Small businesses get tax workshop presentation
Vance County commissioners, Henderson city councilmen and Mayor Pete O’Geary gathered with small business owners Wednesday morning for an informative session on small business tax incentives.
Guest speaker Lynn Douthett, district director for the U.S. Small Business Administration, shared resources available to small businesses through the SBA as well as highlights from the Taxpayer Relief Act of 2012.
According to Douthett, the SBA provided over $430 million in capital last year through lending communities across North Carolina. Thirty-five to 40 percent of that lending went to start-up businesses.
In Vance County, over the last two years, the SBA has funded over 15 small businesses, creating 82 jobs.
“There is some value to our program, whether it’s from $35,000 up to $5 million, we’re here to help support the deals that can potentially be done through our lending community,” Douthett said.
Key tax incentives resulting from the fiscal cliff deal included a research and development tax credit, providing 14 to 17 percent credit to small businesses primarily in place for research, experimentation and development.
“There are a lot of businesses in the manufacturing sector that can utilize this,” Douthett said.
Companies purchasing or financing qualified equipment during the tax year can benefit from what’s known as a Section 179 deduction.
Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year.
The incentive encourages businesses to buy equipment and invest in themselves.
“We’ve seen a lot of small business expand, despite the economy we have had, and this could be the capital improvements, but any equipment would definitely qualify,” Douthett said.
Deduction rates for Section 179 were also raised in 2013, from $125,000 to $500,000.
“There’s a significant change in the amount that qualify,” Douthett said.
Coupled with the Section 179 tax deduction is bonus depreciation, useful to very large businesses spending more than $2 million on new capital equipment in 2013.
Bonus depreciation covers new equipment only.
Through the work opportunity tax credit, entrepreneurs hiring ex-military as well as those who come from underserved communities can receive tax credit.
“Hiring our military today is very important,” Douthett said. “Those that are transitioning out of service have a lot of challenges to face.”
Employees who qualify must work for 120 hours in order for an employer to claim the credit.
Resource partners available through the SBA help companies meet challenges, manage change and plan for the future through management counseling and educational services.
“Our resource partners to me are like gold,” said Ivan Hankins, senior area manager for the U.S. SBA. “You pay for them as a taxpayer.
“If you’re like me, if you’ve prepaid for something, I’m going to use it.”
Locally, Vance-Granville Community College provides one of the most accessible resources to the area with their small business center.
“We do partner with the N.C. Women’s Business Center, we work with the SBA, we work with our local lending institutions,” said Tanya Weary, director of the Small Business Center at VGCC. “We listen to the community and what the community wants.”
Andrea Harris, president of the N.C. Institute of Minority Economic Development, helps sponsor the Women’s Business Center of N.C., providing informative workshops and training to the community.
“The chamber of commerce and Small Business Center have become real resources for us to get information out,” Harris said. “SBA really does help facilitate that process.”
Contact the writer at email@example.com.