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Alpha-Mail

A Tax Professional's Guide to Credits and Incentives, Courtesy of Alpharesults
Vol. VIII No. 12 December 2014
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In this issue

Bankers and Tax Credits

Spotlight on Pennsylvania Credits and Incentives

Hello!

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

This month, learn more about how to get your clients' bankers to help you find tax credits! Also, some of you may have clients with operations in New York, so be sure to see our overview of Pennsylvania credits and incentives. 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

Bankers and Tax Credits                    
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Your clients may be planning for business growth and expansion, and to make it happen, they may need bank financing. Guess what?  Much, or at least some of this financing will likely be used for activities that qualify for tax credits.
  
For example:
Line of Credit: increased payroll costs from adding employees = Job Tax Credits
Loan for computer systems: replacing or upgrading key business software = Retraining Tax Credit
Loan for capital: new or expanded land, facilities and equipment = Investment Tax Credit
Operating lease: new software, new or expanded buildings = Retraining and Investment Tax Credits
Other activities including R&D, energy, and others
As you work with clients on their year-end tax planning, ask about their expansion plans for the next few years and their means of financing it.  There is a good chance that their banking needs may provide hidden tax credits that really help them.
  
Talk with commercial bankers about their existing and prospective business clients. Discuss how you may be able to help strengthen their competitive advantage, using tax credits to help them close more business.  
 
Educating bankers on tax credits for their clients will help you solidify referral relationships with them, ultimately bringing more new clients your way!

Pennsylvania 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.
 
One of our clients recently asked about credits and incentives for their location in Pennsylvania. I was able to speak with some Pennsylvania economic development professionals and learned some of their details (Pennsylvania's Department of Community and Economic Development (DCED) site click here).
 
A big difference between Pennsylvania and most other states is that they have fairly high corporate tax rates.  Pennsylvania ranks 24th in the The Tax Foundation's 2014 Business Tax Climate Index (click here).

Pennsylvania offers a wide array of incentives, credits, and funding programs to assist businesses in locating or expanding in Pennsylvania jobs and development.  DCED's Single Application for Assistance enables companies to apply for most credits and incentive programs using one form.  The Governor's Action Team (GAT) is the single point of contact for for new and expanding businesses planning significant growth or investments in PA (click here).  Keystone Opportunity Zones (KOZs, click here) provide special zones with reduced or eliminated state and local taxes.

One consideration -- an application and approval process is required for all of Pennsylvania's primary incentives.  And, Pennsylvania's credits and incentives can be more complicated than other competitive states. 

Compared to Georgia, Pennsylvania has:             
Higher taxes:  Far higher corporate income taxes.  Similar personal income taxes.  Higher sales taxes and 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 regional council officials.
Location, location, location -- if that's what is important to the business 
To summarize, Pennsylvania is not highly competitive for new and expanding businesses, unless those businesses really need Pennsylvania's prime location for global commerce, corporate headquarters, transportation and culture.  

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

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

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