Most companies realize that states have tax credit incentives for research and development, purchasing new assets, job creation, film projects, etc. But did you know that many states allow for the purchase of tax credits and even net operating losses (NOLs)? In many cases the companies eligible for these credits or having NOLs may not be in a position to utilize these tax benefits.
To nurture the success of these companies or encourage future projects in a locale, some states have elected to establish special programs to enable highly vetted companies in targeted industries and areas to sell their tax benefits. While the tax benefit sellers are carefully screened, qualified and even certified, the buyer can be any company in the state with a liability. The typical transfer puts valuable cash into the hands of the seller to feed new business or their next project and saves the buyer anywhere from 7% to 14% of their state tax liability.
States with substantial sellable tax benefits include Arizona, California, Connecticut, Georgia, Illinois, Louisiana, Massachusetts, Michigan, Missouri, New Jersey, Pennsylvania, and Rhode Island.
Our NTCI Tax Benefit Exchange practice is led by Paul Westbrook, who has been helping sellers get state-approved and matching up buyers and sellers for almost 10 years. To learn more about Paul’s experience and credentials, click here. Additionally, if you’d like to learn if your tax benefits are sellable or what tax benefits are available for purchase, Paul can be reached by phone at (732) 698-7225 or email him at Paul.Westbrook@ntlci.com.