Helping a Spirits Distributor Find Opportunity in the Mountains

Top 3 Areas of Impact

Secured incentives worth more than $500,000

Identified annual tax credit for hiring new employees

Offset infrastructure improvement costs and challenges

Summary

Learn how BDO’s State & Local Tax Credits & Incentives team negotiated a first-of-its-kind incentive offer for an international spirits importer and distributor. The client sought to build a mixed-use facility that comprised a distillery and tourism destination in a county with unique business challenges. The project would include tours of the production facility, a hotel, and an outdoor amphitheater.


INDUSTRY
State & Local Tax, Consumer Services

SERVICES PROVIDED
State & Local Tax Credits & Incentives

two men meet with a tablet in distillery

Challenge

A major spirits distributer required assistance growing one of its brands in a county that posed economic and logistical challenges. To capture the essence of its product, the client wanted to build production and tourism facilities on the side of a mountain. However, construction was difficult because the rugged, rural area lacked infrastructure.

Recommendations

BDO secured incentives to offset the additional infrastructure costs the client incurred for building a distillery on the side of a mountain.

We were the first firm to negotiate a combined package that included Colorado’s two primary incentives programs — a cash grant and an annual tax credit — which are normally mutually exclusive.

Results

The incentives — worth more than $500,000 — offset the costs of the site challenges and helped seal the deal. The one-time cash grant was based on job creation and capital investment. Our client also received an annual tax credit, amounting to a percentage of wages for new employees for up to eight years. Combined, the incentives and credits helped pay for the needed infrastructure improvements.

The client was the first to benefit from a negotiated incentive offer that made user of Colorado's two primary incentives - a cash grant and an annual tax credit - which are usually mutually exclusive. The incentives, worth more than a half million dollars, offset the costs of the building site challenges.

Tim Schram
Tax Principal, State & Local Tax