www.mybaycity.com
December 21, 2008
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State, Local Tax Free Status Set for Four Tool & Die Shops by City Fathers
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Four Bay City tool and die companies successfully achieved a tax-free Tool and Die Recovery Zone designation
A critical need to preserve the tool & die industry in Michigan is now part of Bay City's industrial development strategy.
According to City Manager Robert V. Belleman, the Michigan Economic Development Corporation recently announced that four Bay City tool and die companies successfully achieved a tax-free Tool and Die Recovery Zone designation under the state's Renaissance Zone program.
"This tax-free designation helps level the playing field by lowering operational costs and encouraging collaboration to help our tool and die companies compete and keep these highly skilled jobs in Bay City," said Mr. Belleman.
The zone allows companies to operate free of virtually all state and local taxes for up to 15 years, thus boosting their efforts to compete in the face of global competition.
The four Bay City companies in the 15-member American Tooling and Manufacturing Coalition include: Cambron Engineering, 3800 E. Wilder Road; Die Stampco, Inc., 1301 N. Lincoln Ave.; ITI Ideal Tool, 406 Sixth St.; and Modern Machine, Inc., 1111 S. Water St.
To qualify, the property designated must be leased or owned by a qualified tool and die business and used primarily for tool and die operations, the company must have fewer than 50 full-time employees, and the Bay City City Commission must agree by resolution to abate local taxes.
On August 6, 2007, the Bay City City Commission approved the abatement of local taxes for up to seven (7) years.
In addition, the businesses must enter into a qualified collaborative agreement which designates synergistic opportunities with other qualified tool and die shops, including collaborative marketing and the development of standardized processes and management methods.
According to the U.S. Bureau of Labor Statistics, Michigan has 1,780 tool and die establishments with 35,831 employees, representing 19 percent of the U.S. total in the industry.
Michigan Tool & Die recovery zones allow companies to operate tax-free for up to 15 years, thus assisting their efforts to compete effectively in the global market. Amendments to the Michigan Renaissance Zone Act in 2004 allow existing zones to request the inclusion of additional companies.
The collaborative agreement must include, but is not limited to, all of the following elements:
Sales and marketing efforts; development of standardized processes; development of tooling standards; standardized project management methods; and improved ability for specialized or small niche shops to develop expertise and compete successfully on larger programs.
The Tool and Die Recovery Zone program is administered by the Michigan Economic Development Corporation. The MEDC is a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life. For more information on MEDC initiatives and programs, visit the Web site at www.michigan.org.###
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