John Hanna, chief executive of engineering and manufacturing firm Invotec Engineering Inc., doesn’t like a lot of attention.
“We’re not flashy people,” Hanna said. “We stay under the radar, to tell you the truth.”
That may change. Recently, the company secured a 40-percent, five-year Ohio tax credit to add 30,000 square feet and $1.2 million to its payroll, or 28 full-time jobs. Ohio competed with Texas for the company, and the agreement requires Invotec to maintain its current location on Industry Lane in the South Tech business park, the Ohio Department of Development said.
Hanna called the planned expansion “good news.”
“We’re happy to be a part of that,” he said.
The plan is to invest at least $1.47 million toward equipment,renovation and construction, expanding the current facility from 30,000 to 60,000 square feet. Nearly $20,000 more must be spent on engineering and design services.
The state expects new employees in place within three years.
Invotec designs and makes assembly and test equipment for manufacturing customers in the medical devices, automotive, aerospace and consumer industries. Sixty percent of its business is medical, an industry not nearly as mature as automotive or transportation, Hanna said.
Founded in 1993, the company started simply as a design firm, but found that actually making equipment gave it more complete control in giving customers what they want. The company obtained an old milling machine “and we kind of went from there,” Hanna said.
Growing business justifies the expansion, but Hanna and his partner are eyeing possible changes in tax laws. Talk of a “millionaire’s tax” worries Hanna.
“There’s a very real cost to us in terms of the federal regulatory burden,” Hanna said of himself and Invotec co-owner Daryl Greywitt.
One reason taxes matter is Invotec is an S corporation, Hanna said. Dennis McLaughlin, head of public accounting firm Clark Schafer Hackett’s Manufacturing Group, said an S corporation is taxed like a partnership. The company passes income to its shareholders, who then pay taxes on that as their own income, he said.
“The drawback on a S corporation is that income is taxed on the personal level,” McLaughlinsaid.
S corporations can distributefunds to shareholders to coverincome taxes, but that would be money out of the company’s pocket — money that might otherwise be used to expand or hire additional employees.
“It’s definitely something to consider,” McLaughlin said.
By Thomas Gnau, Staff Writer, Dayton Daily News, 17 November 2011
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