8.0. EDSR 01-13-2003 - Laserfiche WebLink

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1 PROGRESS PARTNER 1.''-„,,t , ch ,lk i ' River January 2003 The Light Industrial Hub of the Northwest Metro Finding cash in your business' floorboards Partnership vs. through cost segregation Landlordship If someone told you there was money in the walls of a building It's easy to understand how many you owned,you'd knock out a little sheet rock to find it. Recent cities work to attract new firms, changes to tax provisions allow you to find significant tax relief, only to forget about them once the putting cash in your pocket,through Cost Segregation. tax revenue starts flowing. The basic concept is simple. Cost segregation allows you to The City of Elk River prefers to separate elements of building acquisition,construction or look beyond the immediate benefits ownership so that some items may be depreciated more for both the community and the quickly. The faster the depreciation,the more quickly you will new business neighbor to what the reduce your tax liability. future can hold for everyone. When President Bush signed the"Job Creation and Worker In an effort to attract and support Assistance Act of 2002"a firm with $100,000 invested in new businesses in its business buildings would benefit from tax savings of around $23,000, parks,Elk River strives to look for 411 according to Stirtz Bernards Boyden Surel & Larter PA. ways the municipal government can add value for businesses, "Completing a Cost Segregation study generates cash savings by beyond tax breaks and facilitation pulling short-lived assets that are imbedded in a building's of paperwork. construction or acquisition cost and putting them on a more appropriate,and short depreciation calendar,"says Karen Elk River's economic development Fredrickson of Stritz Bernards Boyden Surdel & Larter. "This new professionals are actively pursuing tax law makes engineering based cost segregation a reliable way information and programs that can to receive tax savings that will pass government scrutiny." be implemented by its new and existing industrial businesses. The Fredrickson cautions that a detailed study is necessary to assure goal of this effort is to provide government agencies accept the depreciation schedule. "A business expertise on a consultative complete audit trail,clearly showing how things were moved basis to small and mediums sized from a long term depreciation schedule of 39 years to as little as firms that may not be able to 7,keeps a firm within recognized IRS rulings and decisions," access such support alone. continues Fredrickson. "We generally see a benefit of at least $10 for every dollar spent on conducting a cost segregation study." One part of that effort is this newsletter,which will provide To learn more about how a cost segregation study can improve interesting stories about ways to the cash flow of your business,Ms.Fredrickson can be reached at maximize the efficiency and (952) 831-6499 or by e-mailing: karenf@sbbsl.com productivity of your business. We hope you find it valuable,and welcome your comments on its contents. If you think of an area . you would like to see highlighted in a future issue,please contact Catherine Mehelich, Director of Economic Development at (763) 441-4905.