Semitool requests tax break

The Daily Inter Lake

After investing $7.3 million in a recent expansion and renovation, Semitool is requesting a multi-year tax break from Flathead County.

The county commissioners will hold a public hearing on the proposal at 10 a.m. Dec. 27.

The request comes under the county's "new and expanding industry" program, which is intended to encourage economic development by reducing the taxes that manufacturing firms pay on new investments.

Earlier this year, Semitool acquired the old Costco property along U.S. 2 north of Kalispell. After relocating its machine shop to the new site, it also built a new lab and storage facility at its West Reserve Road plant.

The application for the tax break indicates that the company made $2.1 million in improvements to the former Costco site, and spent $624,000 on the new storage facility. It also purchased quite a bit of new lab equipment and computerized machining tools, which raised its total investment to $7.3 million.

If the tax break is approved, the taxable value of the new assets would be cut in half for five years. The value would then increase by 10 percent a year until the full taxable value is reached in the 10th year.

It's unclear how much tax revenue the county, local school districts and other taxing jurisdictions would lose if this request is approved. Based on average property-tax rates, however, Semitool might save about $50,000 in property taxes in the first year.

The county typically receives two or three requests of this kind each year. As long as the proposals comply with the requirements of the new and expanding industry program, they're invariably approved.

Semitool reported $243 million in sales during fiscal year 2006, which ended Sept. 30; that was the second-highest annual revenue in the company's history, and a 28 percent increase from the previous year. Officials said they anticipated strong demand this year as well.

Reporter Bill Spence may be reached at 758-4459 or by e-mail at bspence@dailyinterlake.com