As one of the principal shareholders of L'Oreal, Liliane Bettencourt is arguably one of the most successful women in the world with a net worth over $40 billion. Since 2002, the L'Oreal billionaire-heiress, has secured over $20 million in state and local tax credits, according to Good Jobs First, a national policy resource center.
Over 80 percent of the secured tax credits have come from three states: Kentucky ($7.3 million), New York ($5.5 million) and New Jersey ($3.9 million.) While these American tax credits have assisted in the growth of this French-owned company, the same lucrative tax abatements are available to small and medium-sized businesses.
Highlighted below are programs L'Oreal has secured that are also available to small and medium-sized companies.
As recent as 2012, L'Oreal announced plans to expand its brand in northern Kentucky and add 211 jobs and invest more than $42 million in the Commonwealth. In exchange, the Kentucky Economic Development Finance Authority approved tax incentives up to $5 million through the Kentucky Business Investment program and up to $800,000 through the Kentucky Enterprise Initiative Act.
The minimum requirements for businesses to qualify for the Kentucky Business Investment is: create a minimum of 10 new, full-time jobs for Kentucky residents, provide wages of at least $9.06 per hour, provide employee benefits, and invest a minimum of $100,000 in eligible costs. Companies must also be engaged in manufacturing, agribusiness, regional and national headquarters, or non-retail or technology activities in order to qualify.
In 2015, L'Oreal was awarded a $5.5 million tax credit from the New York Empire State Development Excelsior Jobs Program for adding 145 jobs to its back-office operation. This popular fund can also be accessed by small and medium-sized businesses. Companies can qualify by either creating a minimum amount of new jobs or making capital investments.
The program currently has the following thresholds for job creation:
- Scientific Research and Development firms creating at least 5 net new jobs;
- Software Development firms creating at least 5 net new jobs;
- Agriculture firms creating at least 5 net new jobs;
- Manufacturing firms creating at least 5 net new jobs;
- Manufacturing firms that retain at least 5 employees;
- Music Production firms creating at least 5 net new jobs;
- Life Sciences Companies creating at least 5 net new jobs;
- Financial services (customer service) back office operations creating at least 25 net new jobs;
- Back office firms creating at least 25 net new jobs;
- Firms in strategic industries that make significant capital investment that have at least 25 employees;
- Distribution firms creating at least 50 net new jobs;
- Entertainment Companies creating at least 100 net new jobs;
- and Other firms creating at least 150 net new jobs and investing at least $3 million.
The New Jersey Economic Development Authority approved nearly $4 million in tax credits and incentives for L'Oreal. In 2014, IT Cosmetics, a L'Oreal company received $1.7 million to create 57 new jobs through the Grow New Jersey Assistance Program. The program awards grants to businesses that are located in a qualified incentive area and meet certain job and capital investment criteria. Tech start-ups and manufacturing businesses can create as little as 10 jobs and retain 25 jobs; other targeted groups must create 25 jobs and retain 35 jobs.
The multi-million dollar tax credits and incentives deals that billion dollar companies secure are both statutory and discretionary in nature. If small companies do not know what is available to ease the burden of growth then they unfortunately get passed up. It is incumbent upon small and medium companies to know what financial tools are available to them in the market place and get credit for a business operation (i.e. hiring 5 people) that they are going to pursue regardless.