How to reduce taxes through negotiation – alpha architectalpha architect


Since this is my first post, I’ll make a quick introduction before getting to the content: I love science and learning. 1 aed to usd In college, I majored in physics and, upon completion, felt I had earned a four-year degree in the Discovery Channel. What are futures in the stock market Whereas I enjoyed the subject matter, I knew I wasn’t going to be an Einstein, so I later pursued an MBA and transitioned into tax consulting.

Prior to joining Alpha Architect, I managed the New York regional tax incentives practice for an international advisory firm. Usd sek chart During my time there, I helped Fortune 500 and middle-market companies obtain over $250 million in cash-based incentives at the local, state and federal levels.

Now, as part of the Alpha Architect team, I’m helping clients reduce taxes and assisting Wes as he fulfills one of his favorite mantras: “ Taxes are more important than alpha.”

This post will deal with the first topic — reducing taxes for businesses through negotiation with all levels of government (federal, state, and local). Futures market transaction An Introduction to Tax Negotiations for Businesses Looking to Reduce Taxes

Taxes are often the single largest expense, after payroll, for many businesses. Exchange rate pound to dollar No one understands this better than business owners because they pay these costs directly. Dollar to pound exchange rate today Many taxes are due even if a company doesn’t have taxable income. Gbp usd forecast today For example, property taxes, payroll taxes, taxes on utilities and others are paid even if a business generates no profits and pays no income tax.

Federal, state and local governments have economic development offices that are tasked with attracting and retaining businesses. Python dictionary example They manage programs that reduce taxes and offer cash incentives in return for job creation and investment that occurs within their jurisdiction. What are futures in stock market The value of these benefits can exceed 10% to 30% of the cost of a company’s expansion or relocation project, and in the case of New Jersey, can exceed 100% of these costs (see below).

These programs are discretionary, meaning that a company must first request them and then negotiate for the benefits. Gold usd chart In some states, these programs are not even publicized, but are held in a reserve fund that a governor can call upon to retain or attract a business. German stock market futures How to Negotiate Taxes Successfully

To be successful in these negotiations, a company must have the option to grow their business in other jurisdictions. The futures market This creates leverage and is often a statutory requirement that must be met before incentives can be offered. Gender research topics Examples include the period before a strategic decision is made that involves a large capital investment, adding new employees, acquiring another business or relocating operations. Eur usd exchange rate live Companies must begin negotiations before a corporate action is made, otherwise leverage is lost. Home meaning in hindi What You Can Get in Tax Reductions

There are numerous tax reduction and cash incentives available depending on the jurisdiction. Silver forecast 2017 Here’s a list of those found in the United States, many of which can serve as business financing:

Of these, property tax and job creation incentives are perhaps the most universal and the Grow New Jersey program is the most lucrative. Decimal to binary calculator In fact, it deserves its own special call-out. Eur usd live rate Case Study on Reducing Taxes: Grow New Jersey

New Jersey offers companies tax credits, which, if unused, can be sold for cash to other companies. Usd inr conversion These ‘assignable’ tax credits are effectively cash grants and offered by the New Jersey Economic Development Authority (NJEDA). Us to inr exchange rate As a tax consultant, I’ve pursued tax incentives in places such as South Africa, Mexico, Europe, Asia and across the United States. Binary key Few governments are offering incentives more lucrative than the NJEDA is right now. Binary to alphabet converter If your business is considering an expansion or consolidation on the East Coast of the United States, I encourage you to look into the Grow New Jersey program which has awarded hundreds of millions to companies over the last few years. The millionaire fastlane $30+ Million Dollar Case Study

A manufacturing client of mine was located in New Jersey. Futures in stock market definition They were a certified HUBZone business and generated significant sales through this program. Pre market stock futures (The HUBZone program enables businesses, in specific locations, to obtain preferred vendor status with the U.S. Crude oil futures market Federal government.)

Their HUBZone was being redefined and they needed to move into another one to continue the benefits. Gbp to usd live charts This prompted a new site search, gave them leverage and the ability to negotiate their taxes.

The Company searched locations in New Jersey and in Pennsylvania that were HUBZone eligible. Pre market us stock futures In New Jersey, they decided to focus on a site in Camden and to pursue the Grow New Jersey incentive program.

After negotiating and making a successful application, they were awarded over $30 million in tax credits, or $150,000 per employee relocated to Camden, NJ. Binary programming These tax credits can be used to offset their corporate income tax or sold to another business for $0.90 on every $1.00 of tax credit earned.

$10,000/Employee – 2007 Revitalization Index > 465 Bonus (designated by location) $5,000/Employee – Targeted Industry Bonus (awarded for being a manufacturer) $150,000/Employee – Total Grow New Jersey Award for Each Employee (Over 10 Years)

This company stands to receive over $30,000,000 in tax credits that can be sold for cash at $3,000,000 per year for the next 10 years. 18 usd This is in addition to generous property tax breaks and HUBZone benefits, all received from government sources.

Can everyone expect to generate this level of success? Not necessarily, but many business owners would benefit from including tax negotiations as part of their due diligence before an expansion project. 1 usd to amd Potential Potholes associated with Tax Reduction Negotiations

Negotiating tax incentives and obtaining tax relief can be very lucrative. Dow jones futures market watch However, be sure to ask about program costs and what happens if you fail to meet your job and investment thresholds. Dollar to pound exchange rate graph In some cases, businesses negotiate these benefits but fail to stay current on reporting and compliance requirements in the years that follow. Usd zar rate This negates the entire process.

If you sell a business or form a joint venture, make sure you’re able to transfer the benefits to the new owners. Binary to decimal calculator In some cases, an asset sale can work, but in other jurisdictions, a stock sale may be the only way to transfer the benefits when you sell a business. Usd brl rate Get clarity on these issues before you move forward. Code binary Are You Leaving Money on The Table?

To qualify for tax reduction incentives, businesses must usually meet job and investment thresholds, operate in certain industries or locate in defined geographic regions. Euro to usd exchange rate To find out if your business qualifies for incentives, and if they are right for you, check with your local and state economic development offices or feel free contact me and I’ll let you know what’s available in your jurisdiction.

Please remember that past performance is not an indicator of future results. Decimal word problems 6th grade Please read our full disclaimer. Binary to ascii The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Alpha Architect, its affiliates or its employees. Ntd to usd This material has been provided to you solely for information and educational purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. Usd to jpy exchange rate The factual information set forth herein has been obtained or derived from sources believed by the author and Alpha Architect to be reliable but it is not necessarily all-inclusive and is not guaranteed as to its accuracy and is not to be regarded as a representation or warranty, express or implied, as to the information’s accuracy or completeness, nor should the attached information serve as the basis of any investment decision. Usd to cad exchange rate history No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Alpha Architect.