Category: Investment Tax Credit


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

Nebraska 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 Nebraska, and their state economic development professionals gave us some details (Nebraska incentives site click here).
Nebraska offers a small selection of credits and incentives for new and existing businesses.  CNBC ranked Nebraska #11 in their 2016 America’s Top States for Business survey (Georgia was #8 in the same survey).    
Incentives and Credits include:
The Nebraska Advantage Package for new, expanding, or relocating businesses. Six tiers, varying benefits, must be qualifying business projects. Benefits include income tax, withholding tax, and sales tax reductions, depending on levels of investment and jobs created. Pretty complex process. An application must be submitted before the project begins.

Nebraska Advantage Research and Development Credit — Offers a refundable tax credit for qualified research and development activities undertaken by a business entity for 21 years. The credit is equal to 15 percent of the federal credit allowed under Section 41 of the Internal Revenue Code of 1986 for research and development.  Higher percentage for expenditures involving Nebraska colleges and universities.

Other Incentives
— Local tax abatement, workforce training, and several financing programs, depending on the project.

Compared to Georgia, Nebraska has:
  • Slightly lower corporate and comparable personal income tax rates
  • Comparable combined state and local tax burden
  • A narrower range of incentives
  • Pre-approval required for all incentives
To summarize, Nebraska is below average for business tax incentives in a central Midwest location.

DaleSig

Tax Credits Can Lead to Other Incentives

Many times a known tax credit can lead you to find more incentives for your client! These could include additional income tax credits, payroll tax credits, sales tax exemptions, property tax abatements, and non-tax cost reductions. For example, a manufacturing company utilized Federal and Georgia R&D tax credits for a new manufacturing process. This new manufacturing process will be moved from the client’s research area to their manufacturing area. Incentive activities for this move can potentially include:
  • Assets purchased (i.e., land, buildings and equipment): Georgia Investment Tax Credit, cost segregation study, Section 179, federal and state energy incentives, Georgia sales tax exemption for supplies/energy, and other incentives
  • New employees hired: Georgia Job Tax Credit and Federal Work Opportunity Tax Credit.
  • Existing employees trained: Georgia Retraining Tax Credit.
  • If this move includes a major expansion or new location: other state and local incentives may be available.
  • Other incentives: Some locations have non-tax related incentives such as the Tennessee Valley Authority for electric power cost reduction for employee head count increases (click here).

So remember — if your client is utilizing a tax credit, ask more questions to flesh out the details of the activities related to the tax credit.  And these activities can lead to more incentives today and tomorrow.

JimSig

Oregon 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 Oregon, and their state economic development professionals gave us some details (business oregon site click here).
Oregon offers a substantial and varied collection of credits and incentives for new and existing businesses.  CNBC ranked Oregon #21 in their 2015 America’s Top States for Business survey (Georgia was #5 in the same survey).  Read below and see how many of these could be Above the Line:

Enterprise Zones – In exchange for investing and hiring in an enterprise zone, businesses receive exemption from local property taxes on new plant and equipment for at least three years (but up to five years) in the standard program. In addition, many zones can offer special incentives for investments in qualifying rural facilities or in electronic commerce operations.

Strategic Investment Program – The Strategic Investment Program exempts a portion of very large capital investments from property taxes for 15 years. The program is available statewide.

Construction-in-Process – Unfinished facility improvements may be exempt from local property taxes for up to two years while under construction.

Food Processing Machinery and Equipment (M&E) – For five years after it is newly placed in service, qualified M&E is exempt from property taxes if certified by the Oregon Department of Agriculture.

Electronic Commerce – Investment tax credit equals 25% of the cost incurred by an authorized business for capital assets used in electronic-commerce operations inside one of several enterprise zones.

Qualified Research Activities Credits – Corporate credit for qualified research and basic research conducted each year in Oregon, as a state-level extension to the federal program.

Oregon Investment Advantage – This program helps businesses start or locate new types of operations in a number of Oregon counties by providing an income tax subtraction, potentially eliminating state income tax liabilityon the operations for several years after they begin.

Oregon Business Expansion Program – This is a cash-based forgivable loanequivalent to the estimated increase in personal income tax revenue from new hiring.

Small Manufacturing Business Expansion Program – This is a cash-based forgivable loan for small manufacturing businesses’ expansion projects.

Film & Video Incentives – Rebate on 20% of the production’s Oregon-based goods and services.  Additional cash payment of up to 16.2% of wages paid to production personnel.  Unlike other states’ programs, these incentives are cash-based as opposed to tax credits. This simplifies and speeds up the process.

To summarize, Oregon is above average for business tax incentives in a great Pacific Northwest location.

DaleSig

Pattern Recognition for Tax Credits

Your tax software may be able to help you find patterns in your client’s tax data that could uncover tax credits! During tax season, everyone is busy collecting and reviewing client tax data. After it has been reviewed, this data is entered into the tax software, and the software usually helps guide you through the steps required to file the tax returns.

But before the tax return is finalized, don’t forget to check for potential tax credits. Since tax credits are based on your client’s activities, it may not be immediately apparent, but their tax data could contain key indicators of tax credit qualifying activities.

Here are a few tax categories that could include indicators of potential tax credit activities:
  • Salaries and wages
  • Rents and operating leases
  • Depreciation, Section 179 deductions & bonus depreciation
  • Other deductions such as computer expenses, professional services, consulting, and outside services
  • “Other costs”

Your tax software’s reporting and business analytics capabilities may be able to assist with your analysis of current year and prior years.  For example, look at a 4-year trend of Section 179 items (such as equipment or software). Any slow steady growth, large blips or increases, or unusual trends?  A year-to-year increase of 20% or more may be worth drilling down into the details for further review. If you find something, talk with your client and ask a few questions! What about that employee training (Retraining Tax Credit or training grant program)? Was that large purchase used for manufacturing (Investment tax credits)?

Your client will thank you for recognizing their patterns — and for not being just another “tax return filer” outfit.

JimSig

Indiana 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 Indiana, and their state economic development professionals gave us some details (Indiana EDC site click here).
Indiana offers a decent collection of credits and incentives for new and existing businesses.  CNBC ranked Indiana #13 in their 2015 America’s Top States for Business survey (Georgia was #5 in the same survey).    
Incentives and Credits include:

Economic Development for a Growing Economy Tax Credit (EDGE):

Based on employment, the credit is calculated as a percentage of the expected increased tax withholdings generated from new jobs created by a company.  This credit can be claimed regardless of whether the company has a state income tax liability or not.

Skills Enhancement Fund (SEF):

Designed to help tailor a workforce that meets a company’s needs. The grant reimburses a portion (typically 50%) of eligible training costs over a period of two full calendar years from the commencement of the project. Eligible expenses include everything except: Orientation Related To New Hires and Federally Mandated Safety Training (OSHA).

Hoosier Business Investment Tax Credit (HBI):

Corporate income tax credit calculated as a percentage of the eligible capital investment needed to support the project. Eligible capital investment includes new machinery and building costs associated with the project. In order to claim this credit, a company must have a state corporate income tax liability.

Headquarters Relocation Tax Credit (HRTC):

HRTC provides a tax credit to corporations that relocate their headquarters to Indiana. The credit equals half the moving costs and is assessed against the corporation’s state tax liability.

Industrial Recovery Tax Credit:

Provides an incentive for companies to invest in facilities requiring significant rehabilitation or remodeling expense. The tax credit amount depends on the age of the facility being rehabilitated. Eligible sites must have been in service at least 15 years, with at least 5,000 interior square meters of space that has been at least 75% percent vacant for one year or more.

Research & Development Incentives:

Two tax incentives targeted at encouraging investments in research and development. Taxpayers may receive a credit against their Indiana state income tax liability calculated as a percentage of qualified research expenses. In addition, taxpayers may be refunded sales tax paid on purchases of qualified research and development equipment.
Compared to Georgia, Indiana has:
  • Slightly higher corporate but far lower personal income tax rates.
  • Higher combined state and local tax burden
  • A narrower range of incentives.
  • Pre-approval required for all incentives
To summarize, Indiana is about average for business tax incentives in a central Midwest location.

DaleSig

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

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

Ohio 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 Ohio. I was able to speak with some Ohio economic development professionals and learned some of their details (JobsOhio site click here).

Ohio offers a variety of tax credits and abatements, grants and low-interest financing along with technical assistance programs that are available to both new and existing businesses.  CNBC ranked Ohio #28 for the cost of doing business in their 2013 America’s Top States for Business survey.

Incentives and credits include:

Job Creation Tax Credit – A refundable tax credit to companies creating at least 10 new jobs (within three years) and at least $660,000 additional payroll in Ohio. The tax credit is measured as a percentage of the state income tax withholdings for all new employees hired under the program, and is applied toward the company’s commercial activity tax liability. A business must apply for the credit before committing to the project.  Applicants must be approved through the Ohio Tax Credit Authority before hiring begins.

Research and Development Investment Tax Credit – The R&D Investment Tax Credit is a non-refundable tax credit up to 7 percent for qualified research and development expenses. Any unused portion of a tax credit may be carried forward for up to seven years.

Ohio Incumbent Workforce Training Voucher – training vouchers worth up to $4,000 per employee per year, up to $250,000 per employer.  Application and approval required up front, limited amounts available per year.

Compared to Georgia, Ohio has:

  • Similar corporate and personal income tax rates, which means that state tax credits are beneficial to business owners.
  • far narrower range of incentives.
  • Pre-approvals required for incentives

To summarize, Ohio is not as competitive as Georgia for business tax incentives.  Their Midwest location could provide advantages, depending on logistical needs.

Do any of your clients have Ohio connections?  If so, start planning early.  JobsOhio industry experts will be happy to help.

DaleSig

Private Equity, Portfolio Companies, & Tax Credits

You may be working with a private equity group and their portfolio companies. In addition, your client may be looking at a transaction such as a buy-out or a recapitalization for their business. Tax credits can generate great leverage by reducing taxes and increasing cash in many cases. Here are some examples:

Pre-Transaction — Getting the company ready 2+ years in advance. Things need to be cleaned up, systems need to be upgraded, operations and processes improved. Many of changes may qualify for retraining tax creditsdue to the changes in workflow and business processes and software. Employment increases may qualify for job tax credits.

Portfolio Company — May be held for 5 to 7 years before it is sold. The private equity group’s operating partner may make changes to the company to prepare it for the exit. These changes may include acquiring, integrating or rolling-up with other portfolio companies. Related business activities could involve new systems and software (retraining tax credit), new equipment (investment tax credit) and new jobs (job tax credit). In certain situations tax credits can be applied against state payroll withholding taxes, which will increase cash flow.

Exit/Divestiture — After the company has been sold, it may benefit from tax credits due to changes the new owner will make. If the new owner is located out of state, you can help them greatly with your knowledge of state incentives.

Whether your client is a private equity group or a potential portfolio company, tax credits can be a tremendous benefit for them and providing a large value added service from you. Keep these credits and incentives in mind when you discuss their big deals!
 

JimSig

Kentucky 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 Kentucky. I was able to speak with some Kentucky economic development professionals and learned some details (Kentucky Cabinet for Economic Development’s Think Kentucky site click here).

Kentucky’s main tax credits and incentives are meant to encourage new jobs and investments within the state.  Incentives and credits are available to a decent range of targeted industries that include manufacturing, energy, technology, motion picture production, headquarters facilities, and others.

Kentucky’s credits and incentives range in complexity and are typically more generous than other states.

  • Kentucky Business Investment Program (KBI) – Up to 100% tax credit or wage assessment up to 5% of gross wages for projects creating 10 new jobs and $100,000 investment.
  • Kentucky Reinvestment Act (KRA) – Provides up to 50% of project costs and 100% of job skills upgrade costs for investments by manufacturers of $2.5 million (plus other qualifications) for up to 10 years.
  • Kentucky Enterprise Initiative Act (KEIA) – Sales and use tax refunds for minimum investments of $500,000 on materials, equipment, and IT.
  • Skills Training Investment Credit – Tax credit for existing companies, providing up to 50% of approved costs for occupational and skills upgrade training, limited to $500 per Kentucky resident not to exceed $100,000 per company per biennium.
  • Other incentives include tax credits, grants, loans, and reimbursements for “environmental stewardship,” industrial revitalization, research and development, alternative fuel development, and small business investments, among others.
  • Bluegrass State Skills Corporation (BSSC) – A leading workforce training program, BSSC provides grants for training and employment services for new, expanding, and existing companies (click here).

Compared to Georgia, Kentucky has:

  • Similar tax rates and structure
  • A similar range of incentives and credits.
  • A somewhat smaller range of companies eligible for most credits.
  • Similar qualifying activities and somewhat smaller incentive $$ amounts.
  • more hands-on approach to working with companies and projects.
  • BIG DIFFERENCE – most incentives must be pre-approved and carefully planned.

To summarize, Kentucky is very competitive with surrounding states. However, prospective and existing Kentucky businesses must get permission from the state to receive benefits from most of the credits and incentive programs.

Do any of your clients have Kentucky connections?  If so, check out the Blue Grass State’s opportunities.

DaleSig

Pennsylvania 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 Pennsylvania. I was able to speak with some Pennsylvania economic development professionals and learned some of their details (Pennsylvania Department of Community and Economic Development (DCED) click here).

 Pennsylvania is in the middle range for corporate tax burdens and incentives when compared with other states.  Pennsylvania ranks 24th in the The Tax Foundation’s 2014 Business Tax Climate Index (click here).

It takes a while to sort through them, but Pennsylvania has a wide selection (ok, hodgepodge) of incentives, credits, loans, and programs to assist businesses for increasing and retaining Pennsylvania jobs and increasing business investments.  Job Creation Tax Credits (JCTC) provide a$1,000-per-job tax credit to create new jobs in the state within three years (click here).  Several Keystone Innovation Zone programs provide tax credits to certain businesses in specific geographic zones.  Other incentives include R&D credits and various sales tax and energy tax exemptions.  The Pennsylvania First program (PA First) provides comprehensive discretionary assistance to businesses (click here). Specific requirements depend on business type, size, wages, location, and other factors.

Another big consideration — an application and approval process is required for all of Pennsylvania’s DCED incentives.  And, Pennsylvania’s credits and incentives are somewhat more complicated than other states. 
 
Compared to Georgia, Pennsylvania has:

  • Higher and lower taxes:  Much higher corporate income tax rate. Lower personal income tax rate.  Similar sales taxes and higher property taxes.
  • A similar range of industries eligible for incentives if adding jobs and capital investments, and a far narrower range for training incentives.
  • NO opportunities for incentives unless pre-approved.
  • Location, location, location — if that’s what is important to the business

To summarize, Pennsylvania is not as competitive as leading states for new and expanding businesses, unless those businesses really need Pennsylvania’s prime East Coast location.
 
Do any of your clients have Pennsylvania connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!

 
DaleSig

New Jersey 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 New Jersey. I was able to speak with some New Jersey economic development professionals and learned some of their details (New Jersey Economic Development Authority click here).

A big difference between New Jersey and most other states is that they have some of the highest corporate and personal tax burdens.  New Jersey ranks 49th in the The Tax Foundation’s 2014 Business Tax Climate Index (clickhere).

But if you are the right kind of company, and in the right place, New Jersey has a wide selection of incentives, credits, and programs to assist businesses and communities for increasing and retaining New Jersey jobs and increasing business investments.  Grow New Jersey Assistance Program (GROW)is a new initiative, consolidating and expanding several expiring programs, that provides 10-year credits for firms considering moving to or leaving the state (click here).  Another program allows certain biotech and tech companies to sell unused NOLs and R&D credits.  There are LOTS of hoops to jump through, including business type, size, wages, location, and other factors.

Another big consideration — a long application and approval process is required for all of New Jersey’s primary incentives.  And, New Jersey’s credits and incentives are far more complicated than most other states. 
 
Compared to Georgia, New Jersey has:

  • Higher taxes:  Higher corporate income tax.  Far higher personal state income taxes.  Higher sales taxes and far higher property taxes.
  • A narrower range of industries eligible for incentives if adding jobs, a narrower range for capital investments, and a far narrower range for training incentives.
  • NO opportunities for incentives unless pre-approved by state and/or local officials.
  • Location, location, location — if that’s what is important to the business

To summarize, New Jersey is not very competitive for new and expanding businesses, unless those businesses really need New Jersey’s prime East Coast location between the New York and Philadelphia business centers. Most of New Jersey’s incentives seem to go toward paying off large companies not to leave the state!
 
Do any of your clients have New Jersey connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!

 
DaleSig

New York 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 New York. I was able to speak with some New York economic development professionals and learned some of their details (New York’s Business First site click here).

A big difference between New York and most other states is that they have some of the highest corporate and personal tax burdens.  New York ranks 50th in the The Tax Foundation’s 2014 Business Tax Climate Index (clickhere).

That being said, New York has a vast array of incentives, credits, and programs to assist businesses, education, nonprofits, and communities for “investment” in New York jobs and development.  The Regional Economic Development Council (REDC) initiative yearly application round closed on June 16.  It covers up to $750 million in grants, tax credits, loans, and “other resources.”  A Consolidated Funding Application (CFA) serves as a single application for state economic development resources from numerous state agencies and regional councils.  START-UP NY is a new initiative that sets up university-sited or connected tax-free zones for new and expanding businesses (click here).  You may have seen the TV advertisements for this program, and it sounds great, but there are a LOT of hoops to jump through, including business type and location.

Another big consideration — a long application and approval process is required for all of New York’s primary incentives.  And, New York’s credits and incentives are far more complicated than most other states. 
 
Compared to Georgia, New York has:

  • Higher taxes:  Higher corporate income tax.  Far higher personal state income taxes.  Higher sales taxes and far higher property taxes.
  • narrower range of industries eligible for incentives if adding jobs, a narrower range for capital investments, and a far narrower range for training incentives.
  • NO opportunities for incentives unless pre-approved by state and/or regional council officials.
  • Location, location, location — if that’s what is important to the business

To summarize, New York is not very competitive for new and expanding businesses, unless those businesses really need New York’s prime location for global finance, corporate headquarters, global media and culture.  
 
Do any of your clients have New York connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!

 
DaleSig

Texas 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 Texas. I was able to speak with some Texas economic development professionals and learned some of their details (Texas Wide Open For Business site click here).

The main difference between Texas and most other states is that they have no corporate income tax or individual income tax!

Texas’ main incentives focus on rewarding “companies who are creating jobs and driving innovation in Texas.”  The Texas Enterprise Fund (TEF) is the largest “deal-closing” fund of its kind in the nation.  The Texas Emerging Technology Fund (TETF) provides grants to recruit the research talent and to help companies in R&D activities.  State and local communities offer a variety of sales and property tax incentives and financing solutions for businesses expanding or relocating. Programs include Enterprise Zone sales tax refunds, manufacturing sales tax exemptionsproperty tax value limitations, and freeport exemptions.

Pre-approval is required for all of Texas’ primary incentives.  Texas’ credits and incentives are not as complicated as many states and are generally straightforward.

Other incentives and grants include generous workforce training programsprovided through the Texas Workforce Commission.

Compared to Georgia, Texas has:

  • Different corporate taxes:  No corporate income tax.  No personal state income taxes.  Similar sales taxes and somewhat higher property taxes.
  • A broader range of industries eligible for incentives if adding jobs, a far narrower range for training incentives, and a much broader range of companies not needing incentives because they aren’t paying taxes in the first place!
  • Almost no opportunities for incentives unless pre-approved by state and/or local officials.

To summarize, Texas is very competitive for new and expanding businesses.  Representatives at the state and local level are eager to help – Texas economic developers are very aggressive and want your growing clients to move to Texas!

Do any of your clients have Texas connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!

DaleSig

Mississippi 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 Mississippi. I was able to attend the Mississippi Economic Development Council (MEDC) 2014 Winter Conference and learned some of their details (MEDC site clickhere).

Mississippi’s main tax credits and incentives cover new capital investments, new jobs, infrastructure, energy, R&D, and workforce training.  Local incentives can include property tax abatement.  Incentives and credits are also available to a wide range of targeted industries that include manufacturing, warehousing and distribution, aerospace, data centers, health care-related, broadband technology, motion picture production, headquarters facilities, and others.

Mississippi’s credits and incentives range in complexity and are typically more generous than other states (see Mississippi Development Authority site here)

  • Advantage Jobs Program provides for a rebate of a percentage of payroll for up to 10 years.
  • Jobs Tax Credits are tied to threshold levels determined by a county tier system.  These credits can can offset 50% of state income taxes, are available for a five year period, and have carryforwards up to 5 years.
  • Manufacturing Investment Tax Credits for existing firms offset up to 50% of state tax liability with a $1 million investment minimum, worth up to 5% of the investment.
  • Headquarters Tax Credits for relocating or expanding corporate headquarters.  Minimum 20 new jobs, can be carried forward up to 5 years.  Amount awarded depends on wage levels of new jobs up to $2,000 per position.
  • Skills Training Tax Credits available for businesses that provide training to employees and can offset up to 50% of state tax liability and carried forward up to 5 years.
  • Other incentives include tax credits for Clean Energy facilities and R&D Skills new positions, among others.
  • Workforce Training and Job Assistance Programs offer comprehensive workforce training, job recruiting, and many other programs (clickhere and here).
  • Local property and sales tax abatements are very generous and widely available, negotiated locally.

Compared to Georgia, Mississippi has:

  • A wider range of incentive and credits.
  • A wider range of companies eligible for most credits.   
  • A more complex assortment of qualifying activities and $$ incentive amounts.
  • Larger incentives that must be pre-approved and carefully planned.
  • Several other credits that can be taken after the fact and on amended tax returns.

To summarize, Mississippi is very competitive for new and expanding businesses, and on a per-capita basis attracts more new industry than most other states.

Do any of your clients have Mississippi connections?  If so, Mississippi economic developers will be very helpful in finding incentives.

DaleSig