Automatic Data Processing, Inc. · NASDAQ:ADP
Automatic Data Processing — Find Your Way to a Lower Tax Rate in Louisiana (ADP Webinar) (July 2012)
52 slides from Automatic Data Processing's conference presentation, Jul 18, 2012
Slide 1: Find Your Way to a Lower Tax Rate in Louisiana
Find Your Way to a Lower Tax Rate in Louisiana An ADP® Webinar Wednesday, July 18, 2012 12 PM Eastern The information and materials provided in this webinar are for informational purposes only and not for the purpose of providing legal advice. Further, the information and materials are not intended
Slide 2: Housekeeping
Housekeeping This is one of a number of complimentary webinars that ADP offers to Finance and HR professionals each year Today’s webinar will last for 60 minutes, ending at 1 PM Eastern The last 10 minutes of today’s program have been reserved for Q&A A .pdf copy of today’s slides is availab
Slide 3: CPE Credit
CPE Credit Are you planning to apply for CPE and/or RCH credits for attending today’s webinar? A. CPE Credit Only D. No B. RCH Credit Only E. Not Applicable C. Both CPE & RCH Credits NASBA® (National Association of State Boards of Accountancy) and APA (American Payroll Association) requirements fo
Slide 4: About ADP
About ADP Over 570,000 clients worldwide Pays 1 out of 6 in the U.S. 33M worldwide Founded in 1949 Went public in 1961 45,000 Associates Revenues of approximately $10 Billion In 60+ Countries Market capitalization of >$23 Billion 1 of 4 AAA Rated U.S. Industrial Companies Electronically ‘moving’
Slide 5: ADP – Tax Credit Services
ADP – Tax Credit Services Maximum Value Unparalleled Thorough, Detailed Technology Screening State & Local The Native American Geographic Mapping The California Incentives Database Database (Indian Tools for Zone Enterprise Zone Employment Credit) Database 5 © 2012 ADP, Inc.
Slide 6: Today's Panel
Today’s Panel Vaqar Khan Heath Williams James Glass ADP LED Walmart Senior Manager, Southwest Region Director, Digital Media Senior Manager, Credits & Incentives 6 © 2012 ADP, Inc.
Slide 7: Agenda
Agenda Introductions Louisiana Business Climate Overview Louisiana Quality Jobs Louisiana Enterprise Zone (LAEZ) Louisiana Digital Media Tax Credits Wrap-up Q&A 7 © 2012 ADP, Inc.
Slide 8: Polling Question #1
Polling Question #1 How is your company taking advantage of state tax credits and incentives? A. We prepare state credits and incentives “in house”. B. We outsource our state credits and incentives work. C. We currently don’t capture any state credits and incentives. D. I am unsure. NASBA® (Nation
Slide 9: What Makes Louisiana So "Business Friendly?"
What Makes Louisiana So “Business Friendly?” Louisiana companies have access to a wealth of programs and incentives to help them grow and prosper – Every day more businesses are taking a serious look at Louisiana – They see bold new leadership, aggressive business incentives and a wealth of busine
Slide 10: Louisiana Facts
Louisiana Facts Outperforming the U.S. and the South: – Since the beginning of the recession in 2008, Louisiana has outperformed the U.S. and the South on a regular basis, experiencing record years for economic development Following a trend that began in 2008, Louisiana has earned it’s highest p
Slide 11: Louisiana Credits & Incentives
Louisiana Credits & Incentives Credit / Incentive Program Qualified Investment Louisiana Digital Media $26.7 Million Louisiana Quality Jobs $7.07 Billion Louisiana Enterprise Zone $2.48 Billion Source: Louisiana Economic Development 2011 11 © 2012 ADP, Inc.
Slide 12: Business Climate Overview & Louisiana Quality Jobs
Louisiana Business Climate Overview & Louisiana Quality Jobs Vaqar Khan ADP Senior Manager, Southwest Region 12 © 2012 ADP, Inc.
Slide 13: Quality Jobs Program Overview
Louisiana Quality Jobs Program Overview Provides a cash rebate to companies creating well-paid jobs and promote economic development Benefits: – 5% - 6% rebate on annual payroll expenses for up to 10 years, and: – Sales tax rebate on capital expenditures, or; – 1.5% investment tax credit on qual
Slide 14: Quality Jobs Program: Eligibility
Louisiana Quality Jobs Program Eligibility: – Business must be in one of the eligible industries or – At least 50% of annual sales out-of-state or – Must be located in a LED designated distressed region. Ineligible: – Retail employers – Business associations and professional organizations – Empl
Slide 15: Quality Jobs Program: Job Requirements
Louisiana Quality Jobs Program Job Requirements – Minimum of five net, new jobs created within three years of the contract effective date – Full-time employees (30 hours per week) – Provide health care benefits – Value of the plan is the actual cost for the individual coverage – Basic health care
Slide 16: Quality Jobs Program: Payroll Requirements
Louisiana Quality Jobs Program Minimum Annual Gross Payroll Requirements Amount of Employees Payroll Requirement ≤ 50 Employees $250,000 > 50 Employees $500,000 Wage and Health Care Benefit Requirements Wage Amount % Rebate $14.50/hr 5% $19.10/hr 6% 16 © 2012 ADP, Inc.
Slide 17: Quality Jobs Program: Baseline Report
Louisiana Quality Jobs Program Baseline Report Requirements (Existing Employees): – Four month Olympic average Need four months of operation to use the Olympic average, otherwise if three or less months of operation prior to contract effective date, average only the months with employment – Thes
Slide 18: Quality Jobs Program: Basic Application
Louisiana Quality Jobs Program Basic Application: – Advance Notification Fee: $100 – Application Fee: $200-$5,000 – Due 18 months after hiring begins, but not later than 24 months after the Advance Notification was filed Application Addendum Material: – Certification of Primary Qualification – M
Slide 19: Quality Jobs Program: Filing Forms
Louisiana Quality Jobs Program Filing Forms: 1) Pre-Application: Advance Notification and $100 fee Disclosure Authorization 2) Application, Approval & Contract Application, addendum material and fee ($200 to $5000)/Certification of Primary Qualification/Medical Insurance Info 3) Post-Approva
Slide 20: Quality Jobs Program: Annual Certification Report
Louisiana Quality Jobs Program Annual Certification Report – Due annually within six months after the close of the fiscal year – Must be filed annually throughout the contract period – Explanation/summary of the BHBP or HIC and the schedule of rates breakdown for the employer and employee share of
Slide 21: Quality Jobs Program: Sales & Use / Investment Tax Credit
Louisiana Quality Jobs Program Job Requirements (If seeking Sales & Use or Investment Tax Credit Rebate) – Minimum of five permanent net new direct jobs within the first 24 months of the contract effective date OR – Increase the current nationwide workforce by 10% (a minimum of one permanent net n
Slide 22: Quality Jobs Program: Document Process
Louisiana Quality Jobs Program Document Process (If seeking Sales & Use or Investment Tax Credit Rebate) – Maximum period of thirty months (up to four project periods per 10-year QJ contract) – QJ (Additional SU/ITC Period) Advance Notification is required per project period (prior to start date o
Slide 23: New Competitive Projects Payroll Incentive
Louisiana New Competitive Projects Payroll Incentive Overview: – This incentive provides a rebate valued at up to 15% of new job payroll each year for ten years Eligibility: – State offers this incentive on qualifying new jobs in specific types of durable goods manufacturing (e.g., auto, batteri
Slide 24: Polling Question #2
Polling Question #2 Is your company currently administering Quality Jobs credits and incentives “in house,” or do you outsource the work related to these programs? A. We handle “in house” and intend to continue doing so. B. We handle “in house,” but are considering outsourcing. C. We outsource the
Slide 25: Today's Panel: James Glass
Today’s Panel James Glass Walmart Senior Manager, Credits & Incentives 25 © 2012 ADP, Inc.
Slide 26: Enterprise Zone Program
Louisiana Enterprise Zone Program What are Enterprise Zones? – Enterprise Zones are areas with high unemployment, low income or a high percentage of residents receiving some form of public assistance 26
Slide 27: Enterprise Zone Program: Incentives
Louisiana Enterprise Zone Program The Louisiana Enterprise Zone program provides incentives to businesses that create qualifying jobs in the State and hire at least 35% of their net new employees from targeted groups Incentives include: – Job credit: income/franchise job tax credit for creating
Slide 28: Enterprise Zone Program: Advance Planning
Louisiana Enterprise Zone Program Advance planning is required! – An “Advance Notification” form must be filed prior to the beginning of the project or before hiring has begun Companies must increase employment by five net new hires or 10%, and 35% of new hires must be individuals from one of th
Slide 29: Enterprise Zone Program: Job Tax Credit
Louisiana Enterprise Zone Program Job Tax Credit (“JTC”) Benefits and Limitations: – $2,500 income and/or franchise tax credit for each net new hire (increased to $5,000 for targeted industries – aerospace, aviation and rubber manufacturing) – The JTC is claimed over a 60-month period, and may be
Slide 30: Enterprise Zone Program: Sales and Use Tax Rebate
Louisiana Enterprise Zone Program Sales and Use Tax Rebate Benefits and Limitations: – Rebate of 4% State sales & use tax on eligible purchases (materials, machinery, furniture or equipment) where Louisiana sales tax was incurred – A rebate of the local portion of sales & use taxes is also availab
Slide 31: Enterprise Zone Program: Investment Tax Credit
Louisiana Enterprise Zone Program Investment Tax Credit (“ITC”) Benefits and Limitations: – Refundable credit equal to 1.5% of capitalized investment reported on the Federal Income Tax Return – excluding certain items and manufacturing equipment that are exempt from sales & use tax – The ITC may n
Slide 32: Enterprise Zone Program Process
Louisiana Enterprise Zone Program Process Application Process: 1. Pre-Application Advance Notification (Fee: $100) Endorsement Resolution (Local Sales Tax Rebate) Disclosure Authorization 2. Application, Approval & Contract Enterprise Zone Application (Fee Varies) and Approval Contract 3
Slide 33: EZ Program: The Step by Step Process
Louisiana EZ Program: The Step by Step Process 33 © 2012 ADP, Inc.
Slide 34: Enterprise Zone Program: Administrative Changes
Louisiana Enterprise Zone Program LED recently announced administrative changes to the program (Effective as of January 20, 2011) Changes (some of which are already effective) include: – To be eligible for the program a minimum of five net full-time jobs must be created (previously five full-tim
Slide 35: Polling Question #3
Polling Question #3 Is your company currently engaging in, or planning to engage in, activities that will enable it to claim Enterprise Zone benefits in these states? NASBA® (National Association of State Boards of Accountancy) and APA (American Payroll Association) requirements for receiving CPE
Slide 36: Today's Panel: Heath Williams
Today’s Panel Heath Williams LED Director, Digital Media 36 © 2012 ADP, Inc.
Slide 37: Digital Media Credits Program Overview
Louisiana Digital Media Credits Program Overview The Digital Interactive Media and Software Tax Credit program is designed to encourage entertainment technology development in the state and to develop and support a highly skilled, creative, technology driven workforce – It targets gaming, simulati
Slide 38: The Digital Media Incentive Cuts Development Costs
The Digital Media Incentive Cuts Development Costs Programmers designers, testers, project managers... Lease costs, hardware, software, facilities... Marketing, distribution, & overhead 38 © 2012 ADP, Inc.
Slide 39: Consider A $1Million Project
Consider A $1Million Project Programmers designers, $720K $252K testers, project managers... Lease costs, hardware, software, $200K $50K facilities... Marketing, distribution, & overhead $80K $0K Total credit: $302K 39 © 2012 ADP, Inc.
Slide 40: Qualifications
Qualifications If you create software for an external audience, you probably qualify 40 © 2012 ADP, Inc.
Slide 41: Qualifications: Commercial Software
Qualifications The digital media incentive covers commercial software Healthcare IT Games Cyber Security Education IT Smartphone Apps 41 © 2012 ADP, Inc.
Slide 42: The Digital Media Incentive Process
The Digital Media Incentive Process The digital media incentive keeps the process simple 2. Receive initial certification 5. Receive your tax credit 1. Fill out application PDF form 4. Submit CPA certified project costs report 3. Track project expenses 42
Slide 43: What If We Do Not Have Tax Liability?
What If We Do Not Have Tax Liability? No Tax Liability? No Problem! 43 © 2012 ADP, Inc.
Slide 44: Solution…
Solution… The digital media incentive converts to cash A. Use the credit to pay taxes you owe B. Elect on a one-time basis to receive a rebate equal to eighty-five percent of face value of the credits 44 © 2012 ADP, Inc.
Slide 45: Additional Information – Digital Media
Additional Information – Digital Media Recent Program Changes Growth of the Program The Future 45 © 2012 ADP, Inc.
Slide 46: Louisiana Digital Media Incentive
Louisiana Digital Media Incentive The Digital Media Tax Credit program is just one of many attractive Louisiana economic development tools, and can be utilized in conjunction with or as an alternative to other incentives (e.g., property tax abatements) for qualifying projects involving job creatio
Slide 47: Polling Question #4
Polling Question #4 Has your company ever taken advantage of the Louisiana Digital Media Incentive? A. Yes, my company has taken advantage of this incentive. B. No, but we plan on taking advantage of this incentive. C. No, my company has not and will not take advantage of this incentive due to our
Slide 48: Wrap-Up
Wrap-Up Review your current company locations – you may be in a zone and not realize that you could be capturing credits When considering expansion or investment, leverage enterprise zones to understand your potential opportunities ADP provides: – One of the largest proprietary credit & incent
Slide 49: Q&A
Q&A 49 © 2012 ADP, Inc.
Slide 50: Thank You for Joining Us Today
Thank You for Joining Us Today For information on any of the ADP products or services referenced during today’s webinar: – Phone: 800-CALL-ADP or visit www.adp.com For a complete listing of ADP webinars and webinar recordings, go to: – adp.com | tools & resources | events | webinars 50 © 2012 AD
Slide 51: Please Tell Us How We're Doing
Please Tell Us How We’re Doing Your input will be used to improve and plan future webinars ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly changing legislation. Our goal is to help minimize your administrative burden so that you can focus on run
Slide 52: Thank You for Attending.
Thank You for Attending. 52 © 2012 ADP, Inc.