Ask Margo: Frequently Asked Questions About Economic Incentives (Final)

Finally, we are at the last post for this series.  Again, I want to remind you that this series is based on questions or concerns I've encountered over the years, while working with the State's agent for managing a number of its major incentive projects. I've also been getting calls recently from businesses with the same the same questions and concerns.  As such, I decided to prepare this list for your review.  If your burning question is not included in any of these posts, send me an email at info@marlynnconsulting.com and I will add them to the list.

Now, here is the final post of Frequently Asked Questions related to incentive programs:

What are the benefits of working with a consultant, rather than doing it myself?

Although managing your project and proving to the State that you meet the scheduled requirements are not difficult, it is time consuming and requires knowledge of the incentive program. As such, I believe the greatest benefit of working with a consultant is you’ll have the benefit of an expert to manage your project and report your incentive commitments to the State. Ultimately, this frees up your team’s time to focus on the real reason why you are in business – to provide excellent client service and to increase your business’ revenue.

If you choose a consultant to provide full compliance services, the consultant acts as your Compliance Department. As a result, you won’t have to worry about your incentive commitments, because someone else if monitoring those commitments on your behalf. If you choose to manage your project on your own, but you feel you need some quality control to ensure that your analysis and annual reports are appropriate and accurate, you may work with a consultant to provide an oversight review. This process gives you peace of mind, knowing that your project’s reporting package will be reviewed and approved in a timely manner. Another option, if you choose to manage your project on your own would be to have your team participate in a training program to ensure that they have the tools needed to successfully manage and report your project commitments. Again the benefit is the peace of mind, knowing that your project is in good hands.

Feel free to comment or send me an email at info@marlynnconsulting.com if you have other questions that you want answered. I look forward to hearing your comments, questions and concerns about your incentive project. 

Ask Margo: Frequently Asked Questions About Economic Incentives (III)

The posts of the past three weeks have included a list of questions/concerns I’ve received from a number of businesses enquiring about their incentive projects. I promised to provide some additional questions/concerns that you may be interested in. The following list encompasses questions I’ve received over the years, as well as others that may not have been asked yet, but will come up. If your burning question is not included, email them to me at info@marlynnconsulting.com and I will add your question to the list. If you haven't had the opportunity to review the previous blogs, I encourage you to check them out now.

Why is managing my incentive project so important?

In my experience, many businesses do not worry about their incentive projects until it’s time to submit their reports to the State for approval of their payments. The problem with this method is it does not give you an opportunity to make adjustments if you do not meet one or more of your project requirements at the end of the year. Usually, if you fail to meet one or more of your incentive commitments, you will not only lose the scheduled payment for that year. You will also forfeit any remaining payments under your incentive agreement.

Can I manage my incentive project on my own?

Sure you can! With some assistance, most businesses are capable of monitoring and reporting their incentive project commitments on their own. I would suggest, however, that the team working on your project participate in a training program to ensure that they know the specific requirements for your project. The State requires specific documentation to confirm that your business qualifies to receive a payment. To ensure timely review and approval of your payment, your team should be familiar with the types of documentation and the methods used by the State to analyze your requirements to confirm that you’ve met those requirements.

How would you help me manage my project?

A consultant assisting a business with management of its incentive project should perform periodic reviews of the business’ incentive obligations to ensure that the business is on track to meet those obligations. At Marlynn Consulting, we perform periodic analysis of your incentive requirements during the year and provide you with a report of our results. Our report also details any findings or recommendations that we believe will help you to meet your project goals.

Community Contribution Tax Credit

The Community Contribution Tax Credit Program (CCTCP) encourage Florida corporations to make donations toward community development and low income housing projects.

Florida Corporations that make donations to approved community development projects may receive a tax credit equal to 50 percent of the value of the donation.  Businesses may take the credit on Florida corporate income tax, franchise tax, or insurance premium tax.

Who qualifies as a sponsor?

§  A Sponsor MUST meet one of the following criteria:

o   Community Action Program

o   Community Development/Redevelopment Agency

o   Neighborhood Housing Services Corporation

o   Local Housing Authority

o   Historic Preservation District Agency or Organization

o   Regional Workforce Development Board (formerly Private Industry Council)

o   Direct-Support Organization (DSO)

o   Enterprise Zone Development Agency

o   Non-profit corporation affiliated with economic/community development efforts

o   Unit of Local/State Government

o   School Board

§  Donate to a project to construct, improve, or substantially rehabilitate housing, commercial, industrial, or public facilities, or to promote entrepreneurial or job development opportunities for low-income persons.

§  Donate to an eligible project in an area designated as a Florida Enterprise Zone.  [A project designed to construct or rehabilitate housing for low-income persons does not have to be located in an Enterprise Zone].

Who is eligible?

Any corporation paying Florida corporate income tax, franchise tax or insurance premium tax is eligible to receive a tax credit up to 50 percent of the value of donations to approved community development projects.

What is an eligible contribution?

Cash, property, and goods donated to approved sponsors are eligible for the credit.

How much credit can a business receive?

A business is eligible to receive credits of up to $200,000 per tax year.  Unused credits may be carried over for up to 5 years.

Does the Cost of An Incentives Consultant Outweigh The Benefits? Part II

In my earlier post, I discussed how a business may consider using an Incentives Consultant to help guide them through the incentives process. To continue this discussion, I urge you to consider the potential consultant's experience with tax incentive programs and their associated requirements.

After your project has been approved by the grantor agency and an agreement has been negotiated, you may wish to continue your relationship with your current consultant, hire a new consultant, or utilize your staff to monitor and prepare the required compliance reports.  Whichever strategy you choose for this stage, ensure that the person(s) assigned to your project is truly knowledgeable of your project’s compliance requirements.  This is extremely important, as this is the part of the incentives process where you begin receiving your scheduled payments.  Again, in order for you to achieve any benefit, your consultant should be knowledgeable of economic development incentives and their requirements.  Your consultant should also be efficient, to ensure accurate and timely reporting. Essentially, your consultant’s goal is to ensure that you maximize your incentives payments.

Based on my experience, a business may be justified in hiring a professional consultant to assist with obtaining government incentives. A business should also consider whether it is better to use a consultant to assist with the monitoring and reporting functions of the business' compliance requirements. If your consultant adds value to the incentives process for your company, I believe the benefits outweigh the cost.

If you believe an incentives consultant will make participation in the incentives process, contact me at info@marlynnconsulting.com.

"Top economist: Florida economy ready for takeoff"

Florida Trend article, "Top economist: Florida economy ready for takeoff" written by Dale White (Published: Wednesday, February 2, 2011 at 6:29 a.m.) highlighted a cautiously optimistic picture of Florida's economy.

Click the link to read the full article: http://www.heraldtribune.com/article/20110202/BREAKING/110209967/2055/NEWS?Title=Top-economist-Florida-economy-ready-for-takeoff&tc=ar

I believe this article should interest Florida businesses, as it gives us hope that Florida's economy is rebounding and the likelihood of job growth is high.  I am optimistic! 

For small businesses, this is also good news!  A growth in the State's economy usually produces new growth opportunities for small businesses.  Have you considered the wealth of new opportunities that may occur for your business?  Attracting these opportunities, of course, may require some creativity on your part.  Have you considered how your business will rebound? 

Will you need to hire new employees?

What about training for your existing employees?

As you think about the endless possibilities (get creative), remember that the State provides funding in the form of tax credits, tax refunds and grants to assist businesses with their growth and training efforts.

ASK ME HOW YOU CAN BENEFIT FROM FLORIDA TAX INCENTIVES.  Email me at info@marlynnconsulting.com

Presentation: City of St. Mark's Commission Meeting

Last night, I participated at the City of St. Mark's monthly Commission meeting.  I presented on Florida economic incentives (i.e. tax breaks in the form of credits, refunds and grants).  It was an amazing experience.  My goal was to inform smaller communities about the availability of these incentives and briefly describe some of their benefits. 

My BIG questions: If I offered you a check for $25,000 for training your employees, would you take it?  What if you had to do the training anyway, would the $25,000 check encourage you to get a move on it?

The responses: What's the catch? It's free money, sure I would take it!

Ultimately, what I wanted to get across to the audience was, the money is available each year.  As small business owners, we have to be willing to get help.  No man is an island.  We cannot exist in a vacuum.  And, although some business owners may consider this a hand-out, when you think about it, it is really your money.  If you pay taxes, consider a tax incentive as the government returning some of your money back to you to help with your growth and training needs.

So, I ask this question again, "If I offered to give you a check for creating, retaining or training your employees, would you take it?"

SURE YOU WOULD!!! 

Why not start now? Email me at info@marlynnconsulting.com so we can discuss how you can start receiving money from to help your business grow.

How Small Businesses Are Rebounding With Tax Incentives (Tax Credits)

I recently read an article on Bloomberg.com, titled: "Small Business Is Hiring, but Very Carefully."  The article indicated that in past recessions, small businesses led the rebound, now they're relying on part-time workers and more productivity with fewer people.  The article also discussed an interview with the CEO of a sales promotion company who let go some of his full-time salespeople as a result of the downturn in the economy. The company later kept these employees on as contractors, reducing payroll costs.  

While reading this article I thought about a conversation I had with a local economic development agency.  Florida and local communities within Florida offer tax incentives to businesses to help with their growth and training needs.  There are even greater opportunities for companies located in enterprise zones, brownfield redevelopment, urban and rural areas.  THE PROBLEM? Many small businesses do not take advantage of these opportunities!

As a small business owner, have you thought about getting money to help train your employees?  Or, maybe you’d prefer a tax credit on business equipment and materials?  In a down economy, as a small business owner, you should be excited these opportunities exist.

I hear you asking, what if my business isn’t in Florida?  That is definitely not an issue.  I assure you that your local community offers similar tax incentive programs.  I strongly suggest you contact your local economic development agency and inquire about available tax incentives.  Whatever your situation is, don’t you think you owe it to yourself to at least check these out?

Email me at info@marlynnconsulting.com to find out what incentives are available.  I can also help with other State incentives.