OBVIOUSLY WASHINGTON. DC Washington, DC has identi?ed four locations matching Amazon?s WASHINGTON, DC IS requirements for an urban-centric, amenity-rich, and accessible campus. All locations offer an incentive package with signi?cant near- and long-term ?nancial value. Intern - ANACOSTIA CADITOL RIVERFRONT HILL EAST RIVERFRONT WHERE CAPITOL HILL MEETS ENTERTAINMENT HUB - THE ANACOSTIA RIVER CITY FOR WOMEN IN TECH ACCESSIBLE BY LAND WATER SMARTASSET 2016 2017 SHAW-HOWARD i /NoMa- . Union A 02 NOMA-UNION UNIVERSITY Internatio . 66 a STATI 1 on our Cap-no. Hi" 0 TRANSPORTATION AXIS ST CIT East HISTORIC MAKER SPACES UNIVERSITY ANCHOR SMARTASSET 2016 Anacostia Riverfront RESTAURANT CITY BON APPETIT 2016 DCA Our proposal includes the following unique features: gag-lanai Unparalleled access to all modes of transportation 0 The only place in the world where Amazon Men: including subway, bike, car sharing, and water taxi; Web Services can have dedicated support A f? from local government connecting with Federal 2017 tt ore ronto InnovatIve transportation rom Government agencies; autonomous vehicles to maglev and hyperloop; COOLEST CITY 0 Amazon University, a customized training FORBES 20? A range 0f hQUS'ng types at varyIng prIce' academy created in partnership with our educational Including a double?downpn the institutions and workforce organizations that will A TH FIRST PLATI unparalleled affordable housmg Investment; be tailored to the company's human capital needs; ERT FIE CITY IN WOR 0 Neighborhood schools and amenities attractive for oun and Old, sin les and families; Metro Major Highways 4 Amazon?s financial incentives The District has some of the most competitive technology incentives in the country. For Quali?ed High Technology Companies like Amazon, an existing incentive program in DC offers one of the most attractive incentive packages for high-tech businesses of anyjurisdiction in the country. The QHTC incentive reduces the cost of doing business by providing certain credits. exemptions. and other bene?ts that address Amazon's upfront capital outlay and ongoing operating costs. This incentive exists in DC's tax code, eliminating uncertainty from a long legislative process. This valuable. on-the-books incentive serves as the baseline for how the District government has engaged technology companies around incentives. We are prepared to work with Amazon to craft a package that accommodates both the company and the District. MOVE TO DC 0 Relocation reimbursements of up to $5,000 for each employee relocated to the District, or $7,500 if the employee also relocates his or her principal residence to the District 0 Five-year freeze on assessed value of real property (no increase in real property tax) GROW IN DC 0 Wage reimbursements of up to $10,000 for each new hire?or up to $30,000 for newly hired veterans Ten-year exemption of quali?ed personal property taxes THRIVE IN DC . 0% corporate tax rate for ?ve years and a reduction in the corporate tax rate from 9% to 6% for the life of the company 0 Exemption from sales tax on purchase of hardware and software 0 Training tax credits of up to $20,000 for newly hired veterans?up to $10,000 may be refunded 0 Exemption from sales tax charged for retail sales and service provided by a quali?ed company What QHTC looks like for Amazon This package addresses Amazon?s main concerns initial capital outlay and ongoing operating costs. Several aspects mitigate capital outlay on building costs, technology hardware and software purchases, and relocation expenses as Amazon builds and expands in DC. A permanently lowered corporate franchise tax rate plus carry-forward credits mitigates Amazon?s ongoing operating costs in the District. Amazon's bene?ts in the District will be based on Amazon's performance in the city. Several aspects of Amazon?s business model impact the total bene?t including: the number of relocations or new hires coming to a DC HQ2, its investment in DC of?ce properties and business tools, and the manner in which Amazon structures its corporate tax liability. 05: INCENTIVES - FINANCIAL INCENTIVES The result is a long-term and ?exible package that lowers the cost of locating and doing business in the District substantially. Below are the seven major components of the QHTC incentives and their estimated values for Amazon. DESCRIPTION AGAINST A.1 Abatement 5?Year Real Property Tax Real Property Unlimited Freeze on each building Tax Amazon occupies (at least 50%) 31 Exemption Personal Property Tax Personal Unlimited Exemption on Quali?ed Property Tax Property Equipment 82 Exemption Sales Tax Exemption on Sales Tax Unlimited Investment in Quali?ed New Purchases C.1 Credit New Hiring Credits Corporate Unlimited Franchise Tax C.2 Credit Relocation Expense Credits Corporate Unlimited Franchise Tax C.3 Exemption 5?Year Corporate Franchise Tax Corporate Exemption Franchise Tax C.4 Reduction Tax Rate Reduction to 6% Corporate Unlimited Franchise Tax *Not estimated due to uncertainty on Amazon's tax practices First ?ve years of occupancy For ten years In perpetuity 10?year carry?forward, non refundable 10?year carry?forward, non refundable 0% tax rate for 5 years After 5 years or in exemption from C3 33 05: INCENTIVES - FINANCIAL INCENTIVES A.1 5-year real property tax freeze This abatement freezes the real property tax rate of buildings where Amazon locates. For the ?rst ?ve years of occupancy of an of?ce building, the real property taxes are frozen, minimizing the impact of improvements on the building?s assessment. The freeze applies to either a build-to-suit or direct lease scenario. If Amazon takes a direct lease of a building delivered in shell condition, the incentive is not dependent on Amazon making the improvements, allowing Amazon to gain the bene?t through rent concessions passed through by a building owner. By allowing Amazon full consideration of its capital investment, either directly or as a bene?t provided through a building owner, Amazon can continue to leverage its market power, minimize real estate costs, and maintain its reporting methodology. 8.1 Personal Property Tax Exemption on Quali?ed Property Equipment Quali?ed tangible personal property that Amazon purchases is exempt from the 3.4% personal property tax for the ?rst ten years of purchase. If the tangible personal property is used or available for use in the eleventh year or thereafter, the property is then reported at 25% of the original cost or exchange value (unless it is technological equipment, reported at 10% of the original cost or exchange value) 34 8.2 Sales Tax Exemption on Investment in Quali?ed New Purchases Amazon will be exempt from sales tax on intangible property or services otherwise subject to retail sales tax, plus sales of computer software or hardware, operating and applications software, computers, terminals, display devices, printers, cable, ?ber, storage media, networking hardware, peripherals, modems, and more. C.1 New Hiring Credits With this incentive, Amazon will receive a credit against its corporate franchise tax liability of up to $10,000 ($5,000 per year) for each quali?ed FTE. The bene?t is equal to 10% of the wages paid over the ?rst 24 months to a quali?ed employee. up to the $5,000 per year cap. The bene?t triples if the new hire is a veteran. There is a 10-year carry forward provision, and the credit is non-transferable or refundable. C.2 Relocation Expense Credits With this incentive, Amazon will receive a credit against its corporate franchise tax liability of up to $5,000 for each quali?ed full-time employee (FTE). This bene?t is equal to the amount reimbursed to or paid on behalf of a quali?ed employee for the cost of relocating the employee to DC. The credit is not available if the relocation costs are claimed as a deduction. There is a per-year cap on the credit limited to $1 million per year, and it may be carried forward 10 years. I C.3 5-Year Corporate Franchise Tax Exemption This provision brings Amazon's corporate franchise tax rate to zero for 5 years, commencing after the date that the company has taxable income, up to $15 million dollars total. C.4 Corporate Franchise Tax Rate Reduction to 6% After the 5-year corporate franchise tax exemption period ends or the $15 million limit is reached, Amazon would be subject to a reduced corporate franchise tax rate of 6% instead of the current 9% rate. Other Considerations A recipient of District support must abide by District law that requires compliance with District Certi?ed Business Enterprise and First Source requirements. The speci?cs of the compliance depend on the nature of the project and support. The Deputy Mayor?s of?ce stands ready to assist Amazon with fully understanding and executing all required documents. The Deputy Mayor's of?ce has worked with employers and District agencies to implement alternative arrangements in situations where public policy and employment goals can be met. 05: INCENTIVES - ADDITIONAL INCENTIVES I ?ll? . .I 2 ADDITIONAL INCENTIVES FOR AMAZON IIC)bvious yDC 3?3