Logistics Tax Credits

Georgia is making a major push to increase logistics operations. The Savannah Harbor Expansion Project (SHEP), the Georgia Logistics Center of Innovation (click here) and the 2014 Georgia Logistics Summit in March (click here) underline the state’s increased economic development focus.

Logistics includes trucking, warehousing, third party logistics (3PL), freight brokerage, light manufacturing, and related services. With all of these expansion and growth activities, logistics-related companies may have opportunities for Georgia tax credits, including:

  • Job Tax Credit: for increasing headcount. You need to be careful that your client’s operations meet the Business Enterprise NAICS requirements (click here).
  • Retraining Tax Credit: for training existing employees. This includes software upgrades, LEAN initiatives and related new technologies.
  • Investment Tax Credit: for capital investments by manufacturing and telecommunications companies. Be careful with NAICS requirements (click here).
  • Port Activity Tax Credit: for import/export through Georgia ports. This tax credit is complex – your client must own the inventory as it passes through the port and increase the quantity imported or exported to utilize this “adder” to the Job or Investment Tax Credit.

Review you clients’ past, present and planned activities. With your advice, they may be able to utilize tax credits for their logistics operations.


Alternative Funding for Your Clients

We recently attended The Georgia Financing Roundtable conference sponsored by the Council of Development Finance Agencies (CDFA, click here). This session highlighted federal, state, local, and private alternative financing tools available to economic development groups to assist companies with job growth. These alternatives include bonds, grants, tax credits, EB-5 financing and equity funding sources. There are a lot of alternatives available, especially for economically distressed and rural areas. Here is an overview:

  • Invest Atlanta – Major push for downtown Atlanta for assisting start-ups, strengthening exports, and increasing foreign direct investments.
  • Georgia – The Department of Community Affairs (DCA) provides grants and Industrial Development Bonds as well as providing guidelines for Job and Opportunity Zone tax credits (click here for DCA overview). Also, the 2014 legislature will consider the proposed Downtown Renaissance Tax Credits to redevelop downtown areas (HB 128 click here)
  • Federal – Due to the budget, sequester, and other issues, federal incentives may be reduced over time. However, several programs are still available including new market tax credits, EB-5 program, and USDA rural development programs.
  • Summary – Alternative financing tools are utilized less than 5% of the time in local economic development efforts. But creative financing could be utilized a lot more to obtain funds for economic development. For example, a new economic development project may be financed with “Capital Stacking.” This approach may combine tax exempt bonds, EB-5 equity, and tax credits to finance a new project.

So reach out to your economic development organizations to find alternative funding for your clients.  You can help to spur local job growth, benefiting your clients and your community!



Legislative Update

The Georgia Legislature is about to wrap up this year’s session, and there have been few changes that relate to business incentives or tax credits. But an interesting one is for the Opportunity Zones. SB 137makes changes that allow Opportunity Zones to be designated by the commissioners of the departments of Economic Development and Community Affairs — IF they agree! (click here for details)