Bonnie
B. Dixon (404) 331-5001 ext. 2013 |
For
Release Tuesday March 23, 2004 |
HUD OFFERS TO SAVE COMMUNITIES MILLIONS IN TAXES
Tax tips could save large and small businesses in Georgia thousands
of dollars a year. Businesses in Atlanta, Albany, Crisp-Dooly Counties
and portions of Burke, Jefferson, Taliferro, Hancock and Warren
Counties are eligible
ATLANTA - April 15th is just around the corner and thousands of
businesses around the country will be paying too much money to Uncle
Sam, unaware of the tax savings that are available to them. The
Department of Housing and Urban Development is hoping to change
that with the release of a series of tax tips that will help cut
the tax burden of businesses located in certain federally designated
areas. Georgia has three Enterprise Zone's (EZ's) and one Renewal
Community (RC). The EZ's are located in Albany, Dooly-Crisp County
and Burke, Jefferson, Taliferro,
Hancock and Warren Counties. The
RC is located in Atlanta (formerly an EZ community).
For example, a grocery store owner who hires an employee who lives
in one of Georgia's three Empowerment Zone Communities can take
up to $3,000 off his taxes or an employee who lives in Georgia's
Renewal Community can take up to $1,500 off his taxes. The owners
of a landscaping company who plan to hire just one summer worker
who
lives in a Renewal Community can cut their tax bill by as much
as $1,200. These are just two examples of dozens
of tax tips HUD
is aggressively promoting to small and large businesses alike as
the federal tax filing deadline approaches.
"I don't know of a single business owner who wouldn't leap
at the opportunity to keep their hard earned money in
their pockets
instead of sending it to Washington," said HUD Assistant Secretary
Roy A. Bernardi. "These tax tips
not only point to the advantages
of doing business in these areas, but will help business owners
save money."
Since 2002, an estimated $11 billion in expanded tax benefits has
been offered exclusively to businesses located in
80 Empowerment
Zones and Renewal Communities, including Atlanta, Albany, Southwest
Georgia United (Crisp-Dooly Counties) and Central Savannah River
Authority Enterprise Commission (portions of Burke, Jefferson,
Taliferro, Hancock and Warren Counties). In addition, $15 billion
in New Market Tax Incentives are available to further
generate
economic growth in these distressed communities. HUD's advice to
businesses located in these areas demonstrates how spending a little
time on a computer could reduce their federal tax liability and
help a company's bottom line.
Through tax credits, deductions, bond financing and capital gains
discounts, businesses are encouraged to locate their operations
in these distressed areas and to stimulate job growth in the process.
For a copy of HUD's tax tips
or to find out whether businesses in
your area qualify for these tax breaks, visit HUD's Community Renewal
website.
HUD is the nation's housing agency committed to increasing homeownership,
particularly among minorities; creating affordable housing opportunities
for low-income Americans; and supporting the homeless, elderly,
people with disabilities and people living with AIDS. The Department
also promotes economic and community development as
well as enforces
the nation's fair housing laws. More information about HUD and its
programs is available on the Internet and espanol.hud.gov.
###
IMPORTANT 2004 TAX TIPS
EMPOWERMENT ZONES
1. A little time on the computer can reduce your federal tax liability
and help a company's bottom line. Just log on
to the address locator
at www.hud.gov/crlocator
to see if your business is located in an Empowerment Zone.
Review
your employee roster to see if you have employees that live in the
Empowerment Zone. From 2002-2009,
your business could earn a yearly
wage tax credit of up to $3,000 for every employee that lives in
an Empowerment Zone.
2. Personal property that you purchased last year and use in an
Empowerment Zone can be expensed, resulting in
an additional $35,000
in deductions each year from 2002-2009, through Increased Section
179 deductions.
3. Plan ahead for this summer. Your business can receive up to $1,200
in Work Opportunity Tax Credits (WOTCs)
if you hire youth from an
Empowerment Zone between May 1 and September 15. While Congress
has not yet
extended the WOTC beyond 2003, we are confident that
it will do this soon.
4. If you have entry-level jobs, you can take up to $2,400 in WOTCs
for each 18 to 24 year-old employee you hire from the Empowerment
Zone. It does not matter where the employee works for you, but you
will need to obtain a certification that the employee qualifies
from the State Employment Services Agency (SESA).
5. You can increase the wage credit available to you by targeting
your employee recruitment to residents of
housing developments located
in the Empowerment Zone. These residents can qualify the business
for the Empowerment Zone Wage Credit or the WOTC.
6. Low-interest financing is available for businesses located in
an Empowerment Zone. The financing is accomplished through a tax-exempt
bond offered by a State or local government. Contact the Empowerment
Zone organization of your municipal government to find out if you
qualify to use this benefit to relocate or expand your business
in the Empowerment Zone. Visit www.hud.gov/cr
for contact information for the director of the Empowerment Zone
in your area.
7. Contact the State Employment Services Agency (SESA) to find
employees who will qualify your business for a WOTC. The SESA can
certify the employees for your tax records and can help with your
specialized training needs.
8. If you are a small business corporation located in an Empowerment
Zone, you may be able to offer stockholders
a 60% exclusion of capital
gains on new stock you offer to expand or set up business in the
Empowerment Zone.
9. If you are looking to reduce your capital gains tax, you can
exclude 60% of the gain on the sale of stock in a
small business
corporation located in an Empowerment Zone.
10. If you assign employees to provide construction work, security,
lawn care, or similar services in specific areas
of your community,
you may be able to claim an Empowerment Zone wage credit. The credit
is available for any employee who lives and works in the Empowerment
Zone, regardless of the location of the business's headquarters.
The credit can be calculated for the pay periods the employee worked
in the Empowerment Zone. This credit began
in 2002 and is available
through 2009.
11. Leverage your tax credits by reviewing State tax laws to significantly
reduce your taxes. In many cases, tax incentives may be available
for businesses located in State or local enterprise communities.
12. To find more information on Empowerment Zone tax incentives
and to obtain a free copy of the publication,
"Tax Incentive
Guide for Businesses in the Renewal Communities, Empowerment Zones
and Enterprise Communities", call (800) 998-9999.
RENEWAL COMMUNITIES
13. A little time on the computer can reduce your federal tax liability
and help a company's bottom line. Just log on
to the address locator
at www.hud.gov/crlocator
to see if your business is located in a Renewal Community. Review
your employee roster to see if you have employees that live in the
Renewal Community. From 2002-2009, your business could earn a yearly
wage tax credit of up to $1,500 for every employee that lives in
a Renewal Community.
14. Personal property that you purchased last year and use in a
Renewal Community can be expensed, resulting in
an additional $35,000
in Increased Section 179 deductions.
15. Plan ahead for this summer. Your business can receive up to
$1,200 in WOTCs if you hire youth from a Renewal Community between
May 1 and September 15. While Congress has not yet extended the
WOTC beyond 2003, we
are confident that it will do this soon.
16. If you have entry-level jobs, you can take up to $2,400 in WOTCs for each 18 to 24 year-old employee you hire from the Renewal Community. It does not matter where the employee works for you, but you will need to obtain a certification that themployeequalifies from the SESA.
IMPORTANT 2004 TAX TIPS
1. You can increase the wage credit available to you by targeting
your employee recruitment to residents of
housing developments located
in the Renewal Community. These residents can qualify the business
for the Renewal Community Wage Credit or the WOTC.
2. Commercial buildings in Renewal Communities are able to take
advantage of a very accelerated depreciation schedule (as short
as 10 years) through a Commercial Revitalization Deduction (CRD)
allocation. If you are looking
to expand, construct a new facility,
or substantially rehabilitate an existing building in the Renewal
Community, you should contact your local Renewal Community director
to see if you can qualify for a CRD "allocation" for accelerated
depreciation. Visit www.hud.gov/cr
for contact information for the director of the Renewal Community
in your area.
3. Contact the SESA to find employees who will qualify your business
for a WOTC. The SESA can certify the employees for your tax records
and can help with your specialized training needs.
4. If you are looking for investors in your business, you may offer investors the opportunity to pay no tax on capital gains if they purchase your stock or partnership interests. This incentive is only available in a Renewal Community.
5. If you are looking to reduce your capital gains tax, you will have a 0% capital gains rate if you purchase stock or partnership interests of entities doing business in a Renewal Community, provided you hold this property for at least five years.
6. If you assign employees to perform construction, security, lawn
care, or similar services in specific areas of town, you may be
able to claim a Renewal Community wage credit. The credit is available
for any employee who lives and works in the Renewal Community, regardless
of the location of the business's headquarters. The credit can be
calculated for work performed during a pay period or a calendar
year.
7. Leverage your tax credits by reviewing State tax laws to significantly
reduce your taxes. In many cases, tax incentives may be available
for businesses located in State or local enterprise communities.
8. To find more information on Renewal Community tax incentives
and to obtain a free copy of the publication, "Tax Incentive
Guide for Businesses in the Renewal Communities, Empowerment Zones
and Enterprise Communities", call (800) 998-9999.
NEW MARKETS TAX CREDIT
- If you can benefit from a loan with more favorable terms for
capital or working capital needs, visit www.cdfifund.gov
to find the investor groups that are making loans to or equity
investments in qualified businesses in low-income communities
across the nation.
- If you are looking to invest in commercial real estate, you
can earn an immediate federal tax credit for
investing in a partnership or corporation that has an allocation of the "New Markets Tax Credit." An investor
can earn credits over seven 7 years equal to 39% of the amount invested. Visit www.cdfifund.gov to find
more information on these investments.