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Alpha-Mail

A Tax Professional's Guide to Credits and Incentives, Courtesy of Alpharesults
Vol. X No. 4 April 2016
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In this issue

Tax Incentives "Above the Line"

Spotlight on Oregon Credits and Incentives

Hello!

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

This month, learn how to look for tax incentives "above the line" that can increase your clients' EBITDA! Also, some of you may have clients who own businesses in Oregon, so be sure to see our overview of Oregon 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 Stapler    Jim Tinsley
     Alpharesults, LLC 

Tax Incentives "Above the Line"                             
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EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a critical measure of cash flow for many companies. Basically it is revenue less operating expenses.  Expenses considered "above the line" typically include operating, general and administrative, and selling expenses. They also include many taxes such as payroll withholding tax, sales and use tax, real and personal property tax, government business license fees, and other local taxes. Note that income tax is not part of the EBITDA calculation and is not an "above the line" expense. 
 
There are many state and local government taxes that may impact these expenses. You can help your clients increase their EBITDA by reviewing tax incentives and savings in the following areas: 
Tax credits & withholding taxes - Instead of using tax credits against income taxes, some tax credits can be utilized against Georgia payroll withholding taxes. This includes the R&D credit, clean energy and some of the job tax credits (click here for details).

Real and personal property tax - Review accumulated depreciation schedules and business personal property tax returns for items no longer owned by the company. Also review for potential business inventory and freeport exemptions (click here for details). 

Sales and use tax - Are all of the sales tax exemption certificates on file?  What about sales tax exemptions for energy used in manufacturing? (click here for details).

Georgia Enterprise Zone - Is the company moving to or expanding in a designed Georgia Enterprise Zone? This incentive may include local property tax exemptions and reductions in occupation taxes, regulatory fees, or local fees (click here for details).

So get started helping your clients find their "above the line" tax incentives -- they will thank you for helping them save money AND increase EBITDA!

Oregon 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 Oregon, and their state economic development professionals gave us some details (business oregon site click here).
 
Oregon offers a substantial and varied collection of credits and incentives for new and existing businesses.  CNBC ranked Oregon #21 in their 2015 America's Top States for Business  survey (Georgia was #5 in the same survey).  Read below and see how many of these could be Above the Line: 
 
Enterprise Zones - In exchange for investing and hiring in an enterprise zone, businesses receive exemption from local property taxes on new plant and equipment for at least three years (but up to five years) in the standard program. In addition, many zones can offer special incentives for investments in qualifying rural facilities or in electronic commerce operations.

Strategic Investment Program - The Strategic Investment Program exempts a portion of very large capital investments from property taxes for 15 years. The program is available statewide.

Construction-in-Process - Unfinished facility improvements may be exempt from local property taxes for up to two years while under construction.

Food Processing Machinery and Equipment (M&E) - For five years after it is newly placed in service, qualified M&E is exempt from property taxes if certified by the Oregon Department of Agriculture.

Electronic Commerce - Investment tax credit equals 25% of the cost incurred by an authorized business for capital assets used in electronic-commerce operations inside one of several enterprise zones.

Qualified Research Activities Credits - Corporate credit for qualified research and basic research conducted each year in Oregon, as a state-level extension to the federal program.

Oregon Investment Advantage - This program helps businesses start or locate new types of operations in a number of Oregon counties by providing an income tax subtraction, potentially eliminating state income tax liability on the operations for several years after they begin.

Oregon Business Expansion Program - This is a cash-based forgivable loan equivalent to the estimated increase in personal income tax revenue from new hiring.

Small Manufacturing Business Expansion Program - This is a cash-based forgivable loan for small manufacturing businesses' expansion projects.

Film & Video Incentives - Rebate on 20% of the production's Oregon-based goods and services.  Additional cash payment of up to 16.2% of wages paid to production personnel.  Unlike other states' programs, these incentives are cash-based as opposed to tax credits. This simplifies and speeds up the process.

To summarize, Oregon is above average for business tax incentives in a great Pacific Northwest location.

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. 
 

Quick Links...-------------------------------------------------------------------------
Alpharesults
Georgia DOR
Georgia DCA Job Tax Credits
Georgia Retraining Tax Credit Guide

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