Welcome to Alpha-Mail, the monthly newsletter about tax credits and incentives for tax professionals.

This month, get some year-end tax (credit) planning tips to help your clients minimize their state taxes.  Also, some of you may have clients with operations in Tennessee, so be sure to see our overview of Tennessee credits and incentives. We hope you can use this information to strengthen your client relationships! 

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All the best, 

 Dale Stapler    Jim Tinsley
     Alpharesults, LLC 

Now that the October 15 tax deadline is behind us, the fun begins with reaching out to your clients about year-end (2013) and next year (2014) tax planning. After you have finished your psychotherapy/Dr. Phil discussions, then you can get down to what matters - helping your clients minimize their taxes. And state tax credits can potentially be a big part of their strategies. 

Commercial bankers are telling us that more and more companies are borrowing money to upgrade their business software. This may include Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Document Management Systems (DMS) and other company wide systems. The bankers say that many companies are accelerating adoption of e-Commerce, mobile apps and other new technologies.

As we mentioned last month, 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 Tennessee. I spoke with Reggie Mudd of the Tennessee Dept. of Economic and Community Development and learned some of their details (DECD site click here). 

Tennessee's main tax credits and incentives cover new capital investments, new jobs, industrial machinery, and workforce training.  Local incentives can include property tax abatement.  Incentives and credits are available to a fairly wide range of targeted industries that include manufacturing, processing, warehousing, R&D, computer services, call centers, data centers, headquarters facilities, and others.   

Tennessee's credits and incentives are not as complicated as many states and are generally straightforward. 

• Jobs Tax Credits are blended with capital investments (usually $500,000) and are tied to threshold levels determined by a county tier system.  These credits can can offset 50%-100% of combined Franchise and Excise (F&E) taxes, depending on location and amounts, and have generous carryforwards up to 15 years.  
• Industrial Machinery Tax Credits offset up to 50% of F&E tax liability.  Also includes computers, software, and devices.  Percentages depend on amount invested.   
• Headquarters Tax Credits offer a variety of inducements for companies locating and expanding headquarters facilities.  Very large credits per job, sales and use tax credits, and relocation expense credits are available.  With prior approval, companies can even convert unused net operating losses to credits against F&E liabilities!   
• Other F&E and Sales and Use credits are available for certain very large projects.  
• FastTrack Job Training Assistance Program (FJTAP) offers comprehensive job training programs and grants (click here). 
• Local property and sales tax abatements are very generous and widely available, but negotiated locally.   

 Compared to Georgia, Tennessee has:

• Different corporate taxes:  Franchise and exise taxes instead of income taxes.  No personal state income taxes.
• A broader range of companies eligible for most credits, and a narrower range for training incentives.   
• Fairly straightforward approach when planning company qualifying activities 
• Many credits can be taken after the fact and on amended F&E returns. They don't normally require pre-approval for the activity, just pre-approval for claiming the credits.

Alpharesults has assembled a team with the specialized knowledge and approach required to obtain Georgia income tax credits.  We are not a public accounting firm.  Rather, our services complement those of public accounting firms and do not create conflicted loyalties, because our professionals do not perform attestation work or other external audit functions.  

We focus on small to medium-sized businesses and work exclusively in Georgia with a wide variety of in-state and out-of-state accounting firms.  For more information on our services, follow this link.