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State of Missouri Sales Tax Project Exemption document sample
Document Sample
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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