Economic Growth – GMG Savings

Economic Development Agencies and The Startup Credit

The typical company being served by an Economic Development Agency meets the exact qualification standard for the startup credit.

Economic Development Agencies & What Their Primary Goals Are

Economic Development (ED) Agencies, although public entities, are highly focused on producing measurable results/metrics because their funding (that is, their jobs) from state, county, city and/or university entities depend heavily on their results.

The key metrics that ED Agencies are measured by:

Number of jobs created by the companies they serve
Number of dollars in follow-on capital which refers to investment (*and/or grant funding*) procured by the companies they serve

How The Startup Act Assists Economic Development Agencies In Reaching Their Goals

Though the Act doesn’t directly speak to grant funding, know that grants are easier to come by if a company is well-capitalized and has the credibility that comes with having procured capital [i.e., implied vetting]. Plus, many grants require matching capital from private/commercial investors.

The article, The “Startup Act”, Catching the Economic Development Winds, was written to resonate with Economic Development Agencies because it addresses how, in practical ways, the Act’s incentives can make both job creation and venture capital investment much less challenging than it would be without the incentives.

The clear intentions of the Act’s incentives are:

Job creation, especially technology-based jobs
Investment capital flowing into younger technology-based companies

These intentions line up perfectly with an ED Agency’s metrics.

It is completely possible that any given ED Agency isn’t fully aware of the Act’s incentives and is therefore not striving to meet its metrics with all of the tools available.

Our Objective

The objective is to “inform and educate” these agencies so they can “inform and educate” their client companies (and potential investors in those companies). This would likely involve connecting client companies with the resources, probably in the form of professionals/experts, that can dig into their particular situations to see about realizing the benefits intended by the incentives.

GMG Savings Advisors can offer the ED Agency to connect its client companies with the experts/professionals that can make both increased job creation and follow-on capital a reality.

What the Last 5 Presidencies Have In Common and How It Affects Every Manufacturer In America

Believe it or not, there is at least one thing that the last five Presidential Administrations have unilaterally supported, and we can feel quite certain the next will as well.

There is a little known tax credit that is part of Section 41 of the Internal Revenue Code, allowing manufacturers to reclaim a small portion of their annual payroll simply by performing activities manufacturing companies are already doing as part of daily operations.

This credit may be the only thing both sides of the aisle can actually agree on. It has bipartisan support in both houses, backing of the Obama Administration, and has been renewed by every single Presidential Administration over the last 32 years. How can there be such a disconnect between what may be the only thing the last five presidencies have in common?

A lot of the confusion is in the name. Many manufacturers don’t believe they do “R&D” because they don’t have a traditional R&D department. The IRS definition of R&D is quite different than yours or mine. It often includes activities such as:

Manufacturing
Fabrication
Engineering
New Product & Process Development
Developing New Concepts or Technologies
Design – Layout, Schematics, AutoCAD
Prototyping or Modeling
Testing / Quality Assurance: ISA 900X, UL, Sigma Six, etc.
Integration of new machinery (CNC, SLA, SLE, etc.) into existing processing
Software Development or Improvement
Automating or Streamlining Internal Processes
Developing Tools, Molds, Dies
Developing or Applying for Patents

Just to name a few…….

Only the folks in Washington DC could take unilateral support and turn it into unilateral confusion.

Since 2004 Growth Management Group has been educating and assisting Manufacturers and other Commercial Property Owners on their rights to programs buried deep within the tax code. To date we’ve assisted small and mid sized companies discover over $300M in benefit. Contact us for a comprehensive review.

Stop Surviving and Start Growing

CEO’s are about the thrill of the deal, achieving something no other person has, the adventure, the vision! Terms like survival, and cost cutting are something they’re willing to tolerate, but only as a means to the next opportunity to dream again. Even though the business landscape hasn’t changed much in the past few years, the attitude of the CEO has. We are tired of surviving, and ready to grow again! Even more, we refuse to live in survival mode.

So, what’s next? The answer is simple: GROW. It seems like such an obvious solution, why didn’t we think of it years ago?

I think it’s because we weren’t hungry enough! Cutting costs was easier than returning to the practices that once grew our empires in the first place. But now the fun is gone, work has become exactly that…WORK! So, the decision has been made; the dreaming has started again and this is where we go from here.

4 Ways to Stop Cutting & Start Growing:

1st: Start dreaming again. Get away, go for a drive, sit down with a notepad or whatever it is you once did to dream. Don’t be afraid, don’t get caught up in the “what if” and “how will we pay for that” roadblocks. Let’s be honest, you never counted cost the first time you wrote a vision, why start now? One tip: dream bigger this time. You’re older, farther down your path, with more capacity.

2nd: Make the commitment. Not just to yourself, make it known. Tell your staff, family, colleagues and friends. Accountability is a mighty force and letting others know your plan not only gets others helping push the boulder up the mountain, but it makes giving up more difficult. Once your name is on the line and your direct reports are coming back with status updates, your team is involved; it becomes real.

3rd: Get back to the basics. I know it was fun for a while when we didn’t have to work to get new clients, when the only thing needed for growth was an open sign, but now it’s time to get back to the basics. Ask yourself, “What was it that made me successful in the first place?” “What crazy forms of gorilla marketing did I implement?” “What associations was I apart of?” And, the painful one…“How many cold calls was I or my staff making?” It’s important that we realize while the world around us has changed into a social hotspot, traditional marketing and relationship building are still the most effective ways to gain long-term clients and partnerships.

4th: Every decision should point towards growth. I’ve watched many CEO’s over the last five years point every decision towards survival, not towards growth. If I asked what they would do if a few hundred thousand dollars dropped in their lap, most would talk about growing their business and expansion, but that isn’t what happens when those opportunities arrive. In the last 10 years we’ve gotten companies around $300M in Specialized Tax Incentives, and I have watched time after time a company receive this money and immediately start plugging holes; going into survival mode. They are dedicating hundreds of thousands of dollars towards keeping the status quo. The answer is so simple; if we are committed to growth, we have to turn every decision towards that plan. Recently I’ve seen a shift in mindset. No longer are CEO’s willing to survive just keeping afloat. They’ve dropped the bucket, stopped bailing water, and decided the real solution is to build a bigger boat.

Senate Finance Committee Votes to Pass Landmark Bill Extending over $200 Billion in Tax Incentives

On August 2, 2012, Congress voiced the sentiment of the American business owner by introducing major tax incentive legislation. The Family and Business Tax Cut Certainty Act of 2012 is bipartisan legislation extending dozens of tax- cuts that have expired or are scheduled to expire at the end of this year. This is the best news possible for millions of companies across the nation.

Highlights of the Bill

Renewal of the Section 41 Research & Development Tax Credit
Reinstatement of Hiring Incentives / Worker Opportunity Tax Credits
Updated Alternative Minimum Tax (AMT) relief
Property Cost Allocation Extensions – Qualified Leasehold Improvements
Updated Alternative Minimum Tax (AMT) relief
Energy Incentives

Research and Development Credit

The bill extends for two years, through 2013, the research tax credit equal to 20 percent of the amount by which a taxpayer’s qualified research expenses for a taxable year exceed its base amount for that year and provides an alternative simplified credit of 14 percent. The bill also modifies rules for taxpayers under common control and rules for computing the credit when a portion of a trade or business changes hands. Based on preliminary estimates, a two-year extension of this proposal is estimated to cost $14.3 billion over ten years.

Work opportunity tax credit

This bill extends for two years, through 2013, the provision that allows businesses to claim a work opportunity tax credit equal to 40 percent of the first $6,000 of wages paid to new hires of one of eight targeted groups. These groups include members of families receiving benefits under the Temporary Assistance to Needy Families (TANF) program, qualified ex-felons, designated community residents, vocational rehabilitation referrals, qualified summer youth employees, qualified food and nutrition recipients, qualified SSI recipients, and long-term family assistance recipients.

Empowerment zone tax incentives

The bill extends for two years the designation of certain economically depressed census tracts as Empowerment Zones. Businesses and individual residents within Empowerment Zones are eligible for special tax incentives.

Cost Allocation

15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements. The bill extends for two years, through 2013, the temporary 15-year cost recovery period for certain leasehold, restaurant and retail improvements, and new restaurant buildings, which are placed in service before January 1, 2014. The extension is effective for qualified property placed in service after December 31, 2011.

Extend AMT relief to 2013

Currently, a taxpayer receives an exemption of $33,750 (individuals) and $45,000 (married filing jointly) under the AMT. Current law also does not allow nonrefundable personal credits against the AMT. The proposal increases the exemption amounts for 2012 to $50,600 (individuals) and $78,750 (married filing jointly). The modified proposal would also increase the exemption amounts for 2013 to $51,150 (individuals) and $79,850 (married filing jointly). The proposal also allows the nonrefundable personal credits against the AMT in both 2012 and 2013. The proposal is effective for taxable years beginning after December 31, 2011. Based on preliminary estimates, a two- year extension of this proposal is estimated to cost $132.2 billion over ten years.

Energy Investment Credit

Under current law, facilities that produce electricity from solar facilities are eligible to take a thirty percent (30%) investment tax credit in the year that the facility is placed-in-service. Facilities that produce electricity from wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, waste-to-energy, and marine renewable facilities are eligible for a production tax credit for electricity produced over a ten-year period. The investment tax credit is better for small and offshore wind facilities. The bill would allow facilities qualifying for the production tax credit to elect to take the investment tax credit in lieu of the production tax credit for facilities that begin construction by the end of 2013.

What does it all mean?

If you own a business or commercial real estate, it is time to review what credits are available to you. The Senate has enacted significant legislation that is geared toward providing incentives to U.S. based businesses. If you fall into this category, it is time to investigate this new bill in detail.

CPA Alliance

GMG offers our CPA Partners a seamless & turnkey solution to offer specialized tax services to their clients across the country. The benefit to our CPA Partners is an increase in billable revenue and added value in the marketplace.

Benefits of joining forces with GMG Solutions Group, LLC

Generating new revenue streams
Attracting new clients to the firm and helping develop desirable niche markets
Solidifying current client relationships and loyalty
Increasing billable hours
Increasing your competitive advantage in the marketplace
Private Label Opportunities

We specialize in providing a suite of engineered accounting solutions to CPA firms and their clients. Our engineers are fully compliant and well versed in IRS Circular 230 – FIN Standards.

GMG Tax Incentive Services

Commercial Building Tax Incentives

Cost Segregation
Section 179 D
Property Tax
Historical Tax Credits
Section 45L Tax Credit

Specialized Tax Incentives

R&D Tax Credits
Hiring Tax Credits
International Sales
Sales & Use Tax

We offer a turnkey partnering program with CPA Firms nationwide to help their clients maximize cash flow and bridge the gap between accounting and engineering.

Local Flint Businesses Teaming Up To Stimulate Flint Economy

Flint based organization, Growth Management Group, LLC (GMG) is proud to announce they are teaming with Insight Institute of Neurosurgery and Neuroscience (IINN) to perform a stimulus review allowing both organizations to continue moving towards their combined goal of transforming Flint’s economic state.

GMG’s Total Savings Review will focus on stimulus incentives in the areas of Research & Development, Commercial Property and Hiring. Although it is too early to determine final benefits, GMG anticipates procuring IINN a NET tax benefit of over $1,500,000 over the next five years.

GMG National Director of Sales, Jeremy Harrison states, “We are extremely excited to partner with Amer and the entire IINN team. Procuring these incentive and savings opportunities, especially for local firms is why we are in business. We look forward to a long term relationship that will not only provide a great business partnership but will help facilitate the economic recovery of Genesee County.”

GMG is a Flint-based full service training, development and cost savings consulting firm. Their vision is to stimulate local economies by providing an extensive array of products, services and strategies that help people and businesses fulfill their potential. GMG recently announced their move to a new national headquarters, taking over the recently vacated Diplomat Pharmacy headquarters at Elms and Corunna Roads in Flint Township. With this move the company plans to add up to 100 new employment positions for Genesee County residents.

IINN plans to invest $18 million over the next 10 years in expansion and create an up to 120 additional jobs over the next 5 years. IINN has teamed with Diplomat Specialty Pharmacy to expand the Great Lakes Tech Center – former home to GM Headquarters and create more than 1,000 jobs over the next five years.

GMG and IINN look forward to helping restore the local economic climate and encourage local businesses to pursue all available opportunities to recover incentive dollars.

More information regarding GMG can be found online at www.gmgsavings.com or by calling 888-705-5557. To learn more about IINN, please visit www.iinn.com.