Looking ahead, innovative tax practices and solutions will be used to capture incentives for going in, assisting US companies to expand internationally, and ensuring businesses capture state and federal tax incentives.
Saving on taxes through such solutions will also function as a revenue raiser to pay for research and development into new products and services, which would foster innovation on the production side.
Each year, billions of dollars are spent on exemptions, tax credits and deductions to encourage companies to make investments. When captured, tax incentives can improve the financial health of a company and enable them to increase production and investment. Businesses need better solutions to identify effective incentives, and avoid reforms and programs that do not meet their expectations.
As the product, services and intellectual assets of a company cross more boundaries…the tax incentives become more widespread.
Solutions on the identification of economic development incentives could greatly improve a company’s ability to recover capital investment with the strongest results at the lowest possible cost. Such solutions could also help answer the company’s demand for taking advantage of new tax opportunities as they recruit new employees. Unfortunately, most businesses lack the information for seeking the best methods for reporting and gathering incentive data.
Let’s not forget, businesses aim to achieve maximum profitability when operating internationally or nationally, which requires up-to-date knowledge on tax incentives and legislation. This calls for a need for compliance and sound planning strategies, which are critical to navigate in the global business environment.
As the product, services and intellectual assets of a company cross more boundaries (go across the state or border), the tax incentives become more widespread. The increasing improvement and volume of investment may make it difficult for the concerned business departments to help ensure effective incentive capture.
So what is the expected benefit from the benchmarking of innovation in tax incentive solutions? Businesses are able to spend their time on understanding what savings are available at the state and federal level. This time can be translated into company profitability and it also frees up the tax department from spending time to identify such opportunities, so they are better able to focus on other tasks.
ADP.com says that the difficulty in identifying all eligible incentives, as well as maintaining compliance, can both be barriers between you and the lowest possible tax rate. As a result, companies need innovative tax incentive solutions that are backed by dedicated practice focused on maximizing tax credit capture exclusively. Such solutions can come in the form of companies that have a database of thousands of tax incentives and propriety mapping software for geographic zone eligibility.
Once the business has the experience of using an innovative tax solution to identify tax incentives, the interest of the business owner and senior managers in capturing identified savings is likely to increase along with the experience of the value-added that is received from the innovative solution provider. The solution will also serve as a basis of recommended measures that should be taken to increase tax savings.
By Becky Wilcox
Becky Wilcox is a mother and entrepreneur. Originally from the east, she now lives on the west coast. Becky enjoys writing about health, fitness, and anything else that sparks her interest!
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