Kingsport leaders set to authorize PILOT agreement with Domtar at special meeting Tuesday

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Kingsport leaders set to authorize PILOT agreement with Domtar at special meeting Tuesday

KINGSPORT, Tenn. (WJHL) – The Kingsport Board of Mayor and Aldermen is scheduled to authorize an agreement that would give Domtar a break on its taxes as it restructures the Kingsport plant.

The Payment in Lieu of Taxes (PILOT) agreement is the only agenda item for a called meeting on Tuesday morning.

Domtar announced August 4 that it is repurposing its Kingsport mill to produced recycled linerboard. When it reopens, about 140 will work at the plant.

The plant was idled in in April due to the COVID-19 pandemic. At the time, 300 employees were laid off.

According to the PILOT agreement, “For tax years 2021, 2022 and 2023, Company shall make a payment in lieu of ad valorem taxes (“PILOT Payment”)… in an amount equal to the combined property taxes that would have been payable if said Real Property and Person Property were subject to City and County property taxes without reduction, provided, however, that in no event shall the annual PILOT Payment for any of these three tax years exceed $1,000,000 per year.”

For tax years 2024 through 2038, the payments will not exceed $2,500,000.

According to the agreement, half of each PILOT payment will be paid directly to the City of Kingsport and half to Sullivan County.

You can read the full agreement below.

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