We arrived at the Kellogg Institute late and tumbled into bed, jet-lagged and exhausted. I awoke to the sun rising over Lake Michigan and decided to walk the campus to get my bearings.
The first thing that always strikes me about America is scale. Lake Michigan is the size of a small ocean with crashing waves and an international city on its waters edge - we have Lake Windermere, Wordsworth’s cottage and cream teas... small but perfectly formed ... I eventually found a donated stone seat overlooking the lake called "Class of 86”" and was musing over the possibility of increasing class years, the further round the running track you go, when I was lapped by two octogenarian joggers…
This afternoon, the UK scholars attended a very pleasant private lunch with Ellis Goodman, our benefactor and president of the Ellis Goodman Foundation. Ellis has had considerable business success in the US and has generously supported the UK scholarship program for a number of years. His advice was to “lawyer up”. In this land of abundance, everything is a negotiation and it’s the small print that will kill you.
After dessert, UKTI, in its infinite wisdom, decided to schedule an hour long presentation on the American taxation system. I have to confess that after the first ten minutes I was starting to lose the will to live; made more poignant by the seminar next door entitled “Marketing for Funeral Directors” (I kid you not!). One simply has to ask the question, how do they define an emerging market…?
I was pulled from my jet-lagged stupor by news of US business investment incentives… It seems that a number of States and local communities can afford to be aggressive with incentive packages because new jobs and potential tax revenues greatly exceed the costs of the incentives provided. Unlike the UK, not all incentives are publicized and there’s no fixed agreement for each offer. Incentives are negotiated directly between the company and the State or local boards. Florida and Texas are considered the most aggressive inward investment states, which is good news for us.
State and local benefits are designed to hook start up and expanding businesses, including technology and manufacturing businesses, and its important to negotiate before you start trading or implementing changes. There’s a little known act called the Work Investment Act that companies can negotiate, based upon the type of training they wish to implement and you get cash dollars. There are also R&D tax credits that cover innovation in processes, as well as products. Talk to the Workforce Investment Boards at State level. Incentives cover:
- Income and franchise tax credits
- Payroll and withholding-based programms
- Direct grants, low interest financing
- Training grants and subsidies
- Property and Sales tax abatements
The tax consultant's final piece of advice was to pay a taxation and legal consulting firm to negotiate your deal which was about as predictable as, well…death and taxes….