Tax program changes target new business in North Smithfield

Tax program changes target new business in North Smithfield

NORTH SMITHFIELD – North Smithfield officials are hoping that changes to the town’s tax stabilization program will encourage new and existing businesses to expand their local investment.

Last Monday, July 19, members of the Town Council considered changes to a program that allows them to grant tax breaks on new and expanded commercial buildings. The council can also grant tax breaks on a company’s tangible property, including newly purchased equipment stored inside a building.

According to Town Administrator Paul Zwolenski, the problem with the old version of the program was many companies missed the deadline to apply or were unaware it existed. Under the new program, companies will have until they receive a certificate of occupancy for their new building to apply and will be notified of the program when they seek a building permit.

“Moving forward, it will be part of the application process when you go through the Building and Zoning Department,” he said.

The problem recently came to light when Marc Branchaud, co-owner of the Beef Barn, applied for a tax stabilization agreement for the restaurant’s new location on Industrial Drive. Zwolenski said he had to notify Branchaud about the program’s existence and personally delivered the application form to the property.

“I’d also like to point out that we’re not making adjustments to the ordinance for the Beef Barn, it’s just that the Beef Barn’s application and the process brought something to light that there was a problem with the ordinance,” Town Council President John Beauregard said.

According to Zwolenski, two other businesses, Planet Fitness in Dowling Village and North Smithfield Auto Body on Route 146, have applied for the program since its inception in 2017.

While the details of the agreements are considered on a case-by-case basis by the Town Council, in the past, most agreements have taken the form of either five- or 10-year programs that phase taxes in gradually. In the case of the Beef Barn, Zwolenski said the agreement as currently written allows for a 10-year program with taxes beginning at zero in the first year before increasing by 10 percent annually until they reach 100 percent. The agreement still requires a final approval by the Town Council.

Zwolenski, a strong proponent of the program, said the changes will help encourage businesses to invest in the community. The agreements, he said, can apply to any type of capital investment, including renovations and new construction.

“This is like saying ‘we appreciate you.’ It’s going to create jobs, it’ll be a job multiplier, honestly,” he said.

In the case of businesses like the Beef Barn that already have a location in town, he said, the program could encourage them to expand to larger locations that will require more employees.

Councilors were receptive to the changes, with Councilor Paul Vadenais saying he knows of several businesses in town looking to expand.

“People don’t even know about this, that’s the thing,” he said.

The council will vote on the changes to the program next month when they consider it for a second reading.