Program Guidelines: City of Williamsburg Tourism Zone Incentive Guidelines & Application Process What are the business incentives in the Tourism Zone? The following charts outline the incentives, which are granted based on the score of your application (see Appendix A for scoring criteria). Expanding business receive benefits based only on the new tax generation resulting from the expansion. Score Range of 30-39 for new and 20-29 for expanding: Incentive Year One Year Two Year Three Year Four Year Five BPOL (Business License Fee) Refund 30% 20% 10% 0% 0% Sales Tax Benefit* 30% 20% 10% 0% 0% Room Tax Benefit** 30% 20% 10% 0% 0% Meal Tax Benefit 30% 20% 10% 0% 0% Zoning and Building Fee Exemption 100% Score Range of 40-49 for new and 30-39 for expanding: Incentive Year One Year Two Year Three Year Four Year Five BPOL (Business License Fee) Refund 60% 40% 20% 0% 0% Sales Tax Benefit* 60% 40% 20% 0% 0% Room Tax Benefit** 60% 40% 20% 0% 0% Meal Tax Benefit 60% 40% 20% 0% 0% Zoning and Building Fee Exemption 100%
Score Range of 50+ for new and 40-49 for expanding: Incentive Year One Year Two Year Three Year Four Year Five BPOL (Business License Fee) Refund 100% 80% 60% 40% 20% Sales Tax Benefit* 100% 80% 60% 40% 20% Room Tax Benefit** 100% 80% 60% 40% 20% Meal Tax Benefit 100% 80% 60% 40% 20% Zoning and Building Fee Exemption 100% * based on the 1% sales tax that is paid by the customer, collected by the business and returned to the City from the State **This is only for the 5% tax collected by the City of Williamsburg. This does not include the $2 transient occupancy tax. What are the steps to qualify? 1. Review the Tourism Zone qualification criteria to see if your business qualifies. (Appendix B) 2. Select a location for your business in the City s Tourism Zone. (Appendix C) 3. Complete a Tourism Zone Application. (Appendix D). Include a five-year business plan with financial projections, a copy of the lease for the building in which you locate (or a copy of the recorded deed if you own the land or building), and other application requirements. If opening your business after July 1, decide whether you will use the remainder of that calendar year for your first year of benefits or defer your first year of benefits to the next calendar year. 4. City staff review application 5. If approved, your business may qualify for the following benefits: Tax Benefit. Qualifying Tourism Businesses receive a tax benefit for a period of 3-5 years, based on the score of the application (see Appendix A for scoring criteria). The rebate amount for each year also varies based on the score of the application (see Appendix A for scoring criteria and rebate amounts). The following taxes are eligible to be rebated: Business Processional Occupancy License (BPOL) Sales Tax (1% local share) Room Tax (5% collected by City) Meal Tax Waiver of Permit and Zoning Fees. Qualifying Tourism Businesses that meet the minimum point threshold of 30 points (see Appendix A for scoring criteria) are exempt from building and zoning permit fees for five years.
What is the timeframe to receive the incentives? BPOL Tax Rebate: By March 1 st, you pay your BPOL Taxes to the Commissioner of the Revenue for the previous calendar year. Once she and the Finance Department receive, review and reconcile your BPOL payment for the previous calendar year, a BPOL rebate check will be sent to you to reimburse your BPOL payment based on the Arts District incentive schedule. You will receive this check the first week of April. A typical schedule follows: On March 1, 2017, you pay BPOL tax for the 2016 calendar year. If you are still a qualifying culinary and hospitality business, you will receive your Tourism Zone incentive for BPOL tax during the first week of April 2017. Sales Tax Benefit: Throughout the calendar year, your customers pay five percent sales tax when they purchase your products. Monthly, you remit this money to the Commonwealth of Virginia. Two months later, the Commonwealth of Virginia sends the local one percent portion of your customers sales tax payments to the City of Williamsburg. In March, the City receives the monthly payment of the local one percent of the sales tax for the prior December. At this point, the City has received a complete calendar year of the one percent local portion of the sales tax for your business. In March, the City s Finance Department will have the data required to calculate the Local Sales Tax Benefit that is due to Qualifying Tourism Zone Businesses for the preceding calendar year. A typical schedule follows: In January 2017, you remit your customers December 2016 five percent sales tax payments to the state. In March 2017, the City has received the last month of its local one percent portion of your customers sales tax payments for the preceding calendar year. By March 31, 2017, the City will review, reconcile, and calculate your Tourism Zone Sales Tax Benefit for 2016. In the first week of April 2017, you will receive your Tourism Zone Tax Benefit check, which will also include the meal and room tax benefit if applicable. Meal & Room Tax Benefit: Unlike the sales tax, the City of Williamsburg collects meal (5%) and room (5%) taxes directly from the businesses on a monthly basis. Note that the room tax DOES NOT include the $2 transient occupancy tax that is used to market the region to visitors. Your customers pay this when they purchase your products or services, and you remit this to the City of Williamsburg the following month. In January, the City receives the monthly payment for meal and room taxes for the preceding December. At this point, the City has received a complete calendar year of the five percent meal tax or five percent room tax for your business. In January, the City s Finance Department will have the data required to calculate the meal and room tax that is due to Qualifying Tourism Businesses for the preceding calendar year. A typical schedule follows:
In January 2017, you remit your customer s December 2016 five percent meal tax or five percent room tax. By March 31, 2017, the City will review, reconcile, and calculate your Tourism Zone meal or room tax benefit for 2016. In the first week of April 2017, you will receive your Tourism Zone Tax Benefit check, which will also include the meal and room tax benefit if applicable Waiver of Permit and Zoning Fees: Once you receive approval as a qualified tourism business, the Williamsburg Planning Department will not charge you fees for building and zoning permits, based on the Arts District Incentive Schedule.
Appendix A: Grant Guidelines and Scoring Criteria The following grant guidelines are established for the purpose of implementing the Tourism Zone Ordinance with respect to the Tourism Zone incentives: 1. In order to qualify to receive incentives, the businesses must meet the definition of a qualified culinary or hospitality business (see Appendix B). 2. The following criteria will be used to evaluate applications to receive Tourism Zone incentives. The businesses must have a combined score of 30 points in order to qualify to receive incentives, and must make a capital investment of at least $250,000 for a new business or $100,000 for an expanding business. 3. Businesses must be current on tax payments and meet all laws before receiving any benefits. New Businesses: Category New Local Taxes Generated (including meal, room and local sales) Minimum Threshold or Level Point Range Points Awarded $50,000 of projected tax 5, 10, 15 revenue Capital Investment $250,000 5, 10, 15, 20 Job Creation 4 Full Time Employees 5, 10, 15, 20 Public Art Contribution $10,000 5, 10 Live Performing Arts at least one night per week or art for sale Yes/No 5 Healthy food concept or pedestrian-friendly designs that exceed City requirements Yes/No 5 Total Points for Project (Max 75) Expanding Businesses: Category New Local Taxes Generated (including meal, room and local sales) Minimum Threshold or Level $10,000 of projected additional tax revenue 5, 10, 15 Point Range Capital Investment $100,000 5, 10, 15, 20 Job Creation 4 Full Time Employees 5, 10, 15, 20 Public Art Contribution $10,000 5, 10 Live Performing Arts at least one night per week or art for Yes/No 5 Points Awarded
sale (as a result of expansion) Healthy food concept or pedestrian-friendly designs that exceed City requirements (as a result of expansion) Yes/No 5 Total Points for Project (Max 75) The higher the score, the larger the potential amount and time of incentive. The incentive value is generated from relief of the following taxes: BPOL, Local Sales, Room and Meal. In addition Zoning and Building Fees are exempted for Qualifying businesses. The following ranges will be used in awarding points to applicants: Eligible Local Taxes Generated Annually: New Expansion (additional tax revenue) Points $50,000- $10,000-$49,999 5 $149,999 $150,000- $50,000-$99,999 10 $249,999 $250,000+ $100,000+ 15 Points Awarded Job Creation: New Expansion (additional jobs) 4 2 5 6 4 10 8 6 15 10+ 8+ 20 Points Points Awarded Capital Investment: New Expansion Points $250,000-$499,999 $100,000-$249,999 5 $500,000-$999,999 $250,000-$499,999 10 $1 million-$1.99 $500,000-$999,999 15
million $2 million + $1 million + 20 Public Art Contribution: Donation Amount Points $10,000-$24,999 5 $25,000+ 10 Points Awarded
Appendix B- Definition of Qualified Tourism Business Qualified Tourism Business shall mean a new or expanded business, as listed below, that carries on at least one of the following business activities in the Tourism Zone, has an aim of attracting customers from outside of the Greater Williamsburg region (defined as City of Williamsburg, James City County and the Bruton District of York County), and has been classified by the district administrator as a Qualified Tourism Business for the purposes of this chapter: Hotels/motels Timeshares Theaters and assembly halls Museums and art galleries Restaurants* Bake shops* Micro-brewery, micro-distillery and/or micro-cidery Brew pubs Schools for the Culinary Arts Retail* Studios or workshops for artists and artisans * In no case shall a restaurant, bake shop, or retail shop that is a franchise or chain with three or more physical locations or that is a franchise or chain with an existing location within Greater Williamsburg (City of Williamsburg, York County or James City County) qualify as a Qualified Tourism Business for the purposes of this chapter. In no case shall a restaurant, bake shop, or retail shop that is a franchise or chain with three or more physical locations qualify as a Qualified Tourism Business for the purposes of this chapter.
Appendix C- Map of Tourism Zone
Appendix D- Tourism Zone Application
Williamsburg Tourism Zone Incentive Application 1. Name of Business: 2. Owner Name: 3. Owner Type: a. LLC b. Sole Proprietor c. Corporation d. Other: 4. Has the business operated under any other names? Yes No a. If yes, list all names under which the business has operated or is operating: 5. Contact Person and Registered Agent: 6. Address: 7. Email: 8. Phone: 9. Business Web Site: 10. Location within Williamsburg Culinary Arts & Hospitality District, including street address:
11. Provide a detailed description of the business and business activities to be conducted at the site located within the Williamsburg Tourism Zone. 12. Explain why this business should qualify as a Qualified Culinary Arts & Hospitality Business as defined by City Tourism Zone Ordinance? (Appendix A includes the definition of a Qualified Arts Business) 13. This business is: a. Start up b. Expansion c. Relocation i. If so, from where, including street address and jurisdiction? d. New additional location i. If so, where are other locations, including street address and jurisdiction? ii. How long have other locations been operating? e. Other: 14. If an existing business, please describe current and past business activities, including past locations of the business. 15. Proposed start date of business or date proposed to open in the Tourism Zone: 16. If opening the business after July 1, do you wish to elect to designate the following calendar year as the first year for incentives? Yes No
17. This business a. Owns property in the Tourism Zone. b. Leases property in the Tourism Zone. If so, attach a copy of the lease. c. Other: 18. Attach a five-year business plan, including revenue and expense projections, for the business. 19. Based on your business plan projections, what is your anticipated Gross Receipt revenue for each of your first five calendar years in the Tourism Zone? A. New Business Year Year 1 Anticipated Gross Receipt Revenue Year 2 Year 3 Year 4 Year 5 B. Expanded Business Year Last full calendar year prior to investment Year 1 Anticipated Gross Receipt Revenue Year 2 Year 3 Year 4 Year 5
20. Based on the anticipated revenue, please fill out the below chart to indicate new tax revenue collected by the City during first full calendar year of business being in operation or expansion being completed in the Tourism Zone. A. New Business Local Tax BPOL (0.20 per $100 of gross sales) Sales Tax (1% of gross sales) Meals Tax* (5% of food & beverage sales) Room Tax* (5% of room sales) TOTAL *If Applicable Annual Local Tax Revenue B. Expanded Business Local Tax BPOL (0.20 per $100 of gross sales) Sales Tax (1% of gross sales) Meals Tax* (5% of food & beverage sales) Room Tax* (5% of room sales) TOTAL *If Applicable A) Annual Local Tax Revenue (Most Recent calendar year) B) Annual Local Tax Revenue (First full calendar year after expansion) (A)-(B) 21. What is the total amount of Capital Invest projected over 5 years? Attach appropriate documentation as evidence. Year Year 1 Investment Year 2 Year 3 Year 4 Year 5
22. How many new jobs will you be creating in the first year that you are open (or in the year after the expansion has been completed)? 23. Will you contribute money to the public art fund (Triangle Arts & Cultural League)? If so how much? Note that a $10,000 minimum donation is required to receive credit. 24. Will your business be offering live performing arts on average at least one night per week? If so, please attach a description of a typical monthly schedule of performances. If an expanding business are these performances a result of the expansion? 25. Will your business be offering art for sale at its location within the Tourism Zone? If an expanding business will this art be for sale as a result of the expansion? 26. Will your business have a healthy food concept? If so, describe the healthy menu items that will be offered. 27. Will your business incorporate pedestrian friendly designs (such as sidewalk connections or bicycle racks) that exceed the requirements of the City? If so explain what these designs will include. If an expanding are these designs part of the expansion? I hereby certify that all the information provided in and attached to this application is true and correct. Date Owner or Principal Title Confidential proprietary records provided by a business as part of this application, including financial information and business plan, shall be maintained as confidential by the City of Williamsburg and are not subject to disclosure under the Virginia Freedom of Information Act, Code of Virginia 2.2-3705.6(a)(3).
Questions? Contact Economic Development Director Michele Mixner DeWitt, 757-220-6120, or Economic Development Specialist Rich Saunders, 757-220-6104. Return application to: Williamsburg Economic Development Office ATTN Northeast Triangle Culinary & Hospitality District 401 Lafayette Street Williamsburg, VA 23185
Appendix A Definition of Qualified Tourism Business Qualified Tourism Business shall mean a new or expanded business, as listed below, that carries on at least one of the following business activities in the Tourism Zone and has been classified by the district administrator as a Qualified Culinary & Hospitality Business for the purposes of this chapter: Hotels/motels Timeshares Theaters and assembly halls Museums and art galleries Restaurants* Bake shops* Micro-brewery, micro-distillery and/or micro-cidery Brew pubs Schools for the culinary arts Retail* Studios of workshops for artists and artisans * In no case shall a restaurant, bake shop, or retail shop that is a franchise or chain with three or more physical locations or that is a franchise or chain with an existing location within Greater Williamsburg (City of Williamsburg, York County or James City County) qualify as a Qualified Tourism Business for the purposes of this chapter.
Appendix E- Tourism Zone Incentive Scenarios A restaurant grossing $1,500,000 per year in sales. Score Range of 50+ Incentive Year 1 Year 2 Year 3 Year 4 Year 5 Total BPOL* $3,000 $2,400 $1,800 $1,200 $600 $9,000 Sales Tax** $15,000 $12,000 $9,000 $6,000 $3,000 $45,000 Meals Tax $75,000 $60,000 $45,000 $30,000 $15,000 $225,000 Zoning/Building Permit*** $110 Total $279,110 *BPOL fee of $0.20/$100 of gross sales **Local Sales Tax portion of 1% of sales ***Zoning fees for signs Score Range of 40-49 Incentive Year 1 Year 2 Year 3 Year 4 Year 5 Total BPOL* $1,800 $1,200 $600 $0 $0 $3,600 Sales Tax** $9,000 $6,000 $3,000 $0 $0 $18,000 Meals Tax $45,000 $30,000 $15,000 $0 $0 $90,000 Zoning/Building Permit*** $110 $111,710 *BPOL fee of $0.20/$100 of gross sales **Local Sales Tax portion of 1% of sales ***Zoning fees for signs
Score Range of 30-39 Incentive Year 1 Year 2 Year 3 Year 4 Year 5 Total BPOL* $900.00 $600 300 0 0 $1,910.00 Sales Tax** $4,500.00 $3,000 1500 $0 $0 $9,000.00 Meals Tax $22,500.0 $15,000 7500 $0 $0 $45,000.0 Zoning/Building Permit*** $110 $55,910.00 *BPOL fee of $0.20/$100 of gross sales **Local Sales Tax portion of 1% of sales ***Zoning fees for signs