ATLANTA, GA (Sept. 18, 2013) – With the increase in tax
rates this past January, reducing tax burdens is more important than ever to
both businesses and individuals. Interestingly, most people can save a lot of
money with the help of tax credits regardless of the size of the tax liability
or type of taxpayer.
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| David McMillian |
That was the
consensus on the most recent episode of the “Commercial Real Estate Show” radio
program, hosted by Michael Bull of Bull Realty. Bull and his guests David
McMillian, president of McMillian & Associates, and Ricky Novak,
CEO of Strategic 1031 Exchange Advisors, discussed tax credits and the
importance of finding out what tax incentives are available for personal,
business and real estate ventures.
Tax credits for film
companies are a growing trend that several states, including Georgia, North
Carolina, Louisiana and Michigan, have embraced.
“There’s been a
tremendous push in Hollywood to build relationships in jurisdictions that are
willing to give tax incentives,” Novak said. Atlanta, in particular, has been a
hotbed for film production. Warner Bros. recently filmed “Fast & Furious
7” in the city and received a 30 percent tax credit, Novak said.
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| Ricky B. Novak |
Since Warner Bros.
has no income tax liability in Georgia, the company is allowed to sell credits
to local business owners or individual taxpayers.
“You not only have
the economic incentive of bringing those dollars to the state, but now you have
a credit that can ultimately be sold back to taxpayers, to offset their income
tax liability,” Novak said.
Buying credits is
one way businesses can grow their bottom line. The cost of purchasing a tax
credit depends largely on the risk involved with the credit, Novak said.
Guaranteed tax credits can trade as high as 90 cents on the dollar. Credits
that carry more risk usually sell for a lower price, between 60 and 70 cents on
the dollar.
Businesses should be mindful of how their practices and
initiatives might yield tax advantages, McMillian said.
“Companies at every
level should look at what they can earn and normal activities they do that have
the potential to create tax credit opportunities,” he added. States often offer
credits for things such as adopting new software technology, developing new
products and buying equipment.
Business owners can
earn tax credits for job creation, which are available at both the state and
federal levels. “Georgia has seven different types of job-creation tax
credits,” McMillian added. “If you are creating jobs, there’s usually an
incentive no matter where you are.”
Federal tax
incentives for hiring certain kinds of employees also are available. For example,
companies hiring veterans or people in government assistance programs are
eligible for tax credits, McMillian said.
If you are
interested in utilizing tax credits, the most important step is to do some
research on the tax credits that suit you and engage a professional.
“In some
instances, whether it’s a state or federal benefit, the paperwork and processes
are easy to follow, but that’s typically not the case,” Novak added.
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| Michael Bull |
“What you find is
that generally whoever created the incentive makes it overly cumbersome to
access that benefit so it’s important for taxpayers to work with experts to
make sure they get the process right.”
The entire show on
tax credits is available for download at www.CREshow.com.
The next “Commercial Real Estate Show” will be available on Sept. 19 and will
feature REIS’ view on real estate.
For a complete copy of the company’s news releases,
please contact:
Stephen Ursery
The Wilbert Group
404.405.2354
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