The New Incentives Guide
To help your company navigate its way through the myriad of state business incentives available, Business Facilities each year presents an overview of the most crucial and unique incentives that currently are being offered. In the past 12 months, most likely in response to the economic downturn, we have seen the introduction of a bevy of new incentives. They cover areas such as corporate tax reduction, job development, job training and education, film and television industry, financial services, foreign trade zones, general business taxes, manufacturing, R&D, sales tax exemptions, sustainable energy, small business, and other tax incentives. An exhaustive list and full explanation of every incentive offered across the country might fill an entire issue of Business Facilities, so this article focuses on the new or expanded entries geared towards jump-starting the new industries that will fuel the recovery.
21st Century Quality Jobs
This new incentive was created in 2009 to attract growth industries and sectors to Oklahoma in the 21st Century through a policy of rewarding businesses with a highly skilled, knowledge-based workforce. The intended purpose of the program is to target and promote indisputably impactful high wage jobs and enable Oklahoma to diversify its economy by developing clusters around knowledge-based, service industries.
This incentive reduces out-of-state sales requirements from 75 percent to 50 percent for industries that are required to have out-of-state sales and requires at least 10 fulltime jobs at an annual wage of the lesser of $86,637 or 300 percent of the countyâ€™s average wage. It also maximizes the eligible incentive payment by incorporating expanded state benefits by allowing a net benefit rate of up to 10 percent of payroll.
There are two net benefit rates in the 21st Century Program, an â€śInitial Net Benefit Rateâ€ť and the â€śFulfillment Net Benefit Rate.â€ť The Initial Net Benefit Rate is calculated similar to the Quality Jobs net benefit rate by taking into account the stateâ€™s direct benefits and direct costs associated with the project. However, the Initial Net Benefit rate is allowed to increase up to 7 percent rather than be capped at 5 percent as with the regular QJ program. The Fulfillment Net Benefit Rate incorporates indirect costs and benefits into the calculations and is allowed to increase up to 10 percent once the company hires/maintains 10 fulltime jobs. If the company drops below the 10 fulltime jobs, then the initial net benefit rate would be applicable. It applies for a total of 10 years.
For technical assistance regarding program concepts, eligible companies, application guidelines and other information pertaining to the program, please call 405-815-5269. For free assistance in completing the 21st Century Quality Jobs application, contact a representative at the Quality Jobs Program office at 405-815-5269, or toll free at 800-879-6552, x5269.
The goal of this program is to lay a foundation to build Oklahomaâ€™s smaller businesses by incentivizing prime contractors to award subcontracting work to Oklahoma businesses.
Prime Contractors may receive a cash rebate of up to 2 percent of the reimbursed labor amount as outlined in the Qualified Federal Contract for Total Qualified Labor Hours performed (not just taxable wages) within Oklahoma by the employees of the Prime Contractor and any Subcontractor which is assigned work under a Qualified Federal Contract.Â Although the participant qualifies for the program based on projected labor hours, the program is performance-based allowing the participant to be paid only for the actual labor hours. Actual performance in Total Qualified Labor Hours worked determines the amount of the Net Benefit Rate. This agreement may last for up to 10 years.
Companies interested in participating in this program as either a Prime or Sub Contractor now or in the future should visit www.okstate-uml.org/ok100.html or call 580-767-8865.
Community Economic Development Pooled Finance Incentive
This program creates a bonding incentive that targets job creation and infrastructure development and a foundation of ensuring Oklahomaâ€™s infrastructure is high quality for attracting and retaining jobs.
A $100 million Economic Development Pool is created for bonding to local governments in conjunction with a for-profit entity through ODFA. It shall be used for economic development projects in the state. Bonds issued from the Economic Development Pool may be paid from withholdings taxes, and other revenue, at the for-profit entity benefited by the bond. For bond obligations issued under this act, there is a maximum maturity of 25 years and a maximum coupon rate of 14 percent.
Sixty-five percent of the net proceeds from both the Infrastructure Pool and the Economic Development Pool shall be used by ODFA for municipalities that do not exceed 300,000 people. The remaining thirty-five percent may be used by the ODFA for any eligible local government.
Clean Energy Solutions
In order to promote a green economy in New Jersey, the stateâ€™s Economic Development Authority (EDA) has created Clean Energy Solutions (CES). This suite of financing programs includes interest-free loans and grants to ensure that commercial, industrial and institutional entities have the resources they need to grow and prosper while simultaneously reducing New Jerseyâ€™s carbon footprint.
Ultimately, CES supports the goals of New Jerseyâ€™s State Energy Master Plan: to reduce New Jerseyâ€™s energy consumption by 20 percent and increase the stateâ€™s percentage of energy supply from renewable sources to 30 percent by 2020. Current programs include the Clean Energy Solutions Capital Investment Loan/Grant Program, the Combined Heat and Power Program and the Clean Energy Manufacturing Fund.
The Preferred Lender Program
The New Jersey EDA wants to ensure that New Jersey businesses have the resources necessary to expand and communities have a healthy climate for growth. Thatâ€™s why it partners with banks to overcome the financial obstacles that can stall the growth and expansion of New Jersey-based businesses.
The enhanced Preferred Lender program creates new loan opportunities for the EDAâ€™s lending partners by providing below-market interest rates with flexible terms for growing businesses in New Jersey. It features a three-day turnaround time for loan approval and applies to transactions in which the EDA buys a participation in bank financing and/or guarantees a portion of a bank loan. The quick turnaround time from approval to closing provides a strong incentive for borrowers, while the EDAâ€™s exposure by participating in or guaranteeing a portion of a loan reduces the lenderâ€™s risk. Under the program, the EDA provides up to 50 percent of the bank loan amount for fixed asset loans, with a maximum participation of $1.25 million and a maximum guarantee of $1.5 million. For working capital loans, the EDA offers up to 50 percent of the bank loan amount, with a maximum participation of $750,000 and maximum guarantee of $1.5 million. EDA participation and guarantee terms may be up to 10 years for fixed asset loans and up to five years for working capital loans.
EDA designated Preferred Lenders may submit credit assistance requests and the EDA will make a decision on the applications within three business days. A written commitment letter is issued within two days of approval, and upon notice, closing may occur within three business days. Business applicants looking to qualify for a loan from a Preferred Lender must be in business for more than two years or a leveraged buyout and commit to creating one new job per $50,000 in EDA commitment (except for manufacturers, which must pledge to maintain and/or create one job per $50,000).
This incentive is a workforce development program, providing workforce recruitment, screening and training to new and expanding companiesâ€”all at no cost. These innovative and customized programs are available to companies that meet eligibility requirements and are aligned with Louisianaâ€™s economic development targets, including digital media, headquarters and business operations, service industries, advanced and traditional manufacturing, warehouse and distribution, and research and development.
To qualify, any manufacturing, corporate headquarters, warehouse and distribution, research and development or other strategic facility must first commit to creating a net of at least 15 new, permanent manufacturing jobs, or a net of at least 50 new, permanent service-related jobs. Service industries, headquarters and business operations, and warehouse and distribution companies must also have a majority of sales out of state. Each request is evaluated prior to project commencement to ensure all eligibility requirements are met.
Louisiana FastStartâ€™s partners include the Louisiana Workforce Commission, the Louisiana Community and Technical College System, and local colleges and universitiesâ€”a unique model that enables streamlined, efficient pre-employment training. The partnership also means Louisiana FastStart has access to a network of adult education resources that can benefit a company at launch and in the future.
Digital Media Incentive
The Digital Media Incentive provides a tax credit of 25 percent of qualified production expenditures for state-certified digital interactive productions in Louisiana and an additional 10 percent tax credit for payroll expenditures for Louisiana residents (35 percent total). There are no minimum investment requirements and no caps on qualified expenditures; the tax credit can be sold or applied against Louisiana tax liability.
The incentive is eligible to digital interactive media productions in Louisiana, excluding largely static Internet sites and products regulated under the Louisiana Game Control Law. To apply for this tax credit program, you must complete and submit the Digital Media Incentive Program Application in the Related Content section. Also, a preliminary budget must be submitted with the program application.
Mega-Projects Development Fund
Provides performance-based grants of up to 30 percent of the total cost of a project that creates or retains at least 500 direct jobs or that provides a major investment in the state. A project must create 500 direct jobs, create or save at least 500 direct jobs at a facility that has been closed or a facility that risks closure, or provide a minimum initial investment of $500 million through the creation of a new facility or the expansion of an existing facility. In addition, the project must provide a substantial return on the investment by the state as measured by projected tax revenues.
Renewable Energy Tax Incentive
In July 2009, Arizona created the Renewable Energy Tax Incentive program to encourage business investment that will produce high quality employment opportunities and enhance Arizonaâ€™s position as a center for production and use of renewable energy products, including solar, wind, biofuel, geothermal and other renewable technologies.
Businesses making new investments in manufacturing and/or headquarter operations in Arizona in renewable energy industries are eligible for the program if they meet the following requirements: 1) 51 percent of new jobs must pay a wage that is equal to or exceeds 125 percent of the stateâ€™s median wage as determined by the Arizona Department of Commerce; and 2) the firm must offer health coverage for which the firm pays 80 percent or more of the premium for the employee or equivalent for alternative models.
Beginning in January 2010, two benefits are offered under this new program: A refundable corporate income tax credit and a real and property tax reduction benefit.
1) The refundable corporate income tax credit is up to 10 percent of the total capital investment of the project. Capital investment is investment in facilities, equipment, land and infrastructure for a qualifying project. The tax credit is to be taken in equal installments over five years. It is calculated by the amount of capital investment and the number of qualified jobs being created (qualified jobs are new full-time positions that pay above the stateâ€™s median wage and offer health insurance coverage).
To be eligible, a manufacturing operation would have to create at least 1.5 jobs per $500,000 in capital investment and a headquarter operation would have to create at least 1 job per $200,000 in capital investment. For example, if a manufacturing operationâ€™s project made a $150 million capital investment and created 1,273 jobs, the company would be eligible for 10 percent of the capital investment for a total of $15 million. If a headquarter operationâ€™s project made a $10 million capital investment and created 50 jobs, the company would be eligible for 10 percent of the capital investment for a total of $1 million.
If the project does not meet the above job-to-capital investment ratio, the firm would receive a reduced benefit to be calculated as follows: If a manufacturing operationâ€™s project made a $150 million capital investment and created 150 jobs the calculation would be: 150 x $500,000/1.5 = $50 million x 10 percent = $5 million. If a headquarter operation made a $10 million capital investment and created 35 jobs, the calculation would be: 35 x $200,000 / 1 = $7M x 10 percent = $700,000.
2) The real and property tax reduction benefit effectively constitutes a 77 percent reduction for projects with a minimum of $25 million in capital investment. It reclassifies both real and personal property (to class 6) for either 10 or 15 years, based on the following: if a project pays 51 percent of employees between 125 percent and 199 percent of the median state wage on average, the reclassification would exist for 10 years; and if a project pays 51 percent of employees at least 200 percent of the median state wage on average, the reclassification would exist for 15 years.
In addition, the state of Arizona may pre-approve $70 million in benefits per year. The program is effective until December 31, 2014, making the cap $350 million over five years (program cap is for the income tax credit portion only). If firms choose to leave before five years, any benefits received must be returned in full with annual interest. If firmsâ€™ employment figures drop below the required number of full-time employees or established wage levels, all future benefits cease.
Incentives for a New Kentucky
This streamlined and aggressive business incentive program signed into law by Governor Steve Beshear in June 2009 provides a program for existing manufacturers who need to make a significant capital investment in Kentucky facilities in order to remain competitive. It consolidates KIDA, KREDA, KJDA & KEOZ into a single, more flexible tax incentive program for new and expanding businesses; provides a sales and use tax refund for companies that are heavy users of computer and telecommunications equipment; and, expands KEIA to allow sales tax refunds for the purchase of electronic processing systems costing $50,000 or more. KEDFA approval is required for participation in the loan and tax incentive programs, except the Skills Training Investment credits, which are approved by the Bluegrass State Skills Corporation (BSSC).
Bluegrass State Skills Corporation Skills Training Investment Credit: Provides credit against Kentucky income tax to existing businesses that sponsor occupational or skills upgrade training programs for the benefit of their employees.
The Incentives for Energy Independence Act (IEIA): Requires a capital investment of at least $25 million for an alternative fuel facility using biomass, or an investment of at least $100 million for an alternative fuel facility using coal, as its primary feedstock. A capital investment of at least $1 million is required for a renewable power facility that meets minimum electric output standards based upon the power source.
Kentucky Business Investment (KBI) Program: Provides income tax credits and wage assessments to new and existing agribusinesses, regional and national headquarters, manufacturing companies and non-retail service or technology related companies that locate or expand operations in Kentucky. Projects locating in certain counties may qualify for enhanced incentives.
Kentucky Reinvestment Act (KRA): Provides tax credits to any existing Kentucky company engaged in manufacturing and related functions on a permanent basis for a reasonable period of time who will be investing in eligible equipment and related costs of at least $2,500,000.
Kentucky Environmental Stewardship Act (KESA): For companies manufacturing products that have a substantial positive impact on human health and the environment. Companies with projects approved under KESA must have at least $5 million in eligible cost and can potentially recover up to 25 percent of the projects fixed asset cost and 100 percent of employee skills training. The tax incentive is available for recovery over a 10-year period.
Kentucky Investment Fund Act (KIFA) : KIFA provides tax credits to individuals and companies that invest in approved venture capital funds. Investors in KIFA approved funds are entitled to a 40 percent credit against Kentucky individual or corporate income tax or Kentucky corporate license tax. KEDFA approves investment funds and fund managers.
PEAK: Promoting Employment Across Kansas
This program authorizes a diversion of employee personal income withholding taxes to certain qualified companies or third parties which create jobs in Kansas. Under the legislation, a company that closes down an existing business entity outside the state, relocates the entity in Kansas, and provides its full-time employees with adequate health insurance coverage for which the company pays at least 50 percent of the premium is generally considered to be a qualified company.
A company that meets those requirements would also be considered a qualified company if they have contract third parties to perform services as the legal employer of newly relocated employees. Additionally, companies meeting additional criteria would qualify for withholding tax diversions of 95 percent for periods of time ranging from five to ten years, provided that the requisite employees are compensated at a rate equal to at least 100 percent of the county average wage.
The legislation expressly excludes business entities within certain industry groups (including bioscience companies, gambling entities, religious organizations, retailers, and utilities), companies delinquent in payment of nonprotested taxes to any government entity, companies that have filed for bankruptcy or announced their intention to do so, and companies participating in other statutory withholding tax diversion programs.
PEAK includes two types of projects:Â Basic and High Impact.
Basic: To qualify, PEAK jobs of the relocated function(s) must be paid an aggregate annual average wage of at least 100 percent of the most recently published annual average wage for the county in which the function will be located.Â A minimum of five (in non-metropolitan counties) or ten (in designated metropolitan counties of Douglas, Johnson, Sedgwick, Shawnee or Wyandotte) PEAK jobs must be relocated to Kansas within two years from the PEAK agreement date. Only those PEAK jobs that pay at or above the county average wage are eligible for retention of withholding taxes.
High Impact: To qualify, PEAK jobs of the relocated function(s) must be paid an aggregate annual average wage of at least 100 percent of the most recently published annual average wage for the county in which the function(s) will be located.Â A minimum of five (in non-metropolitan counties) or ten (in designated metropolitan counties) PEAK jobs must be relocated to Kansas within two years from the PEAK agreement date.Â Additionally, to qualify as a High Impact project, the qualified company must relocate a minimum of 100 jobs within five years from the PEAK agreement date. Only those PEAK jobs that pay at or above the county average wage are eligible for retention of withholding taxes.
Wind and Solar Bond Financing
Enacted April 2009, this incentive allows the State to issue up to $5 million in bond financing for eligible wind and solar energy manufacturers locating in Kansas. The principal and interest of the bonds are paid off from the payroll withholding tax of the new jobs. Manufacturing companies building solar or wind equipment or components thereof in Kansas may be eligible for financing through the Kansas Department of Commerce to support a research, development, engineering or manufacturing project.
To qualify the project must result in $30 million in new investment in Kansas, the hiring of at least 200 new employees within 5 years, and the company must pay at least $32,500 of average annual compensation per Kansas employee. Individual solar or wind projects are eligible for up to $5 million in financing.
Enterprise Zone Program
This program offers corporate income tax credits for new job creation and qualified capital investment in Kansas. The entire state of Kansas is designated as an Enterprise Zone. To be eligible, manufacturers need to create at least two net new jobs, non-manufacturers five net new jobs and ancillary support and headquarters need to create at least 20 net new jobs. The job creation tax credit in the metropolitan areas of Kansas City, Topeka, Wichita and Lawrence is $1,500 per new job created. Designated non-metropolitan areas can provide a credit of $2,500 per new job created. The investment tax credit is one percent of qualified investment. The credits can be used to significantly reduce a firmâ€™s corporate income tax liability in a given year, and allowed unused credits may be carried forward.
Eligibility for the various incentives and the value of the incentive depend on 1) the type of business, 2) the location of the business within the state, and 3) the number of net new jobs created. The Kansas Enterprise Zone Act defines six counties of Douglas, Johnson, Leavenworth, Sedgwick, Shawnee, and Wyandotte as metropolitan counties. As such, they are ineligible to apply for the enhanced job credits available to designated non-metropolitan counties.
Centers of Energy Excellence
The Michigan Economic Development Corporation (MEDC) is accepting applications from energy technology development companies for grants from the new Centers of Energy Excellence (COEE) program financed by $45 million from the 21st Century Jobs Fund over three yearsâ€”$18.7 million this fiscal year. The initiative provides grants to for-profit companies that are commercializing innovative energy technologies with support from a university.
The funds can be used for one of the following purposes: match for foundation funding, federal funding or international investments up to 50 percent of the total project cost; accelerating the commercialization of an innovative energy technology or process that will be ready to market within 3 years of the agreement date; activities of the Center, including, but not limited to, workforce development and technology demonstration.
Interested applicants can begin by submitting a non-proprietary project abstract by email to email@example.com. Additional details on the application format, process and confidentiality can be found at michiganadvantage.org/21cjf.
Entertainment Industry Incentive Act
Exempts certain sales, use and lodging taxes and provides credits against the income tax liabilities of qualified production companies to encourage growth within the entertainment industry.
The Act includes a rebate for production expenditures equal to 25% of the State-Certified Production expenditures and a 35% of all payrolls paid to residents of Alabama for the state-certified production. Expenditures must equal or exceed $500,000 but not exceed $10,000,000.
â€˘ A Qualified Production Company shall be entitled to a rebate for Production Expenditures on funds expended in AL
â€˘ The rebate shall be equal to 25 percent of the State-Certified Productionâ€™s production expenditures excluding payroll
paid to residents of Alabama
â€˘ The rebate shall be equal to 35 percent of all payroll paid to residents of Alabama
â€˘ Production expenditures for a project must equal or exceed at least five hundred thousand dollars ($500,000), but
must not exceed ten million dollars ($10,000,000)
â€˘ A Qualified Production Company that intends to expend in the aggregate one hundred fifty thousand dollars
($150,000) or more in connection with one or more Qualified Productions in the State of Alabama within a consecutive
12-month period, shall be exempted from the payment of state sales, use, and lodging taxes.
The total direct impact to Louisiana’s economy from entertainment industry growth is expected to exceed $1.4 billion. Entertainment Industry growth in the United States will increase from $582 billion in 2006 to $745 billion in 2011 Filmed entertainment will expand at a 4.9 percent compound annual rate, rising to $103 billion in 2011. Digital cinemas will help the expansion of the marketplace. High Definition DVDâ€™s will stimulate home video sell-through. This increase will fuel the â€śproduction engine.â€ť
Gov. Bob Riley recently signed HB-69, making the Alabama Entertainment Industry Incentive Act of 2009 a reality. The Alabama Film Office and the Alabama Dept. of Revenue are in the process of developing the rules and regulations and setting the application policy in place.
Quick Response Training (QRT)
The Quick Response Training Program (QRT) provides grant funding for customized training for new or expanding businesses. Through this employer-driven program, Florida is able to effectively retain and attract businesses creating new high-quality jobs. Workforce Florida, Inc. administers the program. Quick Response has provided customized training for over 100,608 employees for more than 303 businesses throughout the state.
An employer-driven training program, QRT is designed to assist new value-added businesses and provide existing Florida businesses the necessary training for expansion. A state educational facilityâ€”community college, area technical center, school district or universityâ€”is available to assist with application and program development or delivery. The educational facility will also serve as fiscal agent for the project.Â The company may use in-house training, outside vendor training programs or the local educational entity to provide training. Reimbursable training expenses include:Â instructorsâ€™/trainersâ€™ wages, curriculum development, and textbooks/manuals. The program has been structured to be flexible and to respond quickly to meet the businessâ€™s training objectives.
The Qualified Target Industry Tax Refund incentive is available for companies that create high wage jobs in targeted high value-added industries. This incentive includes refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium, and certain other taxes. Pre-approved applicants who create jobs in Florida paying 115 percent of the average annual wage, receive tax refunds of $3,000 per net new Florida full-time equivalent job created; $6,000 per job within an Enterprise Zone or rural county. For businesses paying 150 percent of the average annual wage, add $1,000 per job; for businesses paying 200 percent of the average annual salary, add $2,000 per job. The local community where the company locates contributes 20 percent of the total tax refund. There is a cap of $5 million per single qualified applicant in all years, and no more than 25 percent of the total refund approved may be taken in any single fiscal year. New or expanding businesses in selected targeted industries or corporate headquarters are eligible.
The Broward Alliance recently announced that Hoerbiger Corporation has been awarded a Florida Quick Response Training Grant for $301,350 by Workforce Florida. The grant will help Hoerbiger create 58 new jobs and provide customized training for the new employees and 272 existing employees at its Pompano Beach location over the next two years. The training will be coordinated through Broward College.
â€śHoerbiger recognized the need for additional employee training as they were working to expand their operations in Pompano Beach,â€ť said James P. Tarlton (JT), president and CEO of The Broward Alliance. â€śThe Broward Alliance was able to assist by identifying an appropriate grant through our partnership with WorkForce One and helped facilitate the grant application process. The referral was made by June Wolfe, president of the South Florida Manufacturers Association.â€ť
â€śOur goal is to attract, retain and develop the best employees, and we continually invest in their skills and talents,â€ť said Hannes Hunschofsky, president of Hoerbiger Corporation of America, Inc. This grant helps make those training resources possible.â€ť
Other companies and organizations that have recently received training grants totaling more than $200,000 through the assistance of The Broward Alliance and WorkForce One include 3 Dimensional Engineering, Inc.; Cbeyond, Certified Metal Finishing, Inc.; the City of Tamarac; Forecast Trading; Interplex Sunbelt, Inc.; and Ultimate Manufacturing Inc. For information about available training programs, contact Vernon Bailey, Director of Workforce Development for The Broward Alliance and WorkForce One, at 954-524-3114.
The Mega Tax Credit
Expanded during the 2009 Legislative Session. the Mega Tex Credit (HB 438) will help position Georgia as a leader in growing industries in the bio, energy and financial sectors. This credit will expand eligibility of this existing credit to projects other than manufacturing. HB 438 encourages large impact by offering a tax credit (allowable against payroll withholding liability) to a company that hires 1,800 new employees and has an investment of more than $450 million or an annual payroll greater than $150 million. The credit is $5,250 per job and may not be taken with other tax credits. Georgia is one of the only states in the country that offers a tax incentive to companies that create such large projects with high paying jobs.
Research & Development Tax Credit
The R&D tax credit also was expanded during the 2009 Legislative session. The changes tie this Georgia credit closer to the federal R&D credit calculation, simplify the credit and encourage innovation and innovative companies to invest in Georgia. Companies in their first five years of operation may take the credit against payroll withholding. The new part of this legislation provides the ability for early-stage technology companies, even without profits, to take advantage of tax credits. There is no longer a requirement that a company have positive net income for the previous three yearsâ€”a challenge for most emerging technology companies. The companies that would benefit from this legislation are the very ones who are in the most need of venture funding. This tax saving makes the state of Georgia one of the best for investment capital utilization for high-growth companies.
Ten percent of a companyâ€™s increased qualified research and development expense over its gross receipts may be claimed as a tax credit. Georgia taxpayers must qualify for a research credit under the IRS code to be eligible. Emerging companies can apply the credit to offset their payroll withholding once all other tax liability has been exhausted for their first five (5) years. A tax credit is allowed for research expenses for research conducted within Georgia for any business or headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries.
The Research & Development tax credit equals up to 10 percent of the additional Research and Development expense over a base amount. The base is computed from the previous three yearsâ€™ taxable income and research expenses.
Research & Development tax credits are available to a business engaged in one of the categories to which the jobs tax credit is available (manufacturing, telecommunications, etc.). Research & Development tax credits can be used against 50% of the remaining income tax liability after all other credits have been applied in a given year. Unused Research and Development tax credits may be carried forward 10 years. These credits can be added to other tax credits.
The Research & Development base is the taxpayerâ€™s Georgia taxable net income in the current year multiplied by whichever is less of the following:
â€˘ The average of the ratios of its qualified research expense to taxable net income for the preceding 3 taxable years, or
â€˘ 30 percent
Quality Jobs Tax Credit
Repurposes the existing Headquarters Tax Credit. The Quality Job Tax Credit will attract more businesses because it is more broadly applicable across Georgia. The new credit rewards the creation of 50 or more high-paying, quality jobs by companies in Georgia. Companies receive a credit (allowable against payroll withholding liability) on an increasing scale for establishing jobs paying higher than the average wage in a proposed county. This bill is effective for tax years beginning on or after January 1, 2009.
Companies that create at least 50 jobs and pay wages at least 110 percent of the county average are eligible to receive a credit of $2,500-$5,000 per job, per year, for up to five years, based on the scaled system below. Credits may be used to offset the companyâ€™s payroll withholding once all other tax liability has been exhausted and may be carried forward ten years.
Governor’s Office of Workforce Development
As part of the Georgia Work Ready Initiative, the state announced a new incumbent worker training grant available to eligible companies who become Certified Work Ready facilities. Becoming a Certified Work Ready facility requires a company to develop and implement a plan to use Work Ready job profiles and assessments/certificates as an integral part of its HR practices. Grant recipients will receive incumbent worker training funds in accordance with number of employees earning Work Ready Certificates, up to a maximum of $500 per employee or $50,000 per facility. The funds may be used for:
â€˘ Time at work for employees to take the Work Ready assessment;
â€˘ Time required for employees to participate in job profile process;
â€˘ Incentives for each employee up to a maximum of $100 to take the assessment;
â€˘ Training costs for any type of training of the companyâ€™s choice, for Work Ready Certified employees.
In the face of the countryâ€™s economic crisis, Georgia has created a unique response designed to help people jump start their job search and improve their core job skills. Be Work Ready is a one-of-a-kind solution from the Governorâ€™s Office of Workforce Development (GOWD) that gives Georgians an incentive to earn a Work Ready Certificate and improve their skills, positioning the state to emerge from the recession faster and stronger. This incentive provides funds to assist with job search expenses.
The Work Ready Certificate gives individuals a competitive advantage in the job market by validating their knowledge base to potential employers and setting them on a road toward the life-long learning that will help them land a job today and tackle tomorrowâ€™s innovations.
Job Training Incentive Program
New Mexico has one of the most aggressive training incentive packages in the country. The Job Training Incentive Program (JTIP) funds classroom and on-the-job-training for newly created jobs in expanding or relocating businesses for up to six months.Â The program reimburses 50 to 70 percent of employee wages and required travel expenses. Custom training at a New Mexico public educational institution may also be covered.
The New Mexico State Legislature created the Job Training Incentive Program, formerly known as the Industrial Development Training Program or â€śin plant training,â€ť in 1972. In FY2008, JTIP allocated $11.6 million for more than 60 separate projects. Of the 1,978 new jobs created, 1,437 were urban and 541 were rural, and the projects covered the entire state, from Farmington to Santa Teresa.
Film Industry Tax Credit
Updated in 2009. Effective Jan. 1, 2010, qualifying productions that spend more than $250,000 in N.C. will receive a 25 percent tax credit on in-state purchases for goods and services up to $7.5 million per project (approximately $30 million in in-state spending.) Here are the specifics:
â€˘ 25 percent refundable tax credit
â€˘ Low minimum spend – $250,000
â€˘ No Annual Cap
â€˘ No Application Process
â€˘ No audit fee
â€˘ Combine local crew, equipment, and stages for greater savings
The North Carolina Film Council and the stateâ€™s film community work with the Governor and state legislators to create financial incentives to encourage film and television production in the state. In addition, the Department of Revenue offers qualifying productions a point-of-purchase one percent sales and use tax certificate when purchasing production-related goods and services.
Customized Worker Training
The North Carolina Community College System offers free, customized job training for new and expanding businesses. Comprised of 58 colleges across the state, it is the third largest community college system in the country and has earned accolades from the economic development, business and industry, and educational communities worldwide. Programs include pre-employment training by a statewide network of skilled professionals with industry-specific expertise, and worker training.
The North Carolina Community College System administers:
â€˘ The New and Expanding Industry Training Program (NEIT) includes: Pre-employment training.
â€˘ Instruction by a statewide network of skilled professionals with industry-specific expertise.
â€˘ No expense or assistance offsetting costs where an instructor is a company employee.
â€˘ Use of nearby college facilities, including transportation of training equipment.
â€˘ Access to the North Carolina Information Highway, a real-time, interactive distance learning system.
â€˘ Cost of training supplies and materials including customized training materials.
â€˘ Continued support as a training partner once your site becomes operational.
â€˘ The Focused Industrial Training (FIT) special training program for North Carolinaâ€™s manufacturing industries. FIT
designs and implements targeted, customized training for organizations that need to upgrade workersâ€™ skills.