Category: Georgia


Georgia Opportunity Zone Job Tax Credit Overview

The Georgia Opportunity Zone Job Tax Credit (Credit Type Code 103) is a special job tax credit for any business adding at least 2 net new jobs in a designated location.  The company must offer group health insurance to all employees and meet other job tax credit requirements. In addition, the tax credit can be earned each year, up to five (5) years.  This credit is administered by the local government and the Department of Community Affairs (DCA).
Key Points to Remember:
  • The tax credit is $3,500 per net new job. For example, $175,000 tax credit for 10 new jobs in an Opportunity Zone over a 5 year period($3,500 X 10 X 5)
  • Right now you have three years of potential benefits to consider: last year, this year, and plans for next year.
  • Be on the lookout, because the designated Opportunity Zones may be introduced throughout the year.  For example, the Forest Park (Clayton County) zone was started April 25, 2017.
  • Benefit $$s go to any company or pass-through equity owners that pay Georgia income taxes. As an alternative, the tax credit can be used against Georgia payroll withholding taxes.
Remember to check your clients’ existing and planned Georgia street address locations for potential.  For example, locating a new branch at the right location could yield tremendous $$ benefits for your client (Click here for details).

Thanks!

JimSig

Georgia Job Tax Credit Overview

The Georgia Employer’s Jobs Tax Credit (Credit Type Code 103) is for adding net new jobs in Georgia. The minimum number of new jobs to qualify depends on the county where the company is located. For example, Clayton County’s minimum net new jobs to qualify in 2017 is two (2).  The company must offer group health insurance to all employees and meet other job tax credit requirements. In addition, the tax credit can be earned each year, up to five (5) years.
Key Points to Remember:
  • The tax credit is up to $4,000 per net new job. For example, $200,000 tax credit for 10 new jobs in Clayton County over a 5 year period ($4,000 X 10 X 5)
  • Right now you have three years of potential benefits to consider: last year, this year, and plans for next year.
  • Benefit $ to any company or pass-through equity owners that pay Georgia income taxes. In certain situations, the tax credit can be used against Georgia payroll withholding tax instead of Georgia income tax.  Administered by the Department of Community Affairs (DCA).
Don’t forget to discuss these activities with your client’s Payroll, HR, and Accounting  contacts.  For program details, click here.  Good luck!

JimSig

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

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

2017 Georgia Job and Investment Tax Credit Tiers Available

Time-critical 2017 Job Tax Credit ranking details have been released by the Georgia Department of Community Affairs (click here ). Also, note:
  • The ranking changes apply to Job Tax Credits and Investment Tax Credits.
  • Changes may adversely impact your clients’ Job Tax Credits based on their County Tier, overall ranking (Bottom 40), Less Developed Census Tract, or Military Zone.
  • No impact on Opportunity Zone tax credits this year. However, zones may be added, expanded or removed during the year (click here).
  • A Notice Of Intent may need to be filed to maintain your client’s tier, zone, or Less Developed Census Tract designation – the form must be filed by Feb. 15, 2017 (click here).

So remember to review your clients’ plans for 2017. Job Tax Credits may be available if they plan to increase employment levels, open new or change locations in Georgia, or buy another company.

JimSig

Job Tax Credit Changes

As you are doing year-end tax planning with your clients, make sure you discuss job tax credit potential for 2016. Here are several Georgia changes in 2016 that may apply to their businesses:
  • New Job Tax Credit regulations to clarify terminology and calculations (for new regulations, click here).
  • New Opportunity Zones started in 2016 include Baldwin, Lake City, and Savannah (for complete list, click here).
  • The new DCA contact for job tax credits is Tricia DePadro – Program Manager, Tax Credit Program, 404-679-1585, tricia.depadro@dca.ga.gov . Dawn Sturbaum has retired.
  • New Parolee Job Tax Credit – This is a new tax credit that starts January 1, 2017. A company can claim up to $50,000 per year for hiring qualified parolees. There is a 3 year carry forward (for regulations, click here).

Review your clients’ potential for 2016. Job Tax Credits may be available if they increased employment levels, opened new locations in Georgia, or bought another company.  And that’s how changes to tax credits can increase value $$ in your client relationships!

JimSig

Tax Incentives “Below the Line”

Tax incentives that impact a company’s income taxes are considered “below the line.”  They are not part of the EBITDA calculation (Earnings Before Interest, Taxes, Depreciation, and Amortization) and only benefit income tax payers.  But tax payers may be the company itself (such as a C-Corp) or individual shareholders (pass-through entities).
Many tax incentives for companies are based on activities that the company has already done or plans to do.  Depending on the type of company and location, a company may be able to benefit from the following Federal and State tax incentives and related activities:

Federal

  • Research and Development Tax Credits — new products or new processes
  • Work Opportunity Tax Credits (WOTC) — hire new employees that have specific backgrounds
  • Section 179-D Deductions — energy incentives for buildings
  • Cost Segregation Studies — reclassify building costs of new construction

State (Georgia Example)

  • Research and Development Tax Credits — new products or new processes
  • Retraining Tax Credits — train existing employees
  • Job Tax Credits — new job additions
  • Investment Tax Credits — new land, buildings, and equipment

If your clients are paying income taxes, remember to review their current and planned activities to find their “below the line” tax incentives — they will thank you for helping them save money!

JimSig

Tax Incentives “Above the Line”

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a critical measure of cash flow for many companies. Basically it is revenue less operating expenses.  Expenses considered “above the line” typically include operating, general and administrative, and selling expenses. They also include many taxes such as payroll withholding taxsales and use taxreal and personal property tax, government business license fees, and other local taxes. Note that income tax is not part of the EBITDA calculation and is not an “above the line” expense.
There are many state and local government taxes that may impact these expenses. You can help your clients increase their EBITDA by reviewing tax incentives and savings in the following areas:
  • Tax credits & withholding taxes – Instead of using tax credits against income taxes, some tax credits can be utilized against Georgia payroll withholding taxes. This includes the R&D credit, clean energy and some of the job tax credits (click here for details).
  • Real and personal property tax – Review accumulated depreciation schedules and business personal property tax returns for items no longer owned by the company. Also review for potential business inventory and freeport exemptions (click here for details).
  • Sales and use tax – Are all of the sales tax exemption certificates on file?  What about sales tax exemptions for energy used in manufacturing? (click here for details).
  • Georgia Enterprise Zone – Is the company moving to or expanding in a designed Georgia Enterprise Zone? This incentive may include local property tax exemptions and reductions in occupation taxes, regulatory fees, or local fees (click here for details).

So get started helping your clients find their “above the line” tax incentives — they will thank you for helping them save money AND increase EBITDA!

JimSig

2016 Annual Job Tax Credit Rankings

The 2016 Job Tax Credit ranking details have been released by the Georgia Department of Community Affairs (click here). Several things to keep in mind for your clients:
  • The ranking changes apply to Job Tax Credits and Investment Tax Credits.
  • Changes may adversely impact your clients’ Job Tax Credits based on their County Tier, overall ranking (Bottom 40), Less Developed Census Tract, or Military Zone.
  • No impact on Opportunity Zone tax credits.
  • Notice Of Intent For Georgia Jobs Tax Credit can be filed to maintain your client’s tier, ranking, Military Zone, or Less Developed Census Tract designation for 3 years – the form must be filed by Feb. 15, 2016 (click here).

So make sure to review your clients’ plans for 2016. Job Tax Credits may be available if they plan to increase employment levels, open new or change locations in Georgia, or buy another company.

JimSig

Georgia DOR Session

We attended the annual Institute for Professionals in Taxation (IPT) Georgia DOR One day session in November. There has been several updates and changes at DOR. The following is an overview:
  • Lynne Riley, new DOR Commissioner: Her CPA background will help with tax policy and regulation.
  • Staci Guest, Chief Tax Officer: In this new position, she is handling many of the tasks previously done by Ed Many.
  • Ronald Johnson, Jr, Director of Taxpayer Services (his dad also worked at DOR): Introduced special contact paths for CPAs and tax preparers: revenue.incometaxcpa@dor.ga.gov and 404-417-2395
  • Tax Tribunal Judge Larry O’Neal: Reported on this lower cost & quicker way to dispute tax issues.  Most of the 3,000 cases are individual income tax issues.
  • John Foster, Income Tax Policy Manager:
    • The film tax credits are undergoing more scrutiny due to higher $ volume. Due to the large backlog of approvals and audits by the state, DOR employees are being added to this area.
    • There were several tax credit changes that will start in 2016. These changes include the Conservation Tax Credit ending in 2016 (HB 464) and the Historic Building Tax Credit adding a new job creation bonus (HB 308) (Click here ).
    • 2015 income tax forms are being changed to better administer tax credits. For example, pass-through entities (forms 600S & 700) will list each shareholder and tax credit amount. C corporations and individuals (forms 600 and 500) will list tax credits used and amount to be carried forward.
  • Information Technology: DOR’s new Integrated Tax System (ITS) is leveraging technology to streamline processes, strengthen compliance and provide better customer service. The Georgia Tax Center (GTC) is will be adding income tax and tax credits capabilities soon (click here). There will be a new Business Credit Manager who will handle submitting tax credits for pre-approval (such as the private school tax credit). Finally, there is a new app for your smart phone called “myGATax.”

If you haven’t already done so, NOW is a great time to reach out to your clients to let them know about the tax credit $$ waiting for them!

JimSig

“Professional” Tax Credits!

Did you know that your professional service firm clients could get Georgia tax credits?  Here’s why — more than ever, professional service firms are continually updating and adding new technologies. Your clients that provide Advertising, Architectural, Consulting, Accounting (including yours!), Engineering, Insurance Agency, Law, Marketing, Public Relations, Software Development, Training, Wealth Management, and others, could be eligible:
  • Job Tax Credits – For firms adding employees and located in Opportunity Zones, Military Zones, or Tier 1/Lower 40 counties.
  • Retraining Tax Credits – For training existing employees on new technologies that include new software, upgrades, additional modules, customized systems and business process changes.
 The following areas offer great potential for Retraining Tax Credits:
  • Business management systems – main business systems for operating the firm, such as Deltek Vision, SAGE, Aderant, Epic, or other software, including annual updates
  • Customer relationship management systems (CRM) – for business development, lead generation, prospective client tracking, and new client intake such as Salesforce.com
  • Document management systems – for paperless operations and workflow
  • Specialized systems – CAD, design, project management, engineering analysis, tax, audit, case management, time & material tracking, portfolio analysis and other software
  • Lean Office – similar to Lean Manufacturing initiatives for quality, cost and customer service improvements.
  • Marketing systems – website, social media, LinkedIn, Twitter and other e-commerce systems

Reach out to your professional service firm clients to let them know about the potential $$ waiting for them!

JimSig

Year End Tax Planning and Obamacare

Now that the October 15 tax deadline has passed, I hope you are rested and back to work! The next big things on your plate are year-end tax planning with your existing clients and reaching out to prospective clients.

While you discuss upcoming tax liabilities with a client, you can also point out how much they can save with tax credits. What does that have to do with Obamacare?

The bad news:  the ACA (Affordable Care Act) requires additional reporting by every company with 50 or more full time employees (called “Applicable Large Employer,” or ALE). Click here for details.

The good news: based on our experience with thousands of retraining tax credit (RTC) projects over the past 13 years, companies with 50+ employees almost always have qualifying activities for Retraining Tax Credits!

The following may help with your client discussions:
  • Last year: Any changes to their business or related software? How about head count increases? Any expansions, new locations or large capital expenditures?
  • This year: Same as above and any plans for November or December
  • Next year: What are they planning to do?

So you see, the Obamacare reporting requirements are a great leading indicator for tax credit opportunities.  Bottom line: ALE = $RTC. Good luck as you reach out, find out, and help out with tax credits.

JimSig

Hungry for Tax Credits?

Georgia offers several tax credits for poultry, pork, sausage, vegetable, pecan, peanuts, Ag business and other food processors. Their activities that may qualify for the following Georgia tax credits:
  • Job Tax Credits – For distribution, manufacturing, or wholesale operations, or if the company has locations in Opportunity Zones, Military Zones, or Tier 1/Lower 40 counties.
  • Investment Tax Credits – Qualified manufacturing operations may benefit from capital expenditure and operating lease investments for investment tax credits, which can include land, buildings, equipment and packing sheds.
  • Retraining Tax Credits – For training existing employees on new technologies that include new software, upgrades, additional modules, customized systems and business process changes.
Here are more details for those Retraining Tax Credits:
  • Enterprise Resource Planning systems (ERP) – order entry, billing, accounts receivable, and human resources such as Microsoft Dynamics, Just Food ERP, Sage software, Vicinity Manufacturing software and SAP
  • Customer Relationship Management systems (CRM) – sales management, lead tracking, customer service and marketing, such as Salesforce.com and other systems
  • Warehouse management systems (WMS) – order picking, replenishment, inventory management, and shipping, such as JDA software, Foxfire, and Ramp Systems
  • Equipment – equipment for cleaning, cutting, cooking, packaging, bailing and other processes
  • Programs and initiatives – SQF 2000, ISO-9000, HAACP, HARPC, GMP and others
  • LEAN Manufacturing and workflow changes – business process and workflow changes for quality, costs, on-time delivery and other initiatives.

Help your food processor clients satisfy their hunger for tax credits. Reach out and let them know about the potential $$ waiting for them!

JimSig

Logistics and Trucking Tax Credits

Georgia’s growing logistics, trucking and third party logistics (3PL) companies are making a big impact on the economy due to Georgia’s location, ports, highways and airports. Fortunately, the State of Georgia offers key tax credits to assist these companies with their growth and activities. These activities could qualify for the following Georgia tax credits:

  • Job Tax Credits – If the company has locations in Opportunity Zones, Military Zones, or Tier 1/Lower 40 counties. There may be additional job tax credits if the company is involved with distribution, wholesale or manufacturing.
  • Retraining Tax Credits – For training existing employees on new technologies that include new software, upgrades, additional modules, customized systems and business process changes.

The following areas offer great potential for Retraining Tax Credits:

  1. Enterprise management systems – order entry, billing, accounts receivable, and human resources such as Microsoft Dynamics, Sage software and SAP
  2. Warehouse management systems – order picking, replenishment, inventory management, and shipping, such as JDA software, Foxfire, and Ramp Systems
  3. Transportation management systems – booking, dispatch, and load management such as McCleod software, CarrierWeb, Profit Tools and Fleetmatics
  4. Hours of Service tracking and management systems such as Peoplenet
  5. On-board vehicle tracking, messaging, and log management systemssuch as Bigroad
  6. Fleet maintenance, tractor service systems and procedures such as Squarerigger

So find out what your logistics, trucking, and 3PL clients are planning next.  Now is a great time to reach out to your existing or prospective clients in these industries to discuss tax credits!

JimSig

Contractors & Tax Credits

Weak recovery or not, seems like contracting and construction company activities have really picked up lately. And with increased business, these companies are now finally upgrading their software, training their employees, and adding more jobs. And guess what?  These activities may qualify for Georgia tax credits:

  • Job Tax Credits – Contractors and construction companies located in Opportunity Zones, Military Zones, or Tier 1/Lower 40 counties.
  • Retraining Tax Credits – For training existing employees on new technologies that include new software, upgrades, additional modules, customized systems and business process changes.

The following areas offer great potential for Retraining Tax Credits:

  1. Business management and project control – main business systems for operating the company, including accounting, estimating, costing, and project management. Examples include Viewpoint, Timberline/SAGE, Deltek or other software packages.
  2. Customer relationship management systems (CRM) – similar to Salesforce.com for the business development team.
  3. Mobile technologies: for field superintendents, project managers, technicians and others that use mobile devices/tablets such as Apple’s iPad.
  4. Document imaging: for paperless contracts, agreements, invoices and document management.
  5. Computer assisted systems: CAD, building information modeling (BIM, virtual construction systems, and others.
  6. LEAN initiatives: Six Sigma, 5-S and other business process and work flow productivity changes.

If your existing or prospective client is a contractor or a construction company, tax credits can be a tremendous benefit for activities last year, this year and next year. Reach out to these companies to let them know about the potential $$ waiting for them!

 

JimSig

Which Employees Count for Tax Credits?

As your clients’ business improves, they may start to hire additional employees or need to retrain their existing employees.  As with many states, there is a lot of confusion about the Georgia tax credits and employment levels. Here is a high level overview that may help in determining which employees count for the credits:

All tax credits:

  • Can NOT count 1099s, contractors, or employees of third party firms

Retraining Tax Credit:

  • Georgia resident (for example, CANNOT reside in South Carolina and commute to Augusta)
  • Existing employee (employed with the company a minimum of 16 weeks)
  • Full time (employed for a minimum of 25 hours per week)
  • Leased employees okay (for example, PEO)

Job Tax Credit (including Opportunity Zones, Military Zones and Less Developed Census Tracts):

  • Georgia withholding (for example, CAN reside in South Carolina and commute to Augusta)
  • All employees (new and existing)
  • Full time (regular work week of 35 hours or more) and not seasonal (no predetermined end date)
  • Leased employees okay (for example, PEO)

Check with your clients about their plans to add jobs and train employees. They may have potential $$ tax credits!

 

JimSig