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Promoting, protecting, and researching the optimal use of incentives, rewards, and related promotions in business.
Current Legal/Legislative Updates
Employee Achievement Awards Exclusion Survives in Tax Cuts and Jobs Act
The 2017 Tax Cuts and Jobs Act passed both the U.S. Senate and the U.S. House of Representatives, albeit with two votes by the House due to some procedural matters, and was signed buy the President before Christmas.
The incentive, recognition and corporate gifting industry is a fortunate recipient of the support of several elected officials who listened to and agreed with industry leaders that the tax exclusion afforded Section 274(j), Employee Achievement Awards of the IRS Code, should remain law and not be repealed as was contemplated by the House of Representatives just a few months ago. Additionally, clarifying language defining tangible property for purposes of instructing what constitutes a tax deductible award was inserted into the bill by the Senate. The language is summarized as follows:
“The Senate amendment adds a definition of “tangible personal property” that may be considered a deductible employee achievement award. It provides that tangible personal property shall not include cash, cash equivalents, gift cards, gift coupons or gift certificates (other than arrangements conferring only the right to select and receive tangible personal property from a limited array of such items pre-selected or pre-approved by the employer), or vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, other securities, and other similar items. No inference is intended that this is a change from present law and guidance.”
The Incentive Federation worked hard this year to monitor the tax reform actions of Congress and to keep the IFI members and other companies in the industry informed. We lobbied, encouraged members to write letters and make calls to elected officials, and contacted Senators and Representatives directly. However, the Federation cannot take all the credit for saving 274(j) from repeal, as it was largely the efforts of IFI member companies and industry leaders that achieved the success.
In particular, the Federation wishes to give a special thank you and acknowledgment to O.C. Tanner, a Utah-based recognition and performance improvement company. O.C. Tanner has been in a unique position to educate and persuade some key elected officials, and in particular Senator Orin Hatch (UT), who chairs the Senate Finance Committee. Senator Hatch was a strong and influential proponent of the provisions within 274(j), and he became a proponent largely due to O.C. Tanner’s relationship with the Senator over many years.
On behalf of the IFI Board of Directors the Federation also wishes to thank all individuals who responded to our call for contacting elected officials by writing letters and making calls. The success we’ve had keeping a valuable and important tax exclusion for our industry’s companies and their business clients was clearly a joint effort. Thank you all.
As we enter the new year we wish all of you a productive and rewarding 2018.
Please click on the Legal/Legislative/Regulatory tab above to see all the other issues the Federation followed and reported on this past year.
2016 Incentive Marketplace Estimate Research Reports 17% Growth Since 2013
Conducted in partnership with market research firm Intellective Group of St. Louis, the study measures the expenditures of businesses for non-cash rewards for employees, customers and partners. The results update studies from previous years and provide details about expenditures spent on gift cards, rewards points, travel, and merchandise by corporate America. New this year, the study also focuses on the number of program owners using award points.
The study of a cross-section of US businesses confirms that award points, gift cards, incentive travel, and merchandise are commonly-used tools for firms seeking to reward and recognize their employees, sales teams, channel partners, and customers. Key findings from the study include:
• 84% of U.S. businesses use non-cash rewards to recognize and reward key audiences in the form of award points, gift cards, incentive travel, and merchandise – up from 74% in 2013
• In 2015, U.S. businesses spent $90 billion on these types of non-cash rewards, a 17% increase from $77 billion in 2013. To see the full research report click here.
Additional inquiries may be sent to IFI’s Managing Director, Steve Slagle.
2015 Incentive Federation Program Design and Support Study Released
IFI engaged Intellective Group of St. Louis to conduct its 2015 Program and Design Study. Using a national sample of business stakeholders with at least $1M in revenue, the study aimed to determine the drivers of programs, award types, supplier use and program metrics. The full study may be reviewed here. Additional inquiries may be sent to IFI’s Managing Director, Steve Slagle.
2015 Incentive Federation Program Design and Support Study Waterfall Release #1 – Program Goals and Objectives
IFI has released the first of a series of white papers on its 2015 Incentive Federation Program Design and Support Study. In this white paper, the Federation focuses on an in-depth analysis of program goals and objectives companies strive to achieve when designing an incentive program. Review the Program Goals and Objectives white paper here.
2015 Incentive Federation Program Design and Support Study Waterfall Release #2 – Communication, Technology and Tools
IFI has released the second of a series of white papers on its 2015 Incentive Federation Program Design and Support Study. In this white paper, the Federation focuses on an in-depth analysis of how companies utilize communication, technology, tools and reporting within their incentive programs. Review the Communications, Technology, Tools & Reporting white paper here.
2015 Incentive Federation Program Design and Support Study Waterfall Release #3 – Award Program Spending
IFI has released the third in a series of white papers on its 2015 Incentive Federation Program Design and Support Study. In the latest release, IFI puts the spotlight on program spending. Click here to learn more.
2015 Incentive Federation Program Design and Support Study Waterfall Release #4 – Engaging Outside Program Support
IFI has released the fourth in a series of of white papers on its 2015 Incentive Federation Program Design and Support Study. In the latest release, IFI puts the spotlight on engaging outside program support. Click here to learn more.