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Top 5 Business Tax Credits to Secure in 2015

2015-01-14 11:00:00

Date/Time: Wednesday, January 14, 2015 | 11:00am PT / 2:00pm ET

Start the New Year right with learning how you can help your company capitalize on five important types of tax credits available to companies in 2015. With thousands of tax credits and business incentives available at the state and federal levels, it can be difficult to identify all of the tax credits for which your company may be eligible. This webinar, sponsored by ADP®, will help you focus on the top tax credit categories that your company should consider examining as the New Year begins. With more than 30 years of experience, ADP has the specialized knowledge, experience and proven processes to help you identify and capture federal and state tax credits for which your company may be eligible.


Paul Vanhuysen headshotPaul VanHuysen
Paul VanHuysen is the director of tax at ADP Tax Credit Services. With more than 13 years in the tax credits and incentives industry, Paul specializes in applying technology to capture and calculate federal and state tax credit opportunities. Paul has designed screening, tracking and calculation processes for various federal tax credits and state-based incentive programs, including the Work Opportunity Tax Credit (WOTC), Federal Empowerment Zone and Renewal Community Credits, Gulf Opportunity Zone Credits, HIRE Act of 2010, California Enterprise Zone Tax Credit and Indian Employment Credit. Throughout his career, Paul has led tax consulting projects for more than 50 of the Fortune 500 companies. Paul holds a bachelor’s degree from Northwestern University and an MBA in economic strategy from Southern Methodist University.


 

5 Types of Business Tax Credits to Consider in 2015

 David DeSon:                       Good afternoon and welcome to today’s webcast brought to you by ADP. Today we’re going to be talking about business tax credits to consider in 2015. Before we get started, I’d like to mention that today’s session is being recorded and you are currently in a listen-only mode.

 Now I’d like to acquaint you with some of the ways you can participate in today’s session. The last 15 minutes will be dedicated to Q&A. Your questions will be kept confidential and anonymous, so please don’t be shy and submit your questions throughout the presentation. You can type a question into the questions and answers panel located in the lower right-hand corner of your screen. Then click on the send button to enter your question into the queue. And again, your questions will be answered at the end of the presentation. If you experience any technical difficulties during today’s event, please enter it into the Q&A panel or call WebEx support at 866-229-3239 for technical assistance.

 Now, let’s get on to our program. Our presenter today is Paul VanHuysen, the director of tax at ADP tax credit services. With more than 13 years experience in the tax credits and incentive industry, Paul specializes in applying technology to capturing and calculating Federal and state tax credit opportunities. Throughout his career, Paul has led tax consulting projects for more than 50 of the Fortune 500 companies. Paul holds a bachelors degree from Northwestern University and a MBA in economic strategy from Southern Methodist University.

                                                 Now, without further delay, I’d like to turn today’s program over to Paul.

 Paul VanHuysen:               Thank you. And as we go in today I think what I want to go through first is the agenda. And really what we’re going to do up front is go through tax incentives and credits 101 and just kind of educate the group on tax incentives in general at a very high level. So, then when we go on and move into the next section about tax incentives and are not one-size-fits-all. Really the fact that they’re so unique to each individual Company’s footprint and the operations that really we’ll have a good base of understanding. Next we’re going to go into the five types and really the meat of this presentation’s going to be going through the five types of business credits that we really think you should be looking at and considering in 2015. Now, that doesn’t — I’ll just caveat up front, that doesn’t address every business credit and every business credit type out there but it’s going to — it’s where we think you should be concentrating in 2015. Then, finally, we’re going to come up on looking at common reasons for missed incentive opportunities. Really, from what we’ve seen by talking to our clients, getting out there, talking to our clients, and understanding what they’re saying to us, just go through some common stories there. And then finally strategies that we’ve seen that can enhance that incentive capture and knowing that we’re fighting things like limited resources and things like that. We’ll look at some strategies to help overcome that. Then we’re going to close with Q&A in the final ten minutes or so. But as David had mentioned earlier, please feel free throughout the presentation to submit questions and hopefully we’ll have the time to answer those at the tail en of the presentation. And if we don’t, then we will definitely contact — we’ll be in contact with you to get those questions answered.

 So, let’s jump into tax incentives 101. Really, the first thing that we’re looking at is corporate tax incentives are really designed to encourage businesses and employers to engage in certain activities that really drive the economy of either certain areas or certain states. Those activities are really around investment. They could be targeted hiring and targeted hiring is really looking at certain targeted populations that might be harder to employ. It’s really looking at those and creating and framing incentive opportunities around that. We’ve seen a lot of opportunities in and around veterans. Veterans programs are hiring the long-term unemployed right now and those are examples of targeted hiring. Next would be like expansion and relocation. This is where if you’re going to expand existing operations, moving into new territory where you’re setting yourself up to have negotiated opportunities to talk with multiple state and local governments to frame and really negotiate discretionary incentives for — discretionary incentive package as a result of those relocation and expansion plans.

 And the next is looking at geographic based credits. Are my operations in certain types of zones that predispose them to have incentive programs around them? And then job creation credits. Am I growing my employment roles in various states that have job creation incentives? You’ll see two distinct flavors of incentive opportunities. The first being statutory, and really that’s just looking at legislative, something that’s very legislative, it’s on the books. Tax payers and employers are entitled to take these just as a virtue of it being on the books. And then discretionary opportunities are more around those relocation or expansion plans or even job retention plans. And really these are more negotiated opportunities where you’re talking with state and local governments to negotiate a tax package to move those expansions and relocations into that specific state or locality.

Then as we move forward from there, oftentimes corporate tax incentives are dollar for dollar reductions in income tax liability. A lot of tax credits and incentives are there as dollar for dollar reduction so income tax liability. Now, what we’ve seen lately is there’s the ability for a Company that may not have income tax liability, there’s also opportunities that are more above the line where it can offset certain expanses, whether they be withholding tax or we’ll talk later about how it can be more like reimbursements of wages or reimbursements of training expenses that you may incur as a result of delivering qualified training. But there’s a lot of programs out there that are dollar for dollar reductions of income tax liability. But if you’re not generating income tax liability, that doesn’t mean you shouldn’t be pursuing incentives because of kind of the things that I was talking about and will dive into more later.

 Next are the common objectives for pursuing corporate tax incentives. Really the primary we see is to reduce tax liability, either in a certain state, federally, it runs the gamut. And lowering that effective tax rate is the primary objective of tax departments that we see across the board. And tracking and engaging and calculating these tax credits and incentives is one tool that tax departments are using to lower that effective tax rate. Next is — these often have a positive impact to EBITDA because they are lowering the income tax. So, they often have a positive impact to EBITDA. Finally, we see that a lot of companies are already engaging in things like veteran hiring initiatives and maybe wage subsidies and working with long-term unemployed populations or youth populations to bolster employment in those areas. That may be because it creates a public relations benefit but oftentimes those same activities are what the government’s trying to encourage employers to do so they’re actually offering incentives for these same types of activities that the employer may be engaged in. So, it behooves you to understand what programs are out there and how those align with the initiatives that you might have, hiring initiatives and likewise.

Next, let’s move on to why tax incentives are not one-size-fits-all. Really, what we’re saying here is when you’re assessing your incentive programs and which ones are a good fit for your employer, you need to first take a look at your own business, understand these aspects of your business, look at your workforce trends, your hiring trends, where you may be consolidating operations, your geographic footprint can be very huge in driving incentives, especially as we talk about being inside certain designated zones, either at the state or Federal level.

Next is getting in front of that real estate planning and understanding and maybe even adding in incentives as one component across that real estate planning process early on so you know what the incentive disposition is of the various localities and states that you’re weighing against each other.

 Finally, just understanding your tax liabilities. It doesn’t make a whole lot of sense to put in large operations and large processes in place to capture certain tax incentives if you’re not generating any tax liability or they’re not refundable in those states where you’re not generating tax liability. And then it’s also just understanding how incentives can be used as a larger tool in the organization as people are often fighting cost control, budgetary concerns, oftentimes these incentives align very tightly with that type of strategic initiative because they are looking at reductions in cost or could actually provide reimbursements for expenses paid and things like that.

                                                 The next thing that a Company needs to know and needs to look at is they need to look at the disposition of the incentives themselves. What attributes do these incentives carry that might make them attractive for my Company, whether or not it’s statutory or discretionary? Am I engaging in activities that would drive discretionary activity? Am I expanding? Am I relocating to a certain area? Or do I have a job retention plan in one state? That kind of thing. Understanding the qualifying activity triggers, and that’s really looking at — Am I growing my workforce? Am I making investments? It’s understanding what you’re doing and understanding how that relates to the various incentives that may be available in that area. Additionally, knowing if you’re just in a targeted industry for a certain area can often lead to more incentives that you can capture.

 And then looking at tax types, the incentives available to offset. Can it offset? I may not generating income tax but is it available to offset payroll withholding taxes that I know I’m paying? Or sales and use taxes? Things like that. And just understanding the nature of that incentive might still be a valuable tool even if I’m not generating an income tax liability in that area.

Is it transferable? Can I sell this credit to another tax payer who is generating tax liability in that area for cents on the dollar? Or is it refundable? Meaning I’m still not generating a tax liability there but the opportunity’s fully refundable and it will come back in the form of cash.

 Next, you should always look at the application or certification process. Do I need to do this ahead of time? There’s a lot of pre-certification credits that are out there right now where you almost need to accelerate when you know you’re going to grow jobs or you know you’re going to make investments and grow jobs. You almost need to know that ahead of time so you can maximize your incentives related towards that investment and not sacrifice a portion of that investment in job creation after the fact because you’re not allowed to do it — because you’re not pre-certified to receive the benefit for that program.

Next, let’s take a step back and look at a case study about how this one-size-fits-all or not one-size-fits-all really plays itself out. If I’m looking at this, a financial services Company leasing a new contact center in Northern California, there’s an urgent business need and tight timeline and that’s preventing their ability to do a thorough incentives analysis during the site selection process. So, what they’re able to do is really at this facility they can capture the Federal Work Opportunity Tax Credit. It’s a targeted hiring credit and available to all Federal employers and so what you’re doing is screening all job applicants for that Federal WOTC program. Additionally, they were able to also get a contract awarded on qualified new hire training under the California ETP or Employment Training Panel program.

So, these seem like they are capturing incentives. But since it’s not one-size-fits-all, as we switch into case study B and we look at what the incremental value created based upon just one attribute of geography and where they’re located that contact center, if that same financial services Company leased that contact center and they were able to perform that cursory geographic review and decided on a facility, put that facility in both a Federal empowerment zone and a state designated geographic area, what that allows them to do, they can still pursue the Federal Work Opportunities Tax Credit, they’re still entitled for the California ETP just as they were in case study A, but incrementally, they’re also able to capitalize on the Federal empowerment zone tax credit which is available for up to $3,000 per qualified individual and also the California new employment credit.

Since they’re making the investment and they’re growing jobs in California, they’re really also eligible for up to $11,200 per qualified individual per year for the next five years for the individuals that they hire and retain who meet the requirements of the California NEC program. Now, that program specifically does require net new job growth across all of California, not just within that zone, but you can see that in case study B that same financial services Company would have been able to really stack the value proposition for that new lease of the contact center and they could’ve done it both at the Federal level and at the state level had they just understood their geographic disposition and what their footprint looked like.

 With that, let’s move into the real meat of this and let’s talk about the five types of business tax credits to be considering in 2015 as we’re sitting here in January. So, the first thing would be hiring and employment incentives. Many companies have made the investment in an electronic capture and automated capture of the Federal Work Opportunity Tax Credit and that investment can be oftentimes leveraged down to capture additional benefits at the state level and so really what these are, if I’m looking at the incentive triggers, I’m hiring employees from certain designated groups. A lot of these designated groups right now revolve around being a veteran or long-term unemployed. There’s a lot of youth hiring initiatives and then there’s a lot of hiring initiatives for hiring people who have been on food stamps or on welfare, things like that.

                                                 There’s also a lot of retention incentives. So, if I hire people in certain localities or from qualifying populations, if I retain those individuals there’s a lot of incentives baked around their continued eligible employment with my Company. And creating new jobs. There’s a real push to create new jobs and bring more people back into work and so to align with that a lot of state governments have created job creation tax credits or tax incentives.

                                                 And then finally, common benefit designs that we see are really you see a percentage of the wages paid to qualified employees will come back as a tax benefit and then a percentage of net new payroll, oftentimes if you look at — it becomes a percentage of payroll over a certain point in time, usually the previous year or at a certain benchmark date and then qualified employees often do need to meet certain retention hurdles and certain retention benchmarks. You would see that within the Federal WOTC program. You need to — the person needs to work initially greater than 120 hours but then the benefit increases as they work over 400 hours.

                                                 Common example programs, we’ve talked about the Work Opportunity Tax Credit program. We’ve talked about the Federal Empowerment Zone tax credit. That’s a zone-based employment incentive that’s really looking at different under developed areas across the country that tax credits and incentives are available for by locating your business and continuing to employ people who are living and working in that same zone.

                                                 Next, you could also see there’s Georgia, the Georgia Jobs Equality and various — there’s multiple states out there with veteran hiring programs right now. And these hiring programs like those veteran opportunities really bolt-on well to those automated screening services that we were talking earlier for the WOTC program. These veteran hiring initiatives really can just latch on and leverage that WOTC screening and allow you to increase your value prop based upon capturing these additional programs through this same process.

                                                 Next, let’s look at investment incentives and really here you’re looking at making qualified investments in property plant and equipment and oftentimes making those investments in certain designated areas or certain designated zones. It doesn’t have to be. Sometimes if you’re in a certain industry making investments in certain things that could also be a trigger for incentives. That’s really understanding and that’s why it’s important to understand the unique inventive triggers within each of the programs that are available.

                                                 Common program designs are really basically a percentage of the qualified investment is oftentimes available as part of — as an incentive. It might be 5% of the qualifying investment, 6% of the qualifying investment is available as a tax incentive to the employer who’s making that investment. Some of these investment programs also require you to at the same time at least hit a minimum threshold of job creation in that same area, whether it be in the state or a certain locality. You might need to — it might be a two-pronged criteria.

                                                 Now, a lot of times these are designed by states to create this targeted investment from a priority industry whether it be manufacturing, high technology, things like that, and then it might be a specific type of investment that’s targeted in terms of am I putting in a data center or something like that and the state’s trying to attract that type of investment in their community.

                                                Certain example programs of this are the Colorado Enterprise Zone Tax Credit program, again this is one of the cases that does require pre-certification. So, these are things that you need to contemplate as you’re thinking about pursuing these. Again, the Connecticut Fixed Capital Investment Tax Credit or the Georgia Investment Tax Credit as well are other examples. These aren’t the only examples but they’re just good representations of these programs if you want to do additional research.

                                                 So, next, let’s go into the negotiated or the discretionary incentives. A lot of times what we’re seeing here is the incentive triggers are expansions, relocations, or the consolidation of an operation. Usually because these types of activities create job growth in an area and create investment in an area, more recently what we’ve seen is states have been more competitive in trying to either keep jobs or attract jobs. We’ve seen a lot of clients be able to negotiate tax incentives related to the retention of jobs where they may otherwise move these operations somewhere else and move these jobs somewhere else. They’re able to negotiate with the state they’re currently in based upon keeping those jobs within that state. These are highly dependent on the Federal state or local government objectives and the negotiation process that you’re dealing with within that group. So, very much these are things that you need to identify early on because you have to identify because it’s negotiated or discretionary, that discretionary component is really looking at a but-for situation. But for these incentives, I would not be moving forward with these activities in this area. So, it really is making sure within that business case that you’re showing the value that without these incentives you wouldn’t be making the choice of this locality.

                                                 Common program designs of this are governor’s discretionary funds, enterprise funds, and strategic growth funds. These are pools of money that are there to be allocated to drive this type of investment in job growth in various priority industries, various priority business activities, things like that. These benefits take on many different flavors. They come across as cash grants, tax credits, property tax abatements, utility reductions, subsidized land, training grants, et cetera. Example programs for this would be the North Carolina JDIG or the Job Development Investment Grant or the Indiana Economic Development for a Growing Economy or the Indian EDGE program. Again, this an exhaustive list of examples but just a way to start and aid your research as you think about how these various programs work.

                                                The fourth area we want to look at is training incentives and I think we saw training incentives kind of go away, the funding for training incentives almost going away for a little bit, but we’re seeing it come back a lot more. Really the triggers here are the design and delivery of qualified training to a Company’s workforce whether it be to new employees or existing employees. It depends on the program that you’re looking at but either of those two could be eligible. And then, it’s also whether — it’s looking at those and curing the qualified expenditures related to delivering those training activities. Those are the main triggers for generating training incentives.

                                                 A common benefit design is getting a percentage of the overall training expenses so a certain percentage, you’ve spent X on training related to those across all your expenses and so that could be trainer’s wages, locations, the development of content, things like that. The more inclusive that list, often the better the program is for the participants as there’s greater qualified training expenses. These can take the form of either being a tax benefit but sometimes they’re a reimbursement of the qualified training expenses so they’re almost coming back as cash based upon the qualifying expenses that you’re incurring, you’re getting a reimbursement of those directly or a fixed fee reimbursement based upon the qualifying training hours. That’s entering into more of a contract thing. I’m going to deliver this many training hours and then I’m developing a fixed fee reimbursement schedule as you hit those certain outcomes.

                                                 The example programs here, the California Employment Training Panel. We talked about that one earlier in the case studies. The George Retraining Tax Credit and the Arizona Jobs Training Credit. I’d mentioned earlier but this is definitely one area that even if you’re not generating tax liability, if it’s not coming back in the form of a tax credit, the benefit isn’t, it’s still as a grant, it can still be very beneficial to you, especially if it involves getting a cash reimbursement of expenses paid. That ties directly to where you’re looking at offsetting or cutting costs as a strategic driver of the business. This is looking at it as one tool that you could pursue to actually do that and fulfill that goal. So, we can’t stop training. We want to keep training our people and developing our workforce but this is how we could do it more cheaply.

                                                 Finally, we’re going to move into the transferable incentive space and really, this is where certain states and areas are allowing the buying and selling of specific tax credits. Some states that we’ve even seen in New Jersey allow for the buying and selling of net operating losses where a Company in a certain industry doing a certain thing and meeting all the parameters of the program can basically transfer a net operating loss to a tax payer who is generating tax liability in that state.

                                                 Not all incentives, it’s important to mention here, not all incentive programs have benefits that can be transferred between tax payers. This is why transferability becomes such an important attribute of the actual programs that you’re pursuing because if you can’t use that program but you’re generating — but you’re engaging in the activities that could create that incentive for your Company, the ability to transfer that to another tax payer becomes pretty important to you because it’s another way to make money even though you can’t capitalize on that program directly by offsetting your tax liability.

                                                 The features of a transferable incentive can be used by the buyer to offset various applicable taxes and so this can be for the insurance industry, this can be the premiums tax. Oftentimes it’s income tax but it can also be franchise tax. And so you just need to look at the tax types that these transferable credits are available to offset and where it’s available to transfer a NOL it allows that Company that’s generating those NOLs and those NOL carry forwards to generate the much needed cash flow that they need at the point that they’re trying to grow their business.

                                                 Currently we have seen and are seeing over 100 transferable Federal and state incentives and they’re allowing the buyer to offset tax liabilities where they themselves aren’t engaging in the types of activities that would allow them to generate the tax incentives themselves. Example of incentives, again we see a lot of times state film production credits where the film production companies are generating these large tax credits for their film production activities but they’re able to transfer those to tax payers who need to offset their income tax liability there. The Grow New Jersey Assistance Tax Credit, the Massachusetts Low Income Housing Tax Credit, or the Massachusetts Brown Field Tax Credit are also good examples of these.

                                                 So, this kind of wraps up the five tax credit types that we should be looking at in 2015 but I did, as I caveated earlier, there are additional incentives that are out there that are available to secure. They can do anything from energy efficiency, renewable energy investment, research and development is also a large one, property tax abatements. There’s a lot of other tax credits out there so it’s just a matter of getting your arms around what’s available based upon the activities that your individual business is currently engaged in and then mapping that along with your geographic footprint and understanding which incentive programs are available in which areas.

                                                 So, let’s now look at when we talk to our client base and as we get into these conversations, let’s talk about common reasons for missing these incentive opportunities. They’re not going to come as a surprise to many of you. I mean, most of these are going to be things that you either see or understand inside of your own business and can recognize there or things you talk about in various trade groups that you see. But really the primary one, or a primary one I see is building incentive expertise and tax incentive expertise isn’t necessarily the primary objective of the business and so understanding all of the requirements of programs, all the triggers of programs and just all of the programs that may be out there, that becomes too much for a tax department to handle or any one person to handle.

                                                 And so that becomes one reason. Again, no line of sight to the available programs. That speaks to a lack of information and ability to find information on the incentives that are out there. Oftentimes, the functional groups that are touching the incentives practice or may just be touching the incentives practice indirectly and not knowing it, they’re not necessarily working or acting in concert, keeping information centralized in terms of what’s going on, whether that be in real estate planning, working with the tax department, those kinds of things, those functional groups aren’t necessarily coordinating and aligning their efforts.

                                                 Oftentimes it comes down to understanding the application process or the compliance obligations, understanding how that’s going to play itself off because oftentimes even when we see it and negotiate it in the discretionary space, we’re negotiating these credits up front but then there becomes a compliance — there becomes compliance — up front there’s application, there’s an application process usually to understand, you need to understand those requirements. How do you check the right boxes? How do you frame it up properly? But then there’s also the compliance obligations associated with that agreement of creating the jobs, making the qualifying investment, and tracking that over the number of years of the agreement which can be upwards even of 15 years. So, that compliance becomes something important that you need to understand.

                                                 And then often I hear this everywhere that I go at least and it’s really the technology systems that they need to centralize incentive information related to their incentive portfolio is oftentimes tracked on various Excel spreadsheets that sit on people’s desktops and there’s no real centralization of information and that kind of leads to why these functional groups aren’t able to get together. And so these are common themes that I see. So, one good case study that I think we could talk about is a large manufacturing Company that we’ve worked with, negotiated a huge incentive package with the state of New York and they went through the ribbon cutting, front page news. Six months after the fact, after that ribbon cutting, six months down the line, the economic development office reaches out to that employer to basically ask them did they want the incentives that they negotiated? Do they plan on filing the required reporting necessary to claim those incentives?

                                                 And so, really what that highlights for me is that you go through all of that hard work to negotiate the incentives up front, do everything right during that negotiation process, be awarded the incentives, but then there’s no smooth handoff, and no smooth coordination between the functional groups to understand that okay, these compliance obligations related to this agreement we entered into, those are going to need to be owned by somebody. What are those? How do I understand those moving forward to understand whether I’m going to be able to meet those and how do I get the information I need to meet those requirements? That becomes just one example of a case study where you go through the huge trouble of negotiating it but then you’re at risk of not really realizing the benefits that you went through all of that trouble to negotiate.

                                                 So, next let’s look at simple strategies that I’ve seen that might work and strategies that would work to help enhance the incentive capture process. So, as the things pop up I think one of the biggest things I’ve seen in the past year and even before that is unlocking the power of your data and understanding your workforce trends and your investment trends within that and how that aligns with your tax liability. But unlocking the power of your data is coming down to understanding where you’re doing the hiring, understanding when that hiring is going to take place and then understanding where you might be turning over or consolidating a labor force across state lines.

                                                 That might be another area where you’re triggering incentives and don’t even know it and so I mean unlocking and looking at these workforce trends really help you define what incentives you can pursue as long as you understand the incentive triggers for each of the programs in the areas where you are and then understanding the compliance requirements of your incentive, very much so I don’t see — in the last case study we looked at, that’s an example of where there wasn’t a clear understanding of compliance requirements. There was almost a blindness towards those compliance requirements or even that compliance requirements existed and somebody needed to be responsible for those in order to realize the benefits they had negotiated.

                                                 Really, benchmarking against your industry, knowing what other similarly positioned companies are getting in terms of credits and incentives can be a good way of looking like — Am I making sure I’m capturing everything I should be? Or am I missing certain things? And then knowing your incentives portfolio is very important because if you know what you’re taking, it’s very easy or it becomes easier for you to know what you’re not taking, know what you’re not capitalizing on, know what types of business activities, whether that be training, whether that be hiring initiatives, things like that, that you know are out there and you know that you’re not fully capitalizing on those and you know that your incentives portfolio may be light in those areas as a result.

                                                 And so, as we move into the next, let’s revisit the case study from before where the large manufacturer was in danger of non-compliance on their negotiated incentive. That could be bad because then the state may come back at them in terms of reclaiming the incentives that they were awarded and then they’re also just in danger of not realizing the value even though they may be meeting all of their thresholds in terms of creating the jobs that they had promised, making the investments they had promised and then not fully capitalizing on what they’d worked so hard to hammer out during that negotiation process. I think where you see these highlights in the strategies, where you see some short-comings within this case study are understanding the compliance requirements of the incentives. We’ve already mentioned that, knowing the incentives in your portfolio. I don’t think there was a clear handoff here between whoever negotiated and the people that were going to be responsible and own those tax incentives going forward. So, there was no way for them to know the incentives in their portfolio.

                                                 And then doing those or ensuring that by centralizing information whether it be through a system or a collaboration engine, allowing people to coordinate and communicate across stakeholder groups could have helped them knowing their incentive portfolio because if you look within a system instead of a spreadsheet it’s easier to know what you’re doing and what the requirements are of compliance and knowing what those are and it also centralizes information. So, really looking at a platform type approach to centralize that information is one way to combat kind of the issues that we’re seeing of non-compliance or not realizing the value of negotiated incentives. Centralizing on a certain technology platform may be one way to combat those.

                                                 So, right now, we can — I’d like to wrap up but I’d like to open it up for questions. I’ve already seen a few questions come across already and so one thing that I’m seeing coming in is what are the advantages of having an automated WOTC process?

                                                 So, just to talk about that, the Work Opportunity Tax Credit, it’s a large Federal credit available for hiring people from designated groups spanning the bounds from veterans to food stamp recipients, welfare recipients, things like that. But a lot of companies have made that investment to capture that WOTC credit because they see value in it and they’ve seen value from that program. Now what I also see is that a lot of companies aren’t necessarily capitalizing on their ability there to expand what they’re doing and capture additional state incentives off of leveraging that WOTC base. So, I think it’s important to understand again taking a detailed look at your geographic footprint and how that aligns with available programs to see if leveraging that WOTC investment or the investment in an automated WOTC process could help you downstream to collect additional incentives that could also proven valuable for the Company.

                                                 Let’s see. If I look down, there’s a few more questions. What are the leading practices in driving communication across functional groups? I alluded to it before but one of the biggest things I see there is consolidating, really getting that incentives information from no longer living inside really unwieldy spreadsheets that are hard to track changes, things like that, and getting it onto more of an incentives management software type approach to where you’re consolidating that information inside a tool that allows you to collaborate across those functional groups but also allows people access into the various — stakeholders access into the right information they need to either drive more incentives or better understand the incentive portfolio they have and the associated compliance requirements within that.

                                                The next question I see is how does understanding my workforce trends lead to — enable me to capture more incentives? So, this is really where you’re unlocking the power of your data and really looking at your data. If I know that I have this many — I’ve already hired this many people in a certain location and I talked to the individual who’s in charge of hiring and they tell me that there’s plans to hire a lot more in the near future then I should start looking at does that position me in a good way to capture incentives related towards that job growth or can I look at where I may be posting for jobs and putting those and maybe even get ahead of that wave before it breaks and I miss the opportunity if it’s more of a pre-certification where I have to agree with the state ahead of time that I’m going to create this amount of jobs. Oftentimes I lose some of that job creation momentum on jobs that I’ve already created because I just don’t see that information flowing through and I don’t have a good way of accessing those workforce trends.

                                                 The final question I’m seeing right now is how many incentive programs are currently out there? And one caveat, this changes every day as legislation is added, as things legislatively fall out in terms of they run their course and they’re no longer available, these things are subject to change. But I can tell you that we are currently tracking within our incentives database over 3,000 programs across the 50 states, both Federal, state, and local opportunities. Now one thing to consider is that not all of these programs are as widely utilized as others so maybe the right approach is to start out your tracking and understanding the programs that are out there by looking at some of the more commonly used programs and commonly utilized programs. You could probably get a sense of that within your own industry by talking in trade groups and with similarly positioned companies might be a good foray into seeing what they’re taking and then as a result you might have a better picture of what might be available to you or you might understand where you might be leaving money on the table.

                                                 So, with that, I think we’re coming up on the end of the hour and we — you can still feel free to submit any questions but if you have questions that I didn’t get a chance to answer, we will definitely have somebody follow up with you in the near future and I thank everybody for taking the time to join this webinar and learn a little bit about the incentives to capture in 2015 and so I think going forward and closing out, I think I’d just like to again thank everybody for their participation and again if we didn’t get a chance to answer your question, then definitely somebody will be reaching out to you. Thank you again.

 

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