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State of Missouri Sales Tax Project Exemption - PowerPoint

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					State Incentives
Presentation for
     SITAKS
      9/2/09
Is Your Company Eligible for State or Local
              Incentives?
                    Incentives are not new

         Incentives are designed to spur you to action

 Paperwork must be filed prior to the commitment of the project




                                                                  1
Overview

•   Targeted Industries
•   Types of Incentives
•   Kansas Programs
•   Missouri Programs
•   Summary




                          2
Targeted Industries

• Manufacturing, Wholesale Distribution,
  Headquarters, Regional Offices of National or
  Multi-National Companies
• Generally available for those businesses that
  generate out of state revenue
• Retail is not a target – typically defined by those
  businesses that charge sales tax or deal directly
  with the end user

                                                        3
Types of Incentives


                       Cash
 •   Sales Tax Exemption
 •   Property Tax Abatement
 •   Training Reimbursement
 •   Free Land and/or Buildings
 •   Utility Discounts
 •   Forgivable Loans

                                  4
Types of Incentives


                 Tax Credits
 • Based on Job Creation
 • Based on higher than average wages

 Use of tax credits:
 • Can be carried forward
 • Can be refunded (Missouri)
 • May be sold or transferred (Missouri)
                                           5
Kansas High Performance Incentive Program


         Eligible Businesses/Requirements
 •   Pay higher than average wages
 •   Invest in training their workforce
 •   If non-manufacturing/non-retail generate >
     51% of revenue from out of state
 •   May qualify as national or multi-national
     company

                                                  6
Kansas High Performance Incentive Program


                      Benefits
 • Sales tax exemption
 • 10% investment credit (on investment >
   $50,000)
 • Training tax credit (up to $50,000 each year)




                                                   7
Kansas High Performance Incentive Program


                Use of Tax Credits
 • 10 year carry forward
 • Subject to re-qualification for any unused
   credits
 • Up to 100% of firm’s annual tax liability




                                                8
Business & Job Development Tax Credits

        Eligible Businesses/Requirements

   Manufacturing Firms            Non-Manufacturing Firms

  Must create at least two         Must create at least five
         new net jobs                     new net jobs


               Corporate Headquarters and
                Ancillary Support Facilities

                   Must create at least 20
                        new net jobs
                                                               9
Business & Job Development Tax Credits

                       Benefits
 Manufacturing, Non-Manufacturing Firms,
 Corporate Headquarters and Ancillary Support
 Facilities
    – Sales tax exemption
    – Job creation tax credit
       • $1,500 per net new job
       • $2,500 per net new job if non-metro
    – Investment tax credit
       • $1,000 per $100,000 of qualified business investment
                                                                10
Business & Job Development Tax Credits


                Use of Tax Credit
 • One-time credits may be taken against 100%
   of income and premium tax liability; unused
   credits may be carried forward until exhausted




                                                11
Kansas Health Insurance Contribution Credit


       Eligible Businesses/Requirements
 • Can not have contributed to a plan in the last
   2 years
 • No more than 2 – 50 employees company
   wide




                                                    12
Kansas Health Insurance Contribution Credit


                    Benefits
 • Partial reimbursement for the first 3 years of
   premium payments (840/600/420)

                Use of Tax Credit
 • Refundable


                                                    13
Kansas


 Workforce Training
   Kansas Industrial Training program
   • Benefits
      – Reimbursement of training for new hires
      – Cap of $2,000 per employee (average $300 - $500)
   • Requirements
      – The company must be adding employees
      – The company must generate 50% of their revenue from
        out of state

                                                              14
Kansas


 Kansas Industrial Training program
   • Benefits
      – Cap of $2,000 per employee (average $300 - $500)
      – Up to 50% of training costs may be reimbursed
      – Reimbursement of training expenses for existing workers
   • Requirements
      – The company must be going through a new technology
        change or new product line
      – The company must generate > 50% of their revenue from
        out of state

                                                              15
Promoting Employees Across Kansas (PEAK)

              Businesses Not Eligible
   •   Gambling
   •   Religious Organizations
   •   Retail
   •   Food & Drink establishments




                                           16
Promoting Employees Across Kansas (PEAK)

          Eligible Business/Requirements
 •   Shut down an existing facility in another state
 •   Create 10 jobs in the metro counties and 5 in
     non-metro counties
 •   Pay higher than county average wages
 •   Must pay 50% of health insurance premiums



                                                       17
Promoting Employees Across Kansas (PEAK)


                  Benefits
   • The company gets to keep 95% of their
     withholding
   • The number of years the withholding is kept
     depends on the company’s average wages




                                              18
Missouri Quality Jobs Program


               Eligible Businesses
 • For profit and not for profit except for:
    – Gambling
    – Retail Trade
    – Food & Drink places
    – Companies that have filed or intend to file for
      bankruptcy
    – Companies that are delinquent in non-protested
      taxes
                                                        19
Missouri Quality Jobs Program


                 Requirements
 • Must pay at least 50% of health insurance
 • Must pay higher than average wages




                                               20
Missouri Quality Jobs Program


                  Requirements
 • Small / Expanding Businesses (must hire
   within two years)
    – Rural areas – 20 or more new jobs
    – Non-rural areas – 40 or more new jobs




                                              21
Missouri Quality Jobs Program


                Requirements
 • Technology businesses (must hire within two
   years)
    – 10 or more new jobs




                                                 22
Missouri Quality Jobs Program


                   Requirements
 • The company reaching the correct job
   creation level in a two year period will be able
   to keep the withholding for three to five years

                Use of Tax Credits
 • Tax credits offered under this program are
   sellable (a 2.5% fee must be paid to the state)

                                                  23
Distressed Community Tax Credit


          Eligible Businesses/Requirements
 •   Be located in a distressed area
 •   Be in targeted industry NAICS code
 •   Must have <100 employees
 •   At least 75% of employees at the specified
     site
 •   Be purchasing new equipment for the
     distressed site
                                                  24
Distressed Community Tax Credit


                     Benefits
 • 25% to 40% equipment tax credit or 40%
   income tax credit
 • Employees get a 1½% tax credit (only if the
   company earns the 40% tax credit)
 • Maximum benefit $75,000 to $125,000 per
   year

                                                 25
Distressed Community Tax Credit


                Use of Tax Credits
 •   Sellable
 •   Transferable
 •   Can be carried back 3 years
 •   Can be carried forward 5 years




                                      26
Enhanced Enterprise Zone


                Eligible Businesses
 • Ineligible
    – Gambling
    – Retail Trade
    – Food & Drink
 • Service businesses must prove that >50% of
   their revenue comes from out of state


                                                27
Enhanced Enterprise Zone


                 Requirements
 • The following minimum new job and
   investment requirements must be met as
   compared to the base year:
    – New or expanded business facility – 2 new
      business facility employees and $100,000 new
      investment
    – Replace business facility – 2 new business facility
      employees and $1,000,000 new investment
                                                            28
Enhanced Enterprise Zone

                          Benefits
 • Tax Credits:
    – Tax credits may be provided each year for five tax
      periods
       • New investment tax credit - .5% of new business facility
         investment over the base year per year for five tax
         periods
       • New payroll tax credit – 2% of new payroll per year for
         five tax periods



                                                                    29
Enhanced Enterprise Zone

                   Benefits
 • Local Real Property Tax Abatement:
    – A Business located in an Enhanced Enterprise
      Zone will receive at least 50% abatement of real
      property taxes on subsequent improvements to
      real property for a minimum of ten years. At the
      zone’s discretion, this benefit can be increased to a
      minimum of 100% abatement for 25 years



                                                         30
Enhanced Enterprise Zone

                   Use of Credits
 • This tax credit can be applied to:
    – Ch. 142 – Income tax, excluding withholding tax
 • Tax credits can only be applied to tax liability
   for the year in which they were earned. The
   tax credits are refundable or may be
   transferred, sold or assigned. The sale price
   cannot be less than 75% of the par value of
   such taxes
                                                        31
Are You Doing Any Of The Following?

•   Buying or leasing a new facility
•   Adding new equipment
•   Adding new employees
•   Retraining existing employees because of a
    change in technology or a new product line




                                                 32
Summary

•   Incentives are designed to spur you to action
•   Incentives vary based on many factors
•   Proper paperwork must be filed in advance
•   You may call or email me with questions:

                 Betty Nelson - Ekey
                   (913) 234-1069
                 bnelson@cbiz.com

                                                    33

				
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