Last Friday, we highlighted a special tax deal offered to Costco by Spanish Fork. Today, we highlight another deal offered in Sandy to Scheels, a sporting goods superstore, and analyze the rationale used to justify these kinds of deals.[pullquote]Government should not be in the business of providing advantages to favored companies[/pullquote]
Earlier this year, Sandy city, Salt Lake County, Canyons School District, and four smaller taxing entities agreed to rebate 100 percent of Scheels’ property taxes for 25 years for a new store in Sandy, a deal worth more than $16.8 million (see here, here, here and here).
To illustrate the magnitude of this deal, the same privilege offered to residents of Salt Lake County, including Sandy, would save each household an average of $1,817 per year in property taxes,1 or $45,425 over a 25-year period. And the same deal would save other businesses an average of $8,928 2 per year for each commercial property they own, equal to $223,205 per property over 25 years.
These numbers raise an important question: Why does Scheels, a company based in Fargo, N.D., get a tax break of mammoth proportions while Utah families and other businesses that have been paying full tax rates for years or decades get nothing? Read more