Tax Incentive Programs

There are a variety of tax incentives available to businesses operating in Northern Louisiana from both the Federal Government and from the State of Louisiana.

Federal Incentive Programs

Renewal Community Program

Claiborne Parish is included in the Northern Louisiana Renewal Community Region. as defined by U S Department of Housing and Urban Development. The Renewal Community is a very signifcant and important package of tax incentives available to qualifed businesses located and/or operating in the region. The incentives are available to any form of business entity - C corps, S corps, LLCs, LLPs, conventional partnerships, and sole proprietorships. The Northern RC Region includes all of Claiborne, Bienville, Franklin and Red River Parishes and parts of Webster, Lincoln, De Soto, Union, Jackson, Caldwell, Richland, Morehouse and Winn Parishes. You can view a map of the Northern RC Region by using this link: www.renewallouisiana.com/nmap/default.asp. The primary incentives are as follows:

Direct income tax credit of up to $1,500 per employee who is a qualifed resident of the renewal community region. In general, a qualifed employee is anyone who is a resident of the RC Region and begins employment at least 60 days before the business' year end. The credit is capped at 15% of the first $10,000 the employee earns in a year. There is a special form to filed with the employer's income tax return and an employee documentation requirement. Finally, if the amount of eligible credits are not used up in the year they are created, they may be carried forward to subsequent years. Please note that compliance with the program's requirements is not difficult.

This has proven to be a very important tax savings device for businesses operating in the Northern RC Region. We can help you to take advantage of these credits.

Accelerated depreciation of approved building and construction projects. Where normal depreciation for non-residential real estate assets is 39.5 years under IRS MACRS guidelines, approved projects maybe depreciated over 10 years. Additionally, the owner has the option of writing-off half the cost of the approved project in the first year. This incentive can significantly improve the after tax cash flow analysis of a capital building project done in the region. Many businesses have taken advantage of this incentive.

There is an application and approval process that must be complete. We have worked with several business on this tax incentive program and are making application for the renovation project for our new offices. We can help you with the program application and submission process.

Elimination of capital gains tax on certain non-residential real estate assets held longer than five years. Assets such as those described above that are bought or improved in the RC area and held more than five years may then be sold and any gain realized not be subject to income tax. The asset must have been bought or improved after the Northern RC Region was established, which was in 2002.

This is a very important incentive for businesses thinking of long-term advantages for their capital expenditure programs.

Other Renewal Community Incentives: There are other tax incentives available within the Northern RC Region. They include incentives for hiring resident individuals who are between 18 and 24 (WTO Wage Credit), individuals who are on long-term assistance programs (WTW Wage Credit), enhanced SEC 179 deduction, low-income housing projects, and a "New Markets" tax credit.

Louisiana Tax Credits and Incentives

Louisiana has a variety of tax credits and incentives for businesses and individuals. The following link will take you to the Louisiana Department of Revenue's web site: http://www.rev.state.la.us/ . Ignore the error message and use the "search site" function to search for: tax credits . The first document listed is a very good recap of Louisiana's available tax credit programs.

We can help you take advantage of the credits that are available to you.

Steven J. Koskie CPA LLC

Providing more than numbers on a page.

Please Note: Technical information contained on this page and througout this web site is of a generic nature and does not constitute advice to be relied upon in any given situation. Always consult a tax professional with specific facts and circumstances for appropriate guidance and advice.