Re-Authorize the Export-Import Bank

Posted by Brian Gilmore on Jul 21, 2014 3:45:51 PM

Thirty-one governors, including Deval Patrick of Massachusetts, urged congressional leaders last week to re-authorize the U.S. Export-Import Bank (Ex-Im) before its charter expires in September.

international.flagssmallConservatives in Washington argue that the bank is putting taxpayer money at risk for a purpose better addressed by the private sector, but state leaders of both parties recognize that it plays a vital part in meeting the needs of firms that export goods and services to global markets.

The 80-year-old Export-Import Bank borrows money from the Treasury and uses it to help American companies sell abroad by offering low-cost loans to foreign buyers or guarantees against potential losses by exporters. The bank authorized $27 billion in credit during 2013 to support an estimated $37.4 billion in U.S. export sales, including aircraft, power-generation equipment and other projects while returning $1.06 billion in interest and fees to the Treasury.  

As Joe Nocera pointed out in a recent New York Times column, the private sector does just fine in 98 percent of American export transactions. But then there’s the other two percent – the small business that wants to expand abroad but can’t find a bank to take a risk on a firm with little experience in the international marketplace; or the mid-size manufacturer for whom financing insurance by the US government is necessary because foreign competitors can offer prospective buyers financing from their governments.

Export data provided to AIM by the U.S. Chamber of Commerce and the National Association of Manufacturers underscores the use of Ex-Im services. Last year, the Ex-Im Bank helped 3,413 small companies across the nation start or expand their export business – and also helped the largest US exporter, Boeing, land aircraft sales against Airbus. In the Bay State, 57 exporters, most classified as small businesses, received assistance from the bank to facilitate more than $749 million in exports.      

The primary importance of the Ex-Im bank is for companies with sales from $2 million to $20 million whose banks worry about accounts receivable from international sales. As one lawmaker and former manufacturer said recently, “An exporter can pay a fee to the Ex-IM Bank and get account receivable insurance. Without the Ex-Im some of our business would be all but impossible.”  

In other words, the Ex-Im Bank exists precisely because the markets aren’t perfect. It supports American business competitiveness in global markets, and makes a profit for the taxpayer. Timely reauthorization should not be held hostage to ideological purity.

Topics: Financial Services, International Trade

Maintain Local Property Tax Exemption: File by April 1 Deadline

Posted by Brad MacDougall on Mar 19, 2014 4:08:00 PM

april 1 deadline for tax exemptionManufacturing or research and development companies entitled to local property-tax benefits must file the Annual Certification of Entity Tax Status online with the Massachusetts Department of Revenue (DOR) by April 1, 2014 to claim those benefits.

Click here for the DOR resource page for the April 1 filing deadline.

Corporations seeking to maintain (or acquire) favored property-tax status must file by the deadline to ensure that they appear on DOR’s Division of Local Services List of Corporations for 2014.  Cities and towns use “The List” to determine which corporations and entities treated as corporations are entitled to local property tax relief. The List also specifies for Massachusetts tax purposes, businesses that have been granted the “manufacturing corporation” classification.

Joseph X. Donovan, a tax lawyer at Sullivan and Worcester, says because of tax law changes in 2009, the Department of Revenue could no longer use filings with the Secretary of the Commonwealth to alert local officials about the tax status of a company.

“While the change to a new procedure was necessary, there is a real risk that companies —unaware of the new annual filing requirement to protect favored local property tax statuswill find themselves effectively declassified, with potentially very harsh consequences,” Donovan said.

“While they will be able to cure the declassification by challenging it in the Appellate Tax Board, that route can be quite costly. Moreover,  the resolution of any dispute before the Board can take a long time.   We should hope that taxpayers who find themselves before the Board in such circumstances will be permitted to quickly and informally resolve with opposing counsel the ‘foot fault’ of failure to file the form.”

The DOR publishes “The List” electronically on its Web site on or about April 1. Omission from the list or any particular classification may be appealed by the employer.

Here are some resources for employers:

If you have trouble with the registration process, or with accessing your account, please contact DOR Customer Service at 617-887-6367.  If you have questions about completing the Annual Certification of Entity Tax Status online application after reviewing the FAQs, please contact the Division of Local Services.

Should you have any additional questions, please contact Brad MacDougall, Vice President for Government Affairs or 617-262-1180.

Topics: A.I.M. Mutual Insurance Company, AIM Employer Issues Survey, Financial Services, Associated Industries of Massachusetts, AIM Business Confidence Index, Massachusetts economy, Employment Law, Taxes, John Regan, Annual Certification of Entity Tax Status, Certification of Entity Tax Status, DOR, Department of Revenue, DOR List of Corporations

Employers Back Rep. Neal's Call to Preserve Retirement Tax Incentives

Posted by Brian Gilmore on Feb 16, 2012 1:47:00 PM

AIM announced its support today for a resolution co-sponsored by Springfield Congressman Richard E. Neal that would affirm the support of Congress for retirement savings tax incentives.

NealIn a letter to the Massachusetts Congressional delegation urging them to support the Gerlach-Neal Resolution, AIM said tax incentives provide important benefits to Americans who face the challenge of planning for a financially secure retirement. The ability of Americans to save through pre-tax contributions to 401(k) plans and other instruments is expected to come under scrutiny once Congress begins to wrestle with the nation’s widening budget deficit.

AIM also noted that the financial services industry that offers retirement savings plans represents a major component of the Massachusetts economy, employing more than 170,000 Bay State residents.

Employer-sponsored plans are a key component of the nation’s retirement system. Approximately 670,000 private- sector defined-contribution plans cover 67 million participants in the United States. More than 48,000 private-sector defined-benefit plans cover another 19 million participants.

The U.S. private retirement plan system paid out more than $3.824 trillion in benefits from 2000-2009, while public-sector plans paid out $2.651 trillion during the same period.

The Gerlach-Neal Resolution notes that the taxation of amounts contributed to pension and retirement plans is simply deferred, not lost; that more than 70 percent of American workers making between $30,000 and $50,000 contribute when covered by a retirement plan at work; and that current law requires business owners and managers who sponsor a retirement plan to also must cover and provide benefits to lower- and middle-income employees. It resolves that:

  • Tax incentives for retirement savings play an important role in encouraging employers to sponsor, maintain and promote participation in retirement savings plans
  • Existing tax incentives have increased the number of Americans who are covered by retirement plans
  • A reformed and simplified tax code should include properly structured tax incentives to allow employees to maintain and contribute to such plans in order to strengthen retirement security for our citizens.

Massachusetts, the birthplace of the mutual fund industry, faces significant risk if Congress changes the rules for retirement tax savings. The commonwealth is home to three of the top 10 defined benefit/defined contribution money managers, and to the top provider of record keeping for retirement assets.

A recent report issued by MassInsight found that the 170,000 people who work in the financial services sector in Massachusetts earn an average wage of about $110,000. Industries that directly touch the finance sector, such as legal services, consulting services, computer systems and design, and accounting and payroll services employ another 150,000 Bay State residents.

Republican representative James Gerlach of Pennsylvania joins Democrat Neal of Massachusetts as primary sponsor of the resolution.

Topics: Financial Services, Retirement, Issues

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