Georgia Retraining Tax Credit Overview

The Georgia Employer’s Credit for Approved Employee Retraining (Credit Type Code 102) is for training employees on new technologies. These technologies can include new software, modifications, upgrades, new modules, and in-house developed applications. In many cases training on new equipment, business process changes such as Lean initiatives, ISO-9000 and quality management programs may qualify.
Key Points to Remember:
  • The tax credit is for up to $1,250 per qualified employee. For example, $62,500 tax credit for 50 qualified employees trained on a new business wide ERP software ($1,250 X 50 = $62,500 tax credit)
  • 3 years of potential – last year, this year and plans for next year.
  • $$ benefits go to any company or pass-through equity owners that pays Georgia income taxes.
  • Administered by The Technical College System of Georgia (TCSG), and must be approved by the local technical college Vice President of Economic Development (Program details click here).
Don’t forget to discuss these activities with your client’s accounting, IT, HR, operations and engineering contacts. We’ve found that most Georgia companies will qualify for this credit, so make sure you ask!
JimSig

Arizona Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions, or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in Arizona, so we spoke with Jesse Broderick of Sumit Credits (link to site here), who provides tax credit services to several Arizona clients.  Also see Arizona economic development site, click here.
Arizona offers a wide selection of credits and incentives for new and existing businesses.  CNBC ranked Arizona #26 in their 2017 America’s Top States for Business survey (Georgia was #2 in the same survey).  Arizona ranked next to last in education.
Incentives and Credits include:
  • Tax Credit for Hiring Recipients of TANF payments (piggybacks off of Federal Work Opportunity Tax Credit WOTC).
  • Quality Jobs Tax Credit offers up to $9,000 of Arizona income or premium tax credits spread over a three-year period for each net new quality job.
  • Qualified Facility Tax Credit offers a refundable income tax credit equal eligible companies making a Capital Investment to establish or expand a Qualified Facilities.
  • Research & Development Tax Credit provides an Arizona income tax credit for increased research and development activities conducted in this state.
  • Other Incentives — Pollution Control Tax Credit, Renewable Energy Tax Credits, Quality Jobs Tax Credit, and several others.

Compared to Georgia, Arizona has:

  • Slightly higher corporate and lower personal income tax rates
  • Comparable combined state and local tax burden
  • A slightly wider range of incentives

Often criticized for its hodge-podge assortment of tax credits, Arizona certainly offers potential, since you almost never know what activities your clients have that could generate $$ credits.

To summarize, Arizona is above average for business tax incentives, and in the wintertime, you can’t beat the weather!

DaleSig

 

Sellable Georgia Tax Credits

In case you didn’t know — Georgia has several sellable, transferable, or monetizable tax credits your clients may be able to utilize. These tax credits are typically used for entities or individuals with large Georgia income tax liabilities. So for tax planning, if you know the tax liability and filing deadlines, your client can buy the exact $ amount needed for the tax years needed.
Be careful though — these tax credits can get pretty complex, and many are hard to find. Often they are sold by brokers that have connections with the “producers” of the tax credits. The “producers” sell from an “inventory” of tax credits available for sale, or they may be bought on an exchange (click here for example). Look for these sellable Georgia tax credits:
  • Low Income Housing Credit (credit type code 109) – Used for financing the development of affordable rental housing for low-income households in Georgia
  • Historic Rehabilitation Credit (credit type code 121) – Rehabilitation of a certified structure or historic home in Georgia
  • Film Tax Credit (credit type code 122) – Produce films in Georgia. Starting July 1, 2017, there will be a new post-production film tax credit.
  • Land Conservation Credit (credit type code 124) – Federal conservation easement for land in Georgia.
  • Film Tax Credit for A Qualified Interactive Entertainment Production Company (credit type code 133) – Produce video games in Georgia

The “credit type code” listed will help with your tax planning analysis of prospective and existing clients. First, see if the client’s business can generate tax credits on their own (i.e., they retrained employees, added jobs, or invested in capital equipment). After you help them get those tax credits for their business, then fill in the remaining tax liability gap with the sellable Georgia tax credits. Good luck!

 

JimSig

Utah Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions, or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in Utah, and their state economic development professionals gave us some details (Utah economic development site click here).
Utah offers a paltry selection of credits and incentives for new and existing businesses, and very few companies actually utilize the incentives.  However, CNBC ranked Utah #1 (!!) in their 2016 America’s Top States for Business survey (Georgia was #8 in the same survey).  They ranked high in most survey categories, but those did not include incentives offered.   
Incentives and Credits include:
EDTIF Tax Credit — a post-performance, refundable tax credit with rebates for up to 30% of new state revenues (sales, corporate and withholding taxes paid to the state) over the life of the project (typically 5-10 years). Available to companies seeking relocation or expansion of operations to the State of Utah, and must be a competitive project.
Life Science and Technology Tax Credits — for qualifying life science and technology  investors.  Eligible investors may submit applications to GOED for tax credits drawn from $300,000 of funds expressly set aside by the Legislature.

Other Incentives — Some local exemptions and credits, recycling, and other limited incentive programs.

Compared to Georgia, Utah has:
  • About the same corporate and personal income tax rates.
  • Comparable combined state and local tax burden
  • A far narrower range of incentives.
  • Pre-approval required for all incentives
All Utah state incentives are awarded on a “post-performance” basis: companies must meet specific, pre-approved milestones, including generation of new state tax revenue, before incentives are disbursed.

To summarize, Utah is below average for business tax incentives, but if you love to ski, you can’t beat the location!

DaleSig