Terrance H. Booth, Sr.'s Page

Federal Tax Credits
Work Opportunity Tax Credit
The Work Opportunity Tax Credit allows your company to receive a tax credit of up to 40% of the first $6,000 in wages paid to an employee who is a member of one of the following targeted groups:
· A member of a family receiving AFDC benefits
· Qualified Veterans
· Vocational Rehabilitation referrals
· Summer Youths
· Ex-Offenders
· Supplemental Security Income (SSI) recipients
· A member of a family receiving food stamp benefits
· High risk youths
· Qualifying hires in the core Hurricane Katrina disaster area
To qualify, the employee must
· be a new hire
· be within the targeted group outlined above
· fill out an IRS 8850 prescreening form prior to being hired
· work a minimum of 120 hours
We relieve your company of the administrative hassles of the program. Each new employee fills a pre-screening form and an IRS 8850 form. We retrieve all necessary information and documentation to certify the benefits for your company. From payroll information, We provide your company with a monthly report outlining the credits earned on each employee. These credits can be carried back one year, applied against estimated tax payment, or carried forward for twenty years.
We earn our fee only from your company's tax savings.
Welfare-to-Work Tax Credit
The Tax Payer Relief Act of 1997 established a new employer tax credit for "long term family assistance recipients."
The Welfare-To-Work Tax Credit is 35% of the first $10,000 of qualified wages in the first year of employment and 50% of the first $10,000 in the second year.

Empowerment Zone / Renewal Communities Credit
Empowerment Zone Tax Credit
The federal government has designated certain economically depressed “zones” as tax advantage areas. If your business is located in an Empowerment Zone and / or Renewal Community, and you employ individuals living in the same area, you can earn credit against your federal tax liability; up to $3000 per qualified employee. In addition, the businesses located within the zone may be entitled to increased tax expensing of equipment purchases and tax incentives for environmental remediation.
Renewal Communities
The 2000 Community Renewal Tax Relief Act established benefits for businesses and investments in 40 distressed communities around the country to be designated as “Renewal Communities (RC).” A Renewal Community is eligible to share in an estimated $17 billion in tax incentives to stimulate job growth, promote economic development and create affordable housing.

Tax Credits

Wage credits are especially attractive to businesses looking to grow. These businesses are able to hire and retain RC residents and apply the credits against their federal tax liability. Businesses operating in the new Renewal Community will enjoy up to a $1,500 credit for every newly hired or existing employee who lives and works in the RC.

Tax Deductions

Commercial Revitalization Deductions permit a State with one or more RCs to deduct $12 million per RC per year, up to $10 million per project for commercial or industrial buildings developed in the RCs. A business can deduct up to $5 million in the year the building is placed in service or deduct the full amount of eligible expenditures pro rata over 10 years.

Section 179 Deductions under the tax code allow a qualified Renewal Community business to expense up to $35,000 of additional qualified property such as equipment and machinery acquired each year during the period of the RC designation, 2002 through 2009.
Environmental Cleanup Cost Deductions allow businesses to deduct qualified cleanup costs in Brownfields.

Capital Gains Exclusions

Zero Percent Capital Gains Rate applies to an interest in, or property of, certain businesses operating in a Renewal Community, if the asset is acquired during the period of the RC designation and held for at least 5 years.

Bond Financing

Qualified Zone Academy Bonds allow state and local governments to match no-interest loans with private funding sources to finance public school renovations and programs.

Other Incentives

Like all distressed communities, Renewal Communities will also be able to take advantage of the New Markets Tax Credits that provide investors with a credit against their federal taxes of 5 to 6 percent of the amount invested in a distressed area. Also available to Renewal Communities is the Low-Income Housing Tax Credit providing credit against Federal taxes for owners of newly constructed or renovated rental housing.

Disaster Relief Tax Credits
To help businesses rebuild and help individuals rejoin the work force in the aftermath of Hurricanes Katrina, Rita, and Wilma and similar natural disasters. The Federal government has joined with state and local governments to insure the rebuilding of infrastructures and physical facilities impacted as a result of the aforementioned disasters. There are two employer related tax credits include:
Work Opportunity Tax Credit (WOTC) for employers that hire individuals affected by Hurricane Katrina.
An Employee Retention Credit for employers that retained existing employees despite a loss of operations due to Hurricanes Katrina, Wilma, or Rita.
Hurricane Katrina WOTC Credit:
All businesses who hire individual’s that lived in the Hurricane Katrina core disaster area when the storm hit. Employers may qualify for this credit through December 31, 2005.
WOTC provision is for employers with a location in the Katrina core disaster area that hires individuals who lived in the core disaster area prior to the storm. Employers may qualify for this credit through August 27, 2007.
In both cases, employers can earn up to $2,400 in tax credits per qualifying new employee.
Employee Retention Credit applies for Hurricanes Katrina, Rita, and Wilma:
Applies to employers whose business suffered a loss of operations due to the aforementioned Hurricanes but continued to pay employees even though the business was inoperable.
To qualify, the employer’s inoperable location must be within certain designated hurricane damaged counties.
If the employee performed no services or if the employee performed services at a different location following the hurricane, the employer may earn a retention credit. Employers can earn up to $2,400 in tax credits per retained employee
Native American Indian Employment Credit

The Native American Indian Employment Credit provides businesses with tax credits, unlike tax deductions, directly offset an organization’s federal tax burden. This provides an incentive to hire and retain individuals who are enrolled members of an Indian tribe (or the spouse of an enrolled member) who live on or near an Indian Reservation
http://taxcreditcenter.com/services_federal_NATC.aspx

Tribes with Free Trade Zones:

Lummi Nation located near Bellingham, Washington
Puyallup Tribe located Near Tacoma, Washington


Free Trade Zone, popularly known as FTZ, is an area where goods may be traded without any barriers imposed by customs authorities like quotas and tariffs. Free Trade Zone (FTZ) is a special designated area within a country where normal trade barriers like quotas, tariffs are removed and the bureaucratic necessities are narrowed in order to attract new business and foreign investments



HUB Zones

Under the federal HUBZone program, businesses located on Indian land have preference in the awarding of federal contracts by the Department of Agriculture and the Department of Housing and Urban Development

Small Business Administration

Under the Small Business Administration’s 8A program, businesses with majority tribal ownership can avoid the competitive bidding process for federal contracts and can be compensated at a rate of up to 15% higher than that received by non-tribal businesses.
http://www.sonnenschein.com/docs/docs_indian-law/Mont_Outsource.pdf

Under this program several Native American Corporations have joint ventured or partnered with major corporations and successfully landed contracts with major companies or government contracts.

Accelerated Depreciation

Non-Indian manufacturers with facilities in Indian Country can use shorter recovery periods when calculating depreciation deductions for its production equipment. “Qualified Indian reservation property” must be used predominately in the active conduct of a trade or business on the Reservation and, must be 3-, 5-, 7-, 10-, 15-, or 20-year property or non-residential real property. “Qualified infrastructure property” that is located off-reservation, but connected to qualified infrastructure within the reservation, is also eligible for shorter recovery periods. Power lines, water systems and telecommunication facilities are examples of qualified infrastructure property. Because the shorter recovery periods for qualified Indian and infrastructure property are in addition to the normal expense deduction of up to $100,000 for such assets, the depreciation tax savings to non-Indian manufacturers could also be significant.

Tax-Exempt Financing. Tribes can issue tax-exempt debt, like state and local government, so long as the proceeds will be used in the “exercise of an essential governmental function.” Accordingly, interest on tax-exempt tribal bonds can be excluded from income, which results in significantly decreased borrowing costs for the Nation as compared to conventional interest rates. Tribes can issue non-taxable bonds when exercising such essential governmental functions as constructing government buildings, health clinics and hospitals, parks, schools and libraries, roads, parking lots, and water and sewer systems. In recent years, however, the IRS has cast doubt on whether tribal “commercial” ventures like golf courses and hotel-resorts can be financed tax-exempt. Notwithstanding, tribal infrastructural developments achieved through tax-exempt savings can be passed on to non-Indian business who develop or lease commercial land in Indian Country.

Discounted Leasing Rates. Tribal trust lands and improvements on such lands are exempt from state taxation. As such, typical pass-through lease costs such as real property taxes can be significantly minimized, if not eliminated, to the benefit of non-Indian commercial lessees. A non-Indian company’s leasehold interest in trust lands may also be exempt from state excise taxation. In October 2004, the Wall Street Journal reported how the Salt River Pima-Maricopa Indian Community attracted a private developer to lease land from tribal members and construct two office parks on those lands for leasing purposes. Although purchasing off-reservation land in Phoenix would cost $10 per square foot, lands within the Pima-Maricopa community were leasing for $1.50 per square foot annually, resulting in tremendous savings for both the developer and lessees. Tribes could also lure developers and lessees to their reservations by offering below- market lease rates

Summary of TAX Incentives
· No tribal corporate income tax.
· No inventory tax on goods held for resale or otherwise in stock.
· Sales tax exemption for machinery and equipment used directly in the manufacturing process, including replacement parts.
· The assessment ratio of the tribal possessory interest tax is normally $1.00 per acre, plus a surcharge tax equal to 1% of the market value of the valuable improvements within a possessory interest. A possessory interest is basically a leasehold interest.
· Property which is held in trust by the United States for the benefit of an Indian tribe and/or individual is generally exempt from any state ad valorem taxes on land and buildings as a matter of federal law.
· Both the Bureau of Indian Affairs and the Oklahoma Department of Transportation have industrial access road programs.
· Tribes, legally, can be grantees for general-purpose foreign trade zones (FTZ), if needed. General purpose FTZ's are located at Will Rogers World Airport, Port of Catoosa in Tulsa and Muskogee.
· Union activity can be avoided by business and industry on Indian trust lands, if needed.
· Tribes can develop their own EPA laws in conformance with federal EPA requirements and issue the required EPA licenses and permits.
· Tribes can structure product liability laws to cap product liability for manufacturing concerns that need this type of protection.
· Tribes can self-insure, thereby providing an opportunity for business and industry to save money by precluding participation in state unemployment insurance and worker's compensation programs.
· Tribes have training programs funded by both the BIA and JTPA. They work closely with the State's Vo-Tech system as required by the prospect's training needs.
Indian tribes, with the passage of The Business Opportunity Development Act of 1988, P.L. 100-656(H.R. 1807), can now participate in the SBA 8(A) program with more flexibility. This opens up new avenues of business opportunities for tribes to joint-venture with private sector corporations to access Department of Defense contracts as well as other federal agencies. This SBA 8(A) program concept, combined with P.L. 100-442, Department of Defense 5% purchasing goal established for American Indians, opens the door to approximately $380 billion Department of Defense purchasing market heretofore unavailable. (By Robert D. Anderson http://greatspiritearth.com/anderson.html)