An elite panel of business brokers who have topped the Georgia Association of Business Brokers’ Million Dollar Club discussed best practices for the industry in a Jan. 31 panel discussion.
The Jan. 31 panel highlighted the monthly meeting of the GABB, the state’s only professional organization dedicated to helping others buy and sell businesses and franchises.
Germaine Curtin, J.D., LLM, of Curtin Law was the GABB’s breakfast sponsor.
Panelists included J. Snypp, Vice President of Preferred Business Brokers, Inc.; C. David Chambless, president of Abraxas Business Services, Inc.; and Matt Matt Slappey, the owner of the Decatur branch of Murphy Business & Financial Corporation. Jeffery Merry, owner and founder of the BUSINESS HOUSE, inc., will moderate the discussion. All were among the top sellers in the 2016 GABB Million Dollar Club, each selling businesses worth more than two million dollars each in 2016. Additionally, Chambless, Slappey and Merry are past presidents of the GABB, Snypp is a former GABB board member, and Merry is a current board member.
GABB meetings begin with guest and member introductions of name, company and what you do, not a networking or elevator minute. After introductions, we have about a 30-minute presentation by either a panel or a speaker and then some time for questions. After the presentation we’ll have a few items of association business and then adjourn the meeting.
There is no cost to attend.
For more information about the GABB, contact GABB President Mike Ramatowski at firstname.lastname@example.org or call him at 770-634-0428 or GABB Executive Director Diane Loupe at email@example.com or 404-374-3990.Read More
Fifteen members of the Georgia Association of Business Brokers (GABB) were named to the 2016 Million Dollar Clubs for helping to broker the sale of small-, medium-sized and large businesses in 2016.
GABB members represent owners of Georgia businesses in extremely important transactions: the sale of their business. GABB members help owners determine the asking price of their business, create marketing plans and strategies for selling their business, identify and qualify buyers, and have the knowledge and skills needed to help maintain the confidential nature of the process.
The top producer for 2016 was Matt Wochele, founder of Preferred Business Brokers, Inc.
“The current market condition for private business sales is active and strong,” said Mr. Wochele, a Certified Business Intermediary. “We are seeing more qualified buyers whether they are individuals, partnerships, strategic industry buyers or private equity they all want the opportunity to look at the deal. Money is more readily available and the banks want to participate.”
“While this may seem like a seller’s market, I would caution sellers not to take lightly one of the most important financial and life decisions they will make. We share a lot of time with sellers discussing and planning their exit strategies,” said Mr. Wochele. “If you are a business owner thinking about selling your company, I hope you will reach out to a professional with the Georgia Association of Business Brokers to help guide you through the process.”
Business brokers in the top five with multi-million dollars in sales for the year were J. Snypp, Vice President of Preferred Business Brokers, Inc.; C. David Chambless, president of Abraxas Business Services, Inc.; Bharat Raga of CBC Metro Brokers and Jeffery Merry, owner and founder of the BUSINESS HOUSE, inc.
Business brokers with multi-million dollars in sales included Jon Merry, a senior business broker with the BUSINESS HOUSE, inc.; Matt Slappey, the owner of the Decatur branch of Murphy Business & Financial Corporation; Steve Josovitz, vice president of The Shumacher Group; Patrick Harkins, President of Anchor Business Advsiors, Inc., Dean Burnette, Managing Broker for Best Business Brokers based in Savannah; Eric Gagnon, the president of We Sell Restaurants and wesellrestaurants.com; and Mannie Maddox, a Commercial Realtor with Coldwell Banker Commercial Metro Brokers. Rounding out the Million Dollar Club are David Still, founder, designated business broker, and lead business appraiser of Capital Endeavors, Inc.; Jon Roman, business intermediary, franchise consultant and developer at Transworld Business Advisors; and Paul Cushman, founder and managing partner of Cushman & Associates, LLC.
Harkins earned the prestigious GABB Phoenix Award for having earned the Million Dollar Club designation for ten years. Snypp became a life member of the Million Dollar Club for having earned the designation for five years.
The Georgia Association of Business Brokers (GABB) is the state’s only professional organization dedicated to buying and selling businesses and franchises. The GABB maintains a website that lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.
According to Greg DeFoor, GABB’s President in 2015 and 2016, selling a business is a complex process with multiple steps and a lot of moving pieces.
“We are the go-to organization for business sales and acquisitions as a result of our dedication to the profession and our members being among the best in the state at what we do,” said DeFoor, who owns DeFoor CPA and Business Services. “Our members have represented thousands of business owners and buyers, and we have a dedicated membership of business brokers, lenders, attorneys and other professionals to assist business buyers and sellers at every step of the process. We work behind the scenes and go mostly unnoticed, but we’re an integral part of Georgia’s business community.”
Matt Wochele CBI (Certified Business Intermediary) founded Preferred Business Brokers, Inc., in 1996 after a successful 17-year career as an investment banker. He is a life member of the Georgia Association of Business Brokers Million Dollar Club, Phoenix Award recipient and a member of the International Business Brokers Association. Under Mr. Wochele’s leadership, Preferred has represented hundreds of private business owners in the sale of their businesses. As the managing broker he has had the opportunity to guide and train a number of successful agents in the brokerage field. Having the experience in both public business sales and the private sector has been rewarding for our firm and to our clients. This dual experience has positioned Preferred to handle both the smaller main street business purchases as well as middle market acquisitions. On a personal note Matt and his wife Kathy, a professional artist, have been married for thirty four years and have five daughters, two sons in law and just recently welcomed their new granddaughter. After a brief but fun experience playing football at Bucknell University Matt continued his interest in sports as a volunteer softball coach at Northside Youth Organization. Matt is a member of the Atlanta Rowing Club and enjoys various outdoor activities.
J. SNYPP III, a former GABB Board member and a life member of the Million Dollar Club, lives in Dunwoody, grew up in Atlanta and graduated from Georgia Southern University with a degree in marketing. Mr. Snypp spent more than two decades in the office furniture business before becoming a Business Broker and has been with Preferred Business Brokers, Inc. for more than 10 years. He has found success selling businesses in a variety of industries most recently selling a day care center, landscape company and distribution business. He is married and has two boys aged 13 and 18. Therefore, when he is not selling businesses he is usually coaching a football or baseball team, camping, canoeing, water skiing, scuba diving, shooting sports or involved in some other family activity.
A lifetime member of the GABB Multi-Million Dollar Club and 2014 GABB President, C. DAVID CHAMBLESS is the president of Abraxas Business Services, Inc. Last year, he earned the prestigious GABB Phoenix award for a decade of reaching the Million Dollar Club. Prior to Abraxas, he held various positions in sales, marketing, and executive roles in technology firms; as CFO for Aaron Rents as well as for private companies; and as a management consultant. Mr. Chambless has a Master of Business Administration in Finance from the Wharton School of the University of Pennsylvania and a Bachelor of Industrial and Systems Engineering from Georgia Tech. He is a certified public accountant (inactive). He is a longtime member of the International Business Brokers Association (IBBA). Active in community work, he has served as a board member of the Technology Association of Georgia, on the membership committee for the Atlanta chapter of Business Executives for National Security, and the Sporting Clays Tournament committee for the Atlanta Area Council of the Boy Scouts of America. Mr. Chambless is very involved in the All Saints’ Episcopal Church community. He was a fifteen-year board member of The Samaritan House of Atlanta and is on the Advisory Council of 24/7 Gateway, a homeless-services center under the auspices of the United Way of Atlanta. Mr. Chambless maintains his family’s home in historic Grant Park while his wife and 15-year-old son spend several years in Guangzhou, China, where she leads an educational joint venture for Georgia State University.
BHARAT RAGHA is with Coldwell Banker Commercial Metro Brokers in Atlanta. He works with commercial/business investors, sellers and buyers in selling retail, day care, hospitality industry, investment properties, commercial and residential real estate. He is certified by Metro Brokers in Commercial Brokerage and Business Brokerage, and is a member of the Atlanta Commercial Board of Realtors. He formerly was the owner and president of Excel Properties in Orlando, was an investor and Partner in the Country Inn and Suite in Jackson, Tenn.; the owner of MiniStop in greater Memphis, an auditor at Best Western in Montgomery, Ala.; and has managed hotels and motels in North Carolina, Georgia, South Carolina and Alabama. A native of South Africa, Mr. Ragha has been married to “my amazing wife, Hansa, for 38 years,” and has two beautiful daughters Tejal and Shaleen. He resides in Alpharetta. He plays tennis and Racquet ball competitively and enjoys reading.
JEFFERY E. MERRY, SR., past president of the GABB, has been the GABB’s top producer numerous times, and has been a part of the Million Dollar Club since its inception in 1999. He is currently a GABB board member, and will remain on the board in 2017. Mr. Merry, owner and founder of the BUSINESS HOUSE, inc. of Gainesville, is a member of the International Association of Business Brokers. For more than two decades, his firm has specialized in serving the manufacturing, distribution, veterinary and medical industries. As a business intermediary, Certified Exit Planner, and consultant, Mr. Merry has been involved in mergers and acquisitions that have ranged in acquisition price from $60,000 to more than $15 million. He is an adjunct instructor for the MBA program at North Georgia College. Mr. Merry holds a bachelor’s degree from Mercer University, a Master of Business Administration from the University of Illinois Edwardsville, and a Juris Doctorate from Atlanta Law School. Mr. Merry, a resident of Dahlonega, is a licensed real estate agent in Georgia and Florida, a senior business analyst, and a member of the Exit Planning Institute. He has three children and five grandchildren, and enjoys travelling, reading and riding his motorcycle.
JON MERRY is a senior business broker with the BUSINESS HOUSE, inc. of Gainesville. Mr. Merry has a keen understanding for the buying and selling process, and is well versed in the industry handling a wide range of deal making activities for the firm and has assisted with numerous M&A transactions. In 2012, 2013, 2014 and 2015, Mr. Merry received recognition as one of five brokers to join the Multi-Million Dollar Club for closed M&A transactions, and became a life member of the Million Dollar Club. In addition, Mr. Merry has been a Certified Machinery/Equipment Appraiser (CMEA) with the National Equipment Business Builders Institute (NEBB Institute) for more than 10 years, and became a Master CMEA this year, the only one in Georgia. A CMEA is intensively trained in the legal requirements involving the USPAP standards, as well as the methodological approach employed in establishing fair market value, orderly liquation value, and force liquation value in any market condition. Mr. Merry is owner of M&E Appraisals, Inc. of Dawsonville, Ga., and is a member of the International Business Broker Association (IBBA), the International Society of Business Analysts (ISBA), and the Georgia Lenders Quality Circle (GLQC). A native of Georgia, Mr. Merry was a professional umpire for Minor League Baseball for 11 years. He and his wife, RaeLynda and their two sons, Jacob and Joseph, live in historic Dahlonega.
GABB Lifetime Multi-Million Dollar Club Member and 2013 GABB President MATT SLAPPEY is the owner of the Decatur branch of Murphy Business & Financial Corporation. Mr. Slappey was awarded the #1 M&A Advisor for 2014, out of more than 200. Matt has a wide array of experience on transactions typically in the $1 million-$50 million range. Mr. Slappey, a native of Decatur/DeKalb County has earned the Mergers and Acquisitions Master Intermediary (M&AMI) and Certified Business Intermediary (CBI) designations, and he also completed the Kennesaw State University Coles College of Business “Certified M&A Professional” program in 2015. He holds degrees in accounting, economics and business from Presbyterian College and has twelve years of experience in management for a Fortune-100 healthcare company. A 7-year active duty veteran, Mr. Slappey was a pilot and military intelligence officer in the U.S. Army. He is an active member of Oak Grove United Methodist Church, the IBBA and M&A Source, and the Hall County Chamber of Commerce and enjoys spending time with his wife and three daughters, playing music, and enjoying the great outdoors.
STEVEN JOSOVITZ is vice president of The Shumacher Group, where he heads the restaurant business brokerage division and provides commercial retail and restaurant real estate site selection, sales and lease negotiation expertise. A former restaurant owner and trained professional chef, Steven has an extensive background in restaurant and hotel management. He also offers consulting and appraisal services. He has been retained by law firms for his expert opinion to help settle disputes. Mr. Josovitz, a resident of Peachtree Corners, earned a Bachelor of Science in Hotel/Restaurant Management from Florida International University in 1981. Mr. Josovitz is a member of the Georgia Restaurant Association, International Council of Shopping Centers, and the Retail Brokers Network.
PATRICK HARKINS, a CPA, is the President and CEO of Anchor Business Advisors of Atlanta, Georgia and presently resides in Marietta, Georgia. He graduated with a major in Accounting Magna Cum Laude from the University of Notre Dame, was awarded his CPA Certificate from the University of Illinois and received his Master’s Degree in Business Administration with Distinction from DePaul University in Chicago. A former GABB president and board member, Mr. Harkins has been active in the Merger & Acquisition Field all of his working life. After working for 6 years in a large international CPA firm involved in large M&A transactions, he served as a Senior Vice President and Chief Financial Officer for 3 different companies. Twenty years ago he started Anchor Business Advisors serving the interests of entrepreneurs in the Southeast. Patrick has served on a number of Board of Directors in both the private and charitable sectors. He is currently on the Board of Directors of Enervex, Inc., an international manufacturer and supplier of completely integrated venting solutions.
DEAN BURNETTE is the Managing Broker for Best Business Brokers based in Savannah Georgia serving the Coastal and South Georgia area. Mr. Burnette is a member of the Real Estate Commercial Alliance (RCA), a subsidiary of the Savannah Area Board of Realtors (SABOR). He served as the 2013-2014 President of the Savannah Small Business Chamber, and he is also a member of the Savannah Area Chamber of Commerce, Georgia Association of Realtors (GAR), International Business Brokers Association (IBBA), and sponsors the Georgia Logistics Summit. Dean has bought, sold, owned and operated businesses since 1986. Best Business Brokers specializes in Manufacturing, Technology and Logistics related business and real estate valued between $1- and $30 million.
ERIC GAGNON is the President and founder of We Sell Restaurants and wesellrestaurants.com. He is a past President of the Georgia Association of Business Brokers and has been named to the GABB Million Dollar Club, has received the GABB Lifetime Million Dollar Club Award and this year, earned the prestigious GABB Phoenix award for a decade of reaching these milestones. Eric has been designated an industry expert by Business Brokerage Press and is a radio personality, frequent speaker and writer. Eric co-hosts a syndicated radio show for the restaurant industry and in 2012, launched his restaurant brokerage brand, We Sell Restaurants, into a national franchise. He co-authored Appetite for Acquisition, his book on buying restaurants that was named “Best of 2012” by Small Business Book Awards. In addition to GABB, Eric is a member of the International Business Brokers Association (IBBA) and has served as a speaker at its national meeting. He is also a member of the Business Brokers of Florida (BBF), the Southeast Franchise Forum (SEFF) and the International Franchise Association (IFA). Eric is licensed as a broker in Georgia, South Carolina and Florida. He holds degrees from major universities in the United States and Canada.
MANNIE MADDOX is a Commercial Realtor with Coldwell Banker Commercial Metro Brokers (CBCMB), Atlanta. Mr. Maddox is a CBCMB Certified Business Broker and a member of the National Association of Realtors and the Atlanta Commercial Board of Realtors. He is an eight-year U.S. Air Force veteran and has more than 30 years of experience in Corporate Business Development and Sales in the Federal Government Marketplace while based in the Washington, D.C. metropolitan area. Mr. Maddox and his lovely wife Patricia relocated to metro Atlanta in 2004 to be near their son, Michael, and granddaughter , Hunter. He is active in his local church and connectional faith community.
GABB Lifetime Multi-Million Dollar Club Member and former GABB President DAVID R. STILL is the founder, designated business broker, and lead business appraiser of Capital Endeavors, Inc., established in 1995 and located in Lawrenceville, Ga. He is a member of the Lawrenceville City Council. He earned a Bachelor of Business Administration from the University of Georgia. As a Certified Business Intermediary, he specializes in the mergers and acquisitions of privately held companies with gross sales between $1 million and $50 million. Mr. Still was a co-owner and publisher of the Gwinnett Post-Tribune newspaper. Mr. Still received the GABB Lifetime Achievement Award in 2002. Mr. Still is the Chairman of the Downtown Development Authority of the City of Lawrenceville and active in multiple non-profit organizations. He is married and has two grown children, one daughter-in-law and two grandchildren.
JON ROMAN is a business intermediary, franchise consultant and developer at Transworld Business Advisors. After 18 years of various business ownerships, including startups, established or franchised ventures and a full-time career as a commercial banker, he founded the local Transworld Business Advisors office in Dunwoody, GA. His experience includes mergers and acquisition of privately owned companies with revenues between $0 and $30 million. His team includes buyer and seller agents, franchise consultants and business evaluation specialists. Married with two children, Mr. Roman has been a Certified Commercial Investment Member for more than ten years. Transworld, nationwide, and Mr. Roman, locally, are members of the Junior Achievement organization. Transworld Business Advisors has currently 400 brokers and 100 offices worldwide.
PAUL CUSHMAN is the founder and managing partner of Cushman & Associates, LLC. He is also the CEO of CM Payroll & Business Services, founded in 2001; the founder and managing partner of Lawnscapes of Georgia, LLC, a landscaping firm; the qualifying broker for John Hunsinger Inc., a Commercial Real Estate firm, and is the General Manager of CM Properties, a property management firm. He is a disabled veteran of the U.S. Air Force. He holds a BSEE and Master of Science in Engineering Management from the University of Alabama in Huntsville, where he also played collegiate basketball and soccer. A former member of the GABB Board of Directors, Mr. Cushman, is also a member of the Commercial Board of Realtors, and he is a Certified Business Intermediary and a member of the IBBA. He is also a choir member at First Redeemer Church in Cumming, Ga.
One of the the United States’ newest citizens is GABB broker Lara Van Pletzen. Van Pletzen, who was born in Bulawayo, Zimbabwe, became a U.S. citizen in a ceremony on Friday, Aug. 26. She is the ROI Business Development Manager for the Southeast of ROI Business Brokers.
GABB asked Lara about her road to becoming a U.S. citizen. She says she left her home country “in the 70’s just before Mugabe came into power.” She grew up with terrorism in the Rhodesian Bush war, and when her family traveled to South Africa for vacation, they were escorted by military convoys. Raised in South Africa, she left for Canada in 2002 and lived there until November 2003.
“I left Africa because of the high frequency of violent crime,” she said. “Yes, there is crime everywhere, but we lived behind electric fencing and burglar bars, home invasions were all too common and extremely violent. Although a tough decision to make, we decided to leave after my husband was held up at gunpoint at work. I personally didn’t want to raise my kids there, and I got tired of looking over my shoulder everywhere I went.
“Obviously some people don’t like to hear this point of view, but it was my view and it does not mean that I am not proud of my roots. I guess I just see the world as a smaller place with things that are humanly common to all people in a variety of lands. Everyone does what they think is best for their children, and there is no one right answer. For us this was the right thing and it was an act of our Christian faith.”
While living in Canada, her husband Andries was offered a wonderful work opportunity in the USA. Lara moved to Appleton, Wisconsin, with her family on an H1B/H4 visa in 2003 and lived there from 2003 until 2008. “I was allowed to live here but I was not allowed to work; only my husband was allowed to work.”
“I arrived on Thanksgiving 2003 and it felt wonderful,” she remembers. “I had grown up watching American TV–especially Dallas–and believed the entire USA was like Texas: cowboy hats, Texan accents.
“I also watched Full House as a kid and always found it strange that there were multiple V’s and phones and was amazed that kids had their own TV’s. I didn’t really believe it was true until I came here; our homes had one TV and one phone.
“For the first few Christmases, my husband thought I was being an extravagant Santa (we called him Father Christmas) when I bought what were small Santa gifts. He thought they cost more as a Santa gift here would be a main gift in South Africa.”
“In 2008 the company who sponsored my husband for his H1B visa told us their attempts to keep us here and get us green cards failed, and since the H visa was only a 6-year temporary visa, we left in 2008. We didn’t want to go back to South Africa; fortunately my husband was offered a job in Australia.”
“I moved there in 2008 on 457 visas, temporary 2-year visas that could then be converted to permanent status. We never got that far as we had only been there a year when, in 2009, with the global recession, the international company my husband worked for in Australia decided to close that unit. Since we had not been there two years, it once again meant having to leave the country.
“Today we are really happy with the way things worked out as our hearts were always in the USA anyway. We never imagined at this time there would ever be a way to come back, but at that time it just felt like our world was falling apart. Before the opportunity to come back here came about, we had to leave Australia, so we moved to New Zealand and I obtained student visas for my kids. I lived there on a guardian visa while we tried to figure out what to do.
“It was two unexpected major moves in two years. Our furniture was still in USA storage, finances tight with us both of us having had temporary work loss. We had been sleeping on air mattresses. Shortly after I arrived in New Zealand, my husband’s Australian company offered my husband a transfer to the USA unit on a L visa.”
“We came back to the USA in 2009 and moved to Atlanta, this time to be near the airport as my husband was expected to travel extensively, and Hartsfield had many flight options. I found Georgia a little harder to move to Wisconsin, but am settled with no plans to move again. My husband, on the other hand, has traveled more than we expected, and he uses that airport more than we had hoped.”
“During the past seven years I have been here, he has worked in South Africa, Botswana, Ghana, Zambia, Chili and now Mongolia. With 21 happy years of marriage behind us, cynics say it is because he isn’t here most of the time that we are happy. Sometimes they ask, ‘How do you do it?’ The truth is, we are a team, and every day and night apart has been worth it to give us and our kids the opportunity to live here. I remind them more than they like that I expect great things from them.
“We are not here to take but to give and make a difference. I have no regrets, and it would feel wrong to complain, we have achieved something we never thought possible.”
“I wanted to become a citizen because this is my country and I want to participate and embrace everything about it. I want to vote but most of all I want to feel secure that I will never have to leave. I also wanted to get it done before my son turned 18 to save him the trouble of converting his green card to citizenship,” she said. “My kids were very young when we moved here, they don’t feel foreign, they were 3 and 3 months when we first moved here. In their minds this is home, and I wanted to make it official.”
“I like the checks and balances that were designed in the constitution that prevent this country from ever becoming a dictatorship. I’m glad people here are free to disagree and don’t all think alike. It keeps the balance and protection; we should see it as a positive and not a negative.”
“I love the patriotism American’ feel for their country, the freedoms this country represents. Technically, I came here for the same reasons the first immigrants did: freedom of religion, freedom of speech, opportunity, life, liberty and the pursuit of happiness.”
GABB congratulates our new U.S. citizen. You can contact Lara at firstname.lastname@example.org, Office: 404-445-8322 ext 26, Cell:770-876-8162Read More
By Andrew L. Moore, CPA
Over the past several years Georgia has grown to become one of the top states in the country for film production, largely as a result of the Georgia Film, Television, and Digital Entertainment Tax Credit. Currently extended to January 1, 2019, Georgia allows for a 20 percent tax credit for companies that spend $500,000 or more on production or post production in Georgia, either in a single production or on multiple projects. The state grants an additional 10 percent credit if the finished product includes a promotional logo provided by the state. Companies producing feature films, television series, music videos, commercials, interactive games, and animated films can take advantage of the credit.
Why should all of this matter to the average Georgia taxpayer whose only film activity involves watching his or her favorite TV shows or catching a movie at the theater? The Georgia Legislature, realizing that many production companies would lack sufficient Georgia tax liabilities to fully utilize the credit against state income or withholding tax, provided the credit be transferrable, one time, to other Georgia taxpayers either in whole or in parts. The credit may only be sold or transferred once; however, the sale or transfer may involve multiple Georgia transferees or buyers.
A number of tax credit brokers work with production companies that have unused film credits and assist with brokering all or some of company’s unused credits. Film credit brokers typically make 2 – 3 cents per dollar of credit sold. So, when credits sell to an end user for 92 cents on the dollar, the broker likely negotiated a commission with the production company based on 89 to 90 cents on the dollar, profiting 2 -3 cents per dollar for putting buyer and seller together. Although rare, some credits are exchanged directly from production companies to the end purchaser of credits without a broker, usually providing for a larger discount to the buyer.
Generally, $1 of Georgia film tax credit can be purchased for around 88 to 93 cents, allowing Georgia taxpayers to settle their Georgia tax liability at a discount because the film tax credits are exchanged dollar for dollar to pay Georgia income tax. Taxpayers can purchase film credits for the current tax year, and three proceeding tax years –with the price generally lowering for prior year credits. For the buyer, the credit is treated much like withholding and is included as a tax payment before the calculation of interest and penalties. This helps taxpayers who are filing late, fail to make estimated tax payments, or have been audited with tax assessments for prior years.
According to Garrett Fox, Tax Senior Associate in charge of facilitating Georgia film tax credits at Atlanta based CPA Firm Frazier & Deeter, the price of tax credits has steadily increased over the past 3-4 years due to the increased popularity of purchasing film credits as a tax savings and planning tool. Brokers and studios are placing minimums on order size which effects pricing and availability. For example, in today’s market, a taxpayer purchasing $100,000 or more in film credits may have access to credits not available to buyers who might only need $35,000. Or, sometimes you will see an increase in price for orders below a particular threshold. In addition, Fox explains that some CPA firms, including Frazier & Deeter, have developed relationships with brokers where, depending on the circumstances, arrangements can be made to reduce minimum order requirements given the sheer volume of business done with the brokers.
As described above, this is an easy way to reduce Georgia tax liability for those taxpayers with higher income tax liabilities. For example, a client who is married and files taxes jointly, already with a high annual income, sells his or her business resulting in 2016 Georgia taxable income of $1,671,000 (the amount of Georgia taxable income that results in Georgia income tax of roughly $100,000 when filing jointly). In this example, your client would purchase $100,000 of Georgia film tax credits for around $92,000 (92 cents on the dollar), saving $8,000 simply by settling Georgia taxes with film credits.
In the above scenario, the benefit is magnified when considering your client could wait until the extended due date of his or her 2016 Georgia tax return, October 15, 2017, to actually make the purchase without being penalized for late payment of tax or underpayment of estimated tax (credits may be harder to find later in the year so careful planning should be done to locate credits as early in the year as possible).
Contrast this to settling taxes via direct cash payment to the Georgia Department of Revenue, where your client would be required to remit $100,000 on April 15, 2017, and likely be penalized for failure to make quarterly estimated tax payments if the balance due was not remitted until the April 15, 2017 due date.
As you can see, by paying via film credits you can not only settle Georgia taxes at a discount but keep cash in your client’s pocket longer!
In addition to the above, your client is eligible for an itemized deduction for state income tax in the amount of $100,000 in the year the credit is purchased. The above benefits are slightly reduced due to the taxable capital gain of $8,000 ($100,000 – $92,000) associated with purchasing the credit and using it in satisfaction of Georgia tax.
Credits left unused can be carried forward for up to five years. The expiration of the carry-forward period is based on the end of the tax year in which the production company claimed the tax credit and not the date the credit was transferred to the buyer. For example, if a production company claimed a credit on its December 31, 2010 tax return, that credit will expire five years later on December 31, 2015, even if the credit was transferred on December 31, 2014.
Sounds Great, But What Are The Risks?
Georgia film tax credits are generally considered by tax advisors to be a fairly low risk investment. However, as with all investments, there are risks to consider –including audit risk with film credits. The risks involved can be mitigated by considering the following:
- Securing a guarantee from a reputable production company (like NBC, Universal, Sony, or The Weather Channel, to name a few);
- Purchasing credits from quality brokers and production companies;
- Ensure the Georgia Department of Economic Development has certified the project;
- Purchasing credits which have already been audited by the state; or
- Purchasing credits where a reputable CPA Firm has provided a “comfort letter” for the credits.
How Can Frazier & Help?
Involve Frazier & Deeter early in the purchase. We have contacts throughout the industry, including brokers and production companies, to find the right credits. As CPAs, we are simply facilitators and advisors and are not influenced by any sort of commission.
If you have questions regarding film credits or any other tax planning strategies or tools feel free to give me a call at 404.573.4336 or email me at Andrew.Moore@FrazierDeeter.com.Read More
Lawrence Domenico is the kind of lawyer you hire when you litigate, or sue someone. And he’s represented a lot of Georgia business brokers in disputes over the years.
On Tuesday, Feb. 23, Larry will offer advice worth hundreds, if not thousands, of dollars to members of the Georgia Association of Business Brokers and their guests. Namely, how NOT to need to hire Larry or someone like him. How to avoid legal disputes will be the topic of the GABB meeting on Feb. 23. The GABB, the state’s only professional association dedicating to buying and selling businesses and franchises, will meet at 10:30 a.m. at the South Terraces Conference Center, preceded at 9:45 a.m. by a free light breakfast and networking session. The South Terraces Conference Center is at 115 Perimeter Center Place, Atlanta, near Perimeter Mall. The meeting is open to the public at no charge.
Samantha Martin, SBA lending specialist with the Fifth Third Bank, is sponsoring the meeting.
Mr. Domenico is a managing partner of the law firm of Mozley, Finlayson & Loggins. He practices extensively in the areas of commercial and business litigation, products liability defense, and general litigation. Mr. Domenico also has extensive experience in assisting start up and existing businesses. In addition, Mr. Domenico has broad experience in alternate forms of dispute resolution including arbitration and mediation.
Mr. Domenico received a B.A., cum laude, from the University of the South in 1985. He attended the University of Georgia School of Law where he received a J.D., cum laude, in 1988. Mr. Domenico is a member of Phi Beta Kappa and Omicron Delta Kappa honorary fraternities. He belongs to the Atlanta and American Bar Associations, the State Bar of Georgia, and the Defense Research Institute. Mr. Domenico is active in a number of civic organizations and is a member of the 1995 class of Leadership DeKalb and the Rotary Club of Dunwoody.
The Georgia Association of Business Brokers (GABB) maintains a website that lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.
According to GABB President Greg DeFoor, selling a business is a complicated process with multiple steps and a lot of moving pieces.
“Our broker members are licensed business brokers, whereas everyone in the industry may not be properly licensed,” said DeFoor, who owns DeFoor Business Services, Inc. “GABB members benefit from continuing education, networking, promotion of professionalism and ethics in the industry, research tools, and forms prepared by a team of attorneys specifically for our association.”
“We are the go-to organization for business sales and acquisitions as a result of our dedication to the profession and our members being among the best in the state at what we do,” said DeFoor. “Our members have represented probably over a thousand transactions, and we have a dedicated membership of business brokers, lenders, attorneys and other professionals to assist business buyers and sellers at every step of the process. We work behind the scenes and go mostly unnoticed, but we’re an integral part of Georgia’s business community.”
For more information about GABB, email email@example.com or call 404-374-3990.Read More