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Growth Planning

Prepare a Credits and Incentives Plan Early


As economic development decision-makers evaluate growth projects and offer tax savings for new business developments, CPAs must ask themselves how they can help clients realize these valuable outcomes.

Jan 12th 2021
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For CPAs, the most important element for a business seeking incentives is timing. Correct timing can deliver tens of thousands of dollars in savings to a client.

The vast majority of incentives are discretionary and often require a “but-for” clause; in other words, were it not for the offered incentives, the company would not invest or would limit its investment in a new growth project. Therefore, CPA firms must communicate with a company before it even draws up a proposal. That way, incentive opportunities can be thoroughly vetted and analyzed, and the company can be advised to consider the best programs or tax savings tools.

The Time is Now for CPAs

We all know 2020 was a difficult year for many reasons. However, many businesses – especially those involved with manufacturing, logistics and distribution, technology, defense or health care – saw opportunities to actually increase production as a result of the pent-up demand from so many consumers staying home.

CPAs have a unique position as trusted advisors to their clients. It is up to them to engage their clients early in the year and ask how the past is influencing future business and revenue projections. Valuable intelligence can be drawn out by a simple question such as, “What does the next year look like for you from a production or sales perspective?” The response can help CPA advisors see opportunities to position the company for future growth.

A few “key triggers” might denote incentive opportunities for client businesses. They include any indicators toward adding jobs, adding investment (tangible property or real property), business acquisitions or company location decisions. When a company states it is thinking of new growth, advisors should see potential incentive value.

Growth triggers often sound like:

  • “I need to add another shift to keep up with demand!”
  • “My equipment is running 24/7 – I need to add more capacity and am looking at capital to purchase additional machinery and equipment.”
  • “We are busting at the seams! We have been looking at the space next door, and I’ve started talking with a real estate broker about finding a bigger location.”
  • “One of our competitors did not make it through the pandemic; I’m starting to talk with my attorney about acquiring their assets and book of business.”

CPA firms that do an annual review with clients shouldn’t solely focus on what has happened over the last year. Future growth and vision are key starting points for economic credits and incentives discussions, and advisors should be prepared to quickly identify and act on these important statements.

For example, a CPA reached out to a business owner to discuss the usual end of year planning and preparation for tax season. The business owner told the CPA that he was planning to sell his business, as it had been in operation for 70 years and he wanted to retire. The CPA connected with the prospective purchaser of the business (one of the current C-suite executives) and discussed his plans for the future.

That discussion retained a client for the CPA and led the CPA to an economic credits opportunity. The CPA connected the purchaser to an incentives specialist to pursue incentives in the area, and the purchaser received a $600,000+ job growth incentive offer from state and local governments.

CPAs and businesses alike may ask, “How could we possibly predict what the future holds, especially under the current conditions?” This is a legitimate and important question. However, in most cases, economic credits and incentives programs can accommodate fluctuations in identified growth benchmarks.

Get to Know the Programs

Because many of these programs are performance-based, they are largely insulated from risk and place the burden of success on the business. If the business does not perform to the level it said it would, the associated reward (the incentive) is adjusted accordingly. But businesses that meet part of their goal still can access part of their incentives.

Understanding state or local economic credits and incentives programs is strategically important prior to pursing these options. For example, good questions to ask about these programs include:

  • Does the incentive program have a specific number of jobs to qualify?
  • What is the time frame?
  • Does the client’s industry type fit with the incentives?

CPA advisors and economic credits and incentives professionals can help vet these opportunities. However, the conversation starts with client discussions of planned future growth.

What questions should CPAs ask their clients as they reach out for the upcoming tax season? Here are a few to ask during those meetings:

  • “I see you increased your payroll expenses this year. Do you plan to increase payroll next year?” The client’s answer may hint at impending job growth.
  • “It looks like some equipment has been depreciated out. Do you plan to purchase new equipment soon?” The answer may determine if the client is planning a new investment.
  • “You mentioned being ‘at capacity’ – are you thinking about expanding or finding a new, larger location?” The answer may show the client is interested in a new location, building or lease.
  • “Are you looking at buying any competitors or expanding into new markets?”  The answer could indicate an acquisition or location decision may be on the horizon.


Questions like these show a CPA partner is interested not only in what has happened, but what could happen to drive a client’s future success. Forward-thinking strategy sessions like this can reap additional confidence in the CPA advisory relationship and uncover valuable opportunities to bring additional savings to the client.