By Gerald Frazier, Senior Manager of Compliance Management Services at Ginovus

From the Indiana Economic Development Association website.

Audits.

That dreadful word no one loves to hear, but many must face from time to time.

What is expected?  What forms will be needed?  How much time will the audit take? What are they looking for?  Should I be worried?

Over the last few months, many of the Ginovus clients have participated in state government incentive audits to review compliance activities.  These sessions have not been typical of the term “audit” one may associate with groups such as the IRS or state tax departments.  Instead, these audits have focused on employee data as it relates to incentive compliance issues.

The audit sessions have honed in on submitted employee data compared to other state forms such as WH-3 tax forms or W-2 payroll summary forms.  Items being checked include matching withholding information between what was submitted to the state for incentive compliance and what was submitted on actual payroll withholding information.  Does the number of employees match?  Does the withholding information match from one form to another?  What might be the reasons for any discrepancies?  Were the submitted employees actually full time, state residents?  Was the tax credit amount received, if any, applied properly to the correct taxing forms?

Of course, the goal is to have all items match and to receive a compliance notice.  However, more often than not, small discrepancies have emerged.  This should not be cause for alarm!  Companies have actually found this exercise to be beneficial, as it causes them to look at reporting responsibilities from various angles, in a more consistent manner.  Many clients use outside payroll companies and have noticed different fields of reporting did not match up with what was requested on the various state incentive forms. The information provided was correct; there were simply different types of fields producing different outcomes.  This has resulted in some companies taking a closer look at how they plan to report information in the future.

The recent audit sessions have also brought to the forefront the need to be consistent with the correct W-2 box information.  When the state runs analyses to determine full-time status, an incorrect piece of information may cause the employee to appear ineligible.  Factors such as family medical leave, maternity leave, military leave, or one who contributes significantly to a pre-tax fund, may cause the employee to appear less than full-time.  Audit sessions have helped Ginovus to clarify certain issues on behalf of client projects that might have otherwise been deemed as ineligible under the terms of the incentive awarded.

During these audit sessions, we have also discovered that some clients had not taken full advantage of the incentives awarded.  A tax credit may have been issued, but for various reasons, was never applied to the tax forms, thus, wasting the credit. With careful review, we have been able to assist clients in reclaiming those credits.

By partnering with our clients, Ginovus has been able to reduce the stress associated with an audit, provide valuable assistance in the pre-audit preparation, work closely with the state auditor to be sure records are clean and accurate, and to create a positive outcome for our clients.  To date, all of our clients have received full compliance status notices from the different states conducting audits.

From the Inside Indiana Business website

For the past 15 years, the Kauffman Foundation has been a leader in gathering and analyzing data related to entrepreneurial activity in the United States. Many governmental, economic development, higher education, and private sector policy leaders have turned to the Kauffman Foundation to understand how to nurture the development of entrepreneurs in their geographic areas.

The Kauffman Index of Entrepreneurial Activity by State report does an excellent job of providing a snapshot of entrepreneurship rates in the 50 states in the U.S.

The Kauffman report had several key conclusions related to entrepreneurial activity in the United States. Please find below a summary of some of the key findings.

1. The rate of business creation declined from 340 out of 100,000 adults in 2010 to 320 in 2011 (a 5.9% drop).

2. Both men and women experienced declining rates of entrepreneurial activity in 2011.

3. Immigrants were more than twice as likely as native-born Americans to start new businesses in 2011.

4. People in the 20-34 and 45-54 age groups experienced increases in entrepreneurial activity from 2010 to 2011, while the age groups of 35-44 and 55-64 suffered decreases.

5. The construction industry had the highest level of entrepreneurial activity in 2011 (1.68%) – the services industry was second at 0.42%.

6. From 2010 to 2011, entrepreneurial activity rates decreased in all regions of the country, except for the Northeast, which experienced a minimal increase.

7. Entrepreneurship is the highest in the West and the lowest in the Midwest.

8. The highest rates of entrepreneurship in 2011 were in Arizona (first), Texas, California, Colorado and Alaska, while the lowest rates were in West Virginia (last), Pennsylvania, Hawaii, Illinois and Indiana.

9. The states experiencing the largest increases in entrepreneurial activity rates over the past 10 years were Nevada (first), Georgia, Massachusetts, Tennessee and California, while Wyoming (last), New Mexico, Alaska, Iowa, Indiana and Oregon.

10. In terms of the largest Metropolitan Statistical Areas in the U.S., Los Angeles (first), Atlanta, Phoenix, Miami and Riverside-San Bernardino ranked the highest in entrepreneurial activity, while Detroit (last), Chicago, Philadelphia, Washington D.C. and Boston ranked the lowest.

Like every report, it is important to review the details of the information presented to understand the methodology and data sources used to reach key conclusions. There are certainly some interesting takeaways from the Kauffman report.

People in the West, Southeast, Southwest and Mountain states are more willing to take the risk of failing as an entrepreneur, as compared to people in the Midwest, Plains, Mid-Atlantic and Northeast United States. The people living in the West and South are simply more comfortable with taking risk as a part of their culture.

Another interesting finding relates to the much higher level of entrepreneurial activity in the immigrant community in the United States. This finding seems to support the widely helf belief that there is a “hunger” amongst many of the ethnic groups that immigrate to our country in hopes of making a better life for their families. This “drive” pushes them to want to build their own businesses.

The other finding that I would point out relates to the decline in entrepreneurship from 2010 to 2011. In some cases, you see more people take the entrepreneurial plunge if they leave or lose their job. However, the prolonged economic downturn and financial crisis in the United States has impacted the availability of capital and confidence in the economy. As a result, many people started sole proprietorships versus launching small businesses that employed other people.

In conclusion, some states and regions are fortunate to be located in areas where risk taking is more acceptable. These areas need to capitalize on this cultural aspect of their area as the economy hopefully improves over the next several years. Other areas of the country that have a legacy of having larger companies and manufacturing industries need to look at ways to improve their “environment” in order to encourage additional entrepreneurial activity and help ensure a healthy economy. The United States was originally built by people looking for a better life for their families. Now is the time for all Americans to look at ways they can help make our country, once again, become economically strong.

Larry Gigerich serves as Managing Director of Ginovus. Ginovus is a leading provider of national site selection, community comparative analysis and economic development incentive procurement & management services to private sector, educational, governmental and not-for-profit organizations throughout North America. Ginovus is headquartered in Indianapolis, Indiana.

Indianapolis-based business consulting firm Ginovus LLC has named a new manager of project administration. Susan Jarvis assumes the role after several years of overseeing tax incentive and grant programs with the Indiana Economic Development Corp.

INDIANAPOLIS, Ind. – North American site selection and economic
development services provider, Ginovus, announced today that Susan Jarvis has joined
the firm as Manager of Project Administration.

Susan comes to Ginovus after spending several years with the Indiana Economic
Development Corporation (IEDC) headquartered in Indianapolis, Indiana. Prior to her
work at the IEDC, Jarvis developed her skills as a project manager in business retention
and expansion with the Indiana Department of Commerce and at Duke Energy, as a
member of its economic development team.

“We are excited to have Susan as part of the Ginovus team. Her lengthy experience in
the field of economic development incentive programs and project management is a
strong addition to the Ginovus organization.” said Larry Gigerich, Managing Director of
Ginovus.

As a Field Auditor for the IEDC, Susan was responsible for overseeing tax incentive and
grant programs, to ensure compliance with State of Indiana requirements, including
audit and eligibility issues.

Susan has a Bachelors Degree from Indiana University at Indianapolis. Susan and her
husband are avid Indianapolis Colts and Butler Bulldog fans. Their family includes three
children and two grandchildren. In her spare time, Susan enjoys reading, decorating,
and shopping.

About Ginovus

Ginovus is a leading provider of national site selection, public policy development,
community comparative analysis and economic development incentive procurement
& management services to private sector, educational, governmental and not-forprofit
organizations located throughout North America. Ginovus is headquartered in
Indianapolis, Indiana.

For more information regarding the firm, please contact Ginovus at (317)819-0890 or
www.ginovus.com.

Source: Ginovus LLC

INDIANAPOLIS (April 23, 2012) – North American site selection and economic development services provider, Ginovus, announced today that Susan Jarvis has joined the firm as Manager of Project Administration.

Susan comes to Ginovus after spending several years with the Indiana Economic Development Corporation (IEDC) headquartered in Indianapolis, Indiana.  Prior to her work at the IEDC, Jarvis developed her skills as a project manager in business retention and expansion with the Indiana Department of Commerce and at Duke Energy, as a member of its economic development team.

“We are excited to have Susan as part of the Ginovus team.  Her lengthy experience in the field of economic development incentive programs and project management is a strong addition to the Ginovus organization.” said Larry Gigerich, Managing Director of Ginovus.

As a Field Auditor for the IEDC, Susan was responsible for overseeing tax incentive and grant programs, to ensure compliance with State of Indiana requirements, including audit and eligibility issues.

Susan has a Bachelors Degree from Indiana University at Indianapolis.  Susan and her husband are avid Indianapolis Colts and Butler Bulldog fans.  Their family includes three children and two grandchildren.  In her spare time, Susan enjoys reading, decorating, and shopping.

About Ginovus

Ginovus is a leading provider of national site selection, public policy development, community comparative analysis and economic development incentive procurement & management services to private sector, educational, governmental and not-for-profit organizations located throughout North America. Ginovus is headquartered in Indianapolis, Indiana.

For more information regarding the firm, please contact Ginovus at (317)819-0890 or www.ginovus.com.

Media Contact:

Larry Gigerich (Managing Director, Ginovus) – (317) 819-0890 or Larry@Ginovus.com

Jennifer Merrell (Senior Manager of Marketing and Communications) – (317) 819-4424

Jennifer@ginovus.com

From the Inside Indiana Business website

During this challenging economic period, states are continuing to look at different ways to support economic development projects and initiatives. One area receiving a lot of attention is the area of tax incentives programs.

In some cases, this means the renewal and/or tweaking of existing incentives programs, while in other cases it may mean the creation of a new program.

Efforts to provide access to capital, encourage research & development activity, and to create new jobs are areas of focus by many locations in the United States. Please find below a summary of actions taken by some states.

1. Florida: Governor Rick Scott and Florida lawmakers approved $10 Million in tax credits for space related business and $7.1 Million in research & development tax credits. The state has done a good job of building technology businesses over the years, particularly in the optics, gaming, life sciences and aerospace related sectors. These efforts should further position the state to continue to grow this important sector of its economy.
2. New Jersey: Governor Chris Christie and New Jersey legislators approved an increase in available funds for the Technology Business Tax Certification Transfer program from $30 Million to $60 Million. In addition, the state increased its research & development tax credit to 100%. Governor Christie has taken dramatic steps to improve the state’s positioning for economic development projects.
3. Colorado: Governor John Hickenlooper and Colorado lawmakers approved the creation of a new seed funding program for biosciences and clean technology industries in the state. The program collects 50% of the future income tax withholdings from these companies and puts them in a fund to make investments in start-up companies. The state has had a significant amount of success in the life sciences and clean technology sectors.
4. Maryland: Governor Martin O’Malley and Maryland legislators created the InvestMaryland initiative. The program is to fill the financing gap for new start-up technology companies. The program will invest at least $70 Million in start-up and early stage companies. The funding of the program comes from the auctioning of premium tax credits to insurance companies and will be invested in private venture capital firms. The state hopes to be a recognized leader in the development of new technology companies.
5. Ohio: Governor Kasich and Ohio lawmakers enacted the InvestOhio program to provide tax credits to angel investors who invest in Ohio small businesses. The state will provide a 10% tax credit to individuals who invest up to $10 Million in a company. The program defines a small business as a company with less than $50 Million in assets or $10 Million in sales. The tax credit is applied if the investment in a small business is held for at least two years. Ohio hopes to grow its economy by supporting the development of small business and technology companies.
6. Louisiana: Governor Jindal and Louisiana legislators took important steps to extend programs critical to the development of technology companies. The state extended the research & development tax credit and the Technology Commercialization Credit and Jobs program for an additional six years. The program allows for a refundable tax credit of up to 40% qualified research & development expenditures and investment in the commercialization of technology. Governor Jindal hopes to leverage the state’s university system and young technology industry in the state, to create good paying jobs.
7. Pennsylvania: Governor Corbett and Pennsylvania lawmakers approved an increase in the state’s research and development tax credit cap. Companies in the state can now take advantage of an allocation of $55 Million in research and development tax credits, as compared to the former $40 Million cap. The state has always been a leader in the life sciences and advanced manufacturing technology sectors.
8. Vermont: Governor Shumlin and Vermont legislators enacted a new research and development tax credit in their state. The program allows for companies to receive a 30% research and development tax credit (calculated based upon what they are eligible for under the federal research & development tax credit). The state is making a concerted effort to build a strong technology company foundation as their neighbors in Massachusetts and New Hampshire already have in place.
9. Virginia: Governor McDonnell and Virginia lawmakers approved an appropriation of $5 Million to seed a new research and development tax credit. Under the program, companies can claim a 15% tax credit for qualifying research activities. The amount can be increased to 20% if the research and development is done in conjunction with a Virginia university. Virginia has some pockets of technology industry sector strength, but recognized a need to encourage more activity in the state, in part, by leveraging the state’s outstanding higher educational institutions.
10. Connecticut: Governor Malloy and Connecticut legislators approved a major investment in the University of Connecticut Health Center. The goal was to double the amount of federal research grants that come to the state. The program includes space and funding for a small business incubator, loan forgiveness for students graduating in certain fields and also includes $254 Million in additional bonding. Connecticut hopes to leverage higher education and life sciences businesses to create more technology based jobs in the state.

These examples only scratch the surface of what is going on across the United States to develop technology based companies and jobs. These states have recognized a need to participate, but not control, the development of young technology companies in their states. With many new governors taking office after the 2010 election, there is a tremendous amount of new thinking and momentum for the development of technology businesses. It is a very positive sign for our country for states to have leaders that understand the need to grow knowledge based industry sectors. Let’s hope this leadership helps our country move out of the economic malaise that we have been suffered during the past three years.

The Heritage Foundation and The Wall Street Journal recently completed a review of approximately 180 countries to measure the level of economic freedom. The list reflects countries that have been strong economic performers for years, a group of countries that are “rising stars” in terms of economic freedom and countries that continue to lag.

The analysis considered the regulatory environment, size and cost of government, trade rules and level of corruption present in national economies. The countries that score the best reflect a higher per capita GDP, improved quality of life and health of its citizens and income growth.

Based upon the aforementioned criteria, the Heritage Foundation and Wall Street Journal analyzed the different countries to finalize the rankings. In terms of the best performing countries, Asia placed the top two countries on the list. African and communist government countries dominated the bottom of the list.

Please find below a list of the Top 10 and Bottom 10 countries from the Heritage Foundation and Wall Street Journal rankings.

Top 10 Countries

1. Hong Kong
2. Singapore
3. Australia
4. New Zealand
5. Switzerland
6. Canada
7. Chile
8. Mauritius
9. Ireland
10. United States

The top performing companies generally are known for fostering free trade, having balanced regulatory policies, minimizing governmental and private sector corruption. The high levels of federal governmental spending, uncertainty regarding federal tax code and the increasing number of federal regulations in the United States threatens its #10 ranking in future years. This is a factor to be monitored closely.

Bottom 10 Countries

170. Equatorial Guinea
171. Iran
172. Democratic Republic of Congo
173. Burma
174. Venezuela
175. Eritrea
176. Libya
177. Cuba
178. Zimbabwe
179. North Korea

Unfortunately, the worst performing countries are known for government and private sector corruption, excessive regulations, strong government control of the economy and are closed off to free trade. These countries will have to embrace fundamental and significant change in order to better position themselves and citizens for a better economic future.

The Heritage Foundation and Wall Street Journal do an outstanding job of reviewing and analyzing detailed information to develop its Economic Freedom Index. Site selectors and corporate decision makers clearly understand that while rankings are helpful, specific criteria must be applied when making capital investment and job creation decisions. In terms of the United States, private sector and government leaders need to come together and discuss ways to improve our country’s competitiveness. The great amount of uncertainty related to tax rates, regulations and the implementation of health care reform, hardly creates an environment for long-term economic growth. This our challenge as a nation.

Larry Gigerich serves as Managing Director of Ginovus. Ginovus is a leading provider of national site selection, community comparative analysis and economic development incentive procurement & management services to private sector, educational, governmental and not-for-profit organizations throughout North America. Ginovus is headquartered in Indianapolis, Indiana.

The Milken Institute released its list of the best performing metropolitan areas in terms of creating and sustaining jobs and economic growth.

The analysis considered the following items: jobs, wages and salaries, and technology growth. The study provided a good overview of regional areas and their respective economies.

Based upon the aforementioned criteria, the Milken Institute analyzed the different metropolitan areas to develop rankings for both large and small cities. In terms of the large metropolitan areas, Texas led the way with four cities on the list, while Utah had two. North Dakota, which is currently experiencing a natural resources boom, and Texas, each placed two metropolitan areas on the list.

Please find below a list of the Top 10 large and small metropolitan areas on the 2011 Milken Institute list.

Large Metropolitan Areas

1. San Antonio, Texas: Jumped from 14th on the 2010 list – friendly business climate and non-onerous regulatory environment.
2. El Paso, Texas: Jumped from 9th on the 2010 list – proximity to Mexico and large military presence has allowed the economy to expand.
3. Fort Collins-Loveland, Colorado: Jumped from 50th on the 2010 list – significant technology job growth and affordable cost of living.
4. Austin-Round Rock, Texas: Fell from 2nd on the 2010 list – significant technology job growth and large government and education sectors workforce allowed the economy to grow.
5. Killeen-Temple-Fort Hood, Texas: Fell from 1st on the 2010 list – large military presence in region and growth in transportation services.
6. Salt Lake City, Utah: Jumped from 49th on 2010 list – well educated workforce and great business climate.
7. Anchorage, Alaska: Up from 8th on the 2010 list – abundant natural resources and significant wage growth in the region.
8. Huntsville, Alabama: Fell from 3rd on 2010 list – job and wage growth, and large military/government presence creates more economic stability.
9. Provo-Orem, Utah: Jumped from 25th on 2010 list – significant technology company growth and low business costs.
10. Kennewick-Richland-Pasco, Washington: Fell from 5th on 2010 list – large amount of government facilities and well established food processing industry.

Small Metropolitan Areas

1. Logan, Utah: Jumped from 19th on 2010 list – growing manufacturing sector and budding technology industry growth.
2. Bismarck, North Dakota: Remained 2nd on list as it was in 2010 – large agricultural sector and fast growing energy industry cluster.
3. Morgantown, West Virginia: Moved up from 6th on 2010 list – large healthcare sector and significant number of educational related jobs.
4. College Station-Bryan, Texas: Remained 4th on list as it was in 2010 – large number of education sector jobs and significant construction activity.
5. Ithaca, New York: Jumped from 12th on the 2010 list – technology growth and fast growing healthcare industry sector.
6. Lebanon, Pennsylvania: Jumped from 70th on the 2010 list – large manufacturing sector and overall wage growth.
7. Fargo, North Dakota: Fell from 1st on the 2010 list – fast growing energy industry sector and significant wage growth.
8. Iowa City, Iowa: Up from 9th on the 2010 list – technology job growth and large educational employment sector.
9. Longview, Texas: Up from 15th on the 2010 list – large job growth and excellent business climate.
10. State College, Pennsylvania: Jumped from 17th on 2010 list – large educational employment sector and strong construction and engineering industry groups.

The Milken Institute does an outstanding job of reviewing detailed information to develop its list of top metropolitan areas. Site selectors and corporate decision makers need to understand that while lists and rankings are instructive, a company must weigh the specific criteria impacting its project and operating costs before making a decision where to locate a new facility or expand an existing operation. A company’s project assumptions must be sound to ensure the right decision is made.

Larry Gigerich serves as Managing Director of Ginovus. Ginovus is a leading provider of national site selection, community comparative analysis and economic development incentive procurement & management services to private sector, educational, governmental and not-for-profit organizations throughout North America. Ginovus is headquartered in Indianapolis, Indiana.

The analysis looked at several key factors to determine the rankings.  Please find below a summary of the key criteria evaluated to develop the list of best states for business and careers.

1. Business costs
2. Labor supply
3. Regulatory environment
4. Economic climate
5. Growth prospects
6. Quality of Life

Based upon these factors, analysts dissected detailed data for the United States to rank the states in each category and, also, determine an aggregate score for each country.  As an example, a state could score highly in some categories, but not do as well in others.  Of the 50 states, only one – Utah, scored in the Top 15 for all six categories used for the rankings.  This explains why Utah is ranked as the top state in the country.  Please find below a list of the Top 10 states in the rankings and the three categories that they ranked the highest in as a location.

1. Utah:  #5 in labor supply, #8 in regulatory environment and #10 in business costs.

2. Virginia:  #2 in labor supply, #2 in regulatory environment and #4 in quality of life.

3. North Carolina:  #1 in regulatory environment, #2 in business costs and #3 in labor supply.

4. North Dakota:  #2 in economic climate, #4 in business costs and #11 for growth prospects.

5. Colorado:  #1 in labor supply, #8 in growth prospects and #10 in quality of life.

6. Texas:  #1 in economic climate, #1 in growth prospects and #4 in regulatory environment.

7. Washington:  #5 in growth prospects, #6 in labor supply and #7 in economic climate.

8. Nebraska:  #3 in business costs, #6 in economic climate and #12 in quality of life.

9. Oregon:  #8 in growth prospects, #10 in labor supply and #15 in business costs.

10. Iowa:  #8 in business costs, #11 in regulatory environment and #11 in quality of life.

Please find below a list of the 10 states that ranked the lowest in the survey and the three categories that they ranked the lowest in as a location.

41.  Illinois:  #42 in growth prospects, #38 in business costs and #31 in labor supply.

42.  Alaska:  #46 in quality of life, #41 in regulatory environment and #36 in labor supply.

43.  West Virginia:  #49 in labor supply, #49 in regulatory environment and #38 in quality of life.

44.  New Jersey:  #48 in business costs, #39 in regulatory environment and #36 in economic climate.

45.  Vermont:  #47 in regulatory environment, #44 in growth prospects and #43 in business costs.

46.  Mississippi:  #47 in quality of life, #46 in growth prospects and #46 in labor supply.

47.  Michigan:  #48 in labor supply, #48 in economic climate and #43 in growth prospects.

48.  Rhode Island:  #50 in regulatory environment, #49 in economic climate and #40 in business costs.

49.  Hawaii:  #49 in business costs, #47 in growth prospects and #46 in regulatory environment.

50.  Maine:  #50 in growth prospects, #45 in regulatory environment and #44 in business costs.

As with all rankings, it is very important to remember that different locations have strengths and weaknesses for different types of companies.  The best states for business and careers will not be the best location for all industry sectors and people.  Any company considering the location of a new facility or expansion of an existing operation, must consider the key factors that impact their company and project.    While rankings are helpful in providing information and identifying trends, they do not spell huge success or failure on their own.  The old expression of “peeling back the onion” is very true when it comes to site selection for companies.

For the second year in a row, Area Development has conducted a survey of a select group of highly respected location consultants who work with a nationwide client base. We asked the consultants to name their top-5 state choices in 12 site selection categories. Here are the top overall states:

States were ranked in each of the 12 site selection categories based on the number of times they were named as a “top-5″ choice by the responding consultants. Next, a top-5 state’s ranking in each of the 12 categories was assigned a weight in accordance with its position in these individual categories. Based on these total weighted scores, Texas is far and away the consultants’ #1 choice for doing business, followed by Georgia, Alabama, and South Carolina (with weighted scores only a point apart), and finally Indiana in the #5 spot. Taking the #6–#10 rankings based on weighted scores are Louisiana, North Carolina, Tennessee, Mississippi, and — surprisingly — California, in that order.

2011 Top States for Doing Business

1 – TEXAS
2 – GEORGIA
3 – ALABAMA
4 – SOUTH CAROLINA
5 – INDIANA
6 – LOUISIANA
7 – NORTH CAROLINA
8 – TENNESSEE
9 – MISSISSIPPI
10 – CALIFORNIA

Larry Gigerich, Managing Director
Ginovus

When evaluating overall business environment, it is no surprise to see Texas come out on top. The combination of a very appealing corporate and individual tax structure teamed with excellent transportation infrastructure and a large deal-closing incentive fund has resulted in tremendous growth throughout the state. In particular, the life sciences and information technology industries continue to build momentum in different areas of the state.

Indiana, ranked fifth in overall business environment, has continued to rise in the rankings during the past several years. The state is leading the Midwest in economic recovery. Changes to its tax structure and incentive programs, along with outstanding transportation infrastructure, have attracted many companies to the state. Despite the current economic conditions, Indiana’s automotive sector has remained strong due to the presence of Chrysler, GM, Honda, and Toyota.