Government Property Lease Excise Tax (GPLET)

A GPLET agreement option is available for negotiation with local governmental agencies.

GPLET is typically utilized to attract potential job-creating businesses into community (re)development areas. GPLET removes the business’s obligation to pay property taxes and instead negotiates an excise tax and a lease rate; the two combined are significantly less expensive within the terms of the agreement than the normal property tax that would be applicable without the GPLET agreement.

The lease and excise tax are usually standard, but are subjected to negotiation depending on factors including how many jobs the firm will create, the financial standing of the firm, and the location of the development. The length of the lease is also open for negotiation although it is typically for 25 years. The first year on GPLET is typically free and new companies do not pay any lease rates or excise tax. The last year of the GPLET lease is designed to cost as much as property taxes and substantially increases every year thereafter. Thus, it is desirable for the business to buy the land from the government agency during the last year of the lease. Increasing GPLET rates after the lease provides incentives for companies to move off of GPLET, purchase the land from the government, and begin paying regular ad valorem property taxes.