Transcript Incentives for Pennsylvania & New Jersey Companies MVM ASSOCIATES Tax Credit Brokers and Consultants Since 1997

Incentives for Pennsylvania &
New Jersey Companies
MVM ASSOCIATES
Tax Credit Brokers and Consultants Since 1997
The Possibilities
Consider This:
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There are nearly 2,000 different state incentives and
thousands of federal programs currently available to
businesses in the US.
Many organizations miss out on substantial benefits that
are in place specifically to support growth.
Available Incentives
Not Your Average Tax Credits
TAX CREDITS = CASH
Pennsylvania Tax Credits
Transferable/Sellable:
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Enterprise Zone (EZ)
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Keystone Innovation Zone (KIZ)
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Research & Development (R&D)
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Keystone Special Development Zone (KSDZ)
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Historic Preservation Tax Credits (HPI)
 Neighborhood Assistance Program (NAP)
Non–Transferable:
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Job Creation Tax Credit (JCTC)
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Keystone Opportunity Zone (KOZ)
New Jersey Tax Credits
Transferable/Sellable:
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Grow New Jersey Assistance Program (Grow NJ)
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Economic Redevelopment and Growth (ERG)
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Technology Tax Certificate Transfer Program (NOL)
Grant Opportunities
Training:
 PA Workforce and Economic Development Network
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Essential skills
Advanced technology
 NJ Workforce Partnership Development Program
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Customized training
Emphasis on front line workers
 NJ Supplemental Workforce Fund for Basic Skills
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Promoting adult literacy
Other:
 Pennsylvania First Grant
 Facilitates investment and job creation
What Can I Use the Benefits For?
 Working capital for your business
 Pay off debt
 Secure investments
 Hire employees
YOU DECIDE!
Research & Development Tax Credit - PA
 Available to companies who incur qualified research
expenses within Pennsylvania.
 Program created to assist with the growth and development
of technology-oriented businesses.
 Not zone related – available to all for-profit entities.
 Tax credit is transferable and sellable for cash.
R&D - Qualifications
 Qualified research expenses (QRE) to be incurred within PA.
 Minimum 2 years of QREs to apply for tax credit.
 QREs are defined by IRS Code and may include wages, disposable
office supplies, contract research and patent costs.
 Submit application by September 15th each year, award letters
announced December 15th.
 Companies valued at $5M or less receive 20% tax credit versus year
over year increase in spending.
 Companies valued over $5M receive 10% award versus year over
year increase in QREs.
Job Creation Tax Credit - PA
PA State Incentive:
 $1,000 per full-time employee
 Must be paid at least 150% of minimum wage
 Jobs must be created within 3 years
 Must create 25 new jobs or expand workforce by 20%
City of Philadelphia:
 $5,000 per full-time employee
 Must be paid at least 150% of minimum wage
 Jobs must be created within 5 years but only jobs created in 2015 qualify
 Must create 25 new jobs or expand workforce by 20%
Grow NJ Assistance Program
 Key job creation incentive program in state.
 Available to companies that add or retain jobs in NJ some
required to add as few as 10 jobs to be eligible.
 Incentives vary based on the location of the jobs within the state
from $500 per job to $15,000 per job per year.
 Benefit is available every year for 10 years.
 Company must remain in location for 1.5 times
years awarded.
 Requires investment in capital improvements.
 Tax credit is transferable and sellable for cash.
 Sunset July 1, 2019
Grow NJ Requirements
Minimum Capital Investment Requirements $/Square Foot:
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Industrial – Rehabilitation Projects
Industrial – New Construction Projects
Office – Rehabilitation Projects
Office – New Construction
$20
$60
$40
$120
Minimum capital investment amounts are lowered to 2/3 in GSGZs and in eight South Jersey counties: Atlantic,
Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean, Salem
Minimum FT Employment Requirements New/Retained FT Jobs:
 Tech Start Ups and Manufacturing Businesses
 Other Targeted Industries
 All Other Businesses/Industries
10/25
25/35
35/50
Minimum employment numbers are lowered to 3/4 in GSGZs and in eight South Jersey counties:
Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean, Salem: 8/19
Grow NJ Preferred Locations
Garden State Growth Zones (GSGZ):
 Camden, Trenton, Paterson and Passaic
Distressed Municipalities:
 A municipality that is qualified to receive assistance under the
Municipal Urban Aid Program; is under the supervision of the
Local Finance Board; identified by DCA to be facing serious fiscal
distress; a SDA municipality; or a municipality boasting a
major rail station.
 Examples include: Pennsauken, Mount Holly, Burlington, Jersey
City
NJ Economic Redevelopment and Growth
 ERG is the state’s key developer incentive program.
 Provides grants and bonus awards for desirable projects.
 ERG authorizes a bonus of 10%, up to a maximum of 30% of
total project costs; 40% for projects in a GSGZ.
 For Local Incentive Grants, up to a maximum of 100% if
 For municipal gov’t/redevelopment agencies.
 All projects are subject to a comprehensive
net benefit analysis to verify that the
revenues the State receives will be greater
than the incentive being provided.
 Sunset July 1, 2019
Tech/Biotech Focused Incentives
Keystone Innovation Zone (KIZ):
 Available to young biotechnology or technology focused businesses
located in PA within the KIZ.
 Local zones are located in Philadelphia, Montgomery and Bucks
Counties (east of 202) – many others throughout state.
 Tax credit is transferable and sellable for cash.
Tech/Biotech Focused Incentives
NJ Technology Business Tax Certificate Transfer Program:
 Benefit for unprofitable NJ based technology or biotechnology
companies with less than 225 US employees.
 Apply for the ability to sell net operating losses and/or R&D tax
credits to unrelated profitable corporations.
 Benefit can be used for growth, research and working capital.
Tax Credit Options
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Use - apply credit against state tax liability including personal income
tax, corporate net income, capital stock and franchise tax.
Carry forward - use in future years versus state tax liability according
to guidelines which vary according to each program.
Sell - if the tax credit is sellable/transferable, once you have deducted
the state liability from the total award, the remainder can be sold for
cash.
Contact an Experienced
Tax Broker.
Additional Financial Benefits
 Incentive awards that are monetized can be used to:
 Raise matching funds – MVM would secure a contract from a credit
worthy buyer that will guarantee payment of a certain amount upon the
transfer of the credits. The distribution of this payment can be made to
a third party.
 Reduce or eliminate debt – once converted to cash the benefit can be
used to pre-pay or payoff an investor note in the required timeframe.
Buyers/Sellers of Tax Credits
 MVM secures individual buyers and corporations who have
a large tax liability to purchase credits.
 Credits are sold throughout the year at a discount.
 50% - 75% of a credit can be used to satisfy a variety of
liabilities as stipulated in guidelines for each program.
 MVM Associates sells the majority of all PA and NJ sellable
tax credits.
Benefits to Buyers of Tax Credits
Businesses Can:
 Reduce your total state income tax liability
 Lower your effective state tax rate
 Diversify your investment portfolio
 Deliver a high rate of return
 Promote the arts and film, renewable
energy, historic rehabilitation, or other
industries you may support
Non-Traditional Financing
 Our partners provide financing options unavailable through
traditional lenders. They include:
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Prefinancing of tax credits
Crowdfunding
Tax free financing
Others
Contact Us
Phone: 215-540-8463
www.mvmgrants.com