The Tax Benefits Of Using A Minority-Owned Business
Did you know that your company could enjoy a number of tax incentives for choosing to work with a minority-owned business? LHP Transportation is one of the top freight brokers in the United States, and we’re proud to be a minority-owned and managed company certified by the National Purchasing Council. Our excellence in our industry has not gone unnoticed, and in fact, we’ve received numerous accolades, including being named the Minority Supplier of the Year in 1993 by the Upstate New York Regional Minority Purchasing Council and being selected by MinorityBusinessNews USA as number 54 in their survey of Top 100 minority-owned firms in the U.S.
When you choose LHP Transportation for your freight transportation needs, you gain access to our national network of carriers and cutting-edge shipping logistics technology — as well as tax benefits. Today, let’s discuss the tax incentives your company can benefit from by choosing LHP Transportation for your freight shipping.
Tax Incentives For Choosing Minority-Owned Businesses
The U.S. government first began offering tax incentives to businesses that worked with minority-owned businesses during the Nixon administration, and those benefits are administered by the Minority Business Development Agency. The MBDA and federal statutes define minority-owned businesses as private companies in which minorities control 51 percent of the firm’s operations and publicly-owned businesses in which minorities control more than 50 percent of the stock offerings. These types of businesses comprise a far greater share of the market than you’d think! According to a survey by Guidant Financial, 45 percent of business owners in 2018 were minorities, compared to just 15 percent in 2015.
Business Operations Incentives
The government offers tax incentives at a federal level for businesses that use minority companies in acquiring materials and supplies. This does not apply to LHP Transportation, but your company can benefit anyway by choosing minority product vendors!
When you choose LHP Transportation to handle your product distribution, you could potentially benefit from a second tax incentive that reduces tax liabilities for choosing minority-owned businesses that supply labor or services to a project funded with federal or state grants or loans.
Federal Tax Incentives
The U.S. Small Business Administration and Department of Transportation sponsor various federal programs to encourage the use of minority suppliers, which your company could be qualified to benefit from when you choose LHP Transportation. The amount and type of federal tax benefits you could vary, depending on each program and the language of the requirements for each, but it’s worth consulting with a contract lawyer or CPA to learn more. Furthermore, LHP Transportation is certified as a minority business enterprise by the Department of Commerce, which could give you an opportunity to apply for additional special tax incentives when you choose to do business with us.
State Tax Incentives
If your company is a government contractor, you could stand to benefit from additional state tax incentives for choosing minority-owned businesses. Some states, including California and Georgia, encourage the use of minority- and female-owned businesses with state income tax credits for subcontractors and contractors using minority suppliers.