RevTrax offers protection for digital coupons
NEW YORK — RevTrax, an enterprise promotion platform, has launched PromoVault, a promotions tool that enables marketers to securely execute e-commerce digital coupon campaigns across any channel or device. PromoVault addresses common challenges faced by retailers: the inability to generate and validate unique codes, and the subsequent rise of pirated offers.
RevTrax’s latest technology creates and serves dynamic promo codes, then protects those codes from being used by unauthorized parties. The security features enable retailers to protect gross margins for rich offers, confidently manage revenue more carefully with targeted markdowns and accept rewards currency online.
"Ensuring that our e-commerce offers don’t spread uncontrolled across the Web is critical, both to our customers and our company," said Jeffrey Liss, SVP and general manager of e-commerce and customer insights for Charming Shoppes, a subsidiary of ascena retail group inc. "RevTrax allows us to develop offers that we’re confident will only be redeemed by our target audience, not by anyone with a Web browser, and the ability to copy and paste."
Walmart goes solar in Ohio
COLUMBUS, Ohio — Walmart announced that it has worked with SolarCity to install solar panels on 12 Walmart stores and Sam’s Clubs throughout Ohio. The solar panel installations will add approximately 6,000,000 kWh of generation production – enough energy to power more than 820 homes – and are expected to supply approximately 5-20 percent of each store’s overall electricity use.
"Solar power makes sense for Walmart, and it makes sense for Ohio," said David Ozment, Walmart Senior Director of Energy. "We are committed to increasing the use of renewable energy resources, including solar panels, at our stores in Ohio and throughout the country."
"Walmart’s installation of solar on 12 store rooftops is the largest solar commitment ever made by a retail business in Ohio," said Bill Spratley, Executive Director of Green Energy Ohio. "At more than four and a half megawatts, it represents almost a tenth of all the solar installed in Ohio currently. It is exciting to see that Walmart’s solar arrays will also eliminate 5,500 tons of CO2e or the equivalent of taking the emissions of 1,152 cars off the road each year."*
The Walmart stores and Sam’s Clubs receiving solar power systems are located in Mason, Xenia, Greenville, Austintown, Middletown, Franklin, Youngstown, Toledo, Milford, Loveland, and two systems in Cincinnati.
"Walmart continues to forge new ground as the #1 corporate solar user in America," said SolarCity CEO Lyndon Rive. "This project brings SolarCity to the state of Ohio for the first time, and is expected to increase the state’s overall solar generation capacity by more than 10%."
R&D Tax Incentives — Cash for Fashion & Apparel Retailers
When the topic of research and development (“R&D”) tax credits is discussed, fashion and apparel retailers may not be the first to come to mind. However, these retailers often make investments eligible for significant R&D tax credits. In fact, the average federal R&D credit reported by apparel companies in 2009 is approximately $235,000, according to the most recent IRS statistics. And many companies increase that number considerably, tacking on the “double dip” opportunities afforded by more than 40 states in the U.S. By maximizing these opportunities, fashion and apparel retailers can generate sizeable tax savings, including generating cash today for their past and future investments.
Overview of the R&D credit
To qualify for the credit, regulations require a company to attempt to develop or improve the functionality, performance, quality, or reliability of one of its products, processes, or software (“component”). This is in contrast to what many people imagine when thinking of R&D – a requirement that it must both succeed and do something that has never been done before. Understanding that this requirement does not exist, many apparel retailers are taking credits for many of their design-related expenses.
As defined in the tax code, an activity can qualify if:
1) It attempts to develop or improve a component in one of the ways described above,
2) The company’s capability or methodology for doing so, or the appropriate design of the component, is uncertain;
3) The company must undertake a process of evaluating different alternatives to try to eliminate the uncertainty; and
4) That process’s success or failure depends on engineering or the physical, biological, or computer sciences.
For the federal credit, eligible expenses include wages paid to company personnel and payments to consultants who perform or directly supervise or support activities in the U.S. involving the four elements above, as well as expenses for supplies used in those activities. Many of the states include these same expenses but require the work to be performed within the applicable state.
Eligible activities for fashion & apparel retailers
Among fashion and apparel retailers, qualified activities typically relate to the scientific or engineering design of a business component. Development activities related to the aesthetic design of a business component (e.g. color, patterns and/or style preferences) typically do not qualify. Examples of scientific or engineering design include, but are not limited to, activities related to attempts to develop or improve leather and other fabrics, construction and integrity of fabrics, material usage, weather resistance, manufacturing processes, comfort and cushioning for footwear.
The wages and expenses paid to people performing, directly supervising, or directly supporting these activities, as well as the supplies used to conduct them, may qualify.
Software development expenses can also qualify. As is true with manufacturing and distribution, fashion and apparel retailers are increasingly developing software to increase efficiency and improve customer-facing and internal processes. Qualifying expenses include those to develop or improve systems related to warehouse management, point-of-sale, price optimization, labor scheduling, merchandising and billing.
Opportunities for multinational companies
In addition to the U.S., many other countries offer tax incentives for conducting R&D activities, with some of them being significantly more generous than those in the U.S. R&D. Companies doing business in more than one country can take advantage of varying national tax incentives, including tax credits, deductions, super-deductions, and exemptions.
Like 10 or so U.S. states, many countries allow some or all of their R&D tax credit to be “refunded,” which means that businesses do not need to have any income tax liability or revenue to receive a cash benefit; the credit is effectively a cash subsidy. In addition to a refund, many countries including Australia, Canada, France and the U.K., allow unused credits/deductions to offset tax liability in other periods.
Although the U.S. credit requires activities to be performed in the U.S., several countries allow activities to be conducted in other countries. For multinational companies, this enables them to receive tax incentives for the same activities in more than one country. The U.K., Japan, and Australia are examples of countries that allow at least a portion of qualified work to take place outside their jurisdictions.
While these incentives may be enticing for multinational companies, there are many other factors to consider when comparing subsidies among countries, including varying eligibility requirements, limitations, and definitions of qualified research. However, taking advantage of available programs may allow multinational companies to further their growth objectives and achieve their financial goals.
In the current competitive economy, it is increasingly important to capitalize on all available tax credits and incentives. As R&D incentives exist on the federal, state, and international levels, fashion and apparel retailers may find these incentives to be the perfect fit.
Jonathan Forman ([email protected]) is principal & managing director of BDO’s Global R&D Centre of Excellence. Randy Frischer ([email protected]) is a tax partner in the Retail & Consumer Products practice and Brad Poris ([email protected]) is a R&D manager at BDO USA, LLP, an accounting and consulting firm.