Today, income tax credit incentives are available in all 50 states and the majority of the states have specific credits that can be allocated or transferred to another taxpayer. This has attracted many individuals and companies that are generating their first tax credit award that they will look to sell to a taxpayer who can better use the tax benefit. Understanding how to maximize the value of the tax credit award is where a tax credit broker comes into the picture.
Tax credit prices are constantly changing and many transactions are negotiated down to a fraction of a penny per dollar of credit. Having a broker with their finger on the pulse of the market will ensure you are being compensated fairly and not leaving money on the table. As important as pricing is to the transaction, timing also plays a key role. Understanding what information the government agency that oversees the transfers is looking for, when they need it and how they want it assembled, makes for a smooth sale process. Tax credit brokers know this in advance, saving you time and money, all while keeping the government agencies happy. We also have the tax credit investor to consider, many of which are banks, insurance companies, large corporations and high net worth individuals. They all want to know they are buying a credit with as little risk as possible, and any perceived risk is factored into the pricing of the credit. Because of this, many large companies prefer to acquire tax credits through brokers that they have used and trust, again making for a more streamlined and efficient process.
Utilizing a tax credit broker allows both parties to focus on their core business, while ensuring that the transfers happen correctly and on time. In this manner, tax credits become excellent investment vehicles, which can provide benefits for years to come. The tax credit broker is a dedicated resource whose sole responsibility is to ensure the most streamlined process when tax credits are sold. To obtain maximum value from a tax credit, using a tax credit broker will be one of the best decisions you will make. The sooner you can involve the tax credit broker, the sooner they can provide guidance and identify the best approach moving forward. Clocktower has been assisting its clients for over 12 years and is always available for a consultation about your specific opportunity.
To schedule a meeting with any Clocktower associate, or a phone call or Zoom session, please call President Jeff Jacobson at (978) 823-0200, or email him at JJacobson@ClocktowerTC.com.