Tax Abatement Area - Its DeterminantsSustained and balanced economic development of the US is as much dependent on the development of brownfields and economically unsaturated areas as on any other factor. An economically unsaturated or backward area, brownfield, blighted area, or tax abatement area is one which has considerable scope for infrastructure development. However, due to certain adverse conditions that exist in such an economically undeveloped area, interest in its development is severely lacking. So, special efforts for revitalization of such an area are very much the need of the hour. In view of this, such an area is also known as an economic revitalization area (ERA) or a redevelopment area. So, how are tax abatement areas decided? The answer to this question forms the scope of this article. First the latest update on this topic. The US government has left it to the government at the level of a county to decide what constitutes an unlisted tax abatement area or zone in their county. Of course, the EPA has notified a government approved countrywide list of brownfields to all counties. Certain other tax abatement areas have also been already listed by the US government as also some by governments at the state and county levels. As per definition of a brownfield, its determinant is that it is an abandoned, underused, or environmentally contaminated site. A blighted area is one that is severely affected by natural disasters, or as though by plague, disease, or due to environmental conditions. This clearly determines such an area. An economically backward area or unsaturated area is one in which basic infrastructure is not in a developed stage. Basic infrastructure includes roads, bridges, railway network, power, means of transportation, airport, drainage, sewerage systems, as well as land development. Reasons could be due to geography, inhospitable terrain, climatic conditions, or other environmental reasons. Historical, poverty related, as well as political reasons may also be responsible for this. All this determines such an area. All the above are all listed tax abatement areas. Besides these areas, the local government has a discretionary power to decide whether an unlisted area within its county limits can be considered as an economic revitalization area or urban enterprise zone (UEZ). For such an area, an applicant needs to submit a special application under form SB-1 / PP to the local government authorities of the county in which the said property is located. In the application, complete details of the location of the property, its surroundings, and the reasons attributable for such property having been covered by the applicant as a UEZ need to be mentioned. The requisite county authorities will then take a decision on whether it can be considered as an ERA or not. Their decision will be considered as final. You may have got an insight into how a tax abatement area is decided, through this article. |