Frequently Asked Questions

General Questions

  • Is there a prohibition against retail?

    Yes. Pursuant to M.S. 469.310, subd. 11(f), "A business is not a qualified business if, at its location or locations in the zone, the business is primarily engaged in making retail sales to purchasers who are physically present at the business's zone location."

  • What is a Qualified Business?

    A person other than a public utility carrying on a non-retail trade or business at a place of business located within a JOB Zone. A business is not considered to be a "qualified business" until it enters into a Business Subsidy Agreement with the local unit of government. In the case of a relocation from a location in Minnesota, a business is not a "qualified business" until it enters into a Business Subsidy Agreement with the local unit of government, AND enters into a Relocation Agreement with the State.

  • In accordance with the business subsidy law, what reports do I have to submit if I get a JOBZ?

    According to the JOBZ statute, all incentives given under the JOBZ program must be treated as a business subsidy and thus local units of government must comply with the requirements of the business subsidy law. The Zone or Subzone administrators must annually submit a Business Subsidy report to DEED for each business benefiting from JOBZ status (Minn. Business Assistance Form). Zone Administrators must also submit an annual Development report to DEED. Finally, qualified businesses must submit annual tax returns to the Department of Revenue.

  • Can Zone or Subzone boundaries be amended?

    Yes. See DEED's JOBZ Zone Modification Process for further information. The process is one of many technical assistance items on the JOBZ web page.

  • Can subzone administrators control who receives zone benefits?

    Yes. Because benefits received in the zone are subject to the business subsidy law, the communities can set criteria that can qualify or disqualify a business to receive JOBZ benefits.

  • What if a company moves to another Zone location?

    The repayment provision applies when the company ceases to operate in the Zone or fails to meet goals of a business subsidy agreement.

Employment & Wages Questions

Community Questions

  • How can communities protect existing businesses from unfair competition?

    Local units of government can set goals and requirements in their business subsidy agreements. Also, the JOBZ law contains specific requirements for a company moving into a zone from another Minnesota non-zone location. By signing a Zone Agreement, JOBZ Administrators are pledging not to recruit businesses from other JOBZs.

  • Can I award a TIF benefit to a JOBZ parcel within a TIF district?

    No, this property is generally exempt from taxation and, therefore, is not included in captured tax capacity under the TIF Act. Captured tax capacity is the value that generates tax increment. Thus, exclusion from captured tax capacity prevents the generation of increment even though the property pays some debt levies. (School operating referenda, the other category of taxes that continue to apply, are calculated on market value, rather than tax capacity, and do no enter in TIF calculations at all.) In addition, if a TIF district is created within a zone, when the zone designation expires and the property becomes taxable, the value at the time of the expiration of the exemption will be included in "original tax capacity" of the TIF district. This will prevent capturing of increases in the value of the property that occur during the zone designation.

  • Can I award an economic development abatement (under M.S. 469.1812, 469.1813, 469.1814 and 469.1815) to a JOBZ parcel?

    There is no strict prohibition against awarding an economic development abatement to a JOBZ parcel, but the justification for such abatements on top of substantial JOBZ benefits may be questionable. Moreover, if economic development abatements are planned to allow the reallocation of the taxes for the payment of bonds (in a fashion similar to TIF), it must be understood that the property tax exemption provided by JOBZ will substantially diminish the property taxes that may be abated. Abatements on a parcel are limited to the local tax rate multiplied by the net tax capacity of a parcel, but the net tax capacity excludes the value of the improvements that are exempt by JOBZ, even though that value is subject to general obligation debt levies. Also, if the abatements precede the JOBZ benefits, the use of JOBZ may jeopardize the bond payments by exempting amounts that can no longer be diverted to bond payments.

  • Can I assess a business for infrastructure to support the development of a site within a tax free zone?

    Yes, levies to pay off GO Bonds on parcels within a JOBZ zone are specifically exempt.

  • Can a city still charge fees to in-zone businesses for basic city services (such as water, sewer, etc.)?

    Yes. Fees are not included as an exempted item in the statute.

Tax Questions