Document Moscow_doc_d403091df8

RESOLUTION NO. A RESOLUTION OF THE CITY OF MOSCOW, A MUNICIPAL CORPORATION OF IDAHO, AMENDING AND RESTATING RESOLUTION NO. 95-08, ADOPTED BY THE MAYOR AND CITY COUNCIL ON JUNE 19, 1995, DECLARING THE EXISTENCE OF DETERIORATED AREAS WITHIN THE SAID CITY AND THE NEED FOR THE EXISTENCE AND BENEFIT OF AN URBAN RENEWAL AGENCY IN SAID CITY AS PROVIDED BY THE LAWS OF THE STATE OF IDAHO, IMPLEMENTING THE STATUTORY CRITERIA OF EMPOWERING THE MOSCOW URBAN RENEWAL AGENCY, MAKING CERTAIN FINDINGS OF FACT AND DECLARATIONS OF NECESSITY REGARDING THE NEED FOR THE URBAN RENEWAL AGENCY; PROVIDING FOR THIS RESOLUTION TO BE EFFECTIVE UPON ITS PASSAGE AND APPROVAL. WHEREAS, on June 19, 1995, the City Council and Mayor approved Resolution No. 95-08, finding that the City is a competitively disadvantaged border community, creating and empowering the Moscow Urban Renewal Agency, describing the Moscow Urban Renewal Agency, making Findings of Fact and Declarations of Necessity regarding the need for the Uroan Renewal Agency, providing for the resolution to be effective upon its passage and approval; WHEREAS, since June 19, 1995, the City has embarked on continued analysis of the Idaho Urban Renewal Law, Ch. 20, Title 50, Idaho Code (the "Law"), and the Local Economic Development Act, Ch. 29, Title 50, Idaho Code (the "Act"), which, by passage of House Bill 966 in 1994 provides for the designation of a competitively disadvantaged border community; WHEREAS, the City Council deems it necessary to amend and restate the provisions of Resolution 95-08; WHEREAS, by virtue of the Law, the Idaho State Legislature has created in the City of Moscow an independent public body corporate and politic known as the "Urban Renewal Agency of the City of Moscow"; WHEREAS, the City of Moscow desires to implement and empower the Urban Renewal Agency by making those certain Findings necessary under Idaho Code, Section 50-2005; WHEREAS, the City recognizes that there are certain factual prerequisites to the empowerment of the Agency; RESOLUTION Pagel ---PAGE BREAK--- WHEREAS, it is the desire of the Mayor and City Council of the City of Moscow, Idaho, to appoint a Board of Commissioners of the Urban Renewal Agency for the municipality and to empower such agency to transact business and exercise powers granted by the Act and the Law and it is the desire of the City of Moscow, Idaho, to exercise the authority conferred upon it by the Act and the Law; WHEREAS, the City has obtained an Eligibility Report from Harlan Mann which has examined areas within the City of Moscow and determined that there are areas within the City of Moscow which are deteriorating or deteriorated as defmed by Idaho Code Sections 50-2018(i) and 50-2903(7)(b); a copy of that report is attached hereto as Exhibit 1; WHEREAS, under Section 50-2903(7)(e) a deteriorated area includes any area which by reason of its proximity to the border of an adjacent state is competitively disadvantaged in its ability to attract private investment, business or commercial development which would promote the purposes of the Act; WHEREAS, the City of Moscow has received a report from Business Plarming Consultants, Inc. (a copy attached hereto as Exhibit which report makes certain Findings concerning the competitive disadvantage of the City of Moscow; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF MOSCOW AS FOLLOWS: Section I. That there are one or more areas within the City of Moscow which are deteriorating or deteriorated areas as defined by Idaho Code, Sections 50-20 !8(i) and 50-2903(6) and (7b). Section 2. That the rehabilitation, conservation, and redevelopment, or a combination thereof, of such area or areas are necessary in the interest of the public health, safety, and welfare of the residents of the City. Section 3. the City. That there is a need for an Urban Renewal Agency to function in Section 4. That the City Council hereby makes the following findings and declarations of necessity: a. The City's competitive disadvantage as a border community hinders its ability to engender a diversified economy through promotion of locally originated businesses based on emerging technologies. RESOLUTION Page2 ---PAGE BREAK--- b. This competitive disadvantage impairs the City's ability to nurture and manage its potential for growth. c. Diversification of the local economy and the orderly management of growth are essential undertakings in the promotion of the public welfare. d. Through its proven ability to generate viable high-technology businesses, the North Central Idaho Business Technology Incubator ("NCIBTI") constitutes a valuable tool for economic diversification and orderly growth. e. Retaining locally originated businesses such as those generated by the NCIBTI is conducive to the public welfare of the city of Moscow; competing with other municipalities for business originated elsewhere generally is not. f. The City of Moscow is compromised in its ability to retain locally originated, business technology-based companies, in particular those which have graduated from the NCIBTI, by the non-existence of available developed properties. g. The City of Moscow requires a means by which it may promote development of properties suitable for the permanent location of locally originated companies. This need is made more acute by Moscow's proximity to the Idaho border, which facilitates competitive offers to those companies from other locations outside Idaho. Revenue allocation financing is the only tool available to the City for the promotion of such development. Section 5. That City staff and the Urban Renewal Agency are hereby directed to present a recommendation as to what area or areas of the City of Moscow (including the designation of the entire City) should be identified as a "competitively disadvantaged border community," what criteria should be used to designate an area for use of revenue allocation financing within a competitively disadvantaged border community, whether those areas should be of a specific size or zoning classification and other criteria the City staff and the Urban Renewal Agency deem necessary. Section 6. That such recommendation shall be presented to the City for consideration of a City Ordinance in compliance with the Act within sixty ( 60) days of the effective date of this Resolution. Section 7. That the Moscow Urban Renewal Agency is hereby authorized and the Mayor shall appoint three commissioners for said district as provided by Idaho Code Section 50-2006. The Moscow City Supervisor is directed to cause City staff to assist in carrying out the Agency's work. RESOLUTION Page3 ---PAGE BREAK--- Section 8. That this Resolution shall be in full force and effect immediately upon its adoption and approval. RESOLVED by the City Council and APPROVED by the Mayor this 6th day of November, 1995. Paul C. Agidius, Mayor Elaine Russell, City ³clerk reoo !utl\urbrenew\sr RESOLUTION Page4 ---PAGE BREAK--- Ill lØi I 3 4 5 !0 SPOTSWOOD Deteriorated or deteriorating structures Faulty lot layout in terms of size, adequacy, accessibility or usefulness Insanitaiy or unsafe conditions Deterioration of site or other improvements Any combination of such factors i L I ' - 'Gen and Publishing \WI1oiE>Saling Dry Grains Internal Distribution I \W;arehotlsirtg. Radio and TV Public Road Construction Public Hospitals \SE•Iec:ted Business Services IF'ir•an.,ial Business Services Source: Washington State Department of Revenue As shown in the table, tax rates vary considerably depending upon the type of business conducted. A general rule is that high volume, low margin business sales (Wholesale Dry Grains) are taxed at a the lowest rates and low volume, high margin sales (Selected Business Services) are taxed highest. Idaho Income Tax and Washington B&O Tax Comparisons The reader is again referred to Appendix A for a complete description of each business scenario and evaluations of overall tax impacts. In this section we will evaluate the tax impact of earnings in both states. 8 ---PAGE BREAK--- Table 5 shows the variation in tax payments for companies with exactly the same financial status. It shows that high volume, low margin businesses like a grocery store, pay a significantly larger amount of corporate tax in Washington than in Idaho. Using this example, a grocery store with sales of $13.9 million and a net profit of only $192,000 would pay only $15,361 in Idaho income tax but would pay $65,445 in B&O tax. Therefore, high volume stores with low margins would fare better in Idaho than in Washington. Stores with higher margins and greater net profit, however, do better in Washington from the Income tax/B&O tax perspective. General Merchandise stores, for instance, pay less in State tax under the B&O tax method than do those subject to Corporate Income Tax. Table 5 Summary of Idaho State Income Tax and on Selected Companies Gross Sales Net Profit 2,343,000 247,513 3,252,000 46,828 3,252,000 352,516 1,855,000 234,750 13,895,000 192,015 6,719,000 224,082 1,864,000 288,040 1,932,000 672,684 Idaho's Income Tax 19,801 3,746 28,201 18,780 15,361 17,927 23,043 53,815 Tax The conclusion to this evaluation is not clear cut; the amount of income/ B&O tax will vary considerable depending upon the particular characteristics of a business as demonstrated by the above example. Determination of whether a particular company is disadvantaged by locating in Idaho can only be determined upon examination of that companies sales and income characteristics. However, it can be generally stated that high volume, low margin businesses will do better in Idaho than in Washington. Conversely, low volume, high margin businesses pay a proportionately higher tax in Idaho. One notable exception to this rule is distribution warehouses which are located in Washington but sell to customers outside the state. In those cases, B&O tax is not charged on out of state sales. To demonstrate this, the example of a Wholesale Trade Company was used with all statistics remaining the same except for the percentage of out of state sales. For purposes of demonstrating the distinct advantage of companies located in Washington which fit this category, we have used an assumption of 75% of sales out of state. 9 ---PAGE BREAK--- The following table, Table 6, shows the comparison between an Idaho company and a Washington State company using both 100% in state and 75% out of state sales. The B&O Tax is substantially reduced for this type of business and creates an even greater disadvantage for Moscow. Comparison of Wholesale Trade Industrial Insurance Rates Table 6 with and Out 0% Out of-State Sales 75% Out of State Sales 6.053 6,053 1,940 1,940 16,748 13,284 1 Idaho State has an industrial insurance rate which is based on the gross payroll for an individual. This rate varies according to the experience rating of each profession and for each business. To obtain a comparison for employment costs between the two states, it is necessary to create a specific example and determine what insurance costs would result. For our example, we used a clerical position, full time, which pays a gross salary of $8.35 per hour ($17,368 per year). In Idaho State, the industrial insurance costs would be $85.10. Washington State's industrial insurance system is based on the number of hours worked and a risk class rating for the type of job related activities. For instance, a clerical worker in Washington State is charged for insurance at the rate of $.0837 per hour. If an average full time year of 1,920 hours (2,080 hours less vacation, holidays and sick days) was worked, this would equate to an industrial insurance cost of $160.70. A similar evaluation was prepared for our selected businesses. The following table, Table 7, shows the difference in Industrial insurance costs for similar type employees in both Washington and Idaho States. 10 ---PAGE BREAK--- Table 7 Summary of Industrial Insurance Costs for Idaho and Washington States Type #Employees Employee Idaho Classification 10 In-store Sales 5,380 4 Warehouse Workers 3,912 4 Machine Operators 5,560 20 Accountants 2,940 30 Grocery Clerks 24,120 15 Pharmacist 7,320 10 Hotel Workers 11,820 690 This comparison shows that, as a general rule, Washington State has higher industrial insurance rates. However, for specific companies such as manufacturing, pharmacists and hotel workers, Idaho's rates are higher. As with the income tax/ B&O tax comparison, the question of disadvantage for Moscow will depend upon the rate classification of employees for each company. Rather than using industrial insurance as a sole determinant of disadvantage or advantage, it should be considered as only a part of the broader tax picture. State Unemployment Compensation Tax Idaho State Unemployment Compensation Tax is levied at a rate of 2.1% on the first $20,400 of wages paid per employee. The maximum rate per employee (assuming an experience rating has not been established) would be $428.40. The W ashington State rate is 2.5% but is based on the first $19,900 per employee. Therefore, the maximum cost per employee would be $497.50, By applying our company scenarios to determine comparable State Unemployment Compensation tax rates, we can obtain a fair relationship of cost between the two states. See Table8. 11 ---PAGE BREAK--- Table 8 State Salary Level #Employees Idaho Washington 20,000 10 4,200 20,000 4 1,680 20,000 4 1,680 30,000 20 6,300 20,000 30 12,600 20,000 15 6,300 15,000 10 3,150 25,000 3 5,250 This table demonstrates that Washington State's workmen's compensation costs are consistently greater than Idaho's. Therefore, Moscow, Idaho does not have a disadvantage regarding this tax. Other Taxes Each state has many other taxes which can effect the overall tax picture for businesses and residents. The following taxes have been identified to provide an example of some of these taxes and the impact they can have on business and residential development. Hote]jMotel Tax The Idaho State Hotel-Motel tax is 2% of gross revenues. Washington State is also 2% of gross revenue but is not assessed in Whitman County. Both rates are added to the existing sales tax rate charged to customers. Therefore, the overall sales tax for Idaho hotel patrons is 7% and the Whitman County rate is the normal 7.5%. Therefore, Idaho, and Moscow, have a 1/2% advantage in this area. Business License Fees No business license fees are charged in Moscow, Idaho or in Pullman, Washington. Therefore, Moscow does not have a disadvantage in this area of taxation. 12 ---PAGE BREAK--- Fuels Tax Idaho State imposes fuel taxes at the following rates: Gasoline $.21/ gallon Diesel $.21/ gallon Propane $.152/ gallon Natural Gas $.165/therm Aviation Fuel $.05/gallon jet Fuel $.04/ gallon Washington State fuel tax is $.23/ gallon for gasoline. This indicates that Idaho does not have a disadvantage regarding fuel taxes. Electricity Tax Electricity generated in Idaho is taxed at 1/2 mill per kilowatt hour. In Washington, a PUD Tax is charged which is 2.14% of gross revenue plus 5.35% of 1st 4 mills per KWH. Since the impact of these tax rates will vary considerably for each type of business depending upon their power consumption patterns and volume, no effort has been made to determine the impact of the cost between Moscow and Pullman. Cigarette, Tobacco Tax Cigarettes sold in Idaho are taxed at $.18 per pack of 20 cigarettes. Washington is $.54 per pack of 20 cigarettes. Other tobacco products sold in Idaho are taxed at 35% of wholesale price. In Washington State, tobacco products are taxed at 74.9% of wholesale price. These taxes, while not significant for determining location of a business or the relative advantage or disadvantage of being in a particular area, indicate general taxation structure in both states. As previously mentioned, Washington State generates its tax revenues in ways different from Idaho State. The higher tax rates in these categories of taxes indicated where the revenues are generated. Port District Formation Disadvantage The City of Moscow has a disadvantage in the creation and operation of a port district. This disadvantage has very direct tax impacts for Moscow. In Washington State, a taxing district can be formed covering an entire county which can initiate economic development projects. The district can incur debt to finance development projects and 13 ---PAGE BREAK--- stimulate the economy. This is evident by the success of the Port of Whitman County. The Port of Whitman County Industrial Park in Pullman, Washington, has many buildings and an extensive base of infrastructure improvements. The industrial park has given Washington a great advantage in attracting businesses to their state. In Idaho, however, the opportunity to create a port district is much more limited. Ports can only be formed where there is a water transportation system potential and only in relatively small areas. Ports cannot incur indebtedness. Because of these limitations, the opportunity to obtain tax revenue to develop industrial infrastructure (and attract industrial development to Moscow) using a port district organization, is significantly less than in Whitman County, Washington. Overall Tax Impacts on Selected Businesses To obtain a clearer picture of the overall tax impact on businesses and the advantage or disadvantage by being located in the State of Idaho, tax costs have been added together (for the selected business scenarios) for the following categories of tax: Corporate Income Tax; Owner's Income Tax; Industrial Insurance; State Unemployment; State B&O Tax; and Property Tax. Sales tax, because it is passed on directly to customers, is not included. Table 9 shows the total tax paid by our selected businesses. Generally, businesses paid more tax in Idaho than in Washington. Adding the total tax for the selected eight businesses resulted in total taxes paid in Moscow, Idaho at $660,476 and $594,009 in Pullman, Washington. This is an 11.2% greater amount of tax paid in Moscow, Idaho compared to Pullman, Washington. This general level of taxation demonstrates that overall, most businesses located in Moscow are at a disadvantage. 14 ---PAGE BREAK--- Businesses Type Total Tax Moscow, Idaho Pullman, 62,127 45,175 81,107 36,944 116,370 98,280 119,819 1 130,124 81,811 The overall tax impact on businesses is different if viewed from the perspective of the customer. The customer pays sales tax in addition to absorbing the costs of doing business which are included in the price charged for the goods or services. The next table, Table 10, shows the total tax paid by the business and the customers. Table 10 Summary of Overall Tax Comparisons for Selected Businesses with State Sales Tax Added jComp.any Type Total Tax Idaho 179,277 45,175 243,707 36,944 811,120 333,445 250,299 130,124 Inc. 81,811 So, impact on the customers is greater in Washington than in Idaho. The glaring exception is grocery stores because no sales tax is added to food items in Washington State. 15 ---PAGE BREAK--- Overall Tax Impacts on Home Owners Resident home owners are also disadvantaged in Moscow, Idaho. Since Idaho State has a personal income tax, and a comparable tax on individuals in Washington State does not exist, Idaho home owners pay more taxes. To obtain an understanding of how much difference there is in total tax payments by home owners, three "typical" scenarios were prepared for comparison. Assumptions were made for annual income, taxable income, food expenditures, consumer goods expenditures and an estimate of the market value of their home. Then, each individual's overall tax payments were measured. The results are shown on Table 11. Also, more detailed information for each scenario is provided in Appendix A. Table 11 Summary of Tax Comparisons for Resident Home Owners 150,000 60,000 110,000 35,000 5,000 4,800 40,000 20,000 250,000 120,000 8,513 2,387 2,250 1,240 6248 2,999 Business Inc Note 1: Taxi;,; determim•d from the 1993 Tax Table, form-10, Marri(pd filing jointly. Note 2: Source is the Idaho State Tax Commission. Note 3: Tax Code Area 1-00, City of Moscow. Note 4: Source is the Washington Stale Department oJ Revt•nue. Note 5: Tax Code Area 13, Pullman, Washington This evaluation demonstrates that home owners ( and all residents) have a tax disadvantage in Moscow, Idaho compared to Pullman, Washington. 16 ---PAGE BREAK--- Conclusions Areas of Significant Disadvantage The City of Moscow is at significant disadvantage as a border community because of taxing methods and levels. These disadvantages include: • • • • • • Higher property taxes than bordering areas in Washington State effects both residential and business development in Moscow; The corporate income tax method of taxation causes overall business taxes to be greater than in bordering areas in Washington; Personal income taxes create a burden on all individuals, whether business owners or employees, which is not borne by people in Washington State. This adversely effects location decisions when Pullman, Washington and Moscow, Idaho are compared; Moscow has a disadvantage regarding the potential for development of a Port District to finance economic development. Also, the existence of the Port of Whitman County causes a disadvantage in Moscow's ability to attract and develop an industrial economic base . Companies which distribute products outside this area would find particularly strong incentives to be located in Washington rather than Idaho because the B&O tax is not applicable to out of state sales; and Overall taxation of individual home owners in Idaho is greater than in Washington. When state income tax, annual sales tax payments and property taxes are added for an hypothetical home owner, Idaho State taxes are significantly higher. Areas of Minor Disadvantages Different types of businesses are effected by taxes in different ways. Many businesses are disadvantaged by locating in Moscow compared to Pullman, Washington because of these tax differences. In our evaluation we found that wholesale trade companies, drug stores, hotels, real estate developers, manufacturing companies and general merchandise stores are all taxed heavier in Idaho than in Washington. The degree of difference will vary depending upon the specific business. However, all of the above listed businesses are disadvantaged when located (or considering locating) in Idaho. 17 ---PAGE BREAK--- Impact on Urban Renewal Projects Urban renewal projects in the City of Moscow may assist in neutralizing, to some extent, the disadvantages of being located close to the Washington State border. Some of the types of projects which can help to overcome these disadvantages include: • • • • • • 0 Projects which can positively impact the community by reducing overall property tax burdens of Moscow residents; Projects which reduce property tax payment of commercial and industrial properties, Projects to provide incentives to locate grocery stores within Moscow; Projects to provide incentives to manufacturers to reduce the personal and corporate income tax and industrial insurance tax burdens; Projects which can provide an infrastructure base for the development of industrial businesses; Projects to overcome the disadvantages for wholesale distribution businesses; and Projects to reduce the combination of a state income tax and proportionately higher property taxes for individual homeowners. The entire city is impacted by the disadvantages identified in this report. Therefore, any location within the city will share equally in the impact. If new areas are annexed into the city, those areas will also share these disadvantages since they will be included in the City of Moscow code area taxing districts 1-00 or 1-01. Therefore, it is recommended that the entire city, and it's area of city in1pact be included in any considerations for designation as areas impacted by proxinU:ty to the border. These are a few of the potential projects which can be justified by the disadvantaged border community status of the City of Moscow. However, using this information contained in this report, it may be possible to identify other projects which can have a similar effect of mitigating the impact of being located close to the W ashington State border. 18 ---PAGE BREAK--- Appendix A Pullman, Washington and Moscow, Idaho Tax Comparisons ---PAGE BREAK--- Moscow. Idaho and Pullman. Washington Tax Comparisons Tax Comparison for Wholesale Trade Companies Assumptions Sales (Note> 1J lnĐState Sales % {Now 21 Out of State Sales % {Note 3; Cost of Goods Sold rNote4) Gross Profit Rate/Amount 100% 0% 65_8% Amount 3 252_000 2,139,816 1,112,184 Employee Wages {Notes; OWner's Wages {Note 6} 4 employees @ $20,000 80,000 1 ,920 6.6% 214,632 Other Operating Costs (Note7} Total Operat1ng Costs 23.7% 7" 72;c4c_ 1,065,356 Net Prof1t Property Market Value Sales Tax Paid by Customers Moscow Idaho {Note 17) Pullman, Washington (Note ts; Income Tax for each employee Moscow, Idaho (Note 19} Pullman, 0.0% 0 0% 6 1% 0 0% 46,828 750,000 1,220 Note 1 -Source 1s Almanac of Busmess and lndusrnal Fil>ancial Rat1os, SIC 5190 WhOlesale Trade Note 2 Assumpt:on of m-srate sales w:ll vary to demonstrate the :mpact of B&O taxes Note 3 · Assumpt;ons of out of state sales w11! vary to demonstrate tr.e 1mpact of B&O taxes Note 4- Source 1n Almanac of Bus1ness and lndustnal F;nancJal Rat1os, Wholesale Trade, SIC 519-0, /'190 to 6/91 Note 5 · Employee wages are estrmated at $10 00 per nour. 1. 920 hours ;s the State of Washington's estimate of full t1me hours after vacation, SiCk time and holidays Note 6-Source 1n Almanac of Business and lndustnal F1nanc1ai Rat1os, Wholesale Trade, SIC 0190 7/90 to 6/91 Note 7 ·Source m Almanac of Busmess and industnal F1nanc1al Ratios, Wholesale Trade, SIC 5190 7t90 to 6/91 Note 8 -Assumes a maximum tax rate_ Source 1s the Idaho State Tax Comm;sston Note 9 . Assumes a maximum tax rate_ Source 1s the Idaho State Tax Comnss1on Note 10- This 1s the Idaho Wholesale Trade rate of $4 89 per $100 of payroll Note 11 -Source IS the State Department of L.abor and lndustnes class 2102 Warehouses Note 12-2 i% on tne l1rst 520,400 per employee Note 13 đ 2 5% on the fnst $19;900 per employee Note 14- 8&0 Tax 1s based on the retarlmg rate effect:ve 1n 1904. Note 15 ·The Property Tax rate IS for the City of Moscow Tax Code ArE:a 1-00 Note i6 - C1ty of Pullman Tax: Code 13 Note 17 - Source 1s the laaho State Tax Comrn:ss1on Note 18 · Source rs the WashingtOn State Department ol Revenue Note; IS Maxrmum tax rotB 1S 8 2% Employees are assumed to pay a iesser rate of 6 1% ---PAGE BREAK--- Moscow, Idaho and Pullman. Washington Tax Comparisons Tax Comparison for Manufacturing Companies Assumptions Sales (Not8 t J In-State Sales % {No/8 21 Out of State Sales % (Not8 3) Cost of Goods Sold (Nots 4) Gross Profit Rate/Amount 100% 0% 65 6% Amount 3,252,000 2,133,312 1,118,688 Employee Wages (Nota 5; Owner's Wages {Nots 6; 4 employees@ $20,000 80,000 1,920 hrs/yr/employee other Operating Costs {Not;;;7j Total Operat1ng Costs Net Profit Property Market Value Sales Tax Paid by Customers Moscow, Idaho {Note 17) Pullman, Washington {Note tfl) Income Tax far each employee Moscow Idaho (Note 19) Pullman, Wash1ngton 5.6% 182,112 15.5% -'!5014206"'03 766,172 5 0% 7 5% 6 1% 0.0% 352,516 i ,250,000 162,600 1.220 243,900 Note 1 -Source IS Almanac of Bus1ness and lndustnal Fmanc1a1 Rauos SIC 3560, Manufactunng Generallndustf'{ Machinery Note 2 -Assumption of m-state sales wt!! vary to demonstrate the 1mpact of 8&0 taxes Note 3 - Assumptions of out of state sales w1il vary to demonstrate the impact of 8&0 taxes Note 4- Source 1s Almanac of Busmess and Industrial F1nanc1a1 Ratios, SIC 3560, Manufactunng General industry Machmery Note 5- Employee v..ages are esttmated at $10 DO per hour 1.920 hours IS the State of Washington's estimate of full t1me hours after vacat1on, SiCk t1me and hol;days Note 6- Source IS Almanac of Bus1ness and lndustnal F1nanc1al Raoos, SIC 3560, Manufactunng Gen8fal industry Macr11nery Note 7- Source I& Almanac of Bus1ness and lndustnal Fmanc1al Rat•os, SIC 3560, Manufactunng Generallndustf'{ Machinery Note B- Assumes a max1mum tax rate_ Source ts the Idaho State Tax CommiSSIOn Note 9 - Assumes a maxJrr,um tax rate_ Source 1s the Idaho State T 3; Cost of Goods Sold {Nota 4 ) Gross Profit Tax Comparison for Grocery Stores RateJAmount 100% 0% 78.6% Amount 13_895,000 1 0.921 .470 2,973,530 Employee Wages (Nora 5) Owner's Wages {Nota 6} 30 employees @ $20,000 600_000 1 . 920 1 3% 1 80,635 Other Operatmg Costs (Note?) Total Operating Costs 14 4% 2 Ğ 0* 00 80 2,781,515 Net Profit Property Market Value Sales Tax Paid by Customers Moscow_ Idaho {Nors 17) Pullman. Washington (Nore 18) Income Tax for each employee Moscow Idaho (Nate t9j Pullman, Washington 5 0% 0 0% 6.1% 0.0% 192,015 2_000,000 694.750 1,220 Note 1 - Source 1s Almanac of Bus;ness ana lnoustnal F1nanc1al Rat1os, SiC 5410, Grocery Stores Note 2 · AssumptiOn of In-state sales w1H vary to demonstrate the Impact of 8&0 taxes Note 3 - Assumptions of out of state sales will vary to demonstrate the Impact of 8&0 taxes Note 4 Source 1s Almanac of Bus; ness and lndustnal Fmanc1a1 RatiOS, SIC 5410. Grocery Stores Note 5 - Employee wages are estimated at $1 0_00 per hour 1 ,920 hours 1s the State of est1mate of full t1me hours after vacat;on, stck t1me and holidays Note 6 - Source :s Almanac of Bus1ness and lndustna: Fmanc1a1 Rat1os, SIC 5410, Grocery Stores Note 7 - Source 1s Almanac of Bus:ness and lndustnal Faoanc1a1 Ratios, SIC 5410, Grocery Stores Note 8 - Assumes a max1mum tax rate Source IS the Idaho State Tax Comm1ss1on Note 9 . Assumes a max1mum tax rate. Source IS the Idaho State Tax Commission Note 10 + Th1s 1S the Idaho Grocer; Store rate of $4 02 per $100 of payroll Note 1 1 • Source :s the Wash;ngton State Department of Labor and lndustnes, class 6402, Supermarkets Note 1 2 . 2.1 % on the first $20,400 per employee Note 1 3 - 2.5% on the first $19,900 per employee Note 14 8&0 Tax: 1s based on the rate effE;Ctlve 1n 1994. Note 1 5 - The Property Tax rate ;s tor the C1ty of Moscw< Tax Code An'"a 1-00 Note ! 6 - City of Puiin--;an Tax Code 13 Note 17 - Source :s the idaho State Tax comm1SÉIon Note 18 + Source !S the Wast'Hngton State Department of Revenue Note 19 - MaxJmurn tax rate ;s 8 2% Emp:oyees ar.-; assumed to pay a !.;sse rate ot 6 1 % ---PAGE BREAK--- Moscow, Idaho and Pullman, Washington Tax Comparisons Assumptions Sales (Note 1} % (Nate 2) % (Nate 3) Cost of Goods Sold {Nat 3) Cost of Goods Sold (Note 4) Gross Profit Rate/Amount 100% 0% 27 6% Amount 1 ,864,000 514,464 1 , 349,536 Employee Wages {Note 5) Owner's Wages (Note 6) 1 0 employees @ S\5,000 150_000 1,920 tlrsiyr/employee Other Operatmg Costs {Note7; Total Operat1ng Costs Net Profit Property Market Value Total Tax Sales Tax Paid by Moscow, Idaho (Nola 17) Pullman, Washington {Nom 18) Income Tax tor each employee Moscow, !datw {Note 19) Pullman, Washington 4.8% 89A72 44 1 % 24:;- 1,061 ,496 288,040 3,000,000 119,819 7 0% 130,480 7 5% 2 0% 300 0 0% 100,243 139.800 Note 1 - Source 1S Almanac of Business and lndustnal F1nanc1al RatiOS, SiC 7000, Hotels and Other Lodg1ng Places Note 2 * Assumption of In-state sales Will vary to demonstrate u--e 1mpact of 8&0 taxes Note 3 Assumptions ol out of state sales w;ll vary to demonstrate the impact of B&O taxes Note 4 - Source is Aimanac of Bus1ness and lndustna! Financial RatiOs, SIC 7000, Hotels and Other Lodg;ng Piaces Note 5 - Employee wages are est;mated at $10.00 per hour 1,920 hours 1S the State of Washington's estimate of full time hours after vacatJon. s1ck time and holidays Note 6 - Source IS Almanac of Busmess and lndustnai F1nanc1al Rat;os, SIC 7000, Howls and Other Lodg;ng Places Note 7 - Source IS Almanac of Busmess and lndustnal Fmanc;al Rat1os, SIC 7000, Hotels ana Other Lodg1ng Places Note 8 - Assumes a max:mum tax rate_ Source 1s the Idaho State Tax Comm1ss;on Note 9 - Assumes a max;mum tax rate Source 1S the Idaho State Tax Comm;ss;on Note 1 0 - Th1s 1s the Idaho Hotel rate of $7 BB per 5100 of payroll Note 1 1 - Source ;s the washington State Department of Labor and lndustnes class 4905. Motels Note 1 2 - 2.1% on the first $20.400 per employee Note 13 - 2 5% on the f1rst $19.900 per employee Note 14 * 8&0 Tax ;s based on the Serv1ce & Other rate efre<:t1ve 1n 1994. Note 15 The Property Tax rate iS for the C1ty of Mosoo,v Tax Cooe Area 1·00 Note 16 - C1ty of Pullman Tax Code 1 3 Note 17 - Source i S tt"1e !dar,o State Tax CommiSSIOn Note 18 Source :s the wash;ngton State Department oi Revenue Note 1 9 - Max:mum tax rate ;s 8 2% Empioyses are 111:1 ɺ 0000 UlM Ň Dt2r; ' " l}ff'X" CC9£· ' SCALE r'l. 100' SDIVISION BOUNDARY eo' · ɼ ' Q u · § v c • v , ' Õ Ŕ· × 0 ' / <3 0 r . ' I i( "  g > c " a Ò § • Deteriorating Area Boundary Moscow ,Idaho October 1995 , c Ö c. i ŋ· ň c. c c c ʼn w· • i5 ! a 8 Q " I" • Ô " ·0 @ ! i5 ·ɹ a to co . n' c f " § cr :5 b c 0 1 n' I" " " Ó Ŋ " l c 0 c e: