With 49 of the state’s counties within the Gulf Opportunity Zone boundaries, the legislation, like the hurricanes of 2005, is cutting a wide swath through the Magnolia State.
Without the massive destruction and clean up of the coastal counties, the areas away from the Coast are making headway with implementation of the act’s incentives
“Counties away from the Coast are using the GO Zone legislation as a recruiting tool for businesses to relocate or expand existing enterprises,” says Chris Maddux with the Jackson law firm of Phelps Dunbar. “We have clients in such counties utilizing the GO Zone bonus depreciation to accelerate performing capital improvement projects with respect to existing facilities.”
Louis Fuller with the Brunini law firm in Jackson says all categories of businesses are taking advantage of the incentives. “We’ve spoken to retail shopping center developers, heavy and light manufacturers, service industries, office buildings and many other categories of businesses,” he said.
He said the firm has been directly involved in GO Zone bond issues for a large manufacturing concern and an auto dealership.
“Additionally, we have consulted on the incentives for large and small office buildings, hotel developments, medical office space and others,” Fuller added.
Practicing what they preach, the Brunini firm plans to move into a GO Zone building in downtown Jackson in the fall of 2008.
Attorneys with the Butler Snow law firm have seen businesses take advantage of the GO Zone throughout the affected counties. “In our experience, we have seen that some of the non-coastal counties have been in a better position to act on the incentives through the first year,” said Barry Cannada. “As the Gulf Coast continues to rebound, we expect to see more businesses that are ready to put these incentives to use.
“The act will prove to be a huge factor in the rebuilding and revitalization of the Gulf Coast as well as attracting new business to many areas of our state. It will also continue to drive investments in other counties that will benefit our state as a whole.”
Thad Varner, also with Butler Snow, says businesses that have benefited the most are existing, operating businesses because they are better able to utilize the full range of incentives and can choose those that best fit their objectives.
“Some of these businesses were already doing business within the GO Zone, while others were doing business elsewhere previously but are now operating within the GO Zone,” he said. “We have assisted clients to utilize the incentives to construct, rebuild, expand or improve manufacturing facilities, office buildings, retail stores, automobile dealerships, hotels, medical clinics and hospitals, warehouse facilities, apartment complexes and a variety of other businesses.”
Examples of some of Butler Snow’s clients include: a retail shopping center — $17-million bond; a medical office facility — $15-million transaction; two hotels — combined $32-million bond deal; and a large ship manufacturing plant — $15-million bond.
Another Butler Snow attorney, Gene Magee, adds that the firm is combining the act’s incentives with other applicable incentives.
“We have advised clients on how to couple GO Zone incentives with certain state and local economic development tax incentives such as property tax abatements, sales/use and contractors’ tax savings, REDs and other income tax credits for new construction within the GO Zone,” Magee said. “For example, one client for whom we handled a $40-million bond project saved over $500,000 using these additional state incentives.”
Melanie Woodrick with GranthamPoole CPAs agrees that every type of business client can benefit from the legislation.
“Even very small businesses have seen a substantial tax benefit from the provision, which allows a tax credit for new employees added after Hurricane Katrina,” she said. “Most businesses can also take advantage of the bonus depreciation and increased section 179 expensing.”
Contact MBJ contributing Lynn Lofton at firstname.lastname@example.org.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info