Logistics Tax Credits
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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 your clients' past, present and planned activities. With your advice, they may be able to utilize tax credits for their logistics operations.
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North Carolina Credits and Incentives
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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 $$ for their portfolio companies.
We were recently asked about credits and incentives in North Carolina, and we spoke with several North Carolina local and state-level economic developers. What we found was quite surprising.
North Carolina's main economic development tax credits covering new capital investments and new jobs ended 12/31/13 (!!!). The legislature decided to lower overall business and personal tax rates and simplify the overall state tax environment as their main economic development strategy.
As of 1/1/14, North Carolina's credits and incentives are less complicated than many states, but are now far less generous.- One North Carolina Fund: Potential for discretionary grants. It is funded in part by state government and matched locally (county/city). It requires increased headcount (for new or existing businesses) and at least $3 million in capital investment (land, building, or equipment). Click here for more info.
- Customized Training Program: no cost to company, provided by local community college (click here).
- Other incentives include a tax credit for Research and Development, one for Interactive Digital projects, and an Incumbent Workforce Development Program Grant up to $40K cap per company (click here).
Compared to Georgia, North Carolina has:
- A far narrower range of targeted incentives and credits.
- A narrower range of companies eligible for incentives.
- A simple approach to determining company qualifying activities and $$ incentive amounts, what few there are.
To summarize, North Carolina is making a bold bet that lower rates and a simpler tax structure are more effective than credits and incentives for promoting the state's economic development.
Economic developers and policymakers across the nation will be watching how this approach turns out. We'll keep you posted!
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About Us------------------------------------------------------------------------- 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. |
