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Last week I told you about the impact credits and incentives can have on your business, but how can a company identify potential incentives and how to companies take advantage of them?
It may sound too good to be true, but the best place to start a search for credits and incentives is Google. Every state and most local governments will discuss the statutory credits and negotiated incentives available in their jurisdiction on the Internet. Unfortunately, although the incentives are discussed on the Web, the descriptions of the incentives are often inaccessible to a novice.
Statutory credits are easy to capture. Review the credit guidelines, determine if the facts presented meet the credit’s requirements and then determine accessibility. Negotiated incentives, including property tax abatements, tax increment financing, sales tax sharing agreements and other grants, will likely be much more complicated.
Professional advisors will understand the traps for the unwary in these programs. Professionals are also better able to navigate the political process that sometimes surrounds these matters. A company may also be best served by having a third party with a deep understanding of local and regional issues negotiate with competing jurisdictions.
Credits and incentives are available to a greater or lesser degree to every company. Executive leadership and tax advisors should evaluate the potential for these incentives for the enterprise. Where necessary, include consultants who focus on credits and incentives. Always be mindful of the potential for incentives when significant capital investment or job creation may occur.