HOUSTON, May 24, 2016 /PRNewswire/ -- On May 18th, over 40 software and technology CEOs and executives gathered in Houston to participate in an exclusive, invite-only roundtable co-hosted by the Software & Information Industry Association (SIIA) and alliantgroup, the nation's premier provider of government-sponsored tax credits and incentives to the software and technology industry.
The event's key speakers included former U.S. Congressman Rick Lazio, former Senior Counsel to the U.S. Senate Finance Committee Dean Zerbe, former IRS Acting Commissioner Steven Miller, Private Equity and M&A Advisor Neeraj Mital, alliantgroup CEO Dhaval Jadav, and alliantgroup Managing Directors Michael Siegel and Tracy Lustyan. Specifically, the roundtable focused on the broader economic challenges facing companies within the software and tech space, and policy proposals that would encourage greater productivity and broader prosperity within the industry.
The event began with an economic update panel hosted by Lazio and Mital as they provided deeper context into key economic indicators such as housing, discretionary spending, labor, unemployment and overall GDP growth. Noting that while many of these statistics have improved significantly seven years removed from a major recession, surveys of general attitudes toward the economy reveal that the broader gains are not translating to the quality of lives of many Americans. Citing polls showing that two-thirds of Americans feel that the country is still on the wrong track and that Americans, by a factor of 2:1, still think the economy is in a recession, the panel dove into the reasons for these negative perceptions on the economy, tracing the anxiety back to economic underperformance.
"The economy just hasn't been performing in a way that gives people a sense of hope," said Lazio. "It doesn't provide financial security. There is a lot of anxiety and it's all over the place."
Noting that this post-recession recovery has been the most subdued in the post-World War II era, and as a result, many of the economic gains have not been felt in the pockets of ordinary Americans, Lazio and Mital tied the slowed growth rate to an overall drop in worker productivity and a decrease in the number of qualified workers in the labor pool. In no area has this been more evident than in the science, technology, engineering and mathematics (STEM) fields, with many software and technology executives in attendance echoing their struggles to the panel in finding qualified candidates. As a major consequence to these workforce woes, many software and technology companies have been forced to offshore their work rather than hire American workers.
"What's driving all of this is value," said Corey Prator, CEO at Custom Business Solutions. "Why would anyone go to a foreign country to find an engineer? I believe the answer is simple: they can't find enough U.S. based engineers."
Believing that the key to stimulating both the software and tech industry, as well as the economy at large, is solving this issue of productivity, the panel advocated for sound legislative and fiscal initiatives that create not only more qualified STEM workers, but tax policies that provide businesses the means to hire such employees.
"This is the first time in the modern era whereby the number of U.S. workers that are exiting the workforce is greater than the number of U.S. workers entering the workforce. Whatever combination of tax reform, immigration reform and education reform gets us there, expanding the labor pool is the single greatest economic mission of government over the next decade," said Mital.
Switching gears from potential to current policy, Zerbe, Miller, Siegel and Lustyan followed up the economic update panel with a presentation on the federal policies and tax incentives currently available for the benefit of software and technology companies. The panel further went on to cite studies showing that 95 percent of qualifying businesses are not claiming these powerful credits and incentives specifically geared toward the software and technology space. In particular, the panel went into an in-depth discussion on the Research and Development (R&D) Tax Credit, which due to legislation that was signed into law this past December, was not only made permanent, but includes two major expansions beginning in 2016 that will greatly increase the number of software and technology companies that can claim the credit and inject much needed cash into the technology sector. The first—the startup provision—was designed specifically for the benefit of newer and innovative software and tech companies, allowing businesses with less than $5 million in gross receipts to take the credit (capped at $250,000) against their payroll taxes. The second—the turnoff of the alternative minimum tax (AMT) floor for companies with less than $50 million in annual gross receipts—represents perhaps the greatest expansion ever for a credit whose purpose is to not only reward companies for advancing new technologies and their internal processes, but for keeping high-paying STEM jobs such as those found in the software and tech industry here in the U.S.
"If you come away with nothing else on the R&D credit, just know that it is a wage-based credit, and the purpose of the credit is to keep jobs here in the United States," said Steven Miller, former IRS Acting Commissioner and alliantgroup National Director of Tax.
To conclude the event, Zerbe and Miller offered a review of other recently passed tax provisions and provided a brief forecast of this year's presidential and congressional elections and how they could impact tax policy and other legislation heading into next year.
"I would like to thank our partners at SIIA for co-hosting this incredible roundtable and for everyone who took the time to attend this event," said alliantgroup CEO Dhaval Jadav. "The software and technology industry is a true passion for us at alliantgroup, and our firm is fully devoted to educating software and tech companies on these fantastic credits and incentives geared specifically for their benefit. It is my hope that we can play a role in supporting this vital industry and in helping to keep high-paying technical jobs here in the U.S."
alliantgroup's mission is one of education and awareness—we exist to help industry organizations, U.S. businesses and the CPA firms that advise them, take full advantage of all federal and state tax credits, incentives and deductions available to them. Our government has legislated these powerful incentive programs to help businesses grow and successfully compete both in the U.S. and abroad. We are proud to have helped over 18,000 businesses claim more than $4 billion in tax incentives. alliantgroup's headquarters is in Houston, Texas, with offices across the country including New York, Boston, Chicago, Orange County, Sacramento, Orlando, Indianapolis and Washington, D.C.