In 1981 the City of Salem established a Community Reinvestment Area to assist in encouraging Economic and Community Development and housing maintenance. Over the years Salem has made updates to the original “CRA”, most recently in 2017, to include the entire City of Salem boundary lines, with exception to specific excluded residential areas.
CRA is a tax abatement program for new construction, expansion, and remodeling. As a participant in the program you are eligible to receive up to a 15 year Tax Abatement on the “increased or improved value” of your real property.
To Qualify for CRA work must be completed in eligible abatement areas, obtain a City of Salem Zoning Permit, complete the Tax Abatement Application and file it with the Zoning Department before December 15th of the year the project is completed.
Additional Business Incentives
In 2008 the City of Salem established 3 additional incentives to encourage Economic Growth in the City of Salem. These incentives are for enterprises expanding, starting or relocating within the City of Salem.
Job Creation Incentive:
ADD NEW JOBS— Get back up to 55% of City withholding Tax! The intent of the Job Creation Incentive Program is to create jobs and increase the City’s competitiveness within the region. The program can provide a yearly incentive for relocating jobs or creating net new jobs in the City. The term of the incentive can extend up to 5 years and can pay up to 55% of the annual City Withholding Tax back to the Employer. New Downtown jobs relocated or created in the City can pay back up to 100% in the first year!
Net Profit Tax Incentive:
Bring in a NEW company or RELOCATE a company in the city — Get back up to 55% of City Net Profit Tax! The intent of the Net Profit Tax Incentive is to attract new start up business and encourage outside business to relocate within the City. This program can provide a yearly incentive for starting or relocating a business in the city by incenting up to 55% of the annual City Net Profit Tax based on the number of new employees added to the City. This incentive program can be extended for up to 5 years. New Downtown Businesses can receive up to 100% incentive in the first year!
Business Acquisition and Growth Incentive:
SAVE & ADD JOBS— Get back up to 100% of City Net Profit Tax! The intent of the Business Acquisition and Growth Incentive is to promote the turn-around of at-risk business within the City of Salem. The program can provide a yearly incentive for maintaining employment levels for 3 years or growing employment for up to 5 years and can pay up to 100% of the annual City Net Profit Tax based on the number of maintained employees or added employees to the City. The Job Creation, Net Profit Tax, and Business Acquisition Incentives require an application and approval of the Tax Incentive Oversight Board and each incentive has their own eligibility requirements. For more information on any of the Business or the CRA Incentives, please contact Julie L. Needs, SOD Center Executive Director, at 330-337-7669.