Rockerbox might be considered your Tax Credit Caddie… the only difference being that Rockerbox will carry the bag for all 18 holes and not get paid unless you shoot under par!
Our group of tax credit experts helps NGCOA members evaluate various tax credit and cost reduction programs. These programs — singularly, or combined together — have the ability to transform the cash flow of the average golf course.
Work Opportunity Tax Credits (WOTC)
Enacted in 1996, the WOTC program is designed to provide a tax credit to employers for hiring from historically disadvantaged target groups. Your golf course is hiring new employees, possibly seasonal employees, that might qualify for the credit. Each qualified employee can earn the golf course between $2,400-$9,600 in credits. The credits captured through the WOTC program are applied to offset the course’s federal income tax liabilities.
Employee Retention Tax Credits (ERTC)
Enacted in early 2020, the ERTC is designed to provide a tax credit to employers for retaining and paying W2 employees during the pandemic. Rockerbox works with courses to determine if they’re eligible to participate in the program; not all courses will be eligible to participate but there are some nuances to the program that may favor your courses’ eligibility – especially if you have food and beverage and / or tournaments and other events. Credits captured through the ERTC program are fully-refundable, or, can be leveraged to offset future payroll tax deposits.
FICA Tip Credits
Chances are you have a food and beverage operation. The FICA Tip Credit is generated from tips received by employees for services on which the club paid or incurred employer Social Security and Medicare taxes. Depending on the size of your F&B operation, the credit could be substantial. Additionally, the credit is available for both taxable and exempt clubs; all clubs could potentially use this credit to offset taxable income. This tax credit goes back one year, or forward 20 years. The credit is based on the amount paid over the federal minimum, not state minimum.
Research and Development Credit (R&D)
The R&D tax credit is available to companies developing new or improved business components, including products, processes, computer software, techniques, formulas or inventions, that result in new or improved functionality, performance, reliability, or quality.
Courses that consider their activities to be business as usual may actually find themselves innovative by evaluating the scenarios below:
- The development of new teaching and practice techniques, including the use of technology aimed at improving the swing.
- The trialing and installation of new and improved technology to improve driving range facilities.
- The maintenance and enhancement of ground and grass conditions.
- The development of new and improved practice facilities, including putting greens and bunker areas.
- Developing or trialing new treatments to improve growth and longevity of greens and fairways.
- The development or use of IT. and software to improve the overall efficiency and standard of the club.
- The development of websites or apps to offer an improved and more efficient customer experience.