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Automatic Data Processing — Enterprise Zones Credits & Incentives ADP Webcast (December 2010)
41 slides from Automatic Data Processing's conference presentation, Dec 15, 2010
Slide 1: Enterprise Zones Credits & Incentives
Enterprise Zones Credits & Incentives What Are They? Where Are They? How Can They Benefit Your Business? An ADP Webcast Wednesday, December 15 1 pm Eastern Time 1 ©2010 Automatic Data Processing, Inc. Proprietary and Confidential Information.
Slide 2: Housekeeping Items
Housekeeping Items This is one of a number of complimentary webinars that ADP offers to tax and finance professionals each year. Today’s webinar will last for 60 minutes, ending at 2pm Eastern time. The last 10 minutes of today’s program have been reserved for Q&A. You can download a PDF cop
Slide 3: About ADP
About ADP Experts in automating corporate business processes Listed on NASDAQ: ADP Fortune 300 company Experts in automating business processes such as payroll, HR benefits administration, and helping nearly 6000 companies maximize their capture of tax credits and business incentives 60 year
Slide 4: CPE Credit
CPE Credit Are you planning to apply for CPE credit for attending today’s webinar? A. Yes B. No C. Not Applicable NASBA (National Association of State Boards of Accountancy) requirements for receiving CPE Credit: •Log in from same e-mail address that you used to register •Stay for the full hour •A
Slide 5: Agenda
Agenda Introductions Enterprise Zone Overview Definition Locations Why they are valuable to states and businesses California Enterprise Zone (CAEZ) Colorado Enterprise Zone (COEZ) Louisiana Enterprise Zone (LAEZ) Wrap-up Q&A 5 ©2010 Automatic Data Processing, Inc. Proprietary and
Slide 6: Today's Panel
Today’s Panel LaRae Pieroni LaRae is the West Region Practice Leader and manages a multi- ADP Tax Credit Services million dollar practice, focusing on the delivery of credit and Director, West Region incentive packages, utilization maximization studies, audit support Practice Leader and legislative
Slide 7: Polling Question #1
Polling Question #1 How familiar are you with Enterprise Zone programs in your state, or in another state that your company does business in? A. Very familiar – we are actively working EZ credits & incentives B. Somewhat familiar – have heard of them but not actively using C. Not familiar with the
Slide 8: Enterprise Zones – What Are They?
Enterprise Zones – What Are They? Enterprise zones are government defined areas Desired Benefits for Government that are in need of Assist urban renewal economic growth and Rural development development. In order to Drive job growth Attract investment encourage that Develop a specific ty
Slide 9: Enterprise Zone - History
Enterprise Zone - History Enterprise Zones go by different names, but the concept is used in countries around the world Used in the U.S. on both the state and federal levels Used extensively by Margaret Thatcher in the late 1970’s and 1980’s in the UK In the U.S. an early focus was urban ren
Slide 10: State Enterprise Zone Incentive Basics
State Enterprise Zone Incentive Basics Broad Potential Opportunity Opportunities in states from coast-to- coast Job creation, investment, property tax exemptions and sales and use tax rebates Common Qualification Criteria (Employees) Work full time (for some types) Majority of their work
Slide 11: Some Larger EZ Opportunities
Some Larger EZ Opportunities California Enterprise Zone Hiring Credit* Kansas Business Property Tax Credit* California Enterprise Zone Sales & Use Credit* Kansas Business Job Development Tax Credit* Arizona Enterprise Zone Employment Credit Illinois Replacement Tax Credit* Colorado Ent
Slide 12: Polling Question #2
Polling Question #2 What are the key drivers for creating Enterprise Zones and who are the expected beneficiaries? A. Governments drive them to try and increase economic activity B. Businesses benefit financially from leveraging the zones C. Local residents benefit from new jobs in their area D. A
Slide 13: California Enterprise Zone Program
California Enterprise Zone Program 13 ©2010 Automatic Data Processing, Inc. Proprietary and Confidential Information.
Slide 14: California Enterprise Zone: Program Overview
California Enterprise Zone: Program Overview The California Enterprise Zone (“CAEZ”) program provides tax incentives to encourage businesses to locate and expand operations in economically distressed areas Hiring Credit Creates an incentive for businesses to hire individuals who are at a disad
Slide 15: California Enterprise Zone: Map
California Enterprise Zone: Map 15 ©2010 Automatic Data Processing, Inc. Proprietary and Confidential Information.
Slide 16: California Enterprise Zone: Hiring Credit Basics
California Enterprise Zone: Hiring Credit Basics Business must operate in an enterprise zone Business must hire a “qualified employee” Food Stamps Dislocated Worker (Business Closure, Laid Off, Long-term Unemployed, etc.) Economically Disadvantaged Work Opportunity Tax Credit Eligible
Slide 17: California Enterprise Zone: Sales or Use Tax Credit Basics
California Enterprise Zone: Sales or Use Tax Credit Basics Businesses operating in an enterprise zone may claim a credit for sales or use tax paid on “qualified property” “Qualified property” includes machinery and equipment used for manufacturing and processing, as well as data-processing and c
Slide 18: California Enterprise Zone: Process
California Enterprise Zone: Process Identify Enterprise Zone Locations Maps and street ranges in different formats and at varying levels of update, meaning different degrees of accuracy Qualify Employees for Credit Identify qualification categories Acquire supporting documentation for vouc
Slide 19: California Enterprise Zone: Program Scrutiny
California Enterprise Zone: Program Scrutiny Political Pressure Legislation to alter or eliminate qualification categories Legislation that would impose a tight deadline for voucher applications California $20 billion budget deficit = risk of program elimination Public Pressure Californi
Slide 20: California Enterprise Zone: Opportunity
California Enterprise Zone: Opportunity Enterprise Zone Expansions Enterprise zones can expand their boundaries up to 15% of their originally designated area If your business is in a zone jurisdiction but not in the zone, request an expansion Retroactive Credit Work No limitation on credit
Slide 21: Colorado Enterprise Zone Program
Colorado Enterprise Zone Program 21 ©2010 Automatic Data Processing, Inc. Proprietary and Confidential Information.
Slide 22: Colorado Enterprise Zones: Program Overview
Colorado Enterprise Zones: Program Overview The Colorado Enterprise Zone (“COEZ”) program provides tax incentives to encourage businesses to locate and expand in designated economically distressed areas of the state There are 16 Colorado Enterprise Zones and two sub- zones, covering the majority
Slide 23: Colorado Enterprise Zones: Zone Map
Colorado Enterprise Zones: Zone Map Map obtained via screenshot from Colorado Office of Economic Development and International Trade (“OEDIT”) website on November 4, 2010. (URL: http://www.colorado.gov/cs/Satellite/OEDIT/OEDIT/1167928216262) The map is provided by OEDIT for informational purposes on
Slide 24: Colorado Enterprise Zones: Tax Credits
Colorado Enterprise Zones: Tax Credits EZ Investment Tax Credit (“ITC”) The Enterprise Zone investment tax credit is 3% of any qualified investment in I.R.C. Section 38 property (generally, tangible property that is depreciable or amortizable and has a useful life of three years or more) The c
Slide 25: Colorado Enterprise Zones: New Business Facility Credits
Colorado Enterprise Zones: New Business Facility Credits There are three "new business facility” (“NBF”) employee credits available to qualified businesses located in Colorado Enterprise Zones; additionally, an enhanced credit is available for NBFs located in an “enhanced rural Enterprise Zone” A “n
Slide 26: Colorado Enterprise Zones: New Business Facility Credits
Colorado Enterprise Zones: New Business Facility Credits Employee Credit (Jobs Credit) An NBF located in an Enterprise Zone can claim an income tax credit of $500 for each “new business facility employee” working within the Zone, prorated according to the number of months employed during the yea
Slide 27: Colorado Enterprise Zones: New Business Facility Credits
Colorado Enterprise Zones: New Business Facility Credits Employer-Sponsored Health Insurance Credit For the first two full income tax years while located in an Enterprise Zone, taxpayers are allowed a credit of $200 for each NBF employee insured under a health insurance plan or program for which
Slide 28: Colorado Enterprise Zones: Additional Incentives
Colorado Enterprise Zones: Additional Incentives Vacant Building Rehabilitation Tax Credit Manufacturing / Mining Sales and Use Tax Exemption Tax Credit for Contributions to Enterprise Zone Projects Local Incentives Like many states, Colorado offers various incentives beyond the Enterprise
Slide 29: Colorado Enterprise Zones: Program Changes
Colorado Enterprise Zones: Program Changes Pre-Certification Requirement Effective January 1, 2012, taxpayers can no longer claim COEZ credits unless they obtain an annual pre-certification from the local Zone Administrator Pre-Certification Forms will be available in late 2011, and an electro
Slide 30: Polling Question #3
Polling Question #3 Is your company currently engaging in, or planning to engage in, activities that will enable it to claim Enterprise Zone benefits in these states? A. California B. Colorado C. Louisiana D. Other States E. Two or more of the above F. None of the above NASBA (National Association
Slide 31: Louisiana Enterprise Zone Program
Louisiana Enterprise Zone Program 31 ©2010 Automatic Data Processing, Inc. Proprietary and Confidential Information.
Slide 32: Louisiana Program Overview
Louisiana Program Overview The Louisiana Enterprise Zone program provides incentives to businesses that create qualifying jobs in the State and hire at least 35% of their net new employees from targeted groups Incentives include: Job Credit: Income/franchise job tax credit for creating net new j
Slide 33: Louisiana Program Overview
Louisiana Program Overview Key Program Features Advance planning is required! An “Advance Notification” form must be filed prior to the beginning of the project or before hiring has begun. Companies must increase employment by 5 net new hires or 10%, and 35% of new hires must be individuals fr
Slide 34: LAEZ Program: Benefits and Limitations
LAEZ Program: Benefits and Limitations Job Tax Credit (“JTC”) $2,500 income and/or franchise tax credit for each net new hire (increased to $5,000 for targeted industries – aerospace, aviation and rubber manufacturing) The JTC is claimed over a 60-month period, and may be carried forward for ten
Slide 35: LAEZ Program: Application Process
LAEZ Program: Application Process 1. Pre-Application Advance Notification (Fee: $100) Endorsement Resolution (Local Sales Tax Rebate) Disclosure Authorization 2. Application, Approval & Contract Enterprise Zone Application (Fee Varies) and Approval Contract 3. Post-Approval Compliance Pr
Slide 36: LAEZ Program: Pending Administrative Changes
LAEZ Program: Pending Administrative Changes BIS recently announced administrative changes to the program Changes (some of which are already effective) include: Part-time employees will no longer count towards the net new employee qualification requirement A company’s creation of “net new jo
Slide 37: Polling Question #4
Polling Question #4 Is your company currently administering Enterprise Zone credits and incentives “in house,” or do you outsourced the work related to these programs? A. We handle “in house” and intend to continue doing so B. We handle “in house,” but are considering outsourcing C. We outsource t
Slide 38: Enterprise Zones: Wrap-Up
Enterprise Zones: Wrap-Up Enterprise Zones may go by different names, but many states across the country offer this type of business incentive Review your current company locations - you may be in a zone and not realize that you could be capturing credits When considering expansion or investme
Slide 39: Questions & Answers
Questions & Answers LaRae Pieroni ADP Tax Credit Services Director, West Region Practice Leader Dan Breen ADP Tax Credit Services Economic Development Services Leader 39 ©2010 Automatic Data Processing, Inc. Proprietary and Confidential Information.
Slide 40: Thank You for Joining Us Today
Thank You for Joining Us Today… For information on any of the ADP products or services referenced during today’s webinar: Phone 800-CALL-ADP or visit www.adp.com For a complete listing of ADP webinars and webinar recordings – go to: adp.com | tools & resources | events | webinars 40 ©2010 Au
Slide 41: Webinar Program Survey
Webinar Program Survey How are we doing? We appreciate your feedback on our webinar which will be used as we plan future webinars in our Tax Credits & Business Incentives Legislative Updates series. 41 ©2010 Automatic Data Processing, Inc. Proprietary and Confidential Information.
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