4 tax elements of DeKalb soccer deal

The draft memorandum of understanding (MOU) between DeKalb County and the new Atlanta United soccer team includes several provisions related to taxes:

Property tax exemption
Sec. 1(i) of the MOU says “…Atlanta United’s interest in the Project will constitute a usufruct, and the County will use its best efforts to cause the DeKalb County Chief Appraiser/Board of Tax Assessors to confirm the Parties’ determination of such interest as a usufruct.” I take this to mean that the property of the soccer headquarters and complex would be exempt from property taxes because the deed would stay in the name of a tax-exempt entity (DeKalb County or the DeKalb County development authority) because the agreement allows Atlanta United to use (as a usufruct) the land without owning it. (See an explanation of usufruct under Georgia tax law here.)

Income tax credits
Sec. 5(a) of the MOU says that DeKalb would seek opportunity zone status from the Georgia Department of Community Affairs. “If awarded, the Operator [Atlanta United] shall be eligible to apply job tax credits up to $3,500 per job created as an offset to its State of Georgia income tax liability.”

Sales tax capital outlay
Sec. 5(c) of the agreement says that “The County’s efforts shall include proposing that the Board of Commissioners of the County include Pedestrian Connectivity improvements in the proposed March 2016 Referendum Ballot for approval as an authorized Capital Outlay Project from a Special Purpose Local Option Sales Tax.” In other words, a portion of one of the existing seven pennies of local sales taxes would go toward pedestrian connectivity from the soccer site to the Kensington MARTA station.

Tax allocation district
Sec. 5(f) of the agreement says that “…The County agrees to discuss in good faith permitting the use of any accumulated funds from any applicable tax allocation district to be utilized for any permissible expense… with respect to the construction, maintenance of Phase 2 of the Project… The County will use its best efforts to obtain the participation of the DeKalb County School Board in this tax allocation district.”