| Description |
Job Corps is a federally funded program, with centers across America that provide technical, educational, and vocational skills to underprivileged youth. As a federally funded program, Job Corps contractors who operate the centers are federally exempt from the payment of state sales, excise, and use taxation through 20 CFR §686.930. According to the Supremacy Clause in the US Constitution, Article VI, Paragraph 2, federal laws take precedence over state laws and constitutions. Despite this, many states choose not to recognize the federal exemption. This tasks Job Corps operators with following various sets of laws depending on which states they operate centers in. Through research on the laws of all 50 states, only 17 states explicitly stated that they acknowledge the exemption. Nineteen states are unclear on their status, with differing statutes, administrative code, tax commissioner rulings, and exemption forms. The remaining 14 states do not allow for the exemption, opposing the federal statute. When this thesis was first brought about, the main focus was on tax exemptions. The main arguments were how state sales exemptions impact companies, which states allow them, and the complex rules laws and regulations surrounding them. After thorough research, state sales tax exemptions were found to be an effect of company success, not the cause. The process of finding and claiming state sales tax exemptions can be very complex. While they are available to all Job Corps contractors, it can be harder for small companies to claim these exemptions. The reduction in total liability provides much more of a benefit to large companies. Large companies have the required resources to claim these exemptions, estimate contracts more accurately, and assume more risk than small companies do. With many companies vying for the same contracts, five have stood apart from the rest. Through proper management and organization, these five companies (Management & Training Corporation, Career Systems Development, Adams and Associates, Serrato Corporation, and Education & Training Resources LLC.) receive over 50% of the obligated $1.1 billion to the Job Corps program. The top five companies aren't the largest companies because they receive the most money. These companies are able to operate centers efficiently and effectively, resulting in more contracts won and higher profits. Through proper leadership, Job Corps contractors are able to manage and operate centers efficiently. The top five companies have the resources required to take the maximum advantage of state sales tax exemptions where applicable. While exemptions certainly are not the key cause of success, they are one of the many reasons that large companies are able to be successful. Small companies need to be able to take advantage of exemptions if they hope to compete and grow within the industry. With the transition to fixed-price contracts, it is now more important than ever for small companies to utilize state sales tax exemptions to operate as efficiently as possible. |
