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TAXES/INCENTIVES
An Evolving Incentives Environment Remote work is creating challenges for incentive agreements and compliance. By Kathy Mussio, Managing Partner; and Eric Dantzler, Director, Incentive Compliance; Atlas Insight LLC
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or nearly two years, the predominant COVID-19 driven incentive compliance issue looming over companies has been the difficulty to achieve and report on headcount performance as part of economic development incentive agreements. The evolving workplace landscape precipitated by the COVID-19 pandemic adds another wrinkle to this process. With the trend toward remote work — whether a hybrid scenario or fully remote — our clients, particularly those with an office-based workforce, are evaluating their long-term footprint needs. Seemingly nothing is off the table with respect to the workplace, including hoteling models, employer choice models, flex-worker models, or pure remote worker strategies. All of the above will have implications for incentive compliance reporting. Many incentive programs are looking toward the future to address the new workforce reality and have already started to formulate policies to address changing workplace dynamics. These policies may help to keep companies in compliance, even if switching to a flex/ remote environment. While some of these policy changes are temporary, others are likely to outlive the COVID-19 pandemic and become permanent. As discussed in this article,
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navigating this transitory period requires case-by-case considerations based on companies’ individual circumstances.
How Have State Agencies Responded? Across the U.S., we have seen states, as well as some local communities, adopt a wide variety of incentive compliance accommodations, including some that are temporary, while others more permanent. Some examples of near-term waivers that do not address longterm workplace changes include:
North Carolina Job Development Investment Grant (JDIG): Allowed companies to push their job creation schedule by one year, but they could not lower their minimum job commitments. Georgia Job Creation Tax Credit: Allowed all companies to use 2019 head counts for the calculation of 2020 and 2021 tax credits, thus nullifying any impacts due to COVID-19 in the near term. Oklahoma Quality Jobs Program: Temporarily waived minimum pay-
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2/28/22 11:58 AM
