Tax Candi

I am a woman, therefore, it almost goes without saying that shopping is a favorite pastime.   Growing up in Dallas, and now living in Chicago, I've always enjoyed great shopping opportunities. 

Now, Chicago has two substantial disadvantages from Dallas: 

1. Walking around Magnificent Mile is unpleasant due to weather for 3/4 of the year, and
2. a 10.25% (9.75% come July) sales tax.

Today, Cook County helped lessen consumer's burden, the county also passed an incentive just over a year ago to attract and maintain major retail projects called, fittingly the...

Cook County Retail Economic Development Incentive

The incentive is fairly easy to understand and compute:  In order to entice major retailers (or shopping centers) to locate within Cook County, rather than locating to a collar county with significantly less tax rates, Cook County and the municipality can rebate a portion of their sales tax revenue from the project with the retail.  (Cook County's participation is dependent upon the city's.)

 The portion rebated is negotiated, and the process to apply for this incentive is rather lengthy (much like the Class 7B property tax abatement).  Cook County's Department of Planning and Economic Development oversees the applications, and they require a number of analysis, including a persuasive argument that without the sales tax revenue rebate, the project would not locate within Cook County.  (But retailers, since you're not actually paying the sales tax out of your own pocket, its really no skin off your nose to collect an extra 2+% from your customers and recieve up to 50% of that back!)

Eligible companies must demonstrate that they will create or maintain jobs and increase sales tax revenue.  Additionally, the rebated money cannot go back into profits, but instead must be used to pay for improvements, expand operations, or increase inventory, etc. 

I have managed to visit 32 of the 50 states.  An entry on my "bucket list" is to visit the other 18.  One of the  places I've yet to visit is South Dakota and Mount Rushmore (which, by the way, was made vastly more exciting after a viewing of National Treasure 2).  So, in honor of the home of the monument to Presidents Washington, Jefferson, Roosevelt and Lincoln, let's discuss......

South Dakota's Sales, Use and Contractor's Excise Tax Refund

Companies building or expanding facilities in South Dakota can get a refund on the sales, use or contractor's  tax on raw materials, machinery and equipment for the new facility.  Project costs must exceed $10 Million, and the amount of the refund is dependent upon the total cost, as follows:

$10-15 Million projects get a 25% refund;

$15-20 Million projects get a 33% refund;

$20-40 Million projects get a 50% refund

$40-60 Million projects get a 67% refund;

$60-600 Million projects get a 75% refund; and

$600+ Million (a.k.a. Ginormous) projects get a 90% refund.

Projects of $60 Million or less get refund permits lasting 36 months.  Permits for projects costing over $60 million last for 72 months. 

And since South Dakota's state sales tax rate is 4%, the refund could add up to a nice piece of change. For example, the refund for a $50 Million project is $1 Million.  That's enough to spring for a good coffee machine.

Refund permits must be approved 18 days before construction commencement, so interested parties need to apply through the Governor's Office of Economic Development well in advance of ground-breaking.

(FYI:  "Great Faces, Great Places" is the official motto of the State of South Dakota.  It's almost as bad as Michigan's unofficial "Good Times, Great Lakes.")

I have been craving crepes from my favorite bistro in Chicago, which inspired today's incentive: 

Crepe --> French Food --> French Quarter --> New Orleans --> Louisiana -->

And vióla, Louisiana Enterprise Zone Jobs Incentive!

This program provides a one-time Income and/or Franchise Tax job tax credit to a business increasing its workforce in Louisiana.  The company must increase its site employment by 10% within first 12 months OR create a minimum of 5 net new jobs within first 24 months. Of those jobs hired, at least 35% of its net new jobs must meet at least one of four targeted groups. 

The amount of the tax credit is $2,500 for each certified net new job created. AND, if the job requirement is met, the company may also be able to take advantage of either:

1) a Sales/Use Tax Rebate for taxes paid on materials, furniture, fixtures, machinery and equipment purchased and used exclusively in the Enterprise Zone site; OR

2) a 1.5% Refundable Investment Tax Credit for capitalized investment.

Note a couple of interesting things about this Enterprise Zone program -- unlike other states, Louisiana does not require new capital investment.  Also, the business does not need to be located within an Enterprise Zone, it must only create new jobs in an Enterprise Zone.

Interested companies must submit an Advance Notification Form prior to and an Application within 90 days after the project start date.

Check out the pretty sweet and easily searchable Lousiana Economic Development website!