionary economic environment that has turned the once pervasive growth scenario on its head, businesses have found themselves unable to keep those desired employees.Local businesses have recently received letters notifying them that they could be subject to paying back previous years tax incentives if they are not retaining employees for five full years.
The City Council meeting today as a Committee of the Whole, explored this issue as it affects the economic climate of the community. It was their expressed opinion and direction to their staff, to prepare city legislation that would cure what has become a punitive situation.
Businesses should expect correspondence from the City Tax & License department notifying them that any repayment ("claw back") of incentives claimed in prior years, should be held in abeyance until the City Council has the opportunity to act.
The City Council wishes to assist businesses in surviving in this stressful economy. However, Councilmembers expressed that companies deciding to relocate jobs outside Tacoma that were previously claimed for B&O credit, would not be exempt from enforcement "claw back" requirement.
For more information, contact Danielle Larson, Ops Manager, City Finance Department.