Commissioners grant one tax break, deny another

Total Label USA was granted a tax break on Monday by the Flathead County commissioners, but a similar request from Nomad Global Communications Solutions and KK&B Partnership was rejected because the company missed a deadline for its application.

The incentive, aimed at encouraging business investment, taxes the added value at 50 percent for the first five years. In the sixth year the business pays 60 percent of its tax liability, then continues the phased plan until it pays 100 percent in the 10th year.

Total Label USA, located northwest of Whitefish, initially asked for a tax break on $258,684 worth of new construction in 2015 and 2016 that enabled the company to add eight new full-time employees. The company’s request had to be altered to reflect the 2016 construction only, because businesses must apply by March 1 during the year the benefit is first applicable, according to Deputy County Attorney Tara Fugina. In this case it precluded Total Label’s 2015 investment.

Total Label will get the tax incentive on $202,089 of new construction completed in 2016. It amounts to about $800 a year for the first five years and then tapers off after that.

“Our position is we’re asking you for a reduction in those taxes because of the employment we’ve made,” Total Label spokesman Terry Hensley told the commissioners during a public hearing. The label manufacturing company now employs 51 people.

While the commissioners voted unanimously in favor of Total Label’s request for a tax incentive, Commissioner Gary Krueger noted that “taxes that are now assessed to this property (Total Label) will then be picked up by the rest of the residents of Flathead County.”

Commissioner Phil Mitchell made a similar assertion.

Hensley disagreed with the commissioners’ viewpoint, saying he believes granting the tax incentive would send a positive message to other companies who may qualify for similar incentives if they’re willing to invest in their businesses and hire workers.

Nomad Global Communications and KK&B Partnership had asked for a tax break on $925,220 in new construction for an 11,000-square-foot building addition to its Columbia Falls facility, but were shot down on a technicality. The companies missed the March 1 deadline to apply for the incentive.

William Phillips, representing Nomad, said the application process was confusing, adding he was “given partial instructions” and the application “bounced its way in various government circles.”

The expansion enabled Nomad to add 35 employees, bringing its workforce to a total of 110.

Will Schmautz, one of Nomad’s owners, told the commissioners the company’s partnership with KK&B has helped Nomad take on a large project with the Army National Guard that has given the manufacturer international exposure.

Nomad makes specialty vehicles such as mobile command centers, communication vehicles and trailers.

The recent expansion also has helped the company grow into markets in Saudi Arabia and South America.

“By the end of the year we’re getting ready to pick up another facility south of Kalispell and grow employment by 50 to 60 percent,” Schmautz said. “We have a real commitment to want to stay here in the valley.”

Nomad asked for the tax incentive in order to stay competitive with other similar manufacturers. He said Nomad has been courted to relocate to other areas of the country.

“We want to stay here, and we certainly understand and believe in paying our fair share of taxes,” Schmautz said.

Kent Reimer, one of the owners of KK&B, asked the commissioners what the county is doing to draw businesses.

“Being a businessman all my life, I believe businesses support the residents here,” Reimer said. “It would seem we need to do whatever we can to grow the business community.”

Commissioner Pam Holmquist, a stickler for policy and procedure, said she could not make an exception for an applicant missing a deadline.

“I do appreciate jobs and economic development. We offer these incentives but we have to meet deadlines,” Holmquist said.

Features editor Lynnette Hintze may be reached at 758-4421 or lhintze@dailyinterlake.com.