Tax Benefits of Working with a Minority or Woman Owned Business
Thursday, September 29, 2016
Did you know that the federal government provides tax breaks for any company that contracts minority and women-owned businesses? Another tax incentive reduces tax liabilities for companies that use minority and women-owned businesses for labor or services on a project funded with federal or state grants or loans.
The government has been encouraging the formation and vitality of minority-owned businesses since the late 1960’s when President Richard Nixon passed Nixon’s Executive Order 11458, which created the Office of Minority Business Enterprise (OMBE). Within two years the OMBE was expanded to provide grants and management assistance to minority-owned businesses. Now called the Minority Business Development Agency (MBDA), the focus has shifted to providing start-up funds and offering business assistance rather than collecting information about minority business opportunities.
In this case a minority is defined as African-American, Alaskan Native, American Indian, Asian-American, Hispanic, and women. To achieve a minority-owned status, 51% of the business must be controlled by one of those groups. Publicly owned businesses also qualify under the definition, but minorities, as defined under law, must control more than 50 percent of the stock offerings.
Not long after the OMBE / MBDA was created, the federal government created incentives for choosing to work with minority- or women-owned businesses by offering federal tax breaks. While the OMBE / MBDA didn’t make tax incentives for working with minority and women-owned businesses official until the 1970’s, the Small Business Act of 1953 used language that encouraged the use of minority- and women-owned companies.
If you need more reasons to hire Gateway Logistics to move freight, products, or goods anywhere in the US, including Alaska and Hawaii, give us a call. We’ll make sure we win you over with our top-notch customer services, impressive attention to detail, and trusted strategies that save you time and money.
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