Credits and Incentives

Credits and Incentives

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Negotiated Credits and Incentives

LBMC's negotiated incentives group advises clients on the nuances of garnering discretionary incentives at the federal, state, and local level and ensures ongoing compliance to reduce the risk of claw-backs.

Discretionary incentive opportunities include:

  • Manufacturer Tax Credits
  • R&D Tax Credits
  • Relocation Credits
  • Property Tax Abatement
  • Sales and Use Tax Exemptions
  • Reduced Costs for Establishing or Relocating Corporate Headquarters
  • Incentives for New, Expanded, and Relocated Facilities
  • Favorable Financing
  • Subsidized Training and Recruiting
  • Streamlined Permitting and Approvals
  • Review of recent expansion activity and future expansion plans for potential eligibility for economic incentives
  • Assistance in meetings with state and local economic development and incentive boards

Work Opportunity Tax Credit
Work Opportunity Tax Credit

Hire individuals from targeted groups; Credit $2400 - $9600 per qualified hire

Research and Development Credit
R&D Credit

Expenditures related to the development or improvement of a product; 20-year carry-forward

TN Job Tax Credit
TN Job Tax Credit

Create 25 new jobs within a 36 month period with $500,000 investment; Credit $4500 per job to offset up to 50% of franchise and excise taxes


TN Industrial Machinery Credit

Credit 1% - 10% of purchase, installation, and repair of industrial machinery (including R&D equipment)

Tennessee-Specific Credits and Grants Overview

Tennessee has its own credits and incentives to spur economic opportunities in the state. LBMC is based in Nashville, Tennessee. No one can navigate the state's credits and incentives laws as well as us.

  • Community Resurgence Jobs Credit
  • Economic Development Council Credits
  • Enhancement County Incentives
  • Fast Track Infrastructure Program
  • Fast Track Job Training
  • Film Incentives
  • Industrial Machinery Tax Credit
  • Standard Job Tax Credit
  • Enhanced Job Tax Credit
  • Super Job Tax Incentive
  • Manufacturer Tax Credits
  • R&D Credits
  • Relocation Credits
  • Sales And Use Tax Exemptions
    • Call Centers
    • Data Centers
    • Headquarters
    • Manufacturing
    • Warehouse/Distribution

AICPA

TSCPA

Financing and Economic Incentives

The financing practice advises on debt and interest rate swaps providing a detailed comparison of the loan and interest rate options available. We negotiate on behalf of the company and complete the process by assisting with the financing recommendation. The economic incentives practice identifies and procures state and local economic incentives for companies that are planning on creating new jobs, making investments in real estate (buying, leasing or building a facility), or purchasing equipment.

Financing

While most organizations are familiar with traditional bank financing options, many are not aware of the other financing alternatives that may be available. Identifying the right financing vehicles, whether traditional or alternative, and negotiating optimal terms can have a tremendous effect on the bottom line of any organization. The LBMC/McGuire Sponsel team provides independent, objective and informed advice with a fiduciary responsibility to our clients.

Debt Advisory Services

  • Analyze company’s current bank relationship and covenants
  • Evaluate debt capacity and sensitivity to additional borrowing
  • Analyze potential for debt refinancing
  • Explore the various means and methods of financing and/or refinancing and the probable range of interest costs, terms, covenant and fees
  • Review the credit markets position regarding the debt
  • Assist in the preparation of request for proposals
  • Assist in the review of request for proposals
  • Assist in the selection of method of financing
  • Provide a full transaction management service through to completion; we will work with all parties to meet the completion deadline and, if requested, will continue to assist with any post-completion issue that may arise.

Derivatives Advisory Services

  • Trade Execution
  • Interest Rate Risk Management
  • Policies
  • Litigation Support
  • Existing Partners
  • Derivative Education
  • Independent Valuation, Counterparty Monitoring, etc.
  • Actively managing counterparty exposure
  • Independent verification of reset notices and settlements calculations
  • Ongoing monitoring of market valuation for restructuring opportunities

Economic Incentives

When companies expand, relocate or consolidate their operations, there are many considerations that can drive location and investment decisions. The LBMC/McGuire Sponsel team provides expert site selection and economic incentive negotiation services to help growing businesses identify land and facility opportunities, determine optimal operating environments, and negotiate economic incentives.

Site Selection Services

When companies look to expand, relocate or consolidate their operations, there are many considerations that can drive location decisions. LBMC/McGuire Sponsel's site selection services provide comprehensive project location analysis for companies investing in new facilities, relocating operations, managing location decisions or planning selective consolidations.

  • Site and/or Building Selection
  • Site Preparation
  • Utility & Public infrastructure
  • Transportation Resources & Infrastructure
  • Demographic Data
  • Labor force Costs, Skill Levels and Availability
  • Workforce Training Availability and Funding
  • Tax Burden Comparisons
  • Non-Tax Cost Comparisons
  • Economic Incentives Negotiations and Procurement
  • Financing Opportunities
  • Education Standards at all Levels
  • Quality of Life Issues
  • Political Climate and Government Leadership

Incentive Negotiations and Procurement Services

Economic incentives include a variety of discretionary incentives available to expanding businesses. These incentives may include:

  • Tax Abatements
  • Payroll tax credits
  • Infrastructure grants
  • Lower interest loans
  • Training grants
  • Tax increment financing

Economic incentives are available far more frequently than many businesses realize. Businesses should always consider the impact of economic incentives prior to hiring new employees, making capital investments or signing lease/purchase agreements. Key actions that should trigger a look at potential economic incentives include:

  • Relocating Operations
  • Expanding or Downsizing Operations
  • Acquisition or Mergers
  • Purchasing Equipment
  • Adding Jobs
  • Training Initiatives
  • Buying, Leasing or Building a Facility

Growth Opportunities Checklist

Incentive planning can be an important factor in location decisions and bring hundreds of thousands of dollars into your business. Whether you plan to relocate or look to expand, there may be valuable state and local incentive opportunities. You should plan and negotiate before any action takes place. Here are six questions that will help you create an incentive plan and ensure you are prepared to make the best site selections for your growth.

  1. Is a lease expiring?
  2. Does your business need additional space for operations?
  3. Does your business need to purchase land?
  4. Does your business plan to hire new employees?
  5. Does your business need to train employees?
  6. Does your business need to purchase additional M&E?

Don't Miss Out on Federal Tax Credits

Alternative Simplified Credit (ASC)

The Alternative Simplified Credit (ASC) is an alternative method used to compute R&D tax credits. Companies using the ASC method may be able to claim R&D credits even in cases where they do not qualify for traditional tax credits. Beginning in 2015, ASCs are also available on amended returns.

Low-Income Housing Tax Credits (LIHTC)

Low-income housing tax credits are dollar-for-dollar federal tax credits that are allocated and administered by individual state housing agencies. These credits provide funding for the development costs of low-income housing projects by allowing investors to offset up to 70 percent of the present value of the costs incurred in developing low-income units for rental housing projects. Each state administers its LIHTC program differently and the specific requirements of the program change from year to year.

Contact Us Today

The State and Local Tax team at LBMC is ready to help you maximize your return on investment and answer any state-specific questions you may have.

Andrew Hill, JD
Manager, State and Local Tax

Eddie Bringhurst, CMI
Director of State and Local Tax

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