‘First Year on Us’: Kyle considers possible small business incentive program

As a small business owner himself, Kyle resident Travis Mitchell campaigned during his run for the Place 6 city council seat on creating a program that encourages small business growth.

With the help of a new small business program, Mitchell hopes to change the mentality that Kyle doesn’t do enough to help small business owners or encourages them to stay.

“First Year on Us” is a program designed to take development agreements that the city contracts with larger developers and scale them down for small business owners.

“With this incentive program, we will be able to offer a dollar-for-dollar tax credit for the business owner in year one,” Mitchell said.

The goal, according to Mitchell on his website travismitchell.net, was not to subsidize the small business community or “give them lip service.”

“If they invest in us, I want to invest in them,” Mitchell wrote on his website.

According to his website, owner-occupied businesses can apply for a one-time tax credit up to $5,000 for improvements on real and personal property.

If an owner-occupied business opened and made capital improvements in order to operate that business, the individual would be reimbursed for the taxes paid up to $5,000 over the land value to the city during the first year.

He said if a developer builds a strip center and leases space out, the company would receive 50 percent of the tax credit.

The program is designed to incentivize commercial property only within the retail sales (R/S), warehouse (W) and the construction and manufacturing district (CM).

Businesses excluded from the program are those operating out of a residence, those in a Tax Increment Refinance Zone (TIRZ) or in specific developments.

Mitchell said the program would offer a tax break on future revenue of a business instead of current revenue. The program credits against improvement value verified by the Hays Central Appraisal District.

“It’s critical we design the program to correspond with an increase in the tax base,” Mitchell wrote on his website. “The credit therefore passes the ‘but for’ argument, meaning that ‘but for’ the improvement we would not receive those tax dollars and therefore the credit is against future earnings and does not cost the current taxpayers.”

The main reason most small businesses fail within the first year is not due to a lack of consumer interest, but the small business owner running out of money due to paying taxes on the capital improvements they make, Mitchell said.

“This incentive program is designed to specifically attack that problem,” Mitchell said.

Mitchell said that council members were very supportive of the presentation they were given about the incentive program.

The program will reappear on the agenda as an ordinance in approximately a month.

“With this program we can ensure that small businesses that come to Kyle will thrive and grow with our community,” Mitchell said.

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