POCATELLO — All four Idaho Tax Commissioners were at the Bannock County Courthouse Tuesday to get answers about the county commissioners granting of a 5-year tax break to Amy's Kitchen as an incentive to the company last year that cut its county tax liability by about 75 percent.
A closed session of the Bannock County Commission was held from 2 to 3:15 p.m. as the three commissioners met with members of the state Tax Commission, the mayors of Pocatello and Chubbuck and legal staff from both the county and state. A conference call was also made to attorneys for Amy's Kitchen.
State Tax Commission members attending Tuesday's meeting were former Bannock County Commissioner Tom Katsilometes, Rich Jackson, Ken Roberts and Elliot Werk.
County deputy attorney Ian Service said an agreement was reached with the state regarding the tax abatement granted to Amy's Kitchen. Details will be hammered out by next week.
“If we do it right, we don't have to have another hearing,” Service said following the closed session.
Service said the big swing in tax assessments regarding the property that was vacated by Heinz Frozen Food early last year, and was occupied by Amy's Kitchen as the year closed, was a red flag to the State Tax Commission.
Service said part of the county's tax break for Amy's was construed as being outside of Idaho Law 63-602NN by the State Tax Commission.
“They thought part of Amy's break came outside of the law,” Service said. “We were blind-sided by the State Tax Commission.”
Before the commissioners went into executive session, chairman Howard Manwaring said he had been in negotiations with the state for more than a week.
“We may have errors on how we applied the law,” Manwaring said.
As a result of Tuesday's negotiations, Bannock County will shift more of the tax break to buildings and equipment at the Amy's site from the actual property where the plant sets.
“We got clarification and everyone is on the same page,” Service said.
Idaho Code 63-602NN states: “A board of county commissioners may declare that all or a portion of the market value of a defined project based on investment in new plant and building facilities meeting tax incentive criteria as defined in subsection (2) of this section shall be exempt from property taxation.”
The debate centered on another portion of the law that states: "'Project site' means an area or areas at which new plant and building facilities are located and at which the tax incentive criteria have been or will be met...”
Service said since the Amy's operation was a take over of existing property, there were concerns by the State Tax Commission that a full abatement of taxes on that property might not be appropriate.
The Amy's operation easily met the state law's threshold of a minimum $3 million investment because Amy's invested $12 in new equipment at its Pocatello facility, according to service.
“We're talking about legal intent,” Service said about the county's use of state law to grant the 5-year tax break.
Service said the land where Amy's is located contributed to about 73 percent of the existing county property tax break. He said adjustments concerning equipment and other personal property at the site will be made to satisfy the State Tax Commission.
“Everyone wants them (Amy's) to stay and we'll do whatever it takes to make that happen,” Service said.
Closure of the Heinz plant resulted in the loss of about 400 jobs. Amy's has pledged to employ up to 1,500 people at the Pocatello facility within the next 15 years. As part of tax incentive packages to lure Amy's Kitchen to the Gate City, the Idaho Department of Commerce put a Tax Reimbursement Incentive plan in place for Amy's. The company is approved to receive a state tax credit of 26 percent for 15 years.