Hoffman Estates may offer tax incentive to ADP Dealer Services
The Hoffman Estates planning, building and zoning committee has recommended approval of a sales tax incentive for a technology solutions company that is expected to bring new jobs and “substantial revenue” to the village.
Last year, the village’s finance department noticed a dip in sales tax revenues and found that ADP Dealer Services — a computing solutions provider for vehicle dealers and manufacturers located at 1950 Hassell Road — was no longer generating sales tax for the village, said Mark Koplin, assistant village manager for development services.
Koplin said he did not know why ADP stopped generating sales taxes in Hoffman Estates, but the company began bringing in sales tax money again several months ago even though the sales tax incentive agreement is not final.
The village board will vote on the agreement on Monday, Sept. 10.
“It brings back sales tax revenue that had been diverted elsewhere,” Koplin said of the ADP agreement.
According to the agreement, the company has also committed to bringing 70 new jobs to the property.
Village Manager Jim Norris would not disclose what the village believes happened with ADP’s retail sales. He and a spokeswoman from the Illinois Department of Revenue said the amount of sales tax revenue the company generates for the village is confidential.
A spokeswoman for ADP did not return calls from the Daily Herald on Wednesday.
Some types of businesses have flexibility as to where they book their sales and might alter the location depending on the perceived tax advantages of doing so.
In discussions that have been going on since last year, Koplin said, ADP representatives told the village they would be willing to re-establish sales and increase their workforce at the Hoffman Estates location, but they asked the village to consider giving them a sales tax incentive.
The agreement approved at last week’s committee meeting offers the company 25 percent of the annual sales tax it generates at the Hassell Road location — up to $120,000 a year — for the next five years, starting with the 2012 fiscal year. The agreement requires ADP to keep its sales function in the village for that time, and for two years after the final incentive payment.
“This is an incentive agreement which is not costing the village anything but will produce additional funds for us and more employees,” said trustee Karen Mills at the meeting.
Peter Gugliotta, the village’s director of planning, said ADP plans to renovate the property by expanding a parking lot that will accommodate additional employees. According to the proposed economic incentive agreement between ADP and the village, the company will be provided Economic Development for a Growing Economy tax credits from the Illinois Department of Commerce and Economic Opportunity because of the jobs created.
The department’s website states that to qualify for the EDGE tax credit, a company with more than 100 employees “must provide documentation that attests to the fact of competition among a competing state, and agree to make an investment of at least $5 million in capital improvements and create a minimum of 25 new full-time jobs in Illinois.”
Gugliotta said he believes the company is hoping for approval of construction plans in the next few weeks so work can start this fall.
Last year, the village agreed to rebate a future Audi dealership up to $250,000 in sales tax over 10 years if it generates at least $350,000 annually in sales tax.
The village also approved a five-year deal earlier this year that gives a portion of the sales tax revenues from a new Mariano’s Fresh Market to the owner of the shopping mall where the store is located.