East Incentive Update

Transcription

1 East Incentive Update Allea Newbold Principal Ryan, LLC Tampa/Orlando, Florida Sherri Fetzner Senior Tax Manager Equifax Workforce Solutions Cleveland, Ohio

2 Learning Objectives Identify recent developments in credits and incentives on the East Coast. Discuss trends and hot topics states and the regions that are making headlines. Explore steps that businesses can take to ensure they re utilizing and realizing available incentives on the East Coast. 2

3 States to be covered: Alabama Delaware Florida Georgia Maryland Massachusetts New Jersey New York Pennsylvania Rhode Island Tennessee Virginia East Coast Update 3

4 Who said it? 1. Money is not the only answer, but it makes a difference. 2. Now you have a choice; we can give more tax breaks to corporations that ship jobs overseas, or we can start rewarding companies that open new plants and train new workers and create new jobs here, in the United States of America. 3. "I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here's the thing. Even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future, because the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation."

5 Who said it? 1. Tax breaks serve a vital role in keeping and bringing jobs to our state; however, without accountability, they are little more than loopholes at taxpayers expense. 2.. you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States,. I think we ll create the incentives for you, and I think you re going to do it. We re going for a very large tax cut for corporations, which you ll be happy about

6 Headlines As GE breaks ground on its new Boston headquarters, here's how Massachusetts drew the company to Boston's Seaport District (Mass Live May 2017) Study: Georgia now No. 1 in feature film productions (Business Journal May 2017) 6

7 Alabama Recent Headlines Jobs Act Incentives (2015 and 2017) Jobs Credit 3% for up to 10 years Veterans bonus Investment Credit 1.5% of investment for up to 10 years Alabama Renewal Act (2016) Port Credits Growing Alabama Credit - Credit for contributions to EDOs for site readiness development 7

8 Florida Recent Headlines 2017 Legislature Update QTI Texas-sized closing fund denied Enterprise Florida Budget 8

9 Delaware Commitment to Innovation Act Research & Development Tax Credit $5M annual cap on credits awarded removed Credit now refundable New law effective for QREs allowed in accordance with IRC Sec. 41 for tax periods after December 31, 2016 New Economy Jobs Tax Credit Expanded headquarter definition to include headquarters of spin-offs 9

10 Jobs Tax Credit Georgia The wage of each new job created must meet the average wage threshold Added definition for New full-time employee job Quality Jobs Tax Credit Amended to include change to the definition of taxpayer to include LLCs Weighted county average wage for jobs in multiple counties Effective for taxable years on or after January 1, 2017, taxpayers have two years to meet minimum 50 person threshold requirement New investment requirement for subsequent job creation periods 10

11 Georgia Qualified Parolee Jobs Tax Credit For taxable years beginning on or after January 1, 2017 and before January 2, 2020 Provides a $2,500 income tax credit for employing a qualified parolee in a full-time position Credit capped at $50,000 per employer, per tax year Other Revitalization Zone Tax Credit Tax Credit for Musical or Theatrical Productions Entertainment Production Tax Credits Tax Credit for Donations to Public Schools 11

12 More Jobs for Maryland Act Maryland The act provides tax incentives for new and existing manufacturers that create jobs New manufacturers establishing operations in high-unemployment (Tier 1) counties are eligible for: 1. Refundable income tax credit equal to 5.75% of qualified wages 2. State property tax credit for taxes paid on qualified property 3. Sales and use tax refund for taxes paid on qualified purchases Existing manufacturers that create jobs in a Tier 1 or Tier 2 county are also eligible for the income tax credit Requires certification from Department of Commerce prior to commencement of the project Act also provides tax credit for apprenticeship programs as well as accelerated and bonus depreciation 12

13 Maryland Research & Development Tax Credits Maryland Department of Commerce increased aggregate amount approved annually from $9 million to $12 million Job Creation Tax Credit Amends the definition of qualified position to mean a position that pays 120% of the state minimum wage (previously, 150% of the federal minimum wage) Biotechnology Investment Tax Credit Amends the definition of qualified Maryland biotechnology company Other Electric vehicle recharging equipment extended to 2020 Energy storage system tax credit applies to systems installed between January 1, 2018 and December 31, 2022 Enterprise Zones Maryland Department of Commerce has updated list Electronic Filing Maryland Comptroller may grant waiver of the electronic filing requirements for the job creation, One Maryland, biotechnology investment incentive, and enterprise zone tax credits, and any other credits specified by the comptroller through regulation. Must make written request for waiver. 13

14 Massachusetts Full Employment Credit Effective April 2017, amendment to the computation of the credit. As amended, the rule provides that a qualified employer that participates in the filing of a combined report may apply the employment credit against portions of the combined group s excise liability. 14

15 Pennsylvania Act 84 of 2016 Research & Development: Sunset date of December 31, 2015 has been removed from the law. Tax Credit for New Jobs (formerly Job Creation Tax Credit): Expanded to include a tax credit equal to $2,500 for hiring of qualified veterans. Manufacturing & Investment Tax Credit: New tax credit up to 5% of new taxable payroll to manufacturing companies that increase annual taxable payroll by at least $1 million above the base year. Rural Jobs and Investment Tax Credit: Credit up to 90% of capital contributions to support growth rural growth funds. Educational Tax Credits: Funding has increased from $100 million to $125 million. 15

16 Pennsylvania Act 84 of 2016 Key Stone Opportunity Zone Program: Expanded to include the designation of 12 new zones through 2026 and existing parcels can be extended up to 10 years provided all other requirements are met. Computer Data Center Equipment Incentive Program: $5M million allocated to attract new investment from businesses that meet program requirements. Keystone Special Development Zone Tax Credit: Sunset date changed from 2026 to Keystone Innovation Zone Tax Credit: Funding decreased from $25 million to $15 million. Promoting Employment Across Pennsylvania Tax Credit: Effective December 1, 2016, the PEP tax credit is repealed. 16

17 Act 84 of 2016 Other: Malt Beverage Tax Credit Pennsylvania Mixed Use Development Tax Credit Waterfront Development Tax Credit City Revitalization and Improvement Zone Program Neighborhood Assistance Tax Credit Neighborhood Improvement Zone (NIZ) Program Coal Refuse Energy and Reclamation Tax Credit Entertainment Production Tax Credit Film Production Tax Credit Concert Rehearsal and Tour Tax Credit Video Game Production Tax Credit Taxpayers should review the newly enacted tax credits and determine whether such credits may be applicable to their business. 17

18 New Jersey First Urban Enterprise Zone Expirations New Jersey Division of Taxation has announced the first set of zone expirations. The following zones are expired as of December 31, 2016: Bridgeton Camden Newark Plainfield Trenton 18

19 New York New York City Incentives Extended Governor Andrew Cuomo has signed a bill to extend tax incentives for office tenants and developers in Lower Manhattan for three years. Commercial Revitalization Program (CRP) Industrial and Commercial Abatement Program (ICAP) Sales Tax Exemption Program Lower Manhattan Relocation Employment Assistance Program (LM-REAP) Lower Manhattan Energy Program (LMEP) 19

20 New York Industrial and Commercial Abatement Program Rules adopted by the New York City Department of Finance on March 17 th providing further details on eligibility, process, and filing requirements: Filing fees were implemented for preliminary application, final application, and final report Solicitation of M/WBE requirements for eligibility Further clarity is provided on eligible expenditures for minimum required expenditures (MREs) Examples demonstrating how to calculate the benefit 20

21 New York START-UP New York Companies must align with a college/university s academic mission and create new jobs. Benefits are available to many different business sectors Benefits: 10-year exemption from: Business tax Corporate tax Sales tax Local tax Real estate transfer tax Employee income tax Franchise fees 21

22 New York FY 2018 Budget Notable Economic Development Items $750M in capital funding for Regional Economic Development Councils (REDC s) to be combined with existing programs to promote economic development. $100M for Round II of the Downtown Revitalization Initiative $620 million to grow a new, world-class life science research cluster and expand the state s ability to commercialize research Buffalo Billions Program $500 million for phase II Ride hailing services will be allowed across the entire state! 22

23 Rhode Island Qualified Jobs Tax Credit Up to $7,500 for up to 10 years for as few as 10 jobs Rebuild Rhode Island Tax Credit Financing gap incentive Redeemable up to 20% of project costs Premium Jobs Initiative Insurance company incentive I-195 Redevelopment Fund $25 million fund for district in Providence 23

24 South Carolina Solar Energy Tax Credit Recently enacted for tax years beginning on or after January 1, 2016 Provides credit equal to 25% of cost for the construction, purchase, or lease of certain solar energy property placed in service Job Tax Credit Per capita income figures by county announced Code amended for qualified service-related facility Other Support Activities for Air Transportation Agricultural Packing Operations 24

25 Tennessee Community Resurgence Job Tax Credit Updated guidance on credit Qualifying jobs must be created in a single census tract in order to qualify for the credit Report to Legislature Beginning in January of each year, the commissioner will provide a report to legislature with respect to the industrial machinery and job creation tax credit The report will list Number of taxpayers claiming credit Total amount of credit claimed Number of jobs created Amount of credit carried forward Taxpayers industry It does not permit the disclosure of returns, tax information, or tax administration information 25

26 Credits Extended: Virginia Research & Development Credit Enhanced and extended until January 1, 2022 Worker Retraining Originally Expired 12/31/2017, now 12/31/2021 Telework Originally Expired 12/31/2016, now 12/31/2021 International Trade Facility Tax Credit, Barge and Rail Usage Tax Credit and Port Volume Increase Tax Credit Originally expired 1/1/2017, now 1/1/2011 Enterprise Zone Amended Qualified zone improvements and qualified real property investment have been expanded to include capital expenditures regardless of treatment (capitalized vs. expensed) 26

27 Virginia Research & Development Tax Credit Effective July 1, 2017 and applicable to all credits certified after December 15, 2016, allocations in credits approved by the Maryland Department of Commerce increased from $9 million to $12 million Guidelines issued for taxpayers claiming credit beginning on or after January 1, 2016 Major Research and Development Expenses Credit Available for certain taxpayers that incur Virginia QREs in excess of $5 million during a taxable year Guidelines issued for taxpayers claiming credit beginning on or after January 1,

28 QUESTIONS? KNOWLEDGE SHARING 28