Ad Valorem Tax Program

Program Overview
The Ad Valorem Tax Exemption Program is an Economic Development incentive program that was passed by the voters of Palm Beach Gardens in November 2012. The program authorizes the City Council to grant Economic Development Ad Valorem Tax Exemptions for qualifying new and expanding businesses in Palm Beach Gardens. The qualifying businesses could receive an exemption to their municipal property taxes of up to 100% for up to 10 years. This program remains in effect until November 2022.

The Economic Development Ad Valorem Tax Exemption program diversifies the city's business base by encouraging industries that offer higher-than-average salaries to locate and expand in the City of Palm Beach Gardens. The program also enables Palm Beach Gardens to more effectively attract new businesses to the city.

Eligibility
Any new businesses and expanding businesses that can prove they meet the definition of New Business or Expansion of an Existing Business as defined by Florida State Statute 196.012 (15) or (16) and determined to be a targeted industry by the City Council.

Definition of New Business
  • A business establishing 10 or more jobs to employ 10 or more full-time employees in the city; provided that such business falls into the following industry clusters: medical and pharmaceutical; aerospace and engineering; information technology; business and financial services; research and development; or any other industry cluster or company headquarters determined to be a targeted industry and approved by the City Council;
  • Any business establishing 25 or more jobs to employ 25 or more full-time employees in the city, whose sales factor, as defined by Section 220.15(5), Florida Statutes, for the facility with respect to which it requests an economic development ad valorem tax exemption is less than 0.50 for each year the exemption is claimed; provided that such business falls into the following industry clusters: medical and pharmaceutical; aerospace and engineering; information technology; business and financial services; research and development; and any other industry cluster or company headquarters determined to be a targeted industry and approved by the City Council; or
  • An office space in this state owned and used by a corporation newly domiciled in the city; provided such office space houses 50 or more full-time employees of such corporation; and
  • Any business located in an enterprise zone
Any new business must first begin operation on a site clearly separate from any other commercial or industrial operation owned by the same business.

Definition of Expansion of an Existing Business
  • A business establishing 10 or more jobs to employ 10 or more full-time employees in the city; provided that such business falls into the following industry clusters: medical and pharmaceutical; aerospace and engineering; information technology; business and financial services; research and development; or any other industry cluster or company headquarters determined to be a targeted industry and approved by the City Council;
  • Any business establishing 25 or more jobs to employ 25 or more full-time employees in the city, whose sales factor, as defined by Section 220.15(5), Florida Statutes, for the facility with respect to which it requests an economic development ad valorem tax exemption is less than 0.50 for each year the exemption is claimed; provided that such business falls into the following industry clusters: medical and pharmaceutical; aerospace and engineering; information technology; business and financial services; research and development; and any other industry cluster or company headquarters determined to be a targeted industry and approved by the City Council; or
  • Any business located in an enterprise zone
Any expansion of an existing business must increase operations on a site collocated with a commercial or industrial operation owned by the same business that results in a net increase of employment of not less than 10%. The 10% requirement does not apply to enterprise zones.

Full-Time Employee
A full-time employee is 1 that has a normal workweek of 25 or more hours per week.

Tax Exemptions
The exemption applies only to taxes levied by the City of Palm Beach Gardens. It does not apply to taxes levied by the County, School District, water management district, waste management district, or stormwater management district.

Application Process & Deadline
Prior to March 1 of the tax year in which the exemption is desired to take effect, the business must fill out the Department of Revenue's DR-418 Form (PDF) as well as the city's Tax Exemption Supplemental Application (PDF) and submit them to the City Manager's Office with the applicable fee as set forth in the city's fees and charges schedule. The application deadline is March 1 of each year.

Once the city receives the application, it will perform an initial screening of the application to determine if the application meets all the requirements to qualify for an exemption. If it qualifies, the application will be referred to the Property Appraiser's Office for evaluation and issuance of a report of the property and the total revenue available, the amount of revenue lost, an estimate of revenue lost for the exemption, and a determination as to whether the property is a new business or expanding business.

Once the city receives the report, Staff reviews the application for number of jobs generated, wage rates, and capital investments from the business. Then a recommendation is provided to the City Council along with an exemption ordinance (which includes 2 readings) for final determination of the total amount of exemption and time frame for the exemption. All degrees and length of exemption recommendations are based on the overall projected economic impact to the city.