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Alpha-Mail

A Tax Professional's Guide to Credits and Incentives, Courtesy of Alpharesults
Vol. VIII No. 7 July 2014
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In this issue

Tax Credits for the Deal

Spotlight on New Jersey Credits and Incentives

Upcoming Event

Hello!

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

This month, learn how you can help your clients generate tax credits even if they are being sold. Also, some of you may have clients with operations in New Jersey, so be sure to see our overview of New Jersey credits and incentives. And finally, note our upcoming speaking engagement at the Georgia Society of CPAs Valdosta chapter meeting. We hope you can use this information to strengthen your client relationships!

Thank you for reading Alpha-Mail -- please click reply to tell us what you think.

All the best,

Dale&JimSigsSM1

Dale Stapler Jim Tinsley
Alpharesults, LLC

Tax Credits for the Deal                    
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Have you seen an increase lately in buyouts, mergers, and acquisitions in your market?  You may have been involved in deals with private equity groups buying local companies, hospitals buying physician practices, etc.  
 
The buyout of a client can create uncertainty and turmoil in your business, as you well know.  But even in this environment, there are ways you can strengthen and build a client relationship, even if they will no longer be your client.  
 
Often in the time leading up to a business sale, the buyer's integration team works with the seller's employees to install the buyer's software, business processes and workflow.  Since the buyer doesn't want to disrupt the seller's business during transition, this installation may be done prior to the "official" sale date (when the seller's employees are moved to the buyer's payroll). During this time period, the seller's employees are still employed by the seller. The seller is heavily involved with the training development and employee training. Luckily, these activities may qualify for a training tax credit or other incentive!  Depending on your client's location, either the seller or the buyer could get a huge training or retraining state tax credit.
 
By letting your clients know about these tax credit opportunities, you will maintain your relationships with them and may be able to leverage new relationships with the buyer for additional business. Who knows, in three years, your main contact may leave the company and start another company (and engage you again).  Either way, that would be a good Deal!

New Jersey 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 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 (click here).

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!!

Upcoming Event-------------------------------------------------------------------------
We will be speaking at the upcoming GSCPA Valdosta chapter meeting on Tuesday, August 19, 2014 (click here for details).

About Us-------------------------------------------------------------------------
Alpharesults has assembled a team with the specialized knowledge and approach required to obtain state tax credits and incentives.  We are not a public accounting firm.  Rather, our business 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 with a wide variety of accounting firms.  For more information on our services, follow this link. 
 

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Alpharesults

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email:  alpha-mail@alpharesults.com                   phone: 770-667-1332 
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