County, city to consider sales tax breaks

Sales tax abatements associated with a local business’ recent expansion will be considered when the Garland County Quorum Court and Hot Springs Board of Directors convene this week.

Valley Building Specialties’ $734,426 capital investment qualifies for sales tax rebates offered under the state’s Consolidated Incentive Act of 2003. The quorum court and city board will consider resolutions required for the company to receive rebates on county and city sales taxes levied on building materials, machinery and equipment connected to the expansion.

Companies submit receipts and paperwork to the Department of Finance

and Administration for reimbursement of sales tax money spent on qualifying items. The city estimates an $11,000 reduction in its sales tax receipts if the board were to approve the rebate. The county didn’t provide an estimate on the effect the rebates would have on its sales tax funds.

Most of the capital investment stems from the purchase of the

70,000-square-foot building at

1898 E. Grand Ave. The company acquired the building and 13-acre parcel in April from Bank of the Ozarks. Arkansas Paper Group Inc. deeded the property to the bank in February to avoid foreclosure, according to property records.

John Brown, president of Valley Building Specialties, said the purchase allowed the business to consolidate its manufacturing under one roof. It retained its Highway 7 south location as a retail outlet for residential products.

The automated fabrication machine that was also part of the capital investment is currently in operation at the Grand Avenue location, he said.

“You can program it and feed all your materials,” he said, noting that his company is the state’s only commercial window manufacturer. “It comes out the other end as a fabricated part with a bar code label.”

An automated saw for fabricating aluminum composite material panels was also part of the capital outlay.

The four employees hired to operate the new machinery qualify the business for a state income tax credit equal to 1 percent of the payroll the new jobs added to the local economy. According to the tax credit application, the jobs pay an average hourly wage of $15.50 and will add $128,960 to the business’ payroll. The company had 28 employees before the expansion.

Brown said the incentives weren’t the deciding factor for expanding, but they played a role.

“We needed a bigger facility to allow us to upgrade our game a little bit,” he said. “When we did that, I thought there was probably something out there that could help us a little bit. It’s a significant purchase.”

The quorum court approved sales tax rebates offered under the same state-incentive program in May for the $400,000 capital investment Triumph Airborne Structures made at its Centennial Drive facility.