Category: Did You Know?

Why do communities offer tax incentives?

Based on economic studies, economic development agencies believe that tax credits and incentives ultimately provide a return on investment to the community. Michael Roberts offers an overview at https://www.thebalance.com/why-do-cities-offer-tax-incentives-to-businesses-1669514

Not all incentives require negotiation. Programs set up by State law are often an application process that a company can do on its own. However, strict attention must be applied to all required steps and those steps may or may not be intuitive. It is always best to talk with a professional before finalizing any applications. Once a contract is accepted, terms may be difficult to change.

The most important aspect of jobs incentives to remember is that States only provide incentives on net new jobs. This means that only jobs added in excess of the number of jobs existing in the State on the contract date (commonly referred to as “base jobs”) will be eligible for benefits. So, if a company has 100 jobs on the contract date of 1/1/2018, adds 20 new jobs in 2018 but loses 21 jobs due to employees leaving for one reason or another, the company will have zero net new jobs in 2018. In fact, the company has to make up 1 job to keep the State whole before any incentive benefit is earned.

The second most important issue is that most applications must be approved by the State (or issuing agency) prior to actual hiring. Any hires added before contract approval will be added to the base job count. Only jobs added after the contract (or approval) date will qualify as net new jobs and be eligible for benefit.

Keeping the State whole and maximizing benefits requires a sophisticated process to prove that base jobs remain filled before any incentive benefits are calculated. IncentiLock has fully-automated this process. Results are immediately available upon upload of data. IncentiLock also tracks project progress from inception through completion. We make everything after contract approval easy and transparent. Explore what we do and give us a try.

 

Planning to add 10 or more jobs in Missouri within a 24-month period?

If you have a legal entity planning to move into or expand within Missouri, your company may benefit from the Missouri Works jobs program.  https://ded.mo.gov/programs/business/missouri-works  

In some instances, no capital investment is required but in all instances, approval must be received before any jobs are added.

Contact the applicable County Economic Development agency for more details. Contact IncentiLock for help with required reporting under any jobs program.  We make compliance easy and efficient.  Call us with questions or comments. We’d love to help.

Is your company eligible for a federal income tax credit for hiring?

Have you heard of WOTC?  (WAAT-see)

If your company hires individuals who consistently find it difficult to secure employment, this credit may be available.  Here is a nice explanation of the US Federal Work Opportunity Tax Credit program:  http://www.hudsonstarobserver.com/opinion/columns/4382021-viewpoint-what-work-opportunity-tax-credit-wotc-and-how-it-impacting-our

The State of Missouri, Department of Economic Development has an excellent site to help you manage the application process.  See:  https://jobs.mo.gov/employer/incentives/work-opportunity-tax-credit

IncentiLock calculates WOTC benefits along with any other job program benefits. We’d be happy to show you how.