State by State Incentives Guide
A comprehensive guide to state incentives offered throughout the U.S.
ALABAMA - updated for 2014
For a list of state economic development agencies, click this link.
Alabama Infrastructure Grant Program: Funds are available to public entities for extension of water, sewer and road facilities to service new or expanding industries.
Alabama Industrial Access Road & Bridge Program: Provides financial assistance to communities for industrial access to new and expanding industries. It allows for the construction of roads, bridges, etc. on public right-of-ways in conjunction with industrial projects.
Certified Capital Company Program (CAPCO): Promotes investment in Alabama-based businesses by creating several venture capital funds required to invest in Alabama companies. Businesses that request CAPCO investment funding must meet certain criteria and requirements set by the Alabama Development Office. CAPCO financing, an alternative to conventional bank financing, can accommodate a slightly higher risk profile and provide a more flexible structure for growing businesses. Eligibility requirements include:
- Headquartered in Alabama or will be relocated to Alabama
- Principal business operations in Alabama or will be relocated to Alabama
- Have no more than 100 full-time employees, and 80% of employees are in Alabama or 80% of payroll is paid to employees in Alabama
- Industries that qualify for the CAPCO program may include manufacturing, processing, or assembling products; conducting research and development; or providing services.
Industrial Revenue Bonds: May be used as long-term financing of up to 100% of a project for:
- Acquisition of land, buildings, site preparation and improvements;
- Construction of buildings;
- Acquisition and installation of furnishings, fixtures and equipment;
- Capitalizable soft costs (e.g., architectural and engineering, interest incurred during construction, etc.)
Typically, tax-exempt IRBs have interest rates ranging from 70-85% of prime and are limited to $10 million per single issuance and $40 million total maximum per company. Taxable IRBs have an interest rate equal to conventional loans and have no limit. Terms for both are normally 10-20 years and can finance up to 100% of the project costs. The principal and interest on the bonds are paid solely from the funds derived from leasing or selling the facilities to the user company. Under most circumstances, upon complete payment of the bond issue, the lessee or user company acquires ownership of the industrial facility for a nominal sum.
Alabama Economic Development Loan Program: The state has more than 2,300 commercial lending sources with assets of over $61.3 billion. The Alabama Economic Development Loan Program is used to work with commercial lenders for projects in non-entitlement communities. Fixed rate financing, at below market rates, is directly available through twelve Alabama Regional Councils.
Alabama Innovation Fund: As part of the implementation of Accelerate Alabama, this fund was created to maximize the use of the State’s economic development resources by leveraging annual research and development expenditures by Public Universities within the State to generate resources which can be used to support economic development initiatives. The Alabama Innovation Fund supports and operates two (2) distinct programs. They are:
- The Renewal Program. 60% of the annual funding, net of expenses, shall be distributed through grants to Public Universities which submit an Application under this chapter. The allocation to each Public University which makes application shall be based on each Public University’s federally financed research and development expenditures as reported by the National Science Foundation.
- The Research Program. 40% of the annual funding available to the Alabama Innovation Fund, net of expenses, shall be used to fund the Research Program. These funds shall be distributed, in keeping with the State’s goals to stimulate economic development as set out in Accelerate Alabama, to Public Colleges and Universities who submit an Application through a competitive process.
TVA Economic Development Loan Fund: A multimillion-dollar revolving loan program designed to stimulate investment and job creation in the TVA region. Loans must be co-sponsored by a power distributor, local government, or economic development agency and are made available to new and expanding industrial companies for fixed assets such as buildings, machinery, and equipment.
Community Development Block Grant/Loan Program: Provides a flexible source of annual grant funds for local governments—funds that they, with the participation of local citizens, can devote to the activities that best serve their own particular development priorities, provided that these projects either (1) benefit low- and moderate-income persons; (2) prevent or eliminate slums or blight; or (3) meet other urgent community development needs.
Appalachian Regional Commission and Delta Regional Authority Grants: Federal-state partnerships that work with the people of 37 Appalachian counties in Alabama and the Mississippi Delta region’s twenty Alabama counties to create opportunities for self-sustaining economic development and improved quality of life. Programs create thousands of new jobs, increase school readiness, improve local water and sewer systems, expand access to health care, assist local communities with strategic planning, and provide technical, managerial, and marketing assistance to emerging new businesses.
USDA Rural Development in Alabama: A variety of loan, grant, and loan guarantee programs, plus technical assistance in the areas of business and industry, cooperative development, rural housing, community facilities, water and waste disposal, and telecommunications, including distance learning and telemedicine.
Property Tax: Amendment 373 of the state constitution provides that all real and personal business property will be assessed at 20% of its fair market value. That is, for property with a fair market value of $1 million, the assessed value would be $200,000. The combined state and local millage rate would then be applied to the assessed value. Inventory is exempt from property tax.
Property Tax Abatements: The Tax Incentive Reform Act of 1992 (TIRA) allows qualified industries to receive abatements of non-educational property taxes for new businesses locating to Alabama and for expansions of existing facilities in Alabama. The property tax abatement is available for up to 10 years, except for data processing centers. To receive an abatement for property taxes, a project must meet certain qualifications and follow certain procedures, as determined by law and regulation.
Income Tax Capital Credit: The Income Tax Capital Credit has been available since 1995. If a business entity invests in a qualifying project that meets certain requirements and is approved by the Alabama Department of Revenue, and maintains minimum annual requirements, the company may receive an annual credit against its income tax liability generated from the qualifying project. The capital credit is equivalent up to 5% of the capital costs of the qualifying project, and can be utilized for a period of 20 years beginning during the year the project is placed in service. The credit is available to all types of business entities, including: S corporations, C corporations, limited liability companies (LLCs), partnerships, trust and sole proprietorships.
Enterprise Zone Credit or Exemption: The Alabama Enterprise Zone Act (Act. No. 87‐573), was enacted in 1987 to stimulate business and industrial growth in designated areas of the state that are considered economically depressed. The program provides state and local tax incentives and non-tax incentives to businesses and industries located within Alabama’s Enterprise Zones. The program is divided into two sections, Section 5 is a tax credit and Section 11 is an exemption. The enterprise zone credit is equal to $2500 per permanent new employee and can be applied against the income tax and/or business privilege tax liability. The exemption is a five year exemption of the entity’s choice of income tax, sales and use tax or business privilege tax. To qualify for either the credit or the exemption, a business must meet detailed requirements concerning site location and employee qualifications. The enterprise zone tax incentive is available under the Alabama Enterprise Zone Act, Sections 41-23-20 through 41-23-32, Code of Alabama 1975. To qualify a business must meet the following requirements:
- Must be located or locating within the boundaries of an Enterprise Zone.
- Must expand its labor force, make new capital investment, or prevent loss of employment.
- May not have closed or reduced employment elsewhere in Alabama in order to expand into an enterprise zone. A business that applies for the exemption must enter into an agreement with the Governor of Alabama.
- Must obtain an endorsement resolution approved by the appropriate local governing authority prior to participation in the program.
- Must be certified annually by the Alabama Department of Economic and Community Affairs.
Business Privilege Tax: An annual tax paid by corporations and limited liability entities (including disregarded entities) for the privilege of conducting business in Alabama. The tax base is the taxpayer’s net worth apportioned to Alabama. For business entities new to Alabama, the tax accrues as of the date of organization, qualification or beginning to do business, and is due 45 days thereafter. The tax for existing entities accrues as of Jan. 1 of every taxable year, and is due March 15. The tax rate for business privilege tax is graduated, based on the entity’s federal taxable income apportioned to Alabama. The rates range from $.25 to $1.75 for each $1,000 of net worth in Alabama. The minimum tax is $100. The maximum business privilege tax for most business entities is $15,000. The exceptions are for financial institutions, financial institution groups, and insurance companies that have a maximum business privilege tax of $3,000,000.
Sales and Use Tax: Alabama has four state rate differentials, which include:
- a 1.5% rate for manufacturing and farm machinery,
- a 2% rate for automotive vehicles
- a 3% rate for food sold through vending machines, and
- 4% general rate for all other items.
Sales and Use Tax Abatements: The Tax Incentive Reform Act of 1992 (TIRA) allows qualified industries to receive abatements of all state (except for coal mining projects, which is limited to 50% of the state tax) and the non-educational portion of the local sales and use tax for business locating to Alabama, and for expansions of existing facilities in Alabama. The sales and use tax abatement is used during the construction and equipping of the facility. To receive abatement for any or all of these taxes, a project must meet certain qualifications and follow certain procedures, as determined by law and regulation.
Sales and Use Tax Exemptions: Alabama also has statutory exemptions from sales and use tax:
- Raw materials used by manufacturers or compounders
- Pollution control equipment
- Quality control testing and donations to charitable entities
- Exemption of certain aircraft maintenance parts
“Made in Alabama” Job Incentives Act: Qualifying companies may receive a transferable income tax credit to offset import tariff costs during local construction process.
Brownfield Development Tax Abatements: Gives cities and counties the ability to abate the following for properties enrolled in the Alabama Department of Environmental Management’s voluntary cleanup program:
- Non-educational city and county sales & use taxes;
- Non-educational state, city and county property taxes—up to 20 years;
- Mortgage and recording taxes.
Renewal Community Program: Created by Congress in 2000, provides federal income tax incentives to businesses that are located or will locate in designated areas. Three of the nation’s 40 Renewal Community areas are in Alabama. The sites include the Greene and Sumter Renewal Community, made up of both counties, the Mobile Renewal Community, which includes Prichard and a section of east Mobile, and the Southern Alabama Renewal Community, which includes Wilcox County and parts of Butler, Conecuh, Dallas, Hale, Lowndes, Marengo, Monroe and Perry Counties.
Employer Education Credit: A tax credit is statutorily available to employers who provide approved basic skills education programs to Alabama resident employees. The credit is 20% of the actual costs limited to the employer’s income tax liability. The requirements are:
- Program must have written approval from the Alabama Department of Education.
- Employees shall have been continuously employed for at least 16 weeks for at least 24 hours per week.
- Employer cannot receive or require reimbursement or any form of remuneration for any cost of education.
Alabama Industrial Development Training (AIDT): State training program certified in compliance with ISO 9001:2000, the International Organization for Standardization Principle for Quality Management. Services are provided at no cost to employers or trainees. The workforce management system includes recruitment, assessment and training of potential employees, development and production of job-related training materials, provision of training facilities and delivery of job-specific services. It also provides certified manager training and supervisory and team leadership training. In 2012 AIDT became a division of the Alabama Department of Commerce.
ALASKA – updated for 2014
For a list of state economic development agencies, click this link.
State Credits available against the Corporate Income Tax:
Education Credit (AS 43.20.014): Taxpayers that contribute to vocational education programs or accredited Alaska universities or colleges for educational purposes or facilities may claim a tax credit for 50% of the first $100,000, 100% of the next $200,000, and 50% of further contributions. This credit can also be claimed against the insurance premium tax, the oil and gas production and property taxes, the fisheries business and landing taxes, and the mining license tax. Through December 31, 2020, the maximum credit is $5,000,000 for each tax year across all tax types. For tax years after December 31, 2020, the credit will be capped at $150,000.
Gas Exploration and Development Credit (AS 43.20.043): Taxpayers may take a corporate income tax credit for 25% of qualifying expenditures incurred in exploration and development of natural gas reserves in Alaska, except for the North Slope. The credit is capped at 75% of tax liability as calculated before applying other credits, and investments in existing units are eligible.
Gas Storage Facility Credit (AS 43.20.046): A refundable credit for establishing a gas storage facility in the amount of $1.50 per thousand cubic feet of “working gas” storage capacity. The credit is capped at the lesser of $15 million or 25% of costs to establish the facility. Effective for facilities placed into service between January 1, 2011 and December 31, 2015.
Film Production Credit (43.98.030): This is a transferable credit with a base rate of 30% of eligible Alaska spending plus bonus credit for Alaska payroll, rural spending and off-season spending. Expires the earlier of July 1, 2023 or once $200 million of credits have been approved.
Internal Revenue Code Credits Adopted by Reference (AS 43.20.021): Under Alaska’s blanket adoption of the IRC, taxpayers can claim all federal incentive credits. Federal credits that refund other federal taxes are not allowed. Multistate taxpayers apportion their total federal incentive credits. For most credits, credit is limited to 18% of the amount of the credit determined for federal income tax purposes which is attributable to Alaska.
LNG Storage Facility Credit (AS 43.20.047): A refundable credit for establishing an LNG storage facility. The credit is capped at the lesser of $15 million or 50% of costs to establish the facility. Effective for facilities placed into service between January 1, 2011 and December 31, 2019.
Minerals Exploration Incentive Credit (AS 43.20.044): Taxpayers may claim a credit for 100% of eligible costs of exploration activities related to determining existence, location, extent, or quality of a locatable mineral or coal deposit. An approved exploration incentive credit may not exceed $20 million and must be applied within 15 tax years after the credit is approved. This credit may also be applied against the mining license tax. Application of the credit is limited to the lesser of 50% of the mining license tax liability or 50% of the corporate tax liability.
Oil and Gas Service Industry Manufacturing Credit (AS 43.20.049): As part of the More Alaska Production Act passed in 2013, this is a credit of 10% of qualified oil and gas industry service expenditures, up to $10 million per taxpayer per year. The credit applies to qualified oil and gas service expenditures that are for in-state manufacture or in-state modification of oil and gas tangible personal property with a service life of three years or more.
Veteran Employment Tax Credit (AS 43.20.048): A credit for the employment of a veteran. The available credit is $3,000 for hiring a disabled veteran or $2,000 for a veteran who is not disabled.
State Credits available against the Oil and Gas Production Tax:
Alternative Credit for Exploration (AS 43.55.025): Credit of 30% or 40% of eligible exploration expenditures. Specific criteria include requirements related to location of work, distance from other wells, etc. The credit is applicable to work performed before July 1, 2016 for the North Slope and Cook Inlet; for areas outside the North Slope and Cook inlet the credit is applicable to work performed before January 1, 2022 as part of the More Alaska Production Act passed in 2013.
Carried-Forward Annual Loss Credit (AS 43.55.023(b)): Taxpayers may receive credit of 25% of a carried-forward annual loss. If applying for a transferable credit certificate, no more than half the credit may be applied in a single calendar year. As part of the More Alaska Production Act passed in 2013, for the North Slope only, this credit will increase to 45% on January 1, 2014, and the credit will change to 35% beginning January 1, 2016.
Cook Inlet Jack-Up Rig Credit (AS 43.55.025(a)(5), (m)): Credit for exploration expenses for first three pre-tertiary wells drilled by unaffiliated parties using the first jack-up rig brought in to Cook Inlet under this program. Credit is 100% of costs up to $25 million for first well, 90% of costs up to $22.5 million for second well, and 80% of costs up to $20 million for third well.
Education Credit (AS 43.55.019): Taxpayers that contribute to vocational education programs or accredited Alaska universities or colleges for educational purposes or facilities may claim a tax credit for 50% of the first $100,000, 100% of the next $200,000, and 50% of further contributions. This credit can also be claimed against the insurance premium tax, the oil and gas production and property taxes, the fisheries business and landing taxes, and the mining license tax. Through December 31, 2020, the maximum credit is $5,000,000 for each tax year across all tax types. For tax years after December 31, 2020, the credit will be capped at $150,000.
Exploration Incentive Credit (AS 38.05.180(i)): Taxpayers may receive credit of up to 50% of the cost of drilling or seismic work performed under a limited time period established by the commissioner. The credit cannot exceed 50% of the tax liability for which it is being applied.
Frontier Basin Credit (AS 43.55.025 (a)(6)-(7)): A credit for expenses for the first four persons to drill exploration wells and the first four persons to conduct seismic projects within designated “Frontier Basins.” Credit is for lesser of 80% of qualified exploration drilling expenses or $25 million; or for seismic projects, credit is for lesser of 75% of qualified seismic exploration expenditures or $7.5 million. Includes expenditures incurred for work performed after June 1, 2012 and before July 1, 2016.
New Area Development Credit (AS 43.55.024(a)): Credit of up to $6 million per year for taxpayers incurring eligible oil and gas lease expenditures in areas of the state other than the North Slope and Cook Inlet. Credit is available until the later of 2016 or 9 years after first eligible production.
Qualified Capital Expenditure Credit (AS 43.55.023 (a),(m)): Taxpayers may receive credit of 20% for qualified capital expenditures and or a credit of 40% for qualified well-related lease expenditures outside the North Slope. For credits earned for North Slope capital expenditures under AS 43.55.023 (a), no more than half the credit may be applied in a single calendar year. As part of the More Alaska Production Act passed in 2013, as of January 1, 2014, this credit will only apply to areas outside the North Slope.
Per Taxable Oil Barrel Credit (AS 43.55.024(i)-(j)): As part of the More Alaska Production Act passed in 2013, a credit of $5 per taxable oil barrel may be applied against a producer’s production tax liability for oil produced from Gross Value Reduction (GVR) eligible areas. For areas not subject to the GVR, a sliding scale credit ranging from zero to $8 per taxable barrel may be applied against a producer’s production tax liability. The sliding scale credit is a dollar-per-taxable-barrel credit ranging from zero to $8 per barrel depending on a producer’s Gross Value at Point of Production per barrel.
Small Producer Credit (AS 43.55.024(c)): Credit of up to $12 million per year for taxpayers incurring eligible oil and gas lease expenditures in North Slope operations. Full credit is given to companies producing less than 50,000 barrels of oil equivalent per day. Credit is available until the later of 2016 or nine years after first eligible production.
ARIZONA – updated for 2014
For a list of state economic development agencies, click this link.
In addition to our aggressive incentive programs, Arizona is committed to attracting and supporting quality companies through competitive tax policies and has demonstrated a continued trend of reducing property, individual sales and corporate income tax rates:
- Among the lowest corporate income tax rates in the country. 30% reduction in Arizona’s corporate income tax rate, which decreases from 6.97% in 2014 to 4.9% by 2017.
- Sales factor further reduces corporate tax burdens. 100% electable sales factor for multi-state corporations (increasing from 80% to 100% between 2014 and 2017).
- Improved accelerated depreciation schedules. Five-year accelerated depreciation schedules reduce corporate tax burdens. This allows many companies to recover investments more quickly, significantly reducing personal property’s full cash value, and taxes owed, over five years.
- 97% increase in personal property tax exemption.
Arizona Innovation Accelerator Fund: $18.2 million loan participation program fostering business expansion and job creation in Arizona by providing debt financing for small businesses (in collaboration with private finance partners).
Arizona Innovation Challenge: $3 million awarded annually ($1.5 million twice yearly) to the most promising technology ventures ($100,000 – $250,000 per company) to help promote and fund Arizona innovation.
AZ Fast Grant: Up to $7,500 grant to pay for consulting services to advance Arizona-based technology companies.
AZ State Trade and Export Promotion Program (STEP): Export assistance grant for small businesses as they export their products for the first time or expand to additional export markets.
Quality Jobs Tax Credit: $9,000 income tax credit for each qualifying new job. It is a credit equal to $3,000 per year for three years for each new qualifying job
- Metro: Capital investment of at least $5 million and at least 25 new jobs
- Rural: Capital investment of at least $1 million and at least 5 new jobs
Research and Development Tax Credit: Income tax credit for investing in R&D in Arizona.The 2011 through 2017 R&D tax credit will be equal to 24% of the first $2.5 million in qualifying expenses plus 15% of the qualifying expenses in excess of $2.5 million. For 2018 and thereafter, the tax credit rates will be 20% of the first $2.5 million in qualifying expenses plus 11% of the qualifying expenses in excess of $2.5 million. It is equal to 34% of qualifying expenses when made in conjunction with an Arizona public university Companies with fewer than 150 employees may take 75% of the credit as a cash refund
Qualified Facility Tax Credits Program: Refundable income tax credit for a manufacturing facility or a manufacturing-related research or headquarter facility. Credit is equal to 10% of the capital investment in a new facility or $20,000 per qualified new job created, whichever is less. 51% of new jobs must pay wages of at least 125% of the state median.
Sales Tax Exemptions for Machinery and Equipment:
- Machinery/Equipment used directly in manufacturing
- Equipment or transmission lines used directly in producing or transmitting electrical power, but not including distribution
- Machinery or equipment used in research and development
Computer Data Center (CDC) Tax Exemptions: Program to provide tax relief to CDC owners, operators and co-location tenants. It is available on purchases of CDC equipment for up to 20 years for qualifying CDCs that are certified by the Arizona Commerce Authority. Investment requirements at a new or expanding CDC:
- $50 million in new investment if the CDC is located in Maricopa or Pima county; or
- $25 million in new investment if the CDC is located in any other county
Angel Tax Credit: An income tax credit of up to 35% is available for investments of at least $25,000 in an Arizona Commerce Authority-certified small business. Beginning 2014, any capital gains income derived from a qualified investment under the Angel program will be exempt from taxation in Arizona.
Renewable Energy Tax Incentive Program: Refundable income tax credits and property tax reductions for companies engaged in the solar, wind, geothermal and other renewable energy (RE) industries when the facility is for RE manufacturing or RE headquarters operations:
- Tax credit of up to 10% of qualifying expenses
- Up to 75% reduction in real and personal property taxes for up to 15 years
- New jobs must pay wages of at least 125% of the county median
Renewable Energy Production Tax Credit: Income tax credit awarded to utility-scale generation systems based on the amount of electricity produced annually for a 10-year period using solar light, solar heat, wind or certain types of biomass. The income tax credits established are intended to promote investment in renewable energy production using low-emission and zero-emission electricity generation technologies. The credits are only for qualified energy generators with at least 5 megawatts generating capacity.
- For wind or biomass derived qualified energy resource the amount of the income tax credit is:
- 1¢ per kilowatt-hour (kWh) of the first 200,000 megawatt-hours of electricity produced. (200,000 megawatt-hours of electricity equals 200 million kWh which, when multiplied by 1¢ per kWh, equals $2 million in credit.) The tax credit cannot exceed $2 million dollars per year per facility that produces electricity.
- For solar light derived or solar heat derived qualified energy resource the income tax credit is:
- 4¢ per kWh in the 1st and 2nd calendar years in which the qualified energy generator produces electricity, 3.5¢ per kWh in the 3rd and 4th years, 3¢ per kWh in the 5th and 6th years, 2¢ per kWh in the 7th and 8th years, 1.5¢ per kWh in the 9th year, and 1¢ per kWh in the 10th calendar year in which the qualified energy generator produces electricity. The tax credit cannot exceed $2 million dollars per year per facility that produces electricity.
Commercial and Industrial Solar Tax Credit Program: Income tax credit for companies installing a solar energy device at an Arizona facility. The tax credit is equal to 10% of the installed cost of the solar energy device not to exceed $25,000 in credits for one building in a single tax year and $50,000 total credits per business per tax year. Tax credits can be used to offset Arizona income tax liability; any unused credit amounts can be carried forward for a five-year period.
Military Reuse Zone (MRZ): A Program established to lessen the impact of military base closures. Currently there are two MRZs in Arizona. In 2001 the MRZ designation was renewed for the former Williams Air Force Base, now known as Williams Gateway Airport. In December 2002, the former U.S. Naval Air Facility in Goodyear, now known as Phoenix/Goodyear Airport, was designated as an MRZ. An applicant for the MRZ program must be located within an MRZ to qualify for the benefits. The program offers three types of benefits:
- Transaction Privilege Tax Exemption – Exemption from transaction privilege tax on contracts for certain types of construction at an MRZ
- Tax Credits – Arizona income/premium tax credits for up to five years for each net new job created, totaling up to $7,500 per non-dislocated employee and up to $10,000 per dislocated employee
- Property Reclassification – Both real and personal property can be reclassified from class one (20% assessment ratio) to class six (5% assessment ratio), which may result in property tax savings of up to 75% for a period of five years
Foreign Trade Zone (FTZ): Up to a 75% reduction in state real and personal property taxes for businesses located in an FTZ. Other benefits include: duty free zone, no time constraints on storage, shorter transit time (direct delivery), and weekly entries.
Private Activity Bond: Issued to finance construction and equipment purchases associated with industrial and manufacturing facilities, residential rental projects, facilities for the furnishing of water, sewage and solid waste facilities and more. Interest on private activity bonds may be exempt from federal income tax for most bondholders.
Robust Workforce Development Assistance:
No-cost workforce assistance:
- Immediate access to job-ready talent pools
- Skill assessments and talent screening
- Human Resource consulting on Arizona’s labor laws
- Custom recruiting services
- Transition and retention services
- Training grants for new hires and incumbent employees
Job Training Grants: Grants to employers implementing job-specific training plan. The maximum grant is $1.5 million, not to exceed $5,000 per employee trained in metro areas and $8,000 per employee trained in rural areas
- New employees: reimbursement of up to 75% of approved training expenses
- Current employees: reimbursement of up to 50% of approved training expenses
ARKANSAS – updated for 2014
For a list of state economic development agencies, click this link.
Create Rebate Program: An incentive that may be offered at the discretion of the director of the Arkansas Economic Development Commission in highly competitive situations, it provides annual cash payments based on a company’s annual payroll for new, full-time, permanent employees. The benefit depends on the tier of the county in which the company locates. The incentive is available for non-retail businesses engaged in commerce for profit that fall into certain categories.
Targeted Business Incentives: “Targeted businesses” may qualify for three special incentives designed to help new, knowledge-based businesses in their early years. These discretionary incentives are for start-up companies in emerging sectors (Advanced materials and manufacturing systems; Agriculture, food and environmental sciences; Biotechnology, bioengineering and life sciences; Information technology; Transportation logistics; and Bio-based products):
- A refund of sales and use taxes paid on the purchase of building materials and machinery and equipment associated with the approved project
- A transferable income tax credit equal to 10% of payroll for up to five years
- A transferable income tax credit equal to 33% of eligible research and development expenditures
Companies must be less than five years old; have an annual payroll between $100,000 and $1 million; show proof of an equity investment of at least $250,000; pay at least 150% of the lesser of the state or county average hourly wage where the business is located; and meet requisite payroll thresholds.
Research & Development Incentives:
- University Based Research and Development: An eligible business that contracts with one or more Arkansas colleges or universities in performing research may qualify for a 33% income tax credit for qualified research expenditures.
- In-House Research and Development: New and existing eligible businesses that conduct “in-house” research that qualifies for federal research and development tax credits may qualify for in-house research income tax credits. The credit allowed is twenty% of qualified research expenditures that exceed the base year, for a period of three years and the incremental increase in qualified research and expenditures for the succeeding two years. The income tax credit earned for in-house research and development may be used to offset 100% of the businesses’ state income tax liability.
- Research and Development in Area of Strategic Value: For qualifying businesses that invest in: 1) in-house research in an area of strategic value—fields having long-term economic or commercial value to the state, and that have been identified in the research and development plan; or 2) a research and development project offered by the Arkansas Science and Technology Authority. The income tax credit is equal to 33% of qualified research expenditures with a maximum of $50,000 per tax year.
Tourism Development Incentives: The Arkansas Tourism Development Act provides state sales and use tax credits and income tax credits to businesses initiating approved tourism attraction projects. Sales tax credits shall be determined in accordance with the following criteria:
- Eligible minimum project costs must be $1 million, except in high unemployment counties (Arkansas, Chicot, Clay, Crittenden, Dallas, Desha and Mississippi) where it is $500,000.
- Sales tax credits are calculated based upon 15% (25% in high unemployment counties) of eligible project cost for projects spending more than $1 million.
- Sales tax credit may be applied against the business’s increased sales tax liability resulting from the project.
- Other review criteria may be requested to determine whether the project meets the intent of the Act.
Additionally, eligible businesses may receive a state income tax credit equal to 4% of the annual payroll of each new, full-time, permanent employee. The income tax credits begin in the year in which the new employees are hired.
Non-Profit Incentives: Provides an incentive payment (payroll rebate) equal to 4% of the payroll of the new, full-time, permanent employees for a period of up to five years. Eligible non-profit organizations must create a payroll for new, full-time, permanent employees of at least $500,000 and pay an average wage in excess of 110% of the state or county average wage (whichever is less) in the county in which the organization locates or expands. In addition, the non-profit organization must receive 75% of its income from out-of-state sources. In addition to the payroll rebate, this program also provides a sales and use tax refund for eligible projects that invest a minimum of $250,000. The refund is eligible for taxes paid on construction materials, and machinery and equipment associated with the approved project.
Tax Back (Sales & Use Tax Refund): Advantage Arkansas participants investing at least $100,000 are eligible for a refund of sales and use taxes for building materials and taxable machinery and equipment associated with the approved project. The business must sign a job-creation agreement under the Advantage Arkansas program within 24 months of signing the Tax Back agreement. Applicants for Tax Back must obtain an endorsement resolution from the local governing authority that authorizes the refund of its local taxes. Applicants must meet the same qualification criteria as Advantage Arkansas and must be approved by the Arkansas Economic Development Commission.
Investark (Sales & Use Tax Credit): Available to businesses established in Arkansas for at least two years that invest $5 million or more in plant or equipment for new construction, expansion or modernization.
The business must be approved for the program prior to beginning construction or incurring eligible project costs. The business must obtain a direct-pay sales and use tax permit from the State of Arkansas. All project expenditures must be incurred within four years of the project eligibility date. All projects will be audited upon completion to confirm the tax credits.
Advantage Arkansas (Income Tax Credit): Offers a state income tax credit for job creation based on the payroll of new, full-time, permanent employees hired as a result of the project. The proposed average hourly wage of the new employees hired as a result of the project must be equal to or greater than the lowest county average hourly wage. The Advantage Arkansas income tax credit is calculated based upon which county tier the project is located in and earned each tax year for a period of five years. The income tax credit cannot offset more than 50% of a business’ income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was first earned. The credit begins in the tax year in which the new employees are hired. Employees must be Arkansas taxpayers.
ArkPlus: An incentive that may be offered at the discretion of the director of the Arkansas Economic Development Commission in highly competitive situations, it is a state income tax credit program that provides tax credits of 10% of the total investment in a new location or expansion project. ArkPlus requires both a minimum investment and a minimum payroll of new, full-time, permanent employees hired as a result of the project, depending on the tier in which the business locates. Arkansas’s counties are ranked into four tiers based on poverty rate, population growth, per capita income and unemployment rate. Total project expenditures must be incurred within four years of the date the project is approved by AEDC. New, full-time, permanent employees must be hired within 24 months of the date the financial agreement is signed. The income tax credits may be used to offset 50% of the Arkansas income tax liability in the tax year the credit is earned. Any unused credits may be carried forward for nine years beyond the tax year in which the credit was first earned.
Equity Investment Tax Credit: An incentive that may be offered at the discretion of the director of the Arkansas Economic Development Commission in highly competitive situations, it is targeted toward new, technology-based businesses that pay wages in excess of the state or county average wage. This program allows an approved business to offer an income tax credit to investors purchasing an equity investment in the business. The income tax credits issued under this program are equal to 33 1/3% of the amount invested by an investor in an eligible business. The income tax credit earned may be used to offset 50% of the investor’s Arkansas income tax liability. Any unused credit may be carried forward for a period of nine years.
CALIFORNIA – updated for 2014
For a list of state economic development agencies, click this link.
The California Capital Access Program (CalCAP): Encourages participating banks and lending institutions to provide loans to small businesses that fall outside of conventional underwriting standards. Small business owners that have difficulty in obtaining conventional financing may qualify for a CalCAP loan through any CalCAP lender. CalCAP is a form of loan portfolio insurance that provides up to 100% coverage on certain loan defaults. CalCAP insures loans made by Participating Lenders to small businesses in order to assist their growth efforts with eligible use of fund proceeds to acquire land, construct or renovate buildings, purchase equipment, working capital, energy efficiency improvement projects as well as bridge financing needed prior to obtaining permanent financing (including SBA 504 bridge loans). There is no minimum loan amount however, the maximum loan amount is $5 million and the maximum enrolled amount is $2.5 million. Borrowers are limited to a maximum $2.5 million enrolled over a three year period. The borrower’s primary business and at least 50% of employees or income, sales or payroll, must be located in California. Borrowers with over 500 employees are ineligible for this program. The Participating Lender sets all the terms and conditions of the loan (including premium levels, maturity dates, fixed or variable interest rates, secured or unsecured, amortization schedule, etc.) and determine which loans to enroll into the CalCAP program. For more information, please visit this link.
CalCAP Collateral Support (CalCAP CS) Program: Pledges cash to cover the collateral shortfall of a loan made by Eligible Lenders in order to enable financing that otherwise might not be available to a small business. The Collateral Support Program provides up to 40% of the loan value, in the form of a cash deposit, with the possibility of an additional 10% for businesses located in a Severely Affected Community. To determine if a business is located in a Severely Affected Community, open this pdf.
- The minimum loan amount is $100,000, the maximum loan amount is $20 million, and the maximum support amount is $5 million per borrower. The term of the collateral support will be based on the original term of the loan not to exceed seven years for any one loan.
- Participating Lenders are free to determine the amount of collateral support they wish to request and may choose to reduce the collateral coverage at any time and for any reason.
- The borrower must have their “Primary Economic Effect” in California where one of the following conditions exists: at least 51% of the total revenues of the business activity are generated in California; or at least 51% of the total jobs of the business are created or retained in California. Borrowers must have fewer than 750 employees to be considered eligible for this program.
The lender must certify its participation to use federal funds, apply to become a Participating Lender and must submit a request and risk assessment for CPCFA’s approval prior to the issuance of a loan. For more information, please visit this link.
Industrial Development Bond (IDB): IDB financing is a competitive financing option available for the acquisition of manufacturing facilities and equipment providing a financing option for manufacturers to access private capital markets at tax-exempt rates. The benefits of IDB financing include interest rates generally 20% to 30% lower than conventional financing. Historically, interest rates have been about 2% below prime and recently have been below 1%. The Securities Industry and Financial Markets Association tracks the weekly average municipal interest rate from 2000 to current. Bonds can be issued over longer terms (30 years) than conventional financing as fixed or variable rates and can be prepaid at any time without penalty. The bonds are assumable if the business is sold to an entity engaged in a qualified use. Funds can be used for construction and take-out financing for land, buildings and equipment. Certain federal and state regulations apply.
- The IDB financed project must be a facility used for the manufacturing, production or processing of tangible property. At least 95% of bond proceeds must be spent on qualifying costs (generally includes land, building, equipment as well as capitalized interest during construction).
- Bond proceeds cannot be used for working capital or inventory.
- The capital expenditures for the project, when added to the company’s other capital expenditures in the same public jurisdiction as the project for the three years immediately preceding and three years following the closing of the financing of the project, cannot exceed $20,000,000.
- The project must meet certain public benefit criteria established by the California Debt Limit Allocation Committee (CDLAC), which among other things, includes the creation or retention of jobs. Prevailing wage must be paid to workers involved in the construction or renovation.
Fees: Pre-application fee ($1,500), issuer fee (0.25%). Transaction costs generally range between 2%-5% of the bond amount, depending on complexity. Transaction costs include bond counsel, underwriter, trustee and financial advisor (if utilized) fees as well as letter of credit costs. Up to 2% of these “costs of issuance” can be included in the bond amount and amortized over time. The term of the bond is determined by the useful life of the assets involved. On-going annual costs, in addition to interest, include trustee fees (flat fee of $1,000-3,000), letter of credit fees as well as the I-Bank’s $500 annual fee until the bonds are redeemed. For more information, please visit this link.
Small Business Loan Guarantee Program (SBLGP): Assists businesses with the creation and retention of jobs while encouraging investment into low- to moderate-income communities. The SBLGP enables small businesses to not only obtain a loan it could not otherwise obtain but more importantly helps to establish a favorable credit history with a lender so the business may obtain loans in the future on its own without the assistance of the program. The SBLGP is administered by designated Financial Development Corporations (FDC) in guaranteeing the loan to the borrower.
- Loan proceeds may be used for start-up costs, working capital, business procurement, equipment and inventory purchases, contract financing, franchise fees, business expansion, lines of credit, as well as real estate construction, renovation or tenant improvements of an eligible place of business.
- Proceeds must be used for small businesses located in the State of California employing no more than 750 employees. Borrowers must show repayment ability.
- The maximum loan amounts vary between federal and state programs. For the federal program the maximum loan amount is $20 million and there is no defined state amount. Please contact a FDC of your choice to determine the maximum loan amount applicable to your needs.
- The maximum loan guarantee is 80% for federal programs and 90% for state programs. The actual loan amount and guarantee percentage is set on a case by case basis. The State’s current loan guarantee can be up to $2.5 million
- For more information please visit this link.
Energy Innovations Small Grant (EISG) Program: Provides up to $95,000 for hardware projects and $50,000 for modeling projects to small businesses, non-profits, individuals and academic institutions to conduct research that establishes the feasibility of new, innovative energy concepts. Research projects must target one of the specified R&D areas, address a California energy problem and provide a potential benefit to California electric and natural gas ratepayers. To encourage participation in the program the application and award process has been simplified and assistance is available in gaining access to technical experts. For more information, please visit this link.
Alternative and Renewable Fuel and Vehicle Technology Program (AB 118): Demonstrating California’s leadership in the national push to reduce dependency on petroleum and greenhouse gas emissions while improving energy security, AB 118 provides financial incentives (as much as $100 million annually through competitive grants, loans, loan guarantees, revolving loans and other appropriate measures or means) for businesses, vehicle and technology manufacturers, workforce training partners, fleet owners, consumers and academic institutions to develop and deploy alternative and renewable fuels as well as advanced transportation technologies that help the state meet its policy objectives on climate change. For more information, please visit this link.
Hybrid Truck and Bus Voucher Incentive Project (HVIP): Designed to accelerate California’s deployment of new hybrid and zero-emission trucks and buses. The program has $18 million in funds as of October 2012. Air Resources Board (ARB) has teamed with CALSTART to implement this streamlined, first-come, first-serve program. The HVIP Implementation Manual defines the roles and responsibilities of ARB, CALSTART, vehicle dealers and vehicle purchasers in project implementation. ARB must approve hybrid truck and bus models for them to become eligible for the program. This program is a component of the AB118 program. For more information, please visit this link.
Air Quality Improvement Program Clean Rebate Project: Intended to encourage and accelerate zero emission vehicle deployment and technology innovation. Rebates range from $900 for zero-emission motorcycles and neighborhood electric vehicles to $1,500 for plug-in hybrid electric vehicles and $2,500 for full function zero emission vehicles. There is a maximum cap of 20 per applicant. This program is a component of the AB118 program. For more information, please visit this link.
California Pollution Control financing Authority (CPCFA): Provides tax-exempt bond financing for pollution control projects. The Tax-Exempt Bond Financing Program provides California businesses assistance with acquisition or construction of qualified pollution control, waste disposal, waste recovery facilities and the acquisition and installation of new equipment. As a “conduit issuer” of tax-exempt private activity bonds, CPCFA is able to facilitate low cost financing to qualified waste and recycling projects. Projects that control pollution may qualify for tax-exempt financing as allowed by federal tax law. Examples of recent assistance include projects to purchase clean-air vehicles by waste companies, recyclers of used oil, animal waste conversions to clean burning fuel, and construction and demolition debris recycling programs. CPCFA works with participating financial institutions to assist small business with loans of up to $2.5 million. CPCFA also assists with the cleanup of contaminated sites through a $60 million grant and loan program as well as a site-assessment loan program. For more information, please visit this link.
Brownfields Revolving Loan Fund Program: Provides low-interest rate loans between $200,000 and $900,000 for financing cleanup activities of sites by eligible public or private property owners including government agencies, private property owners as well as non-profit organizations. Up to $200,000 in sub-grants can also be awarded to government agencies and non-profit organizations. For more information, please visit this link.
Rural Energy for America Program (REAP): The REAP Guaranteed Loan Program encourages the commercial financing of renewable energy (bioenergy, geothermal, hydrogen, solar, wind and hydro power) and energy efficiency projects. Under the program, project developers will work with local lenders who in turn can apply to USDA Rural Development for a loan guarantee up to 85% of the loan amount. Maximum percentage of guarantee (applies to whole loan):
- 85% for loan of $600,000 or less
- 80% for loans greater than $600,000 but $5 million or less
- 70% for loans greater than $5 million up to $10 million
- 60% for loans greater than $10 million up to $25 million
Loans are limited to 75% of the project’s cost with a maximum amount of $25 million and a minimum of $5,000. For more information, click this link.
Investment in Advanced Manufacturing: In September 2012, Governor Brown signed SB 1128 (Padilla) to encourage investment, job creation and economic growth by allowing advanced manufacturers sales and use tax exemptions on the purchase of manufacturing equipment. SB 1128 builds upon the current sales tax exemption program administered by the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) by including “advanced manufacturing” companies in industries such as biotechnology, computers, appliances, machinery, furniture, fabricated metals and transportation goods.
Employment Training Tax (ETT): Provides funds to train employees in targeted industries to promote a healthy labor market and help California businesses invest in a skilled and productive workforce, develop the skills of workers who directly produce or deliver goods and services and improve the overall competitiveness of California’s businesses. ETT is an employer-paid tax. Employers are subject to an assessment of one-tenth of 0.1% (.001) on the first $7,000 in wages paid to each employee in a calendar year. The tax rate is set by statute at 0.1% (.001) of UI taxable wages for employers with positive UI reserve account balances and employers subject to Section 977(c) of the California Unemployment Insurance Code (CUIC). The maximum tax is $7 per employee, per year ($7,000 x .001).
Enterprise Zone Program: Businesses located within one of California’s 42 Enterprise Zones are eligible for the following incentives:
- Hiring Tax Credit – State tax credit of $37,000 or more over five years for each qualified employee hired.
- Sales or Use Tax Credit – State tax credit for sales and use taxes paid on qualified machinery and machinery parts purchases on the first $20 million per year for corporations and on the first $1 million per year for individuals.
- Increased Expense Deduction – Accelerated expense deductions for certain depreciable property.
- Net Operating Loss Carryforward – Up to 100% net operating loss deduction and a 20-year carryforward.
- Net Interest Deduction for Lenders – Net Interest Deductions for lenders on loans made to firms within an Enterprise Zone.
- State Preference Points – Enterprise Zone companies can earn preference points on state contracts.
Each Enterprise Zone is administered by a local jurisdiction. For more information, please visit this link.
Local Agency Military Base Recovery Area (LAMBRA): Program developed to attract reinvestment and create re-employment opportunities on certain former military bases in California which were closed in the Base Closure and Realignment process. The program has tax incentives which are similar to those offered in the Enterprise Zone Program. The LAMBRA’s boundaries encompass all or part of the former military base and the term of the program designation is eight years. For more information, please visit this link.
Research & Development Tax Credit: The California R&D tax credit program reduces income or franchise tax. You may qualify for the credit if you paid or incurred qualified research expenses while conducting qualified research activity in California. You may receive 15% of the excess of current year research expenditures over a computed base amount (minimum of 50% of current year research expenses) or a 24% credit for basic research payments to third party organizations. You may claim the credit on the return for the taxable year you incurred the qualified expenses. Qualified research expenses include wages, supplies and contract research costs. To qualify, the research must be conducted within California and include basic or applied research of scientific inquiry, original investigation for the advancement of scientific or engineering knowledge or improved function of a business component. California has several exceptions to the federal law that can affect your computations for the credit. For more specific information, please review the Franchise Tax Board’s Frequently Asked Questions.
New Jobs Tax Credit: Small businesses comprise 99% of the State’s economy. In order to stimulate small business job creation efforts, the State provides a $3,000 tax credit for each new full-time employee hired by businesses that employed 20 or less on the last day of the preceding taxable year. The credit is prorated on an
annual full-time equivalent basis for employees employed less than a full year. For more information, please visit this link.
California Film & Television Tax Credit Program: The California Film Commission offers a tax credit incentive program to qualified motion pictures. $100 million has been allocated annually beginning in fiscal year 2009-2010 through 2016-2017 on a first-come first-served basis. The Program allows a 20% tax credit for qualified production related expenses to a taxpayer against State income taxes. The program offers a special 5% additional tax credit bonus for those TV series that return from out of state and to “independent films.” A qualified taxpayer may, in lieu of claiming the credit, apply the credit amount against sales and use taxes. For more information, please visit this link.
Advanced Transportation and Alternative Source Manufacturing Sales & Use Tax Exclusion Program (SB71): Designed to promote the creation of California-based manufacturing, California-based jobs and the reduction of greenhouse gases, air and water pollution or energy consumption through an approved sales and use tax exclusion (STE) for eligible projects on property utilized for the design, manufacture, production or assembly of advanced transportation technologies or alternative source–including energy efficiency–products, components or systems. To receive sales or use tax exclusion on qualified green-tech manufacturing property, businesses must apply through the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA). The following fees apply: an Application Fee equal to 0.0005 of the total amount of Qualified Property identified in the Application as originally submitted (minimum fee of $250 not exceed $10,000) and an Administrative Fee amount equal to 0.004 of the total amount of the Qualified Property purchased (no less than $15,000 nor more than $350,000). Applicants will receive a resolution and written notice of their approval by CAEATFA. For more information, please visit this link.
Sales & Use Tax Exclusion for Advanced Manufacturing Projects (SB1128): Approved by the Governor during the 2012 legislative session, which expanded the scope of this program. Program regulations are currently being drafted to include the expanded definition for “Advanced Manufacturers.” For more information, please visit this link.
New Markets Tax Credit (NMTC) Program: Permits taxpayers to receive a credit against federal income taxes for qualified equity investments in designated Community Development Entities (CDEs). Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities. The credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year period. In each of the first three years, the investor receives a credit equal to 5% of the total amount paid for the stock or capital interest at the time of purchase. For more information visit this link.
Investment Tax Credit (ITC): Reduces federal income taxes for qualified tax-paying owners based on capital investment in renewable energy projects (measured in dollars). The ITC generally allows taxpayers to take a single tax credit against the project’s tax basis equal to 30% in its first year and allows a taxpayer to elect certain qualified facilities to be characterized as energy property eligible for a 10% or 30% ITC, depending on the technology. Incentives are dependent on the type of energy. Fuel cells can receive a $1500 credit per 0.5 kW. Eligibility: wind; closed-loop biomass; open- loop biomass; geothermal; solar; small irrigation power; municipal solid waste; qualified hydropower production; marine and hydrokinetic renewable energy. System must be placed in service between December 31, 2005 and December 31, 2012. Certain geothermal and open- or closed- loop biomass systems qualify through December 31, 2013. For more information, visit this link.
Employment Training Panel (ETP): A business and labor supported state initiative that assists employers in strengthening their competitive edge by providing funds to off-set the costs of job skills training necessary to maintain high-performance workplaces. Since its inception in 1983, the ETP has funded the training of over 800,000 employees, served over 78,000 businesses and expended over $1.25 billion in funds. ETP uses a pay-for-performance contract to provide a specific, fixed-fee cash reimbursement for the costs of employer- customized, job-specific skills training conducted by a company for new hires or existing employees. Common training topics include: Business Skills, Computer Skills, Commercial Skills, Manufacturing Skills, Continuous Improvement, Hazardous Materials and OSHA 10/30, Management Skills and Literacy Skills.
The ETP reimbursement is based on the contract specified reimbursement rate and the number of training hours delivered and tracked. The rate is inclusive of all administration and training costs. Contracts are based on a two-year term. ETP funding is earned once the trainee completes a minimum number of ETP funded training hours and a post training employment retention period earning a contract specific wage. ETP uses a web-based tracking system for tracking of training hours, invoicing and supporting the contract with free development and monitoring services. For more information, please visit this link.
COLORADO – updated for 2014
For a list of state economic development agencies, click this link.
Advanced Industries (AI) Accelerator Programs: OEDIT offers four types of grants and two global business programs in support of Colorado’s advanced industries—Aerospace, Advanced Manufacturing, Bioscience, Electronics, Energy and Natural Resources, Infrastructure Engineering, and Technology and Information. Grants are available for Proof of Concept, Early-Stage Capital & Retention, Infrastructure Funding and AI Exports. A network of consultants and export training program are also available as part of the AI Global Business Programs to support these industries as they strive for worldwide markets.
Local Infrastructure Assistance: Designed to create new permanent jobs and retain existing jobs, primarily for low- and moderate-income persons. It encourages new business development, expansions and retentions of businesses located in non-entitlement cities and counties. Funds may be provided for the construction and/or improvement of water lines & wastewater facilities, sewer lines, sewage treatment facilities, roadways, natural gas-line services, electric power services, railroad spurs, lighting, sidewalks and alternative power sources such as solar.
State of Colorado Business Loan Funds: Every year, the State of Colorado receives an allocation of federal funds from the Department of Housing and Urban Development (HUD) to use for both community development and economic development efforts in the state. The funds are allocated to the Department of Local Affairs (DOLA), which uses the funds for community development projects, such as housing and public facilities. OEDIT receives approximately 1/3 of the annual allocation of funds to use specifically for economic development efforts statewide. OEDIT uses its allocation of funds to capitalize the state’s Business Loan Funds. Currently, the state has 15 Business Loan Fund locations which have service areas covering the majority of the rural areas of the state. The state’s program does not cover any of the metropolitan or ‘entitlement’ cities in Colorado (since these communities receive their own allocation of funds).
The 15 programs are responsible for promoting and fostering economic development efforts at the local level by providing financial assistance in the form of loans and loan guarantees to businesses in their respective regions. The loan program is locally driven, with each loan fund having its own local loan review committee and local Board of Directors who approve the types of businesses they feel will have a positive economic impact in the community. All funding decisions (of $100,000 or less) are made at the local level, with final oversight approval provided by OEDIT. All funding requests over $100,000 also require final approval by the Governor’s Financial Review Committee.
Colorado Enterprise Fund (CEF): Nonprofit lending source specializing in loans that range from $1,000 to $250,000 to support small and startup business by offering loans, guidance, training and resources. Many small businesses that are not able to receive traditional bank financing can get support through CEF.
Colorado Film Incentive Program: Offers producers a 10% cash rebate for production costs taking place in Colorado. It covers feature films (both independent and studio), television pilots, television series (broadcast and cable), television commercials, music videos, industrials, documentaries and video game design and creation. To qualify for the program, a Colorado production company must have qualified in-state spending of at least $100,000 on the project while an out-of-state production company must have at least $250,000 in qualifying expenses. In addition to the qualifying expenses, at least 25% of the workforce on every project must be Colorado residents in order for the project to meet state incentive guidelines.
Job Creation Performance Incentive Fund (PIF): Provides a performance-based incentive payment to qualifying companies that have created and hired net new full-time permanent jobs paying above average wages. The employer must maintain all of the new jobs for at least one year in order to claim an incentive from $1,500 to $4,500 per net new full-time job. The program is designed to support and encourage new business development, business expansions and relocations that have generated new jobs throughout the state.
Bioscience Discovery Evaluation Grant Program: Grants are provided to Offices of Technology Transfer at qualified Colorado nonprofit research institutions for advancing bioscience research toward commercialization. Grants are also available to qualified early-stage Colorado bioscience companies that are commercializing technologies founded at one of Colorado’s qualified research institutions. Additionally, OEDIT is using some of the funds to develop infrastructure that results from the cooperation of industry and research institutions, and that will support the development of the industry throughout the state.
Colorado Export Development Grant: Attempts to increase Colorado companies’ ability to export products and services to global markets. The Colorado International Trade Office (ITO) funds this grant to assist Colorado exporters of products and services in all sectors of manufacturing and services, excluding agricultural commodities and food products. The CEDG will provide funding for Colorado small and medium-sized enterprises (200 or fewer employees worldwide) that may be applied towards travel expenses, trade show exhibition and/or attendance, business matchmaking services or other direct expenses for developing a new target market.
Strategic Fund: Provides funding for incentives and various economic development activities in Colorado. It may provide a cash incentive to a business that creates and maintains net new jobs generally with above average wage rates in Colorado. The incentive amount is based on a cost per job calculation after the Colorado Economic Development Commission (EDC) has reviewed various factors and the level of non-state and local matching funds. A project introduction must be provided to the EDC prior to any announcements being made or the project proceeding. A business may receive an incentive through the Job Growth Incentive Tax Credit or from the Strategic Fund but may not receive an incentive from both programs for the same net new job growth.
Additionally, the Strategic Fund provides funding for various economic development activities in Colorado, which includes economic development marketing activities completed by state agencies, funding for business incubators and support for targeted industries.
Public Infrastructure Grants: The Infrastructure Assistance program is designed to create new permanent jobs and retain existing jobs, primarily for low and moderate income persons. This federally funded program encourages new business development, expansions and retentions of businesses located in non-entitlement cities and counties. Typically, eligible improvements are owned and/or maintained by a public or quasi-public entity. Funds may be provided for the construction and/or improvement of:
- Water Lines & Wastewater Facilities
- Sewer Lines, Sewage Treatment Facilities
- Natural Gas-Line Services
- Electric Power Services
- Railroad Spurs
- Alternative Power Sources such as Solar
Aircraft Manufacturer New Employee Tax Credit: Aircraft manufacturers located in a Colorado aviation development zone may qualify for a state income tax credit of $1,200 per new employee. An aviation development zone’ is any airport in Colorado that is a public-use facility designated by the FAA in its latest National Plan of Integrated Airport Systems, which has registered with the Colorado Office of Economic Development and International Trade (OEDIT). A business or portion of a business involved in the maintenance of aircraft is not eligible. If a facility performs both manufacturing and maintenance functions, only employees working exclusively in the manufacturing portion of the business may qualify for the credit.
Biotechnology Sales & Use Tax Refund: Biotechnology industries may recover the sales and use taxes paid in the preceding year on equipment and supplies purchased to conduct biotechnology research and development. Qualified taxpayers may seek a refund every year for all Colorado sales and use taxes they paid on purchases of tangible personal property used directly and predominately in research and development of biotechnology. This includes property such as microscopes, chemical reagents, and software.
Enterprise Zone Program: Provides tax incentives to encourage businesses to locate and expand in designated economically distressed areas of the state.
Local Government Property Tax Incentives (Business Incentive Agreements): Local governments can provide property tax credits or incentive payments based on the amount of increased property taxes for qualifying new business activity in their jurisdictions.
Manufacturing Revenue Bonds: Provides favorable tax-exempt Private Activity Bond financing targeted to small manufacturers in Colorado. It provides for the financing of real estate, machinery and equipment associated with expansion projects specific to manufacturers. Borrowers must meet all eligibility thresholds and federal tax code requirements and often must compete for available volume, which is capped statewide under federal rules.
Job Growth Incentive Tax Credit: Provides a state income tax credit to businesses undertaking job creation projects that would not occur in Colorado without this program. Businesses have to create at least 20 net new jobs (full-time equivalents) in the state (if located in an Enhanced Rural Enterprise Zone must create at least five) during the credit period (60 consecutive months where the business may qualify for an annual tax credit) with an average yearly wage of at least 110% of the county average based on where the business is located. All net new jobs must be maintained for at least one year after the positions are hired to qualify for the minimum amount of tax credits. All net new jobs must be maintained for one year after the credit period to qualify for the maximum tax credits that may be available to a business. The EDC has oversight authority, but a business should work with OEDIT to introduce a project to the EDC. A business may not start the proposed project in Colorado (including locating or expanding in the state, hiring employees related to this project or making material expenditures for this project) until a final application has been submitted and approved. Businesses already receiving an incentive from the EDC’s Strategic Fund or Performance Incentive Fund may not receive an incentive from the Job Growth Incentive Tax Credit Program for the same net new jobs.
Colorado First/Existing Industry Customized Training Programs: Jointly administered by OEDIT and the Colorado Community College System (CCCS), Colorado First grants are for companies that are relocating to Colorado or existing companies that are undertaking a major expansion. Existing Industry grants are designed for CO companies that are implementing new technology to remain competitive and keep jobs in the state. Approved training is for transferable job skills that support both the company’s economic competitiveness by re-training its workers in new skills, while enhancing the workers’ resumes and long-term employment opportunities.
CONNECTICUT – updated for 2014
For a list of state economic development agencies, click this link.
Manufacturers Assistance Act: Provides direct financial assistance in the form of low-interest loans under its Economic Development and Manufacturing Assistance Act (MAA). MAA also provides incentive driven direct loans for projects when there is a strong economic development potential. Funding may be used for purchase of equipment, furniture and fixtures, construction, leasehold improvements, training and other eligible project-related activities.
Small Business Express Program (EXP): An innovative business assistance program created in October 2011 that provides funding and technical assistance to Connecticut’s small businesses to spur job creation and economic growth. EXP provides access to capital through a revolving loan fund and incentive-driven loans and matching grants to create jobs. Connecticut-based businesses that are in good standing, have been in operation for at least 12 months, and employ no more than 100 are eligible for revolving loans of $10,000-$100,000; job creation loans of $10,000-$300,000; and matching grants of $10,000-$100,000.
First Five Program: One of Governor Malloy’s first initiatives in 2011, it provides substantial financial assistance for large-scale business projects to encourage business expansion, relocation and job creation. Eligible business development projects must create no less than 200 jobs within 24 months or invest no less than $25 million and create no less than 200 new jobs within five years.
IT Direct Loan Program: Provides substantial financial assistance to companies looking to upgrade their IT systems. The program covers the cost of lease hold improvements dedicated to high speed digital technology; plant expansions to house IT systems; devices and systems to safeguard wireless networks; hardware; software and more. To be eligible, companies must have been in operation for at least five years and must have a historic profitability record. Additionally, the company must demonstrate that it can service the debt. CI will advance up to 80% of the cost of the project, up to a maximum of $1,000,000, at a 2.00% fixed rate.
Job Expansion Tax Credit Program (JET): Created in October of 2011, it provides tax credits of $500 per month for each new full-time job created. If the new employee is receiving unemployment benefits, is a veteran, or receiving vocational rehabilitative services from the Bureau of Rehabilitative Services, employment services from the Department of Mental Health and Addiction Services or participating in employment opportunities and day services through the Department of Developmental Services, then the tax credit is increased to $900 per month. Credits will be available for each new employee hired between January 1, 2012, and prior to January 1, 2014, for period of three years. The credit may be applied against the insurance premiums tax, corporation business tax, utilities company tax, or income tax.
Urban and Industrial Site Reinvestment Tax Credit: Dollar-for-dollar corporate tax credit of up to 100% for an investment up to a maximum of $100 million in an urban area or an industrial project; minimum investment is $5 million in distressed communities and $50 million in all other communities.
Film Production & Digital Media Tax Credit: A tax credit equal to 10% of qualified digital media and motion picture production, pre-production and post-production expenses in the state between $100,00 – $500,000, 15% of qualified expenses between $500,00 – $1M; and 30% of qualified expenses over $1M.
Research & Development Tax Credits: A tax credit equal to 20% of the R&D expenditures in Connecticut in the current income year exceeding R&D expenditures of the prior taxable year; unused R&D credits can be carried forward and, for companies with gross income of $70 million or less, can be sold to the state for 65% of their value; credit equal to 100% of property taxes owed and paid on electronic data processing hardware peripheral equipment and software; credit may be applied against certain other Connecticut taxes.
Corporate Business Tax Credits: Financial institutions constructing new facilities and adding new employees can receive a credit of as much as 50% of the tax for up to 10 years; may be extended for an additional five years; based on size of the facility and level of employment.
Corporate Business Tax Exemptions: Available for:
- All insurance companies, Connecticut incorporated and non-Connecticut incorporated
- Corporate income, insurance premium and sales and use taxes for certain banks, insurers and investment companies locating in the Hartford Financial Service Export Zone that conduct all business with non-U.S. persons
- Capital gains from the sale of protected open space or Class I or II water company land to the state or certain entities
- Non-U.S. corporations whose sole activities in CT are trading stocks, securities or commodities of their own account
Sales & Use Tax Exemption: Connecticut Innovations (CI) can act as a conduit for a sales and use tax exemption for the company’s anticipated qualifying capital equipment and/or construction materials. This exemption will relieve the company and/or the developer from the state’s 6.35% sales tax, up to the CI Board approved amount. This procedure is subject to review and approval by the CI Board of Directors and the Connecticut Department of Revenue Services.
Angel Investor Tax Credit Program: The State of Connecticut launched a program in 2010 that allows Angel Investors to take a credit against Connecticut State income tax for certain investments made in qualifying businesses. Investments must be at least $25,000 in order to be considered under the Program and the income tax credit equals 25% of the cash investment, up to a maximum credit of $250,000.
- Qualified businesses must apply to Connecticut Innovations and be approved to be eligible for a tax credit
- The Connecticut business must be principally located in Connecticut and be engaged in bioscience, advanced materials, photonics, information technology, clean technology or any other emerging technology as determined by the Commissioner
- The business must have annual gross revenues of less than $1 million in the most recent income year; have fewer than 25 employees, not less than 75% of whom reside in the state; have been operating in the state for less than 7 consecutive years; be primarily owned by the management of the business and their families; and received less than $2 million in cash investments eligible for the tax credits.
The state of Delaware takes a comprehensive approach in supporting businesses and entrepreneurs of all sizes and has special programs that play to Delaware’s strengths, including: The DELAWARE STRATEGIC FUND: represents the primary funding source used by the Delaware Economic Development Office (DEDO) to provide customized financial assistance to businesses. For businesses considering locating in the State of Delaware, financial assistance may be provided in the form of low interest loans, convertible loans to grants, or other creative instruments to support the attraction of businesses hiring Delawareans. SMALL BUSINESS INNOVATION RESEARCH (SBIR): The Delaware Strategic Fund represents the primary funding source used by for SBIR Bridge Grants. The SBIR Matching Grant program provides grants funds to businesses located in the State that have obtained a federal SBIR Grant. BROWNFIELD GRANT PROGRAM: The Delaware Strategic Fund represents the primary funding source used for the Brownfield Grant program that helps reduce the capital expenditure of redeveloping a Brownfield site where at least five jobs will be created. TAX CREDITS FROM NEW ECONOMY JOBS PROGRAM: Eligible businesses receive an initial 25 percent rebate on withholding taxes. To qualify, the business must add at least 50 new jobs, each of which must have an annual salary of at least $100,000. Participating businesses may receive a maximum rebate of up to 40 percent after 250 qualifying employees have been hired and the business operates within targeted growth zones, incorporated municipalities or former Brownfields. Qualifying firms are eligible for credits for a ten-year period. TARGETED INDUSTRY TAX INCENTIVES: Businesses in targeted industries are eligible for tax credits of $400 for every $100,000 of capital investment, as well as $400 for every new job created. This credit can be used for a period of up to ten years. It requires a minimum capital investment of $100,000, which may not exceed 50 percent of annual pre-tax liability. Select commercial businesses may also qualify for a ten-year reduction in gross receipt taxes. Targeted industries include manufacturing, wholesaling, computer Processing, engineering, computer credit, aviation, telecommunications, laboratories and scientific research. TARGETED LOCATION TAX INCENTIVES: Targeted industries (as defined above) that expand or relocate to targeted locations are eligible for corporate income tax credits of $650 for every $100,000 of capital investment, as well as $650 for every job created. This credit can be used for a period of up to ten years. Select commercial businesses may also qualify for a ten-year reduction in gross receipt taxes. Targeted locations include Targeted Census Tracts*, Government Owned Property, Foreign Trade Zones and Non-profit Owned Property for Economic Development GREEN INDUSTRIES: Green manufacturers may be eligible for tax credits if they reduce chemical waste by 20 percent, reduce other waste by 50 percent, use 25 percent recycled materials in their manufacturing and take other steps to remove materials from Delaware’s solid waste stream. BROWNFIELD TAX CREDITS: Businesses that develop property on former Brownfields and make more than a $100,000 capital investment are eligible for tax credits. Brownfields in targeted locations are eligible for a $900 credit for every $100,000 of capital investment and $900 for every job created. Those in non-targeted areas are eligible for a $400 credit for every $100,000 of capital investment and $400 for every job created. PUBLIC UTILITY TAX REBATES: Tax Credits are available for a rebate of 50 percent of the public utilities tax imposed on new or increased consumption of gas and electricity for five years. The public utilities tax rate is 4.25 percent. The utility tax on the consumption of electric by licensed manufacturers and food or agribusiness processors is reduced to 2 percent. Additionally, electricity consumed in the manufacturing of automobiles is exempt from utility taxes. BUSINESS FINDERS FEE (BFF): Existing Delaware companies that successfully recruit other companies to the state are eligible for a tax credit of $500 for each new job that the new company brings. This is an innovative new program that will help strengthen local supply networks and sectors. LIMITED INVESTMENT FOR FINANCIAL TRACTION (LIFT): This loan program allows participating small businesses to defer interest payments on their line of credit for a two-year period. Eligible businesses must meet the following requirements: · Have been in business for at least three years · Have an existing line of credit with a Delaware commercial bank · Have between 3 – 50 employees SMALL BUSINESS ENERGY AND FACILITIES REVOLVING FUND: Created by a $500,000 grant from the U.S. Department of Commerce and matched with funds from the Delaware Strategic Fund, this fund provides loans at market or below-market interest rates to businesses that will create or retain jobs in industries that promote energy efficiency or recycling. TAX-EXEMPT FINANCING: The Delaware Economic Development Authority (DEDA) provides statewide financial assistance to new or expanding businesses, governmental units and certain organizations that are exempt from federal income taxation (collectively, “assisted persons”) by issuing tax-exempt bonds and lending the proceeds of such bonds to these assisted persons. Tax-exempt bonds bear lower interest rates than comparable taxable bonds, because the interest paid to bond holders is exempt from federal and Delaware income taxes. DEDA is able to pass on this lower interest rate to the assisted persons. DEDA does not guarantee the payment of principal or interest on the bonds, and the bonds are not backed by the full faith and credit of the State. Tax exempt financing may be cost effective for projects involving the issuance of more than $1,250,000. DELAWARE ACCESS PROGRAM: Designed to give banks a flexible and extremely non-bureaucratic tool to make business loans that are somewhat riskier than a conventional bank loan, in a manner consistent with safety and soundness. It is designed to use a small amount of public resources to generate a large amount of private bank financing, thus providing access to bank financing for many Delaware businesses that might otherwise not be able to obtain such access. Based on a risk-pooling concept, the approach is fundamentally different from the traditional type of insurance or guarantee program, such as the Federal Small Business Administration 7(a) Program, which guarantees a percentage of a loan on a loan-by-loan basis. When a bank makes a loan under the Program, the borrower pays a one-time premium charge, which is matched by a bank premium payment. DEDA then matches the combined total of the borrower’s payment and the bank’s payment. The borrower’s premium is one of the terms of the loan to be worked out privately between the bank and the borrower. BLUE COLLAR TRAINING GRANT: Available to help Delaware businesses provide customized training programs to upgrade and/or retrain their employees and provide financial assistance to full time employees.
QUALIFIED TARGET INDUSTRY TAX REFUND (QTI): Available for new or expanding companies that create high wage jobs in targeted high value-added industries. It includes refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium and certain other taxes. Pre-approved applicants who create jobs in Florida receive tax refunds of $3,000 per net new Florida full-time equivalent job created, $6,000 in an Enterprise Zone or Rural Community (county). For businesses paying 150 percent of the average annual wage, add $1,000 per job; for businesses paying 200 percent of the average annual salary, add $2,000 per job; businesses falling within a designated high impact sector or increasing exports of its goods through a seaport or airport in the state by at least 10 percent in value or tonnage in each year of receiving a QTI refund, add $2,000 per job; projects locating in a designated Brownfield area (Brownfield Bonus) can add $2,500 per job. The local community where the company locates contributes 20 percent of the total tax refund. There is a cap of $5 million per single qualified applicant in all years, and no more than 25 percent of the total refund approved may be taken in any single fiscal year. QUALIFIED DEFENSE AND SPACE CONTRACTOR TAX REFUND (QDSC): Florida defense, homeland security and space business contractors are given a competitive edge in consolidating contracts or subcontracts, acquiring new contracts or converting contracts to commercial production. Pre-approved applicants creating or retaining jobs in Florida may receive tax refunds of $3,000 per net new Florida full-time equivalent job created or retained; $6,000 in an Enterprise Zone or rural county. For businesses paying 150 percent of the average annual wage, add $1,000 per job; for businesses paying 200 percent of the average annual salary, add $2,000 per job. CAPITAL INVESTMENT TAX CREDIT (CITC): Used to attract and grow capital-intensive industries, it is an annual credit, provided for up to 20 years, against the corporate income tax. Eligible projects are those in designated high-impact portions of the following sectors: clean energy, biomedical technology, financial services, information technology, silicon technology, transportation equipment manufacturing, or be a corporate headquarters facility. Projects must also create a minimum of 100 jobs and invest at least $25 million in eligible capital costs. Eligible capital costs include all expenses incurred in the acquisition, construction, installation, and equipping of a project from the beginning of construction to the commencement of operations. The level of investment and the project’s Florida corporate income tax liability for the 20 years following commencement of operations determines the amount of the annual credit. HIGH IMPACT PERFORMANCE INCENTIVE GRANT (HIPI): A negotiated grant provided to pre-approved applicants in certain high-impact sectors designated by the Governor’s Office of Tourism, Trade and Economic Development (OTTED). In order to participate in the program, the project must operate within designated high-impact portions of the following sectors: clean energy, corporate headquarters, financial services, life sciences, semiconductors and transportation equipment manufacturing; create at least 50 new full-time equivalent jobs (if a R&D facility, create at least 25 new full-time equivalent jobs) in Florida in a three-year period; and make a cumulative investment in the state of at least $50 million (if a R&D facility, make a cumulative investment of at least $25 million) in a three-year period. Once recommended by Enterprise Florida, Inc. (EFI) and approved by OTTED, the high impact business is awarded 50 percent of the eligible grant upon commencement of operations and the balance of the awarded grant once full employment and capital investment goals are met. QUICK RESPONSE TRAINING PROGRAM (QRT): Employer-driven and designed to assist new value-added businesses and provide existing Florida businesses the necessary training for expansion. A state educational facility is available to assist with application and program development or delivery. The educational facility will also serve as fiscal agent for the project. The company may use in-house training, outside vendor training programs or the local educational entity to provide training. Reimbursable expenses include: instructors’/trainers’ wages, curriculum development and textbooks/manuals. INCUMBENT WORKER TRAINING (IWT): A program that provides training to currently employed workers to keep Florida’s workforce competitive in a global economy and to retain existing businesses. It is available to all Florida businesses that have been in operation for at least one year prior to application and require skills upgrade training for existing employees. Priority is given to businesses in targeted industries, Enterprise Zones, HUB Zones, Inner City Distressed areas, Rural Counties and areas, and Brownfield areas. ECONOMIC DEVELOPMENT TRANSPORTATION FUND: Commonly referred to as the “Road Fund,” it is an incentive tool designed to alleviate transportation problems that adversely impact a specific company’s location or expansion decision. The award amount is based on the number of new and retained jobs and the eligible transportation project costs, up to $3 million. The award is made to the local government on behalf of a specific business for public transportation improvements. SPECIAL OPPORTUNITY INCENTIVES
- Florida offers increased incentive awards and lower wage qualification thresholds in its rural counties. Additionally, a RURAL COMMUNITY DEVELOPMENT REVOLVING LOAN FUND and RURAL INFRASTRUCTURE FUND exist to meet the special needs that businesses encounter in rural counties.
- URBAN INCENTIVES: Florida offers increased incentive awards and lower wage qualification thresholds for businesses locating in many urban core/inner city areas that are experiencing conditions affecting the economic viability of the community and hampering the self-sufficiency of the residents.
- ENTERPRISE ZONE INCENTIVES: An assortment of tax incentives to businesses that choose to create employment within an enterprise zone—a specific geographic area targeted for economic revitalization. These include a sales and use tax credit, tax refund for business machinery and equipment used in an enterprise zone, sales tax refund for building materials used in an Enterprise Zone and a sales tax exemption for electrical energy used in an enterprise zone.
- Florida offers incentives to businesses that locate in Brownfield sites— underutilized industrial or commercial sites due to actual or perceived environmental contamination. The BROWNFIELD REDEVELOPMENT BONUS REFUND is available to encourage Brownfield redevelopment and job creation. Approved applicants receive tax refunds of up to $2,500 for each job created.
- JOBS FOR THE UNEMPLOYED TAX CREDIT PROGRAM (JUTC): Provides incentives to businesses throughout Florida to hire qualified employees who were previously unemployed. The program is available to all businesses that are identified as a “target industry”. The business may receive a tax credit of $1,000 for every employee hired as of July 1, 2010. The business may claim only new hires that were previously unemployed for a minimum of 30 days, and that remain employed after a 12-month period at an average of 36 hours per week. This program will run until June 30, 2012 with a limit of $10 million available for tax credits.
- LOCAL GOVERNMENT DISTRESSED AREA MATCHING GRANT PROGRAM (LDMG): Assists local governments in attracting and retaining targeted businesses. Applications are accepted from local governments/municipalities that plan on offering financial assistance to a specific business in the area. These targeted businesses are required to create at least 15 full-time jobs and the project must either be new to Florida; expanding operations in Florida; or leaving Florida unless it receives local and state government assistance. The amount awarded by the State will equal $50,000 or 50 percent of the local government’s assistance amount, whichever is less, and be provided following the commitment and payment of that assistance.
- MANUFACTURING AND SPACEPORT INVESTMENT INCENTIVE PROGRAM (MSII): Encourages capital investment and job creation in manufacturing and spaceport activities in Florida. Applications are accepted by eligible businesses from July 1, 2010 to June 30, 2012. A tax refund up to $50,000 will be given on the State Sales and Use Tax paid for eligible equipment purchases. Purchase cost must exceed a business’ total expenditures on eligible equipment purchased and placed into service in this state during the 2008 tax year.
GEORGIA – updated for 2014
For a list of state economic development agencies, click this link.
Foreign Trade Zone (FTZ): Allows qualified companies to defer, decrease or eliminate duties on materials imported from overseas that are used in products assembled in Georgia. FINANCING Employees’ Retirement System of Georgia Enhanced Investment Authority Act: This measure means venture capital funds can now access state pension funds, thus encouraging start-up companies to stay and grow in the state. Entrepreneur and Small Business Loan (ESB) Guarantee Program: In partnership with the OneGeorgia Authority, the state can provide loan guarantees to spur entrepreneurial growth in specified rural communities throughout GA. The guarantee amounts can range between $35,000 and $250,000, can be used for hard assets or for start-up and working capital and require a 10% cash equity injection by the borrower. See onegeorgia.org/programs/esb. TAX INCENTIVES Elimination of the Sales & Use Tax on Energy Used in Manufacturing: Not only is this sales tax exemption targeted to both new and existing companies, it also applies to all energy, not just electricity, used directly or indirectly in manufacturing. Discretionary Elimination of Sales & Use Tax for Construction Materials: To help defray the costs of a company’s start-up operations, Georgia now has the option to offer a sales and use tax exemption on construction materials. The exemption can only be used for the expansion or location of a competitive project of regional significance. Research & Development Tax Credits: R&D tax credits are available to any company that increases its qualified research spending. Brand new companies, existing companies embarking on R&D for the first time and established companies expanding their R&D budget are eligible. The tax credit earned is a portion of the increase in R&D spending. The credit can be used to offset up to 50% of net Georgia income tax liability, after all other credits have been applied. Any unused R&D tax credits can be carried forward for up to 10 years. In addition, excess R&D tax credits can be used against state payroll withholding. With the enhancements in statutory R&D Tax Credits, qualified companies can now take credits earned against their state payroll withholding liability, a targeted and innovative use of excess credits that incentivizes the growth of technology-based companies. Job Tax Credit: Companies and their headquarters that are engaged in strategic industries such as manufacturing, warehousing & distribution, processing, telecommunications, broadcasting, tourism and R&D may qualify. Depending on the community’s tier, companies must create between two and 25 net new full-time jobs in the first year. Credits may also be accrued for additional jobs created in years two through five. Jobs created outside of year five may not be claimed unless a new threshold for job creation (year 1) is met. Qualified companies can claim a tax credit with a value of $750—$4,000 per job, per year, beginning with the first taxable year in which the new job is created and for the following four years the job is maintained. Increased job tax credits, equal to Tier 1 credits, are also allowed for companies that create jobs in Less Developed Census Tracts (LDCT), Opportunity Zones (OZ) or Military Zones (MZ). OZs, MZs and Georgia’s 40 least developed counties offer job tax credits to businesses of any nature. Credits may be taken against 100% of state corporate income tax liability in Tier 1 & 2 counties, or 50% of state corporate income tax liability in Tier 3 & 4 counties. Excess credits up to $3,500 per job may also be applied to payroll withholding in Tier 1 counties, LDCTs, OZs and MZs. Credits that are claimed but not used in any taxable year may be carried forward for 10 years from the close of the taxable year in which qualified jobs were established. Statutory Job Tax Credits: In 2012, Georgia specifically identified biomedical manufacturing and alternative energy manufacturing, including solar, wind, biofuel and electric vehicle manufacturing, as qualifying industries for the Job Tax Credit, along with eight other industries. Mega Project Tax Credit: Recently updated, this tax credit applies to qualified companies employing 1,800 new employees, and either investing a minimum of $450 million or meeting a minimum annual payroll of $150 million. The maximum number of jobs a company can claim is raised to 4,500. Single Factor Apportionment: 2005, Georgia became the first state in the Southeast to adopt a “Single Factor Gross Receipts” apportionment formula. This formula treats a company’s gross receipts, or sales in Georgia, as the only relevant factor in determining the portion of that company’s income subject to Georgia’s 6% corporate income tax. This significantly reduces the effective rate of Georgia income taxation of companies with substantial sales to customers outside the state. In addition, GA does not use the so-called “Throw Back Rule,” which many states use to tax income from sales of goods or services to out-of-state customers if the customer’s state does not already tax that income. Quality Jobs Tax Credit: Companies that create at least 50 jobs in a 12 month period where each job pays wages at least 110% of the county average are eligible to receive a tax credit of $2,500-$5,000 per job, per year, for up to five years, based on a scaled system. New quality jobs created within seven years can qualify for the credit. Credits may be used to offset the company’s payroll withholding once all other tax liability has been exhausted, and may be carried forward for 10 years. Port Tax Credit Bonus: Available to taxpayers who increase imports or exports through a Georgia port by 10% over the previous or base year. Base year port traffic must be at least 75 net tons, five containers or 10 TEUs (20-foot equivalent units); if not, the percentage increase in port traffic will be calculated using 75 net tons, five containers, or 10 TEUs as the base. The port tax credit bonus can be used with either the Job or the Investment Tax Credit program, provided that the company meets the requirements for one of those programs. Port Tax Credits may be used to offset up to 50% of the company’s corporate income tax liability. The credits cannot be utilized with the Quality Jobs Tax Credit and can only be used in Opportunity Zones, Military Zones and Less Developed Census Tracts in limited cases by existing large distribution centers.
- Port Tax Credit bonus for JOB Tax Credits – an additional $1,250/job credit for taxpayers with qualified increases in shipments through a GA port. The $1,250 is added to the Job Tax Credit.
- Port Tax Credit bonus for INVESTMENT Tax Credit – increases the Investment Tax Credit to the equivalent of a Tier 1 location regardless of the tier level. The port bonus would therefore be equal to 5% of the qualified investment in expenses directly related to manufacturing or providing telecommunication services, with the credit increasing to 8% for recycling, pollution control and defense conversion.
Child Care Tax Credits: Employers who purchase or build qualified child care facilities are eligible to receive GA income tax credits equal to 100% of the cost of construction—the credit is spread over 10 years (10% each year). Unused credits from the purchase or construction of a child care facility can be carried forward three years. The child care facility must be licensed by the state. Employers who provide or sponsor child care for employees are eligible for a credit against Georgia income tax equal to 75% of the employer’s direct costs. Credits that are related to the operating cost of the facility may be carried forward five years. All child care credits can be used against 50% of the taxpayer’s income tax liability in a given year. Work Opportunity Tax Credit Program (WOTC): Coordinated by the Georgia Dept. of Labor, it is a federal tax credit incentive that the U.S. Congress provides to private-sector businesses for hiring individuals from nine target groups who have consistently faced significant barriers to employment. Among others, target groups include certain TANF (Temporary Assistance for Needy Families) and food stamp recipients, and certain residents of an Empowerment Zone or Rural Renewal County. Participating companies are compensated by being able to reduce their federal income tax liability with a tax credit between $1,200 and $9,000 per qualified employee, depending on the target group. See www.doleta.gov/business/incentives/opptax/. Inventory Tax Exemption: Effective January 1, 2011, business inventory is exempt from state property taxes (0.15 mils in 2013, 0.10 in 2014, 0.05 in 2015 0.0 in 2016 forward). Many Georgia counties also exempt from property tax up to 100% of qualified raw material, work-in-process and finished goods inventory under Georgia’s local-option “Freeport” law. In most of these counties, distribution center and warehouse inventories are exempt if the inventory is destined to be shipped out of state. Angel Investor Tax Credit: An income tax credit for qualified investors who invest in certain qualified businesses in Georgia in calendar years 2011, 2012 and 2013. The credit is claimed two years later, in 2013, 2014 and 2015, respectively. The credit is 35% of the investment with an individual investor cap of $50,000 per year. The aggregate annual cap for this program is $10 million. The qualified investor must get approval from the Georgia Department of Revenue before claiming the credit. Small Business Tax Credits: Small businesses are eligible for the job tax credits, assuming all job thresholds and other eligibility criteria are met. This includes eligibility if located in OZs, MZs and Georgia’s 40 least developed counties, which offer job tax credits to businesses of any nature, including retail businesses that create two jobs. Investment Tax Credit: Existing Georgia companies that have operated a manufacturing or telecommunications support facility in the state for at least three years, and that make a minimum $50,000 additional qualified capital investment, may claim from 1% to 5% (depending on tier status) of the new investment directly related to manufacturing or providing telecommunications services as a tax credit. Higher credits (3% to 8%, depending on tier status) are available for investments in recycling or pollution control equipment and for defense plant manufacturing conversion to a new product. Taxpayers must choose either the investment tax credit or the job tax credit. This credit may be applied against 50% of state corporate income tax liability and carried forward for 10 years. Optional Investment Tax Credits: Can be taken in lieu of the investment tax credit. The credits range from 6% to 10% of qualified capital investment. This credit is available to taxpayers that qualify for investment tax credits, with the minimum investment ranging from $5 million to $20 million. A taxpayer can use the tax credits up to the calculated amount for a given year. The credit may be claimed up to 10 years after the year the property was first placed in service, provided the property remains in service. The optional investment tax credit is a calculated risk. Without large increases each year in income tax liability, the usable tax credit could be very small and possibly zero. Georgia Film Tax Credit: The Georgia Entertainment Industry Investment Act offers an across-the-board flat tax credit of 20% based on a minimum investment of $500,000 on qualified productions in the state. An additional 10% uplift can be earned by including an imbedded animated GA logo on approved projects. Qualified expenditures include materials, services and labor. Eligible productions include feature films; television movies, pilots or series; commercials; music videos; and certain interactive projects including types of animation, special effects and video game development. The minimum expenditure threshold can be met with one or the total of multiple projects aggregated. The income tax credit may be used against GA income tax liability or the company’s GA withholding. If the production company chooses, they may make a one-time sale or transfer of the tax credit to one or more Georgia taxpayers. WORKFORCE DEVELOPMENT Hiring Assistance: Georgia’s Department of Labor (GDOL) assists companies in recruitment by posting job notices, collecting and screening applications and/or résumés, providing interview space, scheduling interviews and hosting job fairs. GDOL will work with private employment agencies that list jobs with the state. Quick Start Employee Training: Provides customized training for new employees in skill-based jobs at no cost to qualifying companies. The training program is given to the company for its future use. Quick Start provides training space, instructors and all needed materials related to the program, potentially saving companies millions of dollars in training costs. See georgiaquickstart.org Retraining Tax Credit: A company’s direct investment in training can be claimed as a tax credit. It is available to all GA businesses that file a GA income tax return. 50% of the employer’s direct cost, up to $500 per full-time employee, per approved training program, may be claimed as a credit. The total amount cannot exceed $1,250 per employee per year. Training programs must be approved by the Technical College System of Georgia and must be for quality and productivity enhancements and certain software technologies. This tax credit can be used to offset up to 50% of a company’s state corporate income tax liability. Unused credits can be carried forward for 10 years. These credits can be combined with other tax credits. University System of Georgia Economic Development: The Board of Regents of the University System of Georgia created an Office of Economic Development in 1995. The System’s Economic Development staff, working with a team of economic development leaders from each campus, bridges the intellectual resources of Georgia’s 31 public college and universities to the Georgia Department of Economic Development and the state’s business community in innovative ways. Georgia businesses can connect with college-educated talent, the latest research and business and operations advice. Centers of Innovation: Georgia’s six Centers of Innovation provide unique, technology-oriented support to businesses and start-ups in the areas of Aerospace, Agribusiness, Energy, Life Sciences & IT, Logistics and Advanced Manufacturing. Each center provides direct access to university and technical college applied research, commercialization resources, technology connections, matching grant funds, potential investor networks and key government agencies. Client companies are connected with industry-specific experts who are on the leading edge of technology and new ideas. See georgiainnovation.org.
HAWAII SMALL BUSINESS INNOVATION RESEARCH PROGRAM (SBIR): A $2.2 billion three-phased Federal program that provides small businesses the opportunity to win federal R&D awards. Hawaii-based companies that receive Phase I feasibility study SBIR awards can apply for funds from HTDC’s Hawaii SBIR Matching Grant program. The matching grants provide up to $25,000 to assist companies with enhancing their Phase I project development, compete for the more lucrative Phase II awards to typically conduct prototype development, and ultimately reach successful commercialization. MOTION PICTURE, DIGITAL MEDIA & FILM PRODUCTON INCOME TAX CREDIT: A refundable tax credit based on a production company’s Hawaii expenditures while producing a qualified film, television, commercial or digital media project. The credit equals 15 percent of qualified production costs incurred on Oahu, and 20 percent on the neighbor islands (Big Island, Kauai, Lanai, Maui, Molokai). ROYALTIES TAX EXEMPTION: Royalties derived from performing arts products are excluded from a Hawaii taxpayer’s income and not subject to state income tax. HAWAII ENTERPRISE ZONES PARTNERSHIP: A joint state-county effort intended to stimulate—via tax and other incentives—certain types of business activity, job preservation and job creation in areas where they are most appropriate or most needed. Up to six zones can be designated per county. If a business (or a branch of business) is eligible and is located in an Enterprise Zone (EZ), it can reduce its state taxes and receive other county benefits for up to seven years by satisfying the EZ hiring and gross receipts requirements. HIGH TECHNOLOGY DEVELOPMENT CORPORATION MANUFACTURING EXTENSION PARTNERSHIP (HTDC-MEP): A federal program administered in Hawaii by the State’s High Technology Development Corporation and designed to bring best practices to small and medium-sized businesses at an affordable cost. Almost every business in Hawaii that develops products can take advantage of the services. It serves all industries and all companies who are willing to invest time, money and people to improve business. HTDC-MEP acts as a general practitioner in providing a wealth of knowledge and meeting various industry-specific needs. It can help increase profitability & competitiveness in the following business areas:
- Reduce costs & lead-times while improving your quality, productivity, capacity and profits.
- Process design and improvements
- Lean Manufacturing
- Plant Layout
- Value Stream Mapping
- Business Planning
- Strategic Planning
- Marketing Research and Planning
- Product development
- Supply chain management
- E-commerce and web development
- Quality control issues
- Business operations and management coaching
- Training (Lean, Value Stream Mapping, TQM, etc.)
HAWAII STRATEGIC DEVELOPMENT CORPORATION (HSDC): An agency of Hawaii established in 1990 to promote technology based economic development and economic diversification in the state through a return driven investment program in partnership with private capital. HSDC has adopted an indirect investment policy whereby it seeks to invest in venture capital partnerships that in turn will make direct investments into Hawaii-based companies. The general partners of the venture capital partnerships, or fund managers, are private sector investors who pool funds from a number of investors, identify and invest in promising businesses, and manage the investments until an exit from the investment is achieved. In this manner, HSDC is able to leverage public funds with private capital and utilize the investment acumen of the private sector in selecting suitable investments. HSDC seeks to invest in fund managers with experience in venture capital investing and that have a commitment to build a portfolio of Hawaii-based investments. Emphasis is given to investment opportunities that further technological innovation in Hawaii. HSDC is currently precluded by law from investing in retail businesses, housing construction and the tourism sector. PRIORITY PERMIT PROCESSING FOR GREE BUILDINGS: Hawaii requires priority processing for all construction or development permits for projects that achieve LEED Silver or equivalent. ALTERNATIVE ENERGY LOANS: Act 209 was enacted in 2008 to establish a new loan program to help full-time farmers, ranchers and aquaculturalists to reduce dependence on fossil fuel by producing renewable energy through sources such as photovoltaic, hydroelectric, wind, methane, biodiesel and ethanol. The act also allows for loans for food safety projects to ensure a safe food supply for Hawaii’s people. The maximum loan amount is $1,500,000 or 85 percent of the project cost (whichever is less). Funds can be used for infrastructure, equipment, land improvement and operating costs associated with the project. The program offers favorable interest rates with a maximum loan term of 40 years. SOLAR AND WIND ENERGY CREDIT: Originally enacted in 1976, it allows individuals or corporations to claim an income tax credit of 20 percent of the cost of equipment and installation of a wind system and 35 percent of the cost of equipment and installation of a solar thermal or photovoltaic (PV) system. For solar thermal energy systems, a commercial property is eligible for a maximum credit of 35 percent of the actual cost or $250,000, whichever is less; for photovoltaic systems, the maximum allowable credit is 35 percent of the actual cost or $500,000, whichever is less; and for wind powered energy systems the maximum allowable credits is 20 percent of the actual cost or $500,000, whichever is less.
The HIRE ONE TAX CREDIT rewards employers that create new jobs. Business that hire new employees to fill newly created positions can receive a refundable income tax credit for the gross wages paid during the first 12 months of employment. The new employer must make at least $12 an hour in counties where the unemployment level is 10 percent or higher and $15 an hour in counties with unemployment below 10 percent. The amount of the refund is based on the employer’s unemployment insurance tax rating. IDAHO BUSINESS ADVANTAGE: Businesses that invest a minimum of $500,000 in new facilities and create at least 10 new jobs averaging $40,000 annually, plus benefits qualify for a variety of incentives: a. An enhanced Investment Tax Credit of 3.75 percent up to $750,000 OR 62.5 percent of tax liability in any one year. b. A new jobs tax credit starting at $1,500 and climbing to $3,000 per job (note, this section may be used in lieu of the Hire One Tax Credit) c. A 2.5 percent real property improvement tax credit up to $125,000 in any one year along with a 25 percent rebate on sales tax paid on construction materials for the new facilities d. Upon request of the company, the respective county commissioners may also authorize a full or partial property tax exemption. CUSTOMIZED WORKFORCE TRAINING is tailored to the specific needs of the company and designed to develop skills for their precise requirements. Financial reimbursement up to $3,000 per employee is available to eligible companies to cover the cost of training new employees or retaining ones facing permanent layoff. 3 PERCENT INVESTMENT TAX CREDIT: Businesses that make qualifying new investments may earn an income tax credit. This credit can be offset up to 50 percent of a company’s state income tax liability and may be carried forward up to 14 years. QUALIFIED INVESTMENT EXEMPTION: May be applied in lieu of the investment tax credit. A two-year exemption from property tax on qualified personal property is available only if a loss was incurred in the second preceding year in which the property is placed in service. The loss must have been computed without regard to net operating loss carry over or carry back. NET OPERATING LOSS DEDUCTIONS: A tax provision for losses up to $100,000 per tax year. Losses may be carried back for two years, or, if not absorbed in those two years, the remainder may be carried forward for up to 20 years. 5 PERCENT RESEARCH INCOME TAX CREDIT: Businesses conducting basic and qualified research may earn an income tax credit of 5 percent that may be carried forward up to 14 years. 3 PERCENT BROADBAND INCOME TAX CREDIT: Businesses that purchase qualified broadband equipment and infrastructure for the benefit of end users in Idaho may earn a 3 percent income tax credit up to $750,000. This credit is transferable and may be carried forward up to 14 years. SALES TAX INCENTIVES
- PRODUCTION SALES TAX EXEMPTION: Businesses purchasing equipment and raw materials used directly in manufacturing, processing, mining, fabrication or logging operations; for clean rooms used in semiconductor and semiconductor equipment manufacturing; for any equipment or material used in research and development activities; and processing materials, substances or commodities for use as fuel for the production of energy may earn a sales tax exemption.
- POLLUTION CONTROL EQUIPMENT SALES TAX EXEMPTION: Businesses purchasing required pollution control equipment are exempt from sales tax on those purchases. Required pollution control facilities are exempt from property tax.
- UTILITY & INDUSTRIAL FUELS SALES TAX EXEMPTION: Businesses are exempt from paying sales tax on utilities and industrial fuels. Examples include power, water, natural gas and telephone.
- 100 PERCENT GOODS-IN-TRANSIT TAX EXEMPTION: The state’s free port law provides that goods in transit (goods purchased by a carrier in its business and delivered outside the state under a bill of lading for use by the carrier in its business) are exempt from taxation.
IDAHO PRIME RATE LOAN PROGRAM: Commercial banks offer low-interest loans to qualifying small business with up to 85 percent Small Business Administration guaranty. INDUSTRIAL REVENUE BONDS: Up to $20 Million is available in tax-free bonds to finance manufacturing, processing, production and assembly projects are issued by a public corporation with the project or business serving as collateral. IDAHO FILM INCENTIVES
- SALES TAX REBATE ON GOODS: Idaho has a rebate of the 6 percent sales tax on tangible personal property (which excludes consumables such as food) when $200,000 is spent on a wide variety of qualifying expenses.
- LODGING EXEMPTION: Production personnel who are staying 30 days or more in Idaho lodging facilities are totally exempt from both sales and lodging taxes, currently 8 percent. Local option taxes levied in certain communities would also be exempt.
- IDAHO’S NATURAL INCENTIVES: Built-in incentives include reasonable prices on crew hires, lodging, goods and services. Permits are not required for any cities other than Coeur d’Alene but are required for Idaho’s public lands. Federally managed public lands in Idaho include national monuments and reserves (National Park Service), national forests (US Forest Service) and lands managed by the Bureau of Land Management.
- FEDERAL TAX INCENTIVE (American Jobs Creation Act): The incentives are for all taxpayers, including companies, as long as they pay taxes.
o Section 181 – any taxpayer, individual or company that invests in a qualifying film receives 100% loss in the year or years the money is spent.
o The limit is up to $15 million per film and $15 million per episode for television with a maximum of 44 episodes. The incentive, unless extended, expires at the end of 2008.
o Section 199 applies to film, music, video and all other manufacturing companies. As to music, it would apply only to those who compose, manufacture, and receive income from the sale of their music. It is the same for film and video. The deduction is 9 percent from 2010 on.
CAPITAL INVESTMENT PROPERTY TAX INCENTIVES
- PROPERTY TAX EXEMPTION: Businesses that invest in new manufacturing facilities may receive partial or full property tax exemptions from local county commissioners. To qualify, businesses need to invest a minimum of $3 million.
- LARGE BUSINESS PROPERTY TAX CAP: Businesses that invest a minimum of $1 billion in capital improvements will receive a property tax exemption on all property in excess of $400 million in value per year.
- LARGE EMPLOYER PROPERTY TAX CAP: Businesses that employ at least 1,500 people within an Idaho county may receive a property tax exemption on property values in excess of $800 million. To qualify, the business must make a yearly capital investment of at least $25 million within that county.
- 100% PROPERTY TAX EXEMPTION: Business inventory and registered motor vehicles, vessels and aircraft are exempt from property tax.
NEW JOBS INCOME TAX CREDITS
- $1,000 TAX CREDIT: Businesses may earn a $1,000 tax credit for each additional employee added. New employees must work a minimum of 20 hours per week, make at least $15.50 an hour and be eligible to receive employer-provided coverage under an accident or health plan. The credit may be carried forward up to three years
- $500 TAX CREDIT: Businesses may earn a $500 tax credit for adding new jobs in the production, assembly, fabrication, manufacturing or processing of natural resources. This credit cannot be combined with the $1,000 new jobs credit.
ILLINOIS – updated for 2014
For a list of state economic development agencies, click this link.
ADVANTAGE Illinois: Accelerates investments and eases the credit crunch for small businesses, thanks to more than $78 million from the federal State Small Business Credit Initiative (SSBCI) of the Small Business Jobs Act of 2010. Advantage Illinois consists of three programs to spur institutional lending to small businesses and one program to leverage private venture capital in start-ups and high-growth businesses. Illinois expects to generate $10 in new private lending for every $1 of federal funding provided through this program.
Large Business Development Program (LBDP): For companies undertaking a major expansion or relocation. Funds may be used by large businesses for bondable business activities including financing the purchase of land or buildings, building construction or renovation, and certain types of machinery and equipment.
Community Development Assistance Program for Economic Development (CDAP-ED): A federally funded program designed to provide grants to units of local government for economic development activities related to private business retention or expansion. Local governments can make their grant funds available as loans to businesses growing or moving to their community. Funds may be used for machinery and equipment, working capital, and building construction and renovation.
Community Service Block Grant (CSBG) Loan: Administered jointly by the Illinois Department of Commerce and Economic Opportunity, statewide Community Action Agencies and Illinois Ventures for Community Action, the program provides long-term, fixed-rate financing to new or expanding small businesses in exchange for job creation and employment for low-income individuals. CSBG funds usually make up between 20% to 49% of the entire loan project and have a low interest rate of 5% to 7.5%.
Illinois Department of Agriculture AgriFIRST Grant: Designed to provide grants to persons and agribusinesses in Illinois for the purpose of developing projects that enhance the value of agricultural products or expand agribusiness in Illinois.
Business Development Public Infrastructure Program (BDPIP): Designed to provide grants to units of local government for public improvements on behalf of businesses undertaking a major expansion or relocation project that will result in substantial private investment and the creation and/or retention of a large amount of Illinois jobs. The infrastructure improvements must be made for public benefit and on public property and must directly result in the creation or retention of private sector jobs. The local government must demonstrate clear need for financial assistance to undertake the improvements. Grant eligibility and amounts are determined by the amount of investment and job creation or retention involved.
New Markets Development: Provides supplemental funding for investment entities that have been approved for the Federal New Markets Tax Credit (NMTC) program. This program supports small and developing businesses by making capital funds more easily available, in turn making Illinois more attractive to possible investors. It provides state and federal tax credits to investors who make investments into approved funds that invest in eligible projects located in low-income census tracks throughout Illinois. The program provides non-refundable tax credits to investors in qualifying Community Development Entities (CDE’s) worth 39% of the equity investment made into the CDE over a 7-year credit allowance period.
Economic Development for a Growing Economy (EDGE): An incentive program that encourages companies to locate or expand operations in Illinois when there is active consideration of a competing location in another state. The program can provide tax credits to qualifying companies, equal to the amount of state income taxes withheld from the salaries of employees in the newly created jobs. The non-refundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years.
Angel Investment Credit: A tax credit to interested firms or persons who make an investment in one of Illinois’ innovative, qualified new business ventures. The tax credit may equal 25% of up to a $2-million investment made by the private investor.
Small Business Jobs Creation Tax Credit: Provides small business owners and non-profits with an extra boost to grow their businesses over the next four years. After creating one or more new, full-time positions that meet the eligibility requirements, small businesses can register online to receive a $2,500 per job tax credit. The program is for new jobs created July 1, 2012 to June 30, 2016.
Illinois Historic Preservation Tax Credit Program: Provides a state income-tax credit equal to 25% of a project’s qualified expenditures to owners of certified historic structures located within River Edge Redevelopment Zones (Aurora, East St. Louis, Elgin, and Rockford) who undertake certified rehabilitations during the taxable year. An awarded tax credit may not be sold or otherwise transferred to another person or entity. The Illinois Historic Preservation Tax Credit Program runs from January 1, 2012 to December 31, 2016.
Enterprise Zone: Designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state. This is accomplished through state and local tax incentives, regulatory relief and improved governmental services.
High Impact Business (HIB): Designed to encourage large-scale economic development activities by providing tax incentives (similar to those offered within an enterprise zone) to companies that propose to make a substantial capital investment in operations and that will create or retain an above-average number of jobs. Businesses may qualify for investment tax credits, a state sales tax exemption on building materials, an exemption from state sales tax on utilities, a state sales tax exemption on purchases of personal property used or consumed in the manufacturing process or in the operation of a pollution control facility. The project must involve a minimum investment of $12 million causing the creation of 500 full-time jobs or an investment of $30 million causing the retention of 1,500 full-time jobs. The investment must take place at a designated location in Illinois outside of an Enterprise Zone.
River Edge Redevelopment Zone: Designed to revive and redevelop environmentally challenged properties adjacent to rivers in Illinois through the use of several incentives authorized by State law. Sales tax exemption and property tax abatement (if offered in the zone) are administered by the local zone administrators and the others involve tax incentives that may be claimed on Illinois Income Tax filing.
Tax Increment Financing (TIF) District: Illinois law allows units of local governments the ability to designate areas within their jurisdiction as TIF districts. They are used by local governments as a way to spur economic growth by dedicating the sales tax revenues and additional property tax revenues generated within the TIF for improvements within the district with the hope of encouraging new economic development and jobs.
Employer Training Investment Program (ETIP): Supports companies in retraining their employees to stay competitive. Through the program, Illinois companies are reimbursed for up to 50% of eligible training costs. Potential reimbursements include trainers, tuition, trainee wages, new technology or processes, learning to operate new machinery and regulatory compliance.
CORPORATE TAX RATE: Indiana’s corporate tax rate was reduced from 8.5 percent to 6.5 percent. This will be phased in from July 1, 2012 to July 1, 2015. The legislature reduced this tax in order to improve upon Indiana’s existing business climate and bring it more in line with rates in other states. VENTURE CAPITAL INVESTMENT (VCI) TAX CREDIT: The $200 filing fee was eliminated for two years until June 30, 2013. The VCI tax credit cap per qualifying business was raised from $500,000 to $1 million. This change provides greater opportunities for young companies to attract capital and grow in Indiana. PROPERTY TAX ABATEMENT: The law was changed to allow local governments the flexibility to structure the property tax abatement schedules however they wish over ten years. The previous statute defined the schedule. This will give local economic development leaders more control over the incentive packages they offer to companies. INDUSTRIAL RECOVERY TAX CREDIT: The General Assembly reduced the statutory thresholds in order to allow more vacant buildings in the state to be eligible for this program. The minimum in-service period for building was reduced from 20 to 15 years. The minimum vacancy period was reduced from two to one year. The minimum square footage for building requirement was reduced from 250,000 square feet (50,000 square feet from 2011 to 2014 and 100,000 square feet starting in 2015). These changes may help bring more vacant facilities back into service by providing an incentive to companies for rehabilitation expenses. INDUSTRIAL DEVELOPMENT GRANT FUND: Provides money to local governments for off-site infrastructure projects associated with an expansion of an existing Indiana company or the location of a new facility in Indiana. State funding through the IDGF program must be matched by a combination of local government and company financial support. CERTIFIED TECHNOLOGY PARK PROGRAM: Created as a tool to support the attraction and growth of high-technology business in Indiana. Designation as a Certified Tech Park allows for the local recapture of certain state and local tax revenue which can be invested in the development of the park. SKILLS ENHANCEMENT FUND (SEF): A tool to encourage companies to invest in their existing workforce and train new employees. It provides reimbursement for eligible training expenses over a two-year term. Companies may reapply for additional SEF Funds after their initial two-year term. HOOSIER ALTERNATIVE FUEL VEHICLE MANUFACTURER TAX CREDIT: Established by IC 6-3.1-31.9, it provides a credit up to 15 percent of the qualified investment for the manufacture of alternative fuel vehicles. An applicant must compensate its employees at least 150 percent of the state’s hourly minimum wage and agree to maintain operations for at least 10 years. HOOSIER BUSINESS INVESTMENT TAX CREDIT (HBITC): Established to encourage capital investment in Indiana by providing a credit against a company’s Indiana tax liability. The credit amount is based on a company’s qualified capital investment with the final credit amount determined by the IEDC based on an analysis of the economic benefits of the proposed investment. ECONOMIC DEVELOPMENT FOR A GROWING ECONOMY (EDGE): Created to reward companies creating new jobs and contributing to the growth of Hoosier income. Credits are calculated as a percentage of payroll tax withholding for net new Indiana jobs and may be awarded for a term of up to ten years. EDGE is a refundable tax credit that can be offered in situations where Indiana is competing against another state or country for a company’s site location investment. The company must commit to maintaining operations in Indiana for at least two years beyond the term of its EDGE award. HEADQUARTERS RELOCATION TAX CREDIT: When a business relocates its corporate headquarters (defined as the location of the principal office of the principal executives) to Indiana, it is entitled to a credit against its state tax liability equal to half of the costs incurred in relocating the headquarters. A company must have a worldwide annual revenue of at least $100 million to qualify and after relocation, the corporation must have 75 employees in Indiana. MEDIA PRODUCTION EXPENDITURE TAX CREDIT (MPETC): Established by IC 6-3.1-32, it provides individuals and companies a credit of up to 15 percent on the amount spent in Indiana for qualified production expenditures. The MPETC is refundable; therefore, if the amount of the MPETC exceeds the taxpayer’s state income tax liability for that taxable year, the taxpayer is entitled to a refund of the excess of the credit amount over their state income tax liability. The total amount of tax credits certified by the IEDC for any fiscal year may not exceed $2.5 million, but there is no cap per project. RESEARCH AND DEVELOPMENT (R&D) TAX CREDIT: Authorized by IC 6-3.1-4-1 and administered by the Indiana Department of Revenue, it provides a credit against state tax liability for qualified company research expenses and is based on the increase in Indiana R&D over the prior three-year base. In the base year, research expenses must have been at least half of the research expenses in the current year. The credit equals 15 percent of qualified research expenses on the first $1 million of investment. The tax credit is applied against income tax liability and may be carried forward 10 years. There is no carry back, and the credit is nonrefundable. RESEARCH & DEVELOPMENT (R&D) SALES TAX EXEMPTION: Authorized by IC 6-2.5-5-40, it provides a refund of 50 percent of the Indiana sales taxes paid on purchases of eligible R&D equipment purchased after June 30, 2007. Taxpayers may also file a claim for the refund for tax paid on retail transactions that occur after June 30, 2005 INDIANA SHOVEL READY PROGRAM: Reduces potential costs of site development for businesses and enhances the marketability of certified sites. The goals of the program are to:
- Certify sites and existing buildings to expedite the location and permitting processes for business development
- Help local communities identify and prepare sites and existing buildings for economic development
- Identify and fast track the state and local permits necessary for a specific site (dependent on the end user)
SMALL BUSINESS INNOVATION RESEARCH INITIATIVE and SMALL BUSINESS TECHNOLOGY TRANSFER (STTR) programs stimulate technological innovation and provide opportunities for Indiana small businesses to participate in federally funded research and development programs.
The GROW IOWA VALUES FUND (GIVF) is the state’s premier financial assistance program designed to support innovation and job growth. A variety of business development programs are available as included below:
- DIRECT ASSISTANCE TO A COMPANY: Assistance is provided in the form of loans and/or forgivable loans, based in part on job creation, capital investment, the ability to meet certain regional/county wage standards, quality of employment, and economic benefits for the state and local community. Applications are filed by cities, counties or community colleges on behalf of eligible businesses.
- The GROW IOWA VALUES FINANCIAL ASSISTANCE PROGRAM serves as the funding source for projects that are focused on job creation or retention, value-added agriculture and entrepreneurial efforts. This program, combined with Iowa’s nationally recognized business climate, tax incentives and proactive state government make Iowa a great place to do business.
- The DEMONSTRATION FUND provides financial awards up to $150,000 to encourage commercialization activities by small and medium-sized Iowa companies in the advanced manufacturing, biosciences, and information technology industries. The fund is designed to encourage product refinements, market planning and market entry activities of unique products to foster competitive, profitable companies that create high paying jobs and wealth in Iowa.
- INFRASTRUCTURE COMPONENT: Designed to financially assist capital-intensive infrastructure projects that create unique opportunities for quality, high-wage jobs and demonstrate a statewide impact. Both Iowa communities and new or existing businesses are eligible for this innovative program. This program may also be used to remediate contaminated sites that have potential development opportunities contingent on the cleanup. Assistance is provided in the form of loans, forgivable loans and cost indemnification agreements.
- The PUBLIC FACILITIES SET-ASIDE (PFSA) program provides financial assistance to cities with less than 50,000 in population and to counties for public infrastructure improvements that enable businesses to create new job opportunities. Projects that will create manufacturing jobs, add value to Iowa resources and/or increase out-of-state exports will be given priority. Eligible projects include adding or improving sanitary sewer systems, water systems, streets, roads, and storm sewers.
BUSINESS TAX CREDITS
- ASSISTIVE DEVICE TAX CREDIT: An assistive device is any item, piece of equipment or product system that is used to increase, maintain or improve the functional capabilities of an individual with a disability in the workplace or on the job. To qualify for the Tax Credit, a business must be located in Iowa, employ 14 or fewer full time employees OR have $3 million dollars or less in gross annual receipts. The credit applies to expenditures made on or after January 1, 2000, and equals one-half of the first $5,000 in qualifying expenses each tax year. Excess credits can be refunded or carried over to the next tax year.
- BROWNFIELD/GRAYFIELD TAX CREDIT PROGRAM: Offers qualifying projects tax credits of up to 24 percent for qualifying costs of a Brownfield project and 30 percent if the project meets green building requirements. “Grayfield” is also included in the tax credit program. A Grayfield project can receive tax credits of up to 12 percent of qualifying costs and 15 percent if the project meets green building requirements. Tax credits are available on a first come first served basis, with a maximum tax credit per project of $500,000 and a $5,000,000 maximum for each fiscal year. An audit of qualifying expenses from an independent Iowa certified public accountant is required prior to issuance of all tax credit certificates.
- ENTERPRISE ZONES: Through state and local tax incentives, businesses and developers are encouraged to make new investments, and create or retain jobs in economically distressed areas in Iowa. The goal of the program is to revitalize these areas and make them competitive with other locations throughout the state. An incentive for housing development may also be available to developers and contractors building or rehabilitating housing in an established enterprise zone.
- HIGH QUALITY JOBS: Provides qualifying businesses tax credits to offset the cost incurred to locate, expand or modernize an Iowa facility. To qualify for this very flexible assistance package that includes tax credits, exemptions and/or refunds, a business must be a non-retail or non-service business.. Actual award amounts will be based on the business’ level of need; the quality of the jobs; the percentage of created or retained jobs defined as high quality; and the economic impact of the project. Created jobs must pay at least 100 percent of the qualifying wage threshold at the start of the project and 130 percent of the qualifying wage threshold by project completion and through the project maintenance period. Retained jobs must pay at least 130 percent of the qualifying wage threshold throughout the project completion and maintenance periods. The business must provide a sufficient benefits package to all full time employees.
- NEW JOBS TAX CREDIT: An Iowa corporate income tax credit available to a company that has entered into a New Jobs Training Agreement (260E) and expands their Iowa employment base by 10 percent or more. The amount of this one-time tax credit will depend upon the wages a company pays and the year in which the tax credit is first claimed. Unused credits may be carried forward up to 10 years. The tax credit may be claimed on Form IA 133 found on the Iowa Department of Revenue Web site.
- RESEARCH ACTIVITIES TAX CREDIT: Iowa is one of very few states to have continuously offered this refundable tax credit for increasing a company’s research activities. Under certain conditions, this credit may be doubled. A company must meet the qualifications of the Federal Research Activities Credit in order to be eligible for the credit in Iowa.
- TARGETED JOBS WITHHOLDING TAX CREDIT: Enacted in 2006, it allows the diversion of withholding funds paid by an employer to be matched by a designated “pilot” city to create economic incentives that can be directed toward the growth and expansion of targeted businesses located within Urban Renewal areas. An approved “pilot” city may enter into a withholding agreement:
1. with a business that is locating to its community from another state and is creating targeted jobs within an urban renewal area; or
2. an existing Iowa business that is creating ten new targeted jobs or makes a qualifying investment of $500,000 within an urban renewal area.
INVESTOR TAX CREDITS
- ENDOW IOWA: Administered by the Iowa Economic Development Authority, it was created to enhance the quality of life for Iowa citizens through increased philanthropic activity by encouraging new investments to existing community foundations and facilitating the creation of new community foundations. The major component of the program is a state tax credit equal to 25 percent of a qualifying gift to a community foundation. The gift must be to an endowment fund within the qualified foundation or community affiliate organization. The tax credits can be claimed by individuals, businesses or financial institutions.
- IOWA COMMUNITY BASED SEED FUNDS: A Community Based Seed Fund is a group of individuals pooling their money to create a fund that will invest in start-up or early-stage companies. A fund may choose to invest only in local projects. However, they can also “network” for the opportunity to invest in other projects and partner up with other funds in Iowa. The benefit of this arrangement is to leverage investment dollars and provide more opportunities for a greater return on investment. A statewide group of investors is forming an association to share deal flow and due diligence. As a general rule community based seed fund look for a 40 to 50 percent return on seed and start-up financing, 30 to 40 percent on second stage financing and 25 to 30 percent on later stage financing.
- REVOLVING LOAN FUND: Developed to encourage the growth and development of economic development revolving loan funds in Iowa. Individuals, businesses or non-profit organizations are eligible for a state tax credit equal to 20 percent of the amount they donate to the Revolving Loan Fund. The credit is refundable for organizations that are exempt from federal income tax pursuant to section 501©(3) of the IRS Code. There are over $2 million per year in new credit authority.
TAX INCREMENT FINANCING (TIF): Businesses are given the incentive to construct new industrial or commercial facilities by receiving direct benefit from the property tax increase caused by the added value of those new facilities. How It Works:
1. Business constructs new industrial or commercial facility
2. New facility increases property tax assessed on the business
3. City councils or county board of supervisors may use the additional property tax to:
o Finance direct grants or loans to the business.
o Offset the costs of public improvements or provision of utilities to serve the new private development
o Provide the local match for federal or state economic development assistance programs.
TARGETED SMALL BUSINESS (TSB) ASSISTANCE: Supports the creation and expansion of small businesses certified as a “targeted small business”. The business must be located in Iowa, operating for a profit and have less than $4 million in annual gross income, computed as an average of the preceding three fiscal years. At least 51 percent of the business must be owned, operated and actively managed by a female, a minority group member or a person with a disability. Certified TSB’s can apply for loans to start or expand a small business with these terms:
- Maximum loan amount is $50,000
- Maximum interest rate is 5 percent (determined by the loan review board, varies for each applicant).
- Successful applicants will have 5 years to repay the loan
- The first installment can be deferred for three months for a start-up and one month for an existing business.
- Applicant must have 10 percent equity in cash for the loan.
- Loan funds can be used for most any business purpose such as to purchase equipment, marketing costs, etc.
- Loans cannot be used to refinance/consolidate existing debt, travel/ training nor for purchase of real estate.
EMPLOYEE TRAINING PROGRAMS To help Iowa companies maintain their competitive edge, the Iowa Economic Development Authority will help develop a workforce and training program to meet the specific needs of a company. By leveraging training resources, filling funding gaps in human resource development initiatives and sponsoring business consortia that address common employment training needs, the skills of Iowa’s workers are enhanced, allowing its industries to grow.
- ACCELERATED CAREER EDUCATION PROGRAM: Assists Iowa’s community colleges in establishing/expanding programs that train individuals in the occupations most needed by Iowa businesses.
- APPRENTICESHIP PROGRAM: Funds projects that increase the skills of workers through a combination of classroom and on-the-job training.
- COMMUNITY COLLEGE BUSINESS NETWORK TRAINING PROGRAM: Provides funding assistance to two or more businesses participating in training programs based in one or more community colleges.
- COMMUNITY COLLEGE CONSORTIUM: Provides funding assistance for community college-sponsored employee training projects in which two or more businesses participate.
- IOWA INDUSTRIAL NEW JOBS TRAINING PROGRAM (260E): Provides no-cost or reduced-cost job training services to new employees of eligible businesses through Iowa’s community college system.
- IOWA JOBS TRAINING PROGRAM (260F): Provides job training services to current employees of eligible businesses that are located in Iowa.
- IOWA STUDENT INTERNSHIP PROGRAM: Links college students from Iowa schools to internship opportunities in small and medium sized firms in the biosciences, advanced manufacturing and information technology industries with the goal of transitioning the interns to full-time employment in the state upon graduation.
KANSAS – updated for 2014
For a list of state economic development agencies, click this link.
Rural Opportunity Zones (ROZ): Designed to spur economic development in and expand job growth in 73 key counties around the state. The program has two main incentives:
- A state income tax exemption for up to five years to individuals who move to a ROZ county from outside the state. Individuals must not have lived in Kansas for the past five years, nor have a Kansas source income of more than $10,000 per year over the past five years.
- Student loan forgiveness of up to $3,000 per year ($15,000 maximum benefit) for individuals who graduate from an accredited post-secondary institution and move to a ROZ county. The student loan forgiveness portion of the program is a county-state partnership, and counties must opt in to participate.
Right-to-Work State: Union membership in Kansas is 6.8%, well below the national average.
Workers’ Compensation: Kansas ranks 9th lowest in the U.S. for worker compensation rates.
Promoting Employment Across Kansas (PEAK): This program offers qualified companies the ability to retain 95% of their payroll withholding tax for up to five to seven years. It is available for new operations in Kansas as well as relocated operations to the state. In 2013, PEAK became available for qualifying business retention projects as well. Companies need to create at least 10 new jobs within two years in metropolitan areas or five new jobs within two years in all other counties of the state. High-impact projects that create 100 new jobs within two years can retain 95% of payroll withholding tax for up to a period of 10 years. The number of years that the withholding tax can be retained depends on how much the annual median wage of the jobs at the Kansas worksite will exceed the current county median wage and the discretion of the Secretary of the Kansas Department of Commerce. A PEAK application must be submitted before locating or creating PEAK-eligible jobs in Kansas.
Industrial Revenue Bonds (IRBs): Industrial Revenue Bonds are a popular method of financing up to 100% of a growing business’ land, building and equipment. IRBs are securities issued by cities and counties to provide funds for creditworthy companies to acquire land, construct and equip new facilities or remodel and expand existing facilities. IRBs allow fixed-rate financing for the life of the bond for the project.
Community Development Block Grant (CDBG): Eligible small city and county governments may apply for these economic development funds to assist an expanding or new business in Kansas. There are two parts to the program: business finance and infrastructure. Under business finance, funds are available for working capital, machinery and equipment and real property. The interest rate is currently set at 3% below prime or 4% (whichever is greater). The term of the loan is based on the asset being financed—working capital loan is 6.5 years, machinery and equipment 10 years and real property is 15 years. For business loans, a match is required of $.50 to every $1 of CDBG funds. For infrastructure, funding is available for water lines, sewer lines, roads, rail spurs and pre-treatment facilities. Infrastructure funding requires that a quarter of the funds be paid back over a 10-year period at a rate of 0%. Funding requires the creation or retention of one full-time job per $35,000 of CDBG assistance up to the maximum of $750,000. At least 51% of the jobs created or retained must be held by individuals, who at the time of hire, meet HUD’s low and moderate income test, which is based on median family income in the county in which the project is located.
Partnership Fund: Commerce provides low-interest state funds to cities and counties for infrastructure improvements that support Kansas basic enterprises such as manufacturing and distribution. Eligible projects may include construction, rehabilitation or expansion of public facilities, including roads, streets, highways, water supply and treatment facilities, water distribution lines, wastewater collection lines and related improvements.
Kansas Bioscience Authority (KBA): Commerce works in partnership with the Kansas Bioscience Authority to assist in the expansion and recruitment of bioscience companies. The KBA has direct financing programs and other resources that can be used to recruit new bioscience companies and world-class scholars, fund equipment and lab space for research and facilitate the commercialization of bioscience discoveries.
SITE LOCATION ASSISTANCE
The Business Recruitment Team for the Kansas Department of Commerce can assist with various site location needs. Whether you’re seeking buildings or sites, our team has the resources and information to help you make an informed decision. Our Business Recruitment Team creates customized incentive proposals for clients based on capital investment, job creation, employee salaries and each company’s unique needs. We also coordinate with community economic development professionals for local incentives such as discounted building and land purchases, reduced property taxes, build-to-suit agreements and finance packages. All types of assistance offered for new company locations are also available for subsequent expansions.
Effective Tax Year 2013, certain Kansas businesses will enjoy significant tax relief. Kansas passed a business income tax exemption which eliminates certain non-wage business income on lines 12, 17 and 18 of IRS Form 1040 for Partnerships, Limited Liability Corporations, Limited Liability Partnerships, Sole Proprietorships and Subchapter-S Corporations that have elected at the federal level to be taxed as a pass-through entity.
Effective July 1, 2013, the Kansas state sales and use tax rate will be 6.15%. However, there are several sales tax exemptions available, which include:
- Labor services related to original construction
- Remodeling costs, furnishings, furniture, machinery and equipment for qualified projects
- New machinery and equipment for manufacturing and distribution. This also includes pre- and post-production machinery and equipment, including raw material handling, waste storage, water purification and oil cleaning, as well as ancillary property such as gas pipes, electrical wiring and pollution control equipment
- Tangible personal property that becomes an ingredient or component part of a finished product
- Tangible personal property that is immediately consumed in the production process, including electric power, natural gas and water
- Incoming and outgoing interstate telephone or transmission services (WATTS)
- Real and personal property financed with an Industrial Revenue Bond
High Performance Incentive Program (HPIP): This program provides a 10% corporate income tax credit on the qualified capital investment of an eligible company. Qualified capital investment can include such items as the purchase or lease of a facility or equipment, remodeling or build-out costs, fixtures, furniture and computers. Equipment transferred to Kansas from out-of-state is also credited at the original acquisition cost. The 10% tax credit is awarded to companies that operate an eligible business, pay above-average wages and invest in employee training. The credits can be used to significantly reduce a company’s corporate income tax liability in a given year. Credits must be used within a consecutive 16-year period. The minimum investment threshold to qualify for HPIP is $1 million for the urban counties of Douglas, Johnson, Sedgwick, Shawnee and Wyandotte. For all other counties, the minimum investment threshold is $50,000. A key component of HPIP is the completion of the Project Description form, which must be submitted to the Department of Commerce prior to the company signing any document, such as a lease or purchase agreement, which commits the company to locating or expanding in Kansas.
Machinery & Equipment Expensing Deduction: Eligible Kansas taxpayers are allowed to claim an expense deduction for business machinery and equipment, placed into service in Kansas. This is a one-time deduction for each qualified purchase of machinery and equipment in the year that it is placed in service. Unused expense deduction is treated as a Kansas net operating loss that may be carried forward for 10 years. Eligible investment is machinery and equipment depreciable under the Modified Accelerated Cost Recovery System (MACRS) in section 168 of the Internal Revenue Code, or canned software as defined in section 197 of the Internal Revenue Code. Examples of eligible equipment include manufacturing equipment, office furniture, computers, software and racking.
Machinery and Equipment Property Tax Exemption: Commercial and industrial machinery and equipment acquired by qualified purchase or lease or transferred into the state is exempt from state and local property tax. The exemption pertains to machinery and equipment used in the expansion of an existing facility or the establishment of a new facility. The exemption covers machinery and equipment used in manufacturing or warehousing/distribution, commercial equipment, computers, desks and chairs, copiers and fax machines.
Property Tax Abatement: Cities or counties may exempt real property from ad valorem taxation. The tax abatement can include all or any portion of the appraised buildings, land and improvements. A total or partial tax abatement may be in effect for up to 10 years after the calendar year in which the business commences its operations. Any property tax abatement is the decision of the city or county.
Inventory Tax Exemption: All merchant and manufacturers’ inventories are exempt from property taxes.
Research Tax Credit: Kansas offers an income tax credit equal to 6.5% of a company’s investment in research and development above the average expenditure of the previous three-year period. 25% of the allowable annual credit may be claimed in any one year.
No Local Income Taxes: Kansas cities and counties do not impose an earnings tax on personal or corporate income.
No Kansas Franchise Tax: Kansas eliminated its franchise tax in 2011.
The Department of Commerce has two workforce training programs to offset a company’s training costs. Projects involving a Kansas Basic Industry—which includes manufacturing, distribution or regional/national service facilities—may qualify for these programs. Both of these programs offer direct financial assistance to pay a negotiated portion of the costs to train a company’s employees. Companies may apply the assistance toward items such as instructors’ salaries; meals, travel and lodging (including out-of-state or international travel); video development; textbooks and training manuals; supplies and materials; temporary training facilities and curriculum planning and development.
Kansas Industrial Training (KIT): Companies creating new jobs may qualify for this assistance. Eligibility for the program depends on the number of jobs created and the corresponding wages.
Kansas Industrial Retraining (KIR): This program is to retrain a Kansas company’s existing workforce on new technology or production activities.
The KENTUCKY BUSINESS INVESTMENT (KBI) program provides income tax credits and wage assessments to new and existing agribusinesses, regional and national headquarters, manufacturing companies, and non-retail service or technology related companies that locate or expand operations in Kentucky. Projects locating in certain counties may qualify for enhanced incentives. The KENTUCKY REINVESTMENT ACT (KRA) provides tax credits to any existing Kentucky company engaged in manufacturing and related functions on a permanent basis for a reasonable period of time who will be investing in eligible equipment and related costs of at least $2,500,000. The KENTUCKY ENTERPRISE INITIATIVE ACT (KEIA): For new or expanded service or technology, manufacturing, or tourism attraction project in Kentucky. KEIA provides a refund of Kentucky sales and use tax paid by approved companies for building and construction materials permanently incorporated as an improvement to real property. It is also available for Kentucky sales and use tax refunds for eligible equipment used for research and development and data processing equipment. The KENTUCKY SMALL BUSINESS INVESTMENT CREDIT (KSBIC): program is designed to encourage small business growth and job creation by providing a nonrefundable tax credit to eligible businesses hiring one or more eligible individuals and investing at least $5,000 in qualifying equipment or technology. With certain exceptions, most for-profit businesses with 50 or fewer full-time employees are considered eligible for this program. The KSBIC program is limited to allocating a total of $3 million in tax credits per state fiscal year. KENTUCKY ECONOMIC DEVELOPMENT FINANCE AUTHORITY DIRECT LOAN PROGRAM (KEDFA): Provides business loans at below-market interest rates (subject to the availability of state revolving loan funds) for fixed asset financing for agribusiness, tourism, industrial ventures or the service industry. Retail projects are not eligible. KEDFA may participate in projects with loans ranging from $25,000 to $500,000. INDUSTRIAL REVENUE BONDS (IRB): Issued by state and local governments in Kentucky, they can be used to finance manufacturing projects and their warehousing areas, major transportation and communication facilities, most health care facilities and mineral extraction and processing projects. COMMUNITY DEVELOPMENT BLOCK GRANTS (CDBG): Federally funded low interest loans made available through the Department for Local Government. KENTUCKY INDUSTRIAL REVITALIZATION ACT (KIRA): Investments in the rehabilitation of manufacturing or coal mining and processing operations that are in imminent danger of permanently closing or that have closed temporarily may qualify for tax credits. An eligible company shall also include one that has closed but resumes mining operations. Eligible entities include manufacturing companies that save or create 25 jobs and coal mining and processing companies that intend to employ a minimum of 500 persons and have a raw production of at least three million tons from the economic revitalization project facility. HIGH-TECH INVESTMENT/CONSTRUCTION POOLS: Provides funds to help further the commercialization of a product, process or other innovation. Incentives awarded are in the form of forgivable loans, with the amount of the loan primarily based on the applicant company’s projected high-tech job creation. These forgivable loans typically range from $150,000 to $400,000 depending upon the project. SBIR-STTR MATCHING FUNDS PROGRAM: The Cabinet will match, on a competitive basis, Phase 1 and Phase 2 federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards received by Kentucky high-tech small businesses and those willing to become Kentucky-based businesses. This includes matching Phase 1 federal awards up to $150,000 to support the exploration of the technical merit or feasibility of an idea or technology, and up to $500,000 of federal Phase 2 awards, which support full-scale research and development. COMMONWEALTH SEED CAPITAL, LLC (CSC): An independent, non-profit fund that makes debt or equity investments in early-stage Kentucky business entities to facilitate the commercialization of innovative ideas and technologies. CSC invests in companies that have a significant Kentucky presence, the prospect for substantial growth, and the potential to generate an appropriate rate of return. Investments are typically made in these specified innovation areas: health and human development; information technology and communications; bioscience; environmental and energy technologies; and materials science and advanced manufacturing. KENTUCKY ENTERPRISE FUND AND RURAL INNOVATION FUND: Provides seed-stage capital to Kentucky-based companies that are commercializing a technology-based product or process. The funds exist to stimulate private investment in Kentucky-based technology companies with high growth potential. The Kentucky Science and Technology Corporation administers the funds under contract with the Council on Postsecondary Education. KENTUCKY NEW ENERGY VENTURES FUND: Provides seed stage capital to support the development and commercialization of alternative fuel and renewable energy products, processes and services in Kentucky. The funds exist to stimulate private investment in Kentucky-based technology companies with high growth potential. KNEV makes grants of $30,000 and investments ranging from $250,000 to $750,000+. Qualified companies must be Kentucky-based and funds are to be used for business development activities. INCENTIVES FOR ENERGY INDEPENDENCE ACT (IEIA): Requires a capital investment of at least $25 million for an alternative fuel facility using biomass, or an investment of at least $100 million for an alternative fuel facility using coal, as its primary feedstock. A capital investment of at least $1 million is required for a renewable power facility that meets minimum electric output standards based upon the power source. The negotiated incentives cannot exceed 50 percent of the capital expenditures and may include a reimbursement of sales and use taxes paid on tangible personal property; a tax credit of the income tax and limited liability entity tax owed by the company; and, wage assessment incentives up to 4 percent of gross wages of each employee whose job was created as part of the project. Advanced disbursements may also be available. KENTUCKY ENVIRONMENTAL STEWARDSHIP ACT (KESA): For companies manufacturing products that have a substantial positive impact on human health and the environment. Companies with projects approved under KESA must have at least $5 million in eligible cost and can potentially recover up to 25 percent of the projects fixed asset cost and 100 percent of employee skills training. The tax incentive is available for recovery over a 10-year period. SMALL BUSINESS LOAN PROGRAM: Designed to help small businesses acquire funding. A small business must be engaged in manufacturing, agribusiness or service and technology. Loan funds may be used to acquire land and buildings, purchase and install equipment or for working capital. The minimum loan amount is $15,000 and the maximum is $100,000. The approved company must create one new full-time job within one year of the loan closing. KEDFA can fund up to 100 percent of the project costs and the loan can be used in conjunction with other lenders. The term of the loan can range from 3-10 years. KENTUCKY MICROENTERPRISE LOAN PROGRAM: Provides technical assistance and business loans, up to $50,000, to entrepreneurs in 25 Kentucky counties that formerly had no access to such a program. Funds may be used for, among other purposes, working capital, equipment purchases and inventory purchases. BLUEGRASS STATE SKILLS CORPORATION SKILLS TRAINING INVESTMENT CREDIT: Provides credit against Kentucky income tax to existing businesses that sponsor occupational or skills upgrade training programs for the benefit of their employees. BLUEGRASS STATE SKILLS CORPORATION GRANT REIMBURSEMENT PROGRAM: Provides matching grant funds for customized business and industry-specific training programs. TAX INCREMENT FINANCING (TIF): A tool to use future gains in taxes to finance the current improvements that will create those gains. The state participates with local governments and eligible agencies in three TIF programs: the Commonwealth Participation Program for State Real Property Ad Valorem Tax Revenues, the Signature Project Program and the Commonwealth Participation Program for Mixed-Use Redevelopment in Blighted Urban Areas. TIF LOAN SUPPORT PROGRAM: Any agency with a Tax Increment Financing Signature Project approved by the former Tax Increment Financing Commission and which executed its tax incentive agreement prior to January 1, 2008 may apply for The Tax Increment Financing (TIF) Loan Support Program. The Loan Support Program facilitates a supplemental reserve fund to cover debt service related to the bond financing of the TIF project. LOCAL REDEVELOPMENT TIF: Available for use to redevelop blighted areas into mixed use development by using the incremental additional local taxes such as property or occupational taxes realized as a result of the development. The community or agency can request state participation in this program with certain additional requirements. LOCAL VACANT LAND TIF: Available to develop vacant land by using the additional incremental local taxes, such as property or occupational taxes, realized as a result of the new development (example: construction of infrastructure at a local industrial park). State tax increment is not available for this type of development area. KENTUCKY AGRICULTURAL DEVELOPMENT FUND: Provides incentives for innovative proposals that increase net farm income, stimulates markets for Kentucky agricultural products, creates new ways to add value to Kentucky agricultural products and explores new opportunities for Kentucky farmers. KENTUCKY AGRICULTURAL FINANCE CORPORATION: Provides capital access for agricultural diversification and infrastructure projects. Participating Loan Programs Include: Agricultural Infrastructure, Beginning Farmer, Diversification through Entrepreneurship in Agri-business and Large Animal Veterinary Programs. Direct Loan Programs include the Agricultural Process Loan Program and the Coordinated Value-Added Assistance Loan Program. KENTUCKY INVESTMENT FUND ACT (KIFA): Provides tax credits to individuals and companies that invest in approved venture capital funds. Investors in KIFA approved funds are entitled to a 40 percent credit against Kentucky individual or corporate income tax or Kentucky corporate license tax. KEDFA approves investment funds and fund managers. TOURISM DEVELOPMENT ACT: Provides developers of approved new or expanding tourism projects the ability to recover up to 25 percent of the project’s development costs over a 10-year term. Projects including, but not limited to, lodging facilities constructed on state park, federal park or national forest lands are eligible to recover up to 50 percent of the development costs over a 20-year term. KENTUCKY FILM INCENTIVE: Provides qualifying applicants the ability to recover up to 20 percent of qualified expenditures through a refundable income tax credit. Qualifying applicants must invest a minimum of $50,000 for documentaries and national touring Broadway shows, $200,000 for commercials, $500,000 for full-length films.
LOUISIANA – updated for 2014
For a list of state economic development agencies, click this link.
Veteran Initiative: Provides veteran-owned and disabled, service-oriented veteran-owned small businesses with greater potential for access to state procurement and public contract opportunities.
Mega-Projects Development Fund: Provides grants of up to 30% of the total cost of a project that creates or retains at least 500 direct jobs or that provides a major investment in the state. A project must create 500 direct jobs, create or save at least 500 direct jobs at a facility that has been closed or a facility that risks closure, or provide a minimum initial investment of $500 million through the creation of a new facility or the expansion of an existing facility. In addition, the project must provide a substantial return on the investment by the state as measured by projected tax revenues.
Economic Development Awards Program: Provides funding for site and/or infrastructure improvements for projects creating new jobs.
Corporate Headquarters Relocation Program: Provides a rebate of up to 25% of facilities and relocation costs, to be claimed in equal parts over five years.
Small Business Loan Program: Provides up to 75% loan guarantees to facilitate capital accessibility
Research & Development Tax Credit: Provides up to a 40% tax credit for Louisiana businesses (based on employment) that conduct research and development activities in Louisiana.
LED FastStart®: Provides workforce recruitment, screening and training to new and expanding Louisiana companies at no cost.
Digital Interactive Media & Software Development Incentive: Provides a refundable tax credit of 25% on qualified production expenditures and an additional 10% tax credit for Louisiana resident labor expenditures.
Motion Picture Investor Tax Credit: Provides a transferable tax credit of 30% on qualified production expenditures and an additional 5% tax credit for Louisiana resident labor expenditures.
Technology Commercialization Credit and Jobs Program: Provides a 40% refundable tax credit on costs related to the commercialization of Louisiana technology and a 6% payroll rebate for the creation of new direct jobs.
Competitive Projects Tax Exemption: Provides a 10-year property tax abatement on qualifying capital investments of at least $25 million in targeted non-manufacturing industry sectors. The abatement applies to ad valorem taxes exceeding $10 million or 10% of the fair market value of the property, whichever is greater. The exemption is only available in selected parishes.
Enterprise Zone Program: Provides a one-time $2,500 tax credit per certified net new job, and either a 4% sales/use tax rebate on qualifying expenses or an investment tax credit equal to 1.5% of capital expenditures, excluding tax-exempted items.
Quality Jobs: Provides a 5% or 6% rebate on annual payroll expenses for up to 10 years, and either a 4% sales/use tax rebate on capital expenditures or an investment tax credit equal to 1.5% of qualifying expenses.
Industrial Tax Exemption: Provides a 100% property tax abatement for up to 10 years on local property taxes (ad valorem) on a manufacturer’s new investment and annual capitalized additions.
Live Performance Tax Credit: Provides a tax credit up to 25% on qualified production or infrastructure development expenditures, with an additional 10% tax credit available for payroll expenditures to Louisiana residents.
Modernization Tax Credit: Provides a 5% refundable state tax credit for manufacturers modernizing or upgrading existing facilities in Louisiana.
Restoration Tax Abatement: Provides a five year, 100% property tax abatement for the rehabilitation of an existing structure.
Sound Recording Investor Tax Credit: Provides a 25% refundable tax credit for qualified production expenditures on state-certified sound recording projects.
Corporate Tax Apportionment Program: Provides single-sales factor apportionment to highly competitive projects in order to secure jobs and business investment in target industry sectors.
Competitive Projects Payroll Incentive: Provides a payroll rebate of up to 15% in target sectors each year for up to 10 years, and either a 4% sales/use tax rebate on capital expenditures or a facility expense rebate equal to 1.5% of qualifying expenses.
Angel Investor Tax Credit: Provides a tax credit up to 35% for individual investors when they invest in early-stage, wealth-creating businesses.
COMMERCIAL LOAN INSURANCE PROGRAM: Insures a portion of a loan to a business made by a participating financial institution. Insurance Types:
- Pro-rata: covers a certain percentage of lenders loss after a default and liquidation, up to 100 percent.
- Leveraged: Covers 100 percent of lenders loss up to 25 percent of the loan amount.
PINE TREE DEVELOPMENT ZONE PROGRAM: Offers eligible businesses the chance to greatly reduce or virtually eliminate state taxes for up to ten years. Eligible Sectors include Biotechnology, Aquaculture and Marine Technology, Composite Materials Technology, Environmental Technology, Advanced Technologies for Forestry and Agriculture, Manufacturing (including Precision Manufacturing) IT and Financial Services. SMALL ENTERPRISE GROWTH FUND (SEGF): Provides Maine companies and entrepreneurs access to patient sources of venture capital. The fund is a $9 million dollar revolving, “evergreen” fund. The SEGF is a professionally managed venture capital fund that invests exclusively in Maine companies that demonstrate a potential for high growth and public benefit. STATE SMALL BUSINESS CREDIT INITIATIVES (SSBCI): $13.2 million in funds will help create new private sector jobs and spur more than $132 million in additional small-businesses lending in the state. The funding will take place in three stages, with the first allocation of $4.3 million now taking place. The SSBCI funds will be used to recapitalize three existing, successful programs:
- $7 million will be available to a group of 15 regional economic development agencies to make loans to businesses in their area. See FAME’s Regional Economic Development Revolving Loan Program.
- $3.2 million will be allocated to FAME for the Economic Recovery Loan Program – loans of up to $1 million that meet the program’s underwriting requirements, which can be used statewide;
- $3 million will be allocated to the Small Enterprise Growth Fund–Maine’s state-run venture capital fund.
ECONOMIC RECOVERY LOAN PROGRAM: Provides subordinate (gap) financing to assist businesses in their efforts to remain viable and/or improve productivity. From time to time, funds are used to address specific business community needs. Maine-based businesses that exhibit a reasonable ability to repay the loan and demonstrate that other sources of capital have been exhausted are eligible for the $750,000 maximum loan amount. Interest rate is fixed at Wall Street Journal Prime plus 2 percent, set at commitment. Loan term is a maximum of five years. Amortization may be based on the useful life of the assets being financed or additional collateral pledged. Balloon payments typically required. SEED CAPITAL TAX CREDIT: Designed to encourage equity and near-equity investments in eligible Maine businesses, directly and through private venture capital funds. State income tax credits may be authorized to investors for up to 60 percent of the cash equity they provide to eligible Maine businesses. Investments may be used for fixed assets, research or working capital. MAINE ECONOMIC DEVELOPMENT VENTURE CAPITAL REVOLVING INVESTMENT PROGRAM: Designed to allow the State to invest as an equal partner with others in eligible private venture capital funds to support emerging and early-growth businesses in Maine. There is a maximum investment of $1,000,000 per fund. It is intended to utilize experienced professional fund managers to increase the probability of successful investments in recipient companies and is available only to established venture capital funds that have a strategy for the creation and retention of jobs in Maine through:
- Investments in Maine high-growth businesses.
- A marketing and technical assistance plan.
- Appropriate monitoring of its investments.
- A technical assistance program to assist the businesses in which it invests.
- A process for complying with proposed measurement and goals.
MAINE NEW MARKETS CAPITAL INVESTMENT PROGRAM: Provides refundable state tax credits of up to 39 percent to investors in qualified community development entities (CDEs) that reinvest in certain businesses in eligible low-income communities in Maine. The program is modeled after the federal New Markets Tax Credit Program, and is administered by the Finance Authority of Maine, in cooperation with Maine Revenue Services and the Maine Department of Economic and Community Development. In order to be eligible to participate in the program, a CDE must be certified as a qualified community development by the Secretary of the United States Treasury, and be a party to an existing allocation agreement with the Department of Treasury’s CDFI Fund that is in effect and not subject to revocation or cancellation. The allocation agreement must have Maine in its service area. AGRICULTURAL MARKETING LOAN FUND: Provides low interest financing to help eligible businesses employ new and innovative technologies and processes in order to improve, expand and enhance the manufacturing, marketability and production of Maine-made agricultural products. Funds may be used for the design, construction or improvement of facilities such as commodity storage buildings and packing and marketing facilities. Funds may also be used to purchase or retrofit machinery and equipment. Depending on the type of project, the loan amount is up to 90 percent of total project cost, if project cost is $100,000 or less; up to 75 percent of total project cost, if project cost is more than $100,000; and up to 45 percent of total project cost, if project is related to the production of potatoes. Maximum loan amount is $250,000, and acquisition costs for start-up enterprises is limited to $100,000. ENERGY CONSERVATION LOAN PROGRAM: Funded through the Maine Public Utilities Commission (PUC), it provides low-interest loans to improve energy efficiency in Maine workplaces. Loan amount is 90 percent of project cost, up to a maximum loan amount of $35,000 and the interest rate is 1 percent, fixed for the term of the loan. Loan term is usually 5 years. Longer terms may be negotiated depending on the useful life of the assets being financed or additional collateral pledged. COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM (CDBG): Provides funding and technical support for community projects that meet economic development objectives and lead to job creation or retention for Maine residents with low to moderate incomes. TAX INCREMENT FINANCING (TIF): Provides municipalities with a local tool to finance the cost of private development. Maine municipalities may redirect some or all of the new property taxes from an investment project within a designated district to assist in that project’s financing. Municipalities have three disbursement options for the tax increment:
- Give directly to the investing business to pay project costs.
- Use to retire bonds issued as part of the project.
- Retain for allowable economic development.
TIF districts may be designated for up to 30 years. Bonds may be issued for up to 20 years. Financing terms are determined by the municipality. Community designation of a TIF district requires proper public notice, a public hearing, and a majority vote of the municipal legislative body. SMALL ENTERPRISE GROWTH FUND (SEGF): Provides initial investments, typically between $150,000 and $350,000, in patient capital to small businesses that demonstrate a potential for high growth and public benefit. Funds must be matched in cash. Investments from the fund may be structured as convertible debentures or direct purchases of preferred stock.
MARYLAND – updated for 2014
For a list of state economic development agencies, click this link.
Maryland Department of Business and Economic Development Programs
Maryland Venture Fund: A state-funded seed and early-stage equity fund; an evergreen fund that receives annual allocations from the Maryland State Legislature. The Fund makes direct investments in technology and life science companies and indirect investments in venture capital funds. Approximately 60% of the Fund is invested in technology companies in the areas of software, communications, and IT security, and 40% of the Fund is invested in life sciences companies in the areas of therapeutics, medical devices and diagnostics.
Invest Maryland: The largest venture capital investment in history by the State and was designed to support young companies in high-growth Maryland industries. In 2012, $84 million was raised for the program through an online auction of premium tax credits to insurance companies with operations in Maryland. Of that funding, two-thirds is being managed by private venture firms in invest in innovative early-stage businesses in the State. If successful with investments, the firms will return 100% of the principal and 80% of the profits to the State’s general fund. The remaining third will be invested by the state-run Maryland Venture Fund. The state is expecting to invest in hundreds of innovative early-stage companies.
Challenge Investment Program: Provides financing for seed-stage companies to cover a portion of the initial costs associated with bringing new products to market. Initial investments of $50,000 to $100,000 are made with incremental investments to a maximum of $150,000. These incremental investments are awarded based upon the client’s performance and the client’s ability to achieve milestones set by the Maryland Venture Fund at the time of the initial closing.
Maryland Economic Development Assistance Authority Fund: There are five financing capabilities offered through the Maryland Economic Development Assistance Authority and Fund (MEDAAF), with assistance being provided to the business community and political jurisdictions. To qualify for assistance from MEDAAF, applicants are restricted to businesses located within a priority funding area and an eligible industry sector. With a few exceptions, assistance cannot exceed 70% of the total project costs.
Maryland Innovation Initiative (MII): Created as a partnership between the State of Maryland and five Maryland academic research institutions, the program is designed to promote commercialization of research conducted in the partnership universities and leverage each institution’s strengths. Qualifying Universities, faculty from Qualifying Universities, and other entrepreneurs interested in creating a University Start-up are eligible for funding.
State Small Business Credit Initiative: Passed as part of President Obama’s Small Business Jobs Act of 2010, this initiative awarded Maryland with $23 million to strengthen existing financing programs that support lending to small businesses. The State is allocating the funds to programs that leverage private lending to help finance small businesses that are creditworthy, but are not getting the loans they need to expand and create jobs.
Community Development Block Grant Program: Provides funding to commercial and industrial economic development projects. Program funds are dispersed to a local jurisdiction in the form of a conditional grant and are then used for public improvements or loaned to a business.
Job Creation Tax Credit: Businesses that create a minimum number of new full-time positions may be entitled to state income tax credits of up to $1,000 per job or $1,500 per job in a “revitalization area.” Businesses engaged in an eligible activity must create at least 60 new full-time jobs in a 24-month period; this is reduced to 30 new full-time jobs if they are “high wage” jobs, and reduced to 25 new full-time jobs if they are located in a Job Creation Tax Credit “priority funding area.” The Job Creation Tax Credit remains in effect until January 1, 2020.
One Maryland Tax Credit: Businesses that invest in an economic development project in a “qualified distressed county” and create at least 25 new full-time jobs may qualify for up to $5.5 million in state income tax credits. Project tax credits of up to $5 million are based on qualifying costs incurred in connection with the acquisition, construction, rehabilitation and installation of a project. Start-up tax credits of up to $500,000 are available for the expense of moving a business from outside Maryland and for the costs of furnishing and equipping the new location. The credit can be carried forward 14 years and is refundable, subject to certain limitations.
Enterprise Zone Tax Credit: The Enterprise Zone program provides real property and state income tax credits for businesses that locate in a Maryland enterprise zone. The real property tax credit is 80% of the incremental increase in property taxes over the first five years, decreasing 10% annually during the next five years. The income credit is $1,000 credit per new employee. For economically disadvantaged employees, the credit increases to $6,000 per new employee over three years. Enhanced credits are available in enterprise zone focus areas.
Research and Development Tax Credit Program: For Maryland businesses that incur Maryland qualified research and development expenses, the Basic R&D tax credit is 3% of eligible R&D expenses that do not exceed the firm’s average R&D expenses over the last four years and the Growth R&D tax credit is 10% of eligible R&D expenses -in excess of the firm’s average R&D expenses. The credits are capped at $4 million each. If the amount of credits all businesses apply for exceeds the cap, each business receives it’s pro rata share. Businesses must submit an application to DBED by September 15 for expenses incurred in the previous tax year. The credit is refundable for small businesses.
Biotechnology Investment Tax Credit Program: Maryland’s Biotechnology Investment Tax Credit provides income tax credits for investors in qualified Maryland biotechnology companies. The value of the credit is equal to 50% of an eligible investment made in a qualified Maryland biotechnology company during the taxable year. The maximum amount of the credit cannot exceed $250,000 for investors. If the credit exceeds the tax liability, the remaining credit is refundable. The program has a program cap and credits are awarded on a first come, first serve basis.
Cellulosic Ethanol Technology Research and Development Tax Credit Program: Provides income tax credits for expenses related to cellulosic ethanol technology research and development conducted in the State. The amount of the tax credit is equal to 10% of the eligible expenses incurred and cannot exceed the tax liability for that year. The maximum amount available for all companies in each year is limited to $250,000. Businesses must submit an application to DBED by September 15 for expenses incurred in the previous tax year.
Brownfields Revitalization Incentive Program: A site that qualifies for this incentive program may qualify for real property tax credits as well. The site must be located in a jurisdiction that participates in the BRIP, and owned by an inculpable person. For five years after cleanup, a site may qualify for a real property tax credit between 50% and 70% of the increased value of the site. (In an Enterprise Zone, the tax credit may last for up to 10 years). This credit, combined with other real property tax credits, may not exceed 100% of the tax on the increased value of the site.
Security Clearance Tax Credit: The program provides income tax credits for businesses that incur costs related to obtaining security clearance for their employees or for the cost of constructing or renovating a sensitive compartmented information facility (SCIF). Businesses may receive a credit of up to $200,000 for security clearance administrative costs, 50% of the costs to construct a single SCIF up to $200,000 or up to $500,000 for the cost of constructing multiple SCIFs. In addition, a qualified small business that performs security-based contracting in Maryland may be eligible for income tax credits for the first year of rental payment for spaces leased in Maryland. The total credit is capped at $2 million. If the amount that businesses apply for exceeds $2 million, each business receives its pro rata share. The program goes into effect for tax years beginning January 1, 2013. Businesses apply to DBED by September 15th for expenses incurred in the previous tax year.
Cybersecurity Investment Tax Credit: The program provides a refundable income tax credit to Qualified Maryland Cybersecurity Companies (QMCCs) that secure investment from an investor. QMCCs receive a credit of 33% of the investment up to $250,000. Companies are limited to participating in the program for only two years. The program has a program cap and credits are awarded on a first come, first serve basis. The credit is available for tax years beginning January 1, 2014.
Wineries and Vineyards Tax Credit: Provides an income tax credit of 25% of qualified capital expenses made in connection with the establishment of new wineries or vineyards, or the capital improvements made to existing wineries or vineyards. Total credits applied for may not exceed $500,000 or the credit will be prorated. Businesses must submit an application to DBED by September 15 for expenses incurred in the previous tax year. The credit is available for tax years beginning January 1, 2013.
Maryland Film Production Tax Credit: A film production project may be entitled to a refundable tax credit against State of Maryland income tax for certain costs incurred in the State that are necessary to carry out a film production activity. Qualified projects can be awarded a maximum of $7.5 million in credits in each fiscal year. Qualifying production activities are eligible for a tax credit of up to 25% of the qualified direct costs for a feature film, and 27% for a television series. If the amount of the tax credit exceeds the total tax liability in the tax year, the entity can claim a refund in the amount of the excess.
For more information, click this link.
Clean Energy Incentive Tax Credit: Businesses that use certain renewable energy sources or waste materials to produce electricity that is sold to an unrelated person may be entitled to an income tax credit. The facility must be placed in service, or co-firing with coal must begin, on or after January 1, 2006, but before January 1, 2016. Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.
Community Investment Tax Credit: Businesses and individuals that donate to qualified organizations’ approved projects can earn credits equal to 50% of the value of the money, goods or real property contribution operated by tax exempt organizations (under Internal Revenue Code section 501(c)(3)) are eligible for a tax credit of up to $250,000. This credit is in addition to any charitable contribution deduction that is allowed for these contributions on both the state and federal income tax returns. The credit may be taken against corporate income tax, personal income tax, insurance premiums tax or public service company franchise tax. The same credit may not, however, be applied to more than one tax type.
Commuter Tax Credit: Maryland-based businesses that provide commuter benefits for employees may be entitled to a tax credit for a portion of the amounts paid during the taxable year. Commuter benefits include certain costs for an employee’s travel to and from home and the workplace, a Guaranteed Ride Home program or a parking “Cash-Out” program. The credit may be taken against corporate income tax, personal income tax, state and local taxes withheld (for tax-exempt organizations) or insurance premiums tax. The same credit may not, however, be applied to more than one tax type. Sole proprietorships, corporations, tax-exempt nonprofit organizations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.
Employer-Provided Long-Term Care Insurance Tax Credit: Employers who provide long-term care insurance as part of an employee benefit package may claim a credit for costs incurred. The credit may be taken against corporate income tax, personal income tax, insurance premiums tax or public service company franchise tax. The same credit may not, however, be applied to more than one tax type. Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.
Employment Opportunity Tax Credit: Businesses that hire an individual who is receiving Aid to Families with Dependent Children (AFDC) or Family Investment Program (FIP) entitlements may be entitled to a tax credit for wages paid to the employee and for child care and transportation expenses paid on behalf of the employee. The credit may be claimed for individuals hired before July 1, 2009. The credit may be taken against corporate income tax, personal income tax, state and local taxes withheld (for certain tax-exempt organizations only), insurance premiums tax or public service company franchise tax.
Maryland Disability Employment Tax Credit: Businesses that hire people with disabilities may be entitled to a tax credit for wages paid to the employees and for childcare or transportation expenses paid on behalf of the employees. A person with a disability includes a veteran released from the armed forces for a service-related disability. The credit may be claimed for individuals hired before July 1, 2012.
Maryland-Mined Coal Tax Credit: A co-generator, a public service company or an electricity supplier that purchases coal mined in Maryland on or before December 31, 2020 may be eligible for a tax credit.
Sustainable Communities Tax Credit: This credit replaces the Heritage Structure Rehabilitation Tax Credit as of June 1, 2010. This credit is an expansion of the Heritage Structure Tax Credit and alters eligibility requirements of the credit. A refundable credit may be allowed for substantial expenditures incurred to rehabilitate certified structures in Maryland on or after June 1, 2010, but before July 1, 2014.
Telecommunications Property Tax Credit: A telecommunications company that is a public utility is allowed a credit for a portion of the total property taxes paid by the company on its operating real property in Maryland, other than operating land, that is used in its telecommunications business. The credit may be taken only against corporate income tax. Only corporations may claim the tax credit.
For current program information, visit the Comptroller’s Office.
ECONOMIC DEVELOPMENT INCENTIVE PROGRAM (EDIP): Participating companies may receive state and local tax incentives in exchange for job creation, manufacturing job retention and private investment commitments. It offers incentives in several ways:
- In municipalities that are Economic Target Areas, expansions can be assisted with locally‐approved TIF agreements which are exemptions on the value added to a property in the expansion and a state‐approved 3‐5 percent Investment Tax Credit,
- For projects that result in 100 or more new jobs (Enhanced Expansion Projects), companies can be approved by the state for the Investment Tax Credits of up to 10 percent, without the need for any local approvals,
- For projects in select “Gateway Communities” that create 100+ jobs, companies can pursue both a local TIF agreement and state‐approved Investment Tax Credits of up to 10 percent. Manufacturing Retention projects can receive up to a 40 percent.
INVESTMENT TAX CREDIT (ITC): Offers a 3 percent credit for qualifying businesses against their Massachusetts corporate excise tax. The credit is to be used for the purchase and lease of qualified tangible property used in the course of doing business. The ITC can reduce the cost of expansion, includes a carry forward provision and is considered a permanent incentive. R&D TAX CREDIT: A tax incentive for research and development investment for both manufacturers and R&D companies. It was designed to remove any obstacles to R&D investment and spur growth and innovation throughout the Commonwealth. The R&D tax credit closely resembles the federal credit program, however, it specifically offers qualifying Massachusetts companies many unique features for doing business in Massachusetts. It is available to any foreign or domestic corporation subject to the corporate excise under Chapter 63 Massachusetts Law SINGLE SALES FACTOR: Tax apportionment that significantly reduces the tax burden for manufacturers and other qualifying companies and may apply to the following types of companies that have multi-state tax filings:
- Manufacturing companies
- Qualifying defense contractors
- Qualifying financial service providers
TAX INCREMENT FINANCING: Allows municipalities to provide flexible targeted incentives to stimulate job-creating development
- Negotiated Agreement between business and host municipality;
- 5 year minimum, 20 year maximum or anything in between;
- Business pays full tax rate on the “base value”;
- Exemption from property taxation on all or part of the increased value accrued as a result of development
- Percentage of exemption may range from 5% to 100%;
- Personal property tax exemption for both existing and new property;
- M.G.L. 40 § 59 governs all TIF Agreements.
BROWNFIELDS REDEVELOPMENT FUND: Created in 1998 to encourage the reuse of Brownfields in Economically Distressed Areas (EDAs) throughout MA. Brownfields are vacant, abandoned or underutilized industrial or commercial properties where expansion, redevelopment or improvement is complicated by real or perceived environmental contamination and liability. MassDevelopment administers the Brownfields Redevelopment Fund programs.
- The Brownfields Site Assessment Program – Provides unsecured, interest free financing up to $100,000 for environmental assessment of Brownfields.
- The Brownfields Remediation Loan Program – Provides flexible loans up to $500,000 for environmental clean-up of Brownfields.
WORKFORCE TRAINING FUND (WTF): Provides grants up to $100,000 to upgrade skills of new or incumbent workers. The Hiring Incentive Training Grant provides up to $2,000 in training funds for hiring eligible unemployed workers. GREEN LOAN PROGRAM: Bridges the gap between energy efficiency project costs and the rebates or subsidies provided by utility companies and state/federal incentive programs. To be eligible, an organization must be a non-profit or for-profit business in Massachusetts that has been in existence for at least five years and demonstrates an ability to repay the loan. Loans are available in the amounts of $50,000 to $500,000 and are net of project-related rebates or subsidies. Loans may only be made for projects that receive approval for a utility rebate under a public utility sponsored energy efficient program authorized by the Massachusetts Department of Public Utilities or approval for a subsidy from a state/federal energy efficiency incentive. Funds may be used for:
- HVAC replacements or improvements
- Windows, insulation, and other building improvements
- Energy control systems
- Chillers and Boilers
- Hot water heaters
- Photovoltaic panels
EMERGING TECHNOLOGY FUND (ETF): Targets technology companies that are starting up or expanding manufacturing in Massachusetts by providing financing for manufacturing facilities and equipment. It offers loans or loan participations up to $2,500,000 and loan guarantees up to $1,000,000. Companies that receive ETF financing must have strong management teams, demonstrated technical feasibility, market demand for their products and a proven fundraising record. To qualify for ETF financing:
- Borrower must be a technology company starting or expanding manufacturing operations in Massachusetts
- Financing must be for the purchase, expansion or improvement of real estate, and/or the purchase of equipment
- There must be at least two other parties at risk
- Financial investment must benefit the Massachusetts economy
COMMUNITY SERVICE 501(C)(3) LOAN FUND: Flexible financing for capital improvements for community-based nonprofit organizations such as elder care centers, daycare facilities, community centers and girls’ and boys’ clubs. The fund will provide loans ranging from $100,000 up to $500,000. Eligible applicants must be registered as a Massachusetts-based 501(c)(3) organization; have an operating budget of less than $5 million for each of the last five years; provide social, youth or family services; primarily work in underserved or disadvantaged communities; and, be ineligible for financing under existing loan programs. MA CULTURAL FACILITIES FUND (CFF): An initiative of the Commonwealth to increase public and private investment in cultural facilities throughout the state. The Program is administered jointly with the Massachusetts Cultural Council and three types of grant programs are available:
- Capital Grants for expenses related to acquisition, design, construction, repair, renovation and rehabilitation of other capital improvements or deferred maintenance of a cultural facility
- Feasibility and Technical Assistance Grants for expenses related to planning and feasibility assessment for a cultural facility
- Systems Replacement Grants for expenses to undertake the production of 20-year capital needs assessments of their buildings and mechanical systems
All Fund grants must be matched by contributions from the private or public sector and are available to:
- Nonprofit 501(c) 3 organizations primarily engaged in the arts, humanities or interpretive sciences. Eligible facilities include, but are not limited to, museums, historic sites, zoos, aquariums, theaters, concert halls, exhibition spaces, classrooms and auditoriums, and must be owned, leased or used by one or more nonprofit cultural organizations and accessible to the public
- Public/private institutions of higher education that own cultural facilities providing service and open access to the community and the general public beyond their educational mission and demonstrate financial need
- Municipalities that own cultural facilities provided that the cultural facility is at least 50,000 square feet, and 50 percent devoted to cultural purposes
SMALL FARM LOAN PROGRAM: To help small farmers in Massachusetts finance projects that improve their operations and increase their income, MassDevelopment, The Strolling of the Heifers, Inc. and The Carrot Project have teamed together to offer a small farm loan program that provides loans ranging from $3,000 to $35,000. Eligible farmers will own or lease farms in Massachusetts. TECH DOLLARS: MassDevelopment offers a special loan program to help non-profit 501(c) 3 organizations purchase and install technology equipment. TechDollars provides loans from $25,000 to $250,000 and 100 percent of cost of purchase of new or used telecommunications and IT equipment and installation costs To be eligible, the borrower must be a Massachusetts 501(c) 3 organization and equipment purchased must be installed in facilities located in the state. LIFE SCIENCE INCENTIVES
- COOPERATIVE RESEARCH GRANT: Supports industry‐sponsored research at universities and facilitates scientific discoveries that lead to medical applications with grants of $250,000 per year for up to three years, in a 1:1 match with its industry partner.
- NEW FACULTY STARTUP GRANT: Targets investments to attract and retain nationally prominent faculty at Massachusetts’ colleges and universities with grants of $250,000 per year for up to three years, in a 1:1 match with the academic institution.
- NEW INVESTIGATOR GRANT: Spurring innovative new research and advancing the careers of new investigators who are working on cutting‐edge research at Massachusetts academic research centers with grants of $100,000 per year for up to three years.
- LIFE SCIENCES ACCELERATOR: Financing, up to $750,000, for early‐stage companies to help leverage additional sources of capital.
- SMALL BUSINESS MATCHING GRANT (SMBG) – Provides “matching” support—capped at $500,000 per company—to Phase II or Post Phase II SBIR or STTR grants already received by applicant companies.
- LIFE SCIENCES TAX INCENTIVE PROGRAM: Companies that are growing jobs, investments and revenue are prospects for the nine distinct tax incentives of the LSI. To receive benefits, companies must apply to the MLSC to become a Certified Life Science Company. The incentives include:
o Refundable 10% Investment Tax Credit o Refundable FDA User fee Credit o Refundable Research Tax Credit o Elimination of Sales Factor Throwback o Deduction for Orphan Drug Clinical Testing o Special Sales Tax Exemption o Life Sciences Research Credit o Construction Sales Tax Exemption
BUSINESS TAX REFORM: The unpopular Michigan Business Tax (MBT) will be replaced effective January 1, 2012 with a simpler and competitive corporate income tax. What does this mean? All industries are in line for significant tax cuts. Lower rates will tax C corporations at 6 percent on federal taxable income apportioned to Michigan. Other entities—individuals, partnerships and LLCs—have income flow to their personal income tax. It is expected that 100,000 businesses will pay no business taxes. The personal income tax rate remains 4.35 percent and is scheduled to decline to 4.25 percent in 2013. The new simplified tax system eliminates a laundry list of MBT credits and deductions. The alternative business income tax for small business remains intact. When the 2012 tax changes take effect, Michigan is projected to rank #13 in the Tax Foundation’s U.S. overall business tax climate ranking, and #22 for corporate taxes, up from #48. PURE MICHIGAN BUSINESS CONNECT: Michigan businesses now have new ways to buy and sell, raise capital and connect with one another. Pure Michigan Business Connect is a $3 billion public-private economic gardening initiative matching people with resources and strengthening relationships to fuel economic growth, including:
- venture capital, debt financing, collateral support, other funding assistance
- customized market research
- executive and professional talent search assistance
- training support
- customized site searches
- ombudsman services
- entrepreneur services
- export assistance
- legal services
- matchmaking with Michigan suppliers
NEW INCENTIVE PROGRAMS FOR BUSINESS, COMMUNITY DEVELOPMENT: New economic development and community revitalization programs will provide $100 million in incentives for highly competitive projects in Michigan. The Michigan Business Development and Michigan Community Revitalization Programs replace the state’s previous MEGA, Brownfield and Historic tax credit programs that were features of the old Michigan Business Tax. The Michigan Business Development Program will provide grants, loans or other economic assistance of up to $10 million to businesses that are creating qualified new jobs and making new investments in Michigan. Factors to be considered in making these awards include: out-of-state competition, private investment in the project, business diversification opportunities, near-term job creation, wage and benefit levels of the new jobs, and net-positive return to the state. Business retention and retail projects are not eligible for consideration of these incentives. The Michigan Community Revitalization Program will provide grants, loans, or other economic assistance of up to $10 million to projects that will revitalize regional urban areas, act as a catalyst for additional investment in a community, reuse vacant or historic buildings and promote mixed use and sustainable development. NEW TALENT PORTAL: Through the MEDC Job Portal, employers can register to post openings and work closely with the MEDC’s Talent Acquisition team to devise strategies to meet their talent needs. Companies posting on the Job Portal will also have access to the MEDC’s other talent acquisition services, including targeted marketing and social media outreach, career events, assistance with identifying relocation services and a triage approach to addressing hard-to-fill positions and hiring challenges. The portal also allows job seekers to search for positions around the state, create profiles and add their resumes to the talent database. The MEDC Job Portal is currently being used in concert with the Michigan Talent Bank. Both systems are working together to effectively connect Michigan’s businesses and job seekers. COST-CUTTING & OMBUDSMAN SERVICES: The MEDC helps companies save money through Workers’ Compensation Cost Control Service. Companies are also assisted in finding property for expansions. The Business Ombudsman Office provides impartial, independent and confidential assistance in resolving disputes and investigating business complaints against state government agencies. FEDERAL CONTRACT ASSISTANCE: With the growing need for qualified defense contractors, the Michigan Defense Center strategically connects defense industry buyers and prime contractors with Michigan based-companies. In addition, Procurement Technical Assistance Centers assist companies throughout the entire government procurement process from pre-award to post-award. MEDC also tracks federal grant programs and makes companies aware of opportunities and offer letters of support where applicable. PATENT/TRADEMARK WORK: In conjunction with Michigan law firms and the Small Business Technology Development Center network, the MEDC is launching an initiative to make available pro bono services in the IP sectors of patents, trademark and copyright laws.
DATA CENTER SALES TAX EXEMPTIONS: Enacted in July 2011, Minnesota created a major tax exemption for data center projects. Qualified data centers will receive a 20-year exemption from sales tax on equipment and energy used in the center (Minnesota state sales tax is 6.875 percent.). To be qualified, the data center must be at least 30,000 square feet of new or substantially renovated space, and represent at least $50 million in construction and equipment costs within 24 months. The incentive takes effect July 1, 2012. Minnesota is also blessed with no personal property or inventory tax. Other benefits in Minnesota are cooler climate to reduce cooling costs, low risk for earthquakes and other natural disasters, a robust fiber network, and reasonably priced and abundant energy. JOB OPPORTUNITY BUILDING ZONE (JOBZ): Provides local and state tax exemptions to qualified companies that start up or expand in targeted areas of Greater Minnesota. There are 10 job zones comprising more than 29,000 acres in about 325 communities. Each zone includes acres for primarily manufacturing, value-added or high paying service businesses. Benefits are determined by the exact nature of the business expansion, as well as its effective date. JOBZ benefits accrue from the date businesses qualify and continue until December 31, 2015, when the JOBZ program is scheduled to expire. Businesses that startup or expand in a zone or relocate from other states or from elsewhere in Minnesota are eligible for the incentives if they meet certain job and wage goals:
- They must increase employment by a minimum of five jobs or 20 percent (whichever is greater) within the first full year of operations in the zone.
o They must pay each employee (including benefits not mandated by law) at a level equal to at least 110 percent of the federal poverty level for a family of four.
ANGEL TAX CREDIT: Signed into law on April 1, 2010, it offers incentives to investors or investment funds that put money into startup and emerging companies focused on high technology or new proprietary technology. Funding for years 2012-2014 is set at $12 million per year. To qualify, businesses must meet these general criteria. At minimum they must:
- Be headquartered in Minnesota
- Have a minimum of 51 percent of employees and 51 percent of payroll in Minnesota
- Have fewer than 25 employees
- Pay employees annual wages of at least 175 percent of poverty level
- Pay interns 175 percent of federal minimum wage
- Not have been in operation for more than 10 years
- Not previously have received private equity investments of more than $4 million
- Not have been disqualified from investment under MN Stat. 80 A.50 (b)(3)
- Not have generated more than $4 million in investments that have received an Angel Tax Credit.
- Be certified by DEED before investment is made. The non-refundable certification filing fee is $150
In addition, qualifying businesses must also be engaged in—or committed to engage in—technological innovation in MN. Their primary business activities must include one or more of the following:
- Using proprietary technology to add value to a product, process or service in a qualified high-technology fiel
- Researching or developing a proprietary product, process, or service in a qualified high-technology field
- Researching, developing, or producing a new proprietary technology for use in the fields of: agriculture, tourism, forestry, mining, manufacturing or transportation
STATE SMALL BUSINESS CREDIT INITIATIVE (SSBCI): Uses federal funding to stimulate private-sector lending and improve access to capital for small businesses and manufacturers that are creditworthy but not getting loans they need to expand and create jobs. It allocates up to $15.4 million into four state programs: The Capital Access Program, Emerging Entrepreneurs Fund, Small Business Loan Guarantees and Early Stage Fun RESEARCH & DEVELOPMENT TAX CREDIT: Individuals involved in partnerships, S-corporations and limited liability companies are allowed to claim the credit against their individual income taxes. This opens up the tax credit to more small and medium-sized businesses. The tax credit for R&D expenditures is10 percent, up to the first $2 million in eligible expenses and 2.5 percent for eligible expenses above $2 million. MINNESOTA INVESTMENT FUND: Provides grants to help add new workers and retain high-quality jobs on a statewide basis. The focus is on industrial, manufacturing and technology-related industries to increase the local and state tax base and improve economic vitality statewide. Grants are awarded to local units of government (one grant per state fiscal year) who provide loans to assist expanding businesses. Cities, counties, townships and recognized Indian tribal governments are eligible for this fund. All projects must meet minimum criteria for private investment, number of jobs created or retained and wages paid. There is a maximum of $500,000 per grant. At least 50 percent of total project costs must be privately financed through owner equity and other lending sources. Grant terms are for a maximum of 20 years for real estate and a maximum of 10 years for machinery and equipment. Interest rates are negotiated. SMALL BUSINESS DEVELOPMENT LOAN PROGRAM: Provides loans for business expansions that result in the creation of new jobs. Small business loans up to $5 million are made by the Minnesota Agricultural and Economic Development Board (MAEDB) through the issuance of industrial development bonds. Manufacturing and industrial companies located or intending to locate in Minnesota and meet the federal definition of a small business (generally those with 500 or fewer employees) are eligible. URBAN INITIATIVE LOAN PROGRAM: Created to support the growth of minority owned and operated businesses and to create jobs in economically distressed areas of the Twin Cities. Grant funds are provided to a network of nonprofit lenders to use for loans to start-up and expanding businesses. Start-up and expansion costs, including normal expenses such as machinery and equipment, inventory and receivables, working capital, new construction, renovation and site acquisition are eligible for the program. Businesses eligible for loans include technologically innovative industries, value-added manufacturing and information industries. Project must demonstrate potential to create jobs for low-income people; be unable to obtain sufficient capital from traditional private lenders; and demonstrate the potential to succeed. Businesses must be located in Minneapolis, St. Paul, Bloomington, Brooklyn Center, Brooklyn Park, Burnsville, Columbia Heights, Coates, Coon Rapids, Fridley, Lauderdale, Lexington, Mendota, Miesville, New Germany, New Brighton, New Hope, Newport, Richfield, Spring Lake Park, South St. Paul and West St. Paul. Micro enterprises, including retail businesses, may apply for up to $25,000. Businesses that are seeking more than $25,000 will be required to find private financing to match the state’s investment. The maximum Urban Initiative investment in any one business is $150,000. INDIAN BUSINESS LOAN PROGRAM: Supports the development of Indian-owned and operated businesses and promotes economic opportunities for Indian people throughout the state. The Minnesota Chippewa Tribe has authority to use IBLP funds to make loans to businesses owned and operated by an enrolled member of its six participating bands–Bois Forte, Fond du Lac, Grand Portage, Leech Lake, Mille Lacs and White Earth. Applicants must be enrolled members of a federally recognized Minnesota-based band or tribe. Businesses must be wholly owned by an enrolled member and can be located anywhere in the state, although the bulk of the loans are made to businesses on a reservation. Loan proceeds may cover start-up and expansion costs. Loans may not exceed 75 percent of the projects costs or the balance of the funds available to any one tribe. Owners must provide a portion of the financing needed to undertake the project. The amount varies between 5 percent and 10 percent, depending upon the requirements of each band or tribe. BORDER CITIES ENTERPRISE ZONE PROGRAM: Provides business tax credits (property tax credits, debt financing credit on new construction, sales tax credit on construction equipment and materials, and new or existing employee credits) to qualifying businesses that are the source of investment, development and job creation or retention in the Border-Cities Enterprise Zone cities of Breckenridge, Dilworth, East Grand Forks, Moorhead and Ortonville SEED CAPITAL INVESTMENT CREDIT PROGRAM: Provides tax incentives for investing in innovative business located in the Minnesota border cities of Breckenridge, Dilworth, East Grand Forks, Moorhead and Ortonville. Investors may receive a 45 percent tax credit on their investment, up to $112,500 per year. The credit is non-refundable and may be carried forward up to four years. TOURISM BUSINESS SEPTIC TANK REPLACEMENT: Makes low-interest financing available to existing tourism-related businesses that provide overnight lodging and need to replace a failed septic system. Participation loans in cooperation with financial institutions can be made for up to 50 percent of the total cost of the project. SBIR PROGRAM: Provides federal grants for small companies in the critical startup and development stages, helping them to compete with larger, more established companies. Each year, 11 federal departments and agencies set aside a portion of their research and development funds for award to small business. To be eligible, companies must be at least 51-percent American-owned, independently operated and located in the United States. Other requirements include:
- Perform all work in the United States.
- Be for-profit.
- Be the primary employer of the lead researcher at the time of award. That researcher may not be employed full time by another institution or company.
- Perform the majority of work themselves, rather than through consultants or subcontractors.
- Have 500 employees or fewer.
SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM (STTR): Provides federal grants to encourage partnerships between businesses with ideas for new technologies and products and the nonprofit R&D institutions that can bring those products to market. Each year, five federal departments and agencies are required by STTR to reserve a portion of their R&D funds for award to small business/nonprofit research institution partnerships. Both small businesses and nonprofit research institutions must meet certain requirements. Small businesses must be American-owned and independently operated, be for-profit and have 500 employees or fewer. The principal researcher on the project need not be employed by small business. Nonprofit research institutions must be located in the U.S. and must also be a nonprofit college or university, a domestic nonprofit research organization, or a federally funded research-and-development center (FFRDC). Unlike the restrictions placed on participating businesses, there are no limits on the numbers of employees a nonprofit research institution may have. MINNESOTA JOBS SKILLS PARTERNSHIP PROGRAM: Grants of up to $400,000 are awarded to educational institutions that partner with businesses to develop new-job training or retraining for existing employees. All training projects pair at least one public or private accredited Minnesota educational institution and one business. Funds may be used for training-related costs or educational infrastructure improvements necessary to support businesses located or intending to locate in Minnesota. A cash or in-kind contribution from the contributing business must match program funds on at least a one-to-one ratio. TAX INCREMENT FINANCING (TIF): Uses the increased property taxes that a new real estate development generates to finance up-front costs of the development. The city, county or development authority uses TIF to pay qualifying costs–land acquisition, site preparation and public infrastructure, for instance–incurred for the project. TAX ABATEMENT: Cities, counties and school districts may use tax abatement to help finance certain economically beneficial projects. Property taxes are forgiven for a period of time to allow the project to cash flow. Or the taxes are captured for a period of time and an up-front payment is made by the political subdivision to help the project cover start up costs. At least 50 percent of the payroll of the operations of the business that qualify must be for employees engaged in one of the following lines of business or any combination of them: Manufacturing, Agricultural processing, Mining, R&D, Warehousing, Qualified high technology LOCAL ENERGY IMPROVEMENTS FINANCING PROGRAM: Provides low-interest loans to building owners who want to make their properties more energy-efficient. Open to qualified residential, commercial and industrial property owners in Minnesota, the program is funded through revenue bonds issued by participating local governments. Building owners pay back the loans through a special tax assessment that may not exceed 20 years. The energy improvements can be any permanent change to a building that leads to a net reduction in energy consumption without altering the principal source of energy. GROWTH ACCELERATION PROGRAM: Provides consulting services to help small manufacturers that employ up to 100 workers become more efficient, more competitive and more likely to thrive and grow. GAP provides grants of up to $50,000, which are matched dollar-for-dollar by companies. The grants are typically used to analyze and improve business and manufacturing processes. FOREIGN TRADE ZONES: Commerce sites (industrial sites, buildings) set up in or near U.S. Customs ports of entry where merchandise is considered legally outside U.S. Customs territory. The zones are operated as public utilities by states, port authorities, other political groups or corporations charted by the state. Companies can use foreign trade zones to reduce duty payments, streamline supply chain costs and improve competitive position in domestic and foreign markets. FEDERAL RURAL DEVELOPMENT FINANCING
- RENEWABLE ENERGY PROGRAM: Loans, loan guarantees and grants are available to help agricultural producers and rural small business purchase renewable energy systems and make energy efficiency improvements. Rural is defined as an area of less than 50,000 in population or its immediately adjacent incorporated communities.
- VALUE-ADDED PRODUCER GRANTS: Help producers expand their customer base by entering into emerging markets for their products or commodities and ensure that a greater portion of the revenues derived from the value-added activity is available to the producer. The maximum allowable grant amount is $100,000 for planning grants and $150,000 for working capital. Grant recipients must provide 1-to-1 matching funds and projects must be completed within 1 year. Independent producers, farmer-owned cooperatives, agricultural producer groups and majority-controlled producer-based groups are eligible to apply. Four categories are considered value-added under this program.
o Ventures in which agricultural producers add value to their products through changing the physical state or form of the product (processing wheat into flour, corn into ethanol, slaughtering livestock).
o Producing products in a manner that enhances its value (organic).
o Physical segregation of an agricultural commodity or product in a manner that results in the enhancement of the value of that product.
o Any agricultural commodity or product that is used to produce renewable energy on a farm or ranch (methane digesters, wind turbines).
- BUSINESS & INDUSTRY LOAN GUARANTEE PROGRAM: Loan guarantees with an upper limit of $10 million. Some high-priority projects may be guaranteed up to $25 million by the administrator in Washington. Most business purposes are eligible, e.g. building and equipment purchase or development, working capital (no lines of credit); aquaculture; commercial nurseries; tourist and recreation facilities (except golf courses); hotels and motels; community facility-type projects; facilities for lease to private businesses; and housing development sites. Eligible borrowers may generally be an individual, cooperative, corporation, partnership, non-profit corporation, Indian tribes or public body. A minimum of 20 percent tangible balance sheet equity is required on a new business and 10 percent on an existing business.
- INTERMEDIARY RELENDING PROGRAM: Loan provided to an entity (intermediary) to establish a revolving loan fund to re-lend to eligible ultimate recipients (businesses) at reasonable rates and terms. Eligible intermediaries are private non-profit corporations, any state or local government, an Indian tribe or a cooperative. IRP funds can be used to finance business facilities and community development projects in rural areas, innovative projects, land, building construction or repair, equipment, working capital, interest, feasibility studies and fees for professional services. Ultimate recipients must be located in a rural area of fewer than 25,000 in population.
- RURAL ECONOMIC DEVELOPMENT LOAN & GRANT PROGRAM: Provides financing to develop projects that will result in a sustainable increase in economic productivity, job creation and incomes in rural areas. Eligible borrowers (or grantees) of this program are current or prepaid RUS electric and telephone borrowers. Funds are either a zero-interest loan or a grant to the utility, which in turn is re-lent as a zero-interest loan to the eligible business for a specific project. Grant funds must be matched 20 percent up-front by the borrower utility company. Projects may include business start-ups and expansion, community development, incubator projects, medical and training projects and feasibility studies.
- RURAL BUSINESS ENTERPRISE GRANT PROGRAM: Applicants are public bodies, non-profit associations and Indian tribes. The purpose is to assist in financing and developing small and emerging private businesses. The grant cannot be passed through to the business. Funds can be used for a revolving loan program to provide financing to businesses that meet all of the following requirements:
o 50 or fewer new employees o Less than $1 million in projected gross revenue o Uses new processes o Uses technological innovations and commercialization of new products that can be produced in rural areas
- RURAL BUSINESS OPPORTUNITY GRANT PROGRAM: May be used to assist in the economic development of rural areas by providing technical assistance for business development and economic development planning. Grants may be made to public bodies, nonprofit corporations, Indian tribes on federal or state reservations and other federally recognized tribal groups, and cooperatives with members that are primarily rural residents and that conduct activities for the mutual benefit of the members. Applicants must have sufficient financial strength and expertise in activities proposed in the application to ensure accomplishment of the described activities and objectives. Grant requests are limited to $50,000 per state and may be used to:
o Identify and analyze business opportunities that will use local rural materials or human resources. This includes opportunities in export markets, as well as feasibility and business plan studies. o Identify, train and provide technical assistance to existing or prospective rural entrepreneurs and managers. o Establish business support centers and otherwise assist in the creation of new rural businesses. o Conduct local community or multi-county economic development planning. o Establish centers for training, technology and trade that will train rural businesses in the utilization of interactive communications technologies to develop international trade opportunities and markets. o Conduct leadership development training of existing or prospective rural entrepreneurs and managers. o Pay reasonable fees and charges for professional services necessary to conduct the technical assistance, training or planning functions.
MISSISSIPPI FILM INDUSTRY INCENTIVE: Passed in 2011 and effective immediately, it increases the rebate by 5 percent and expands the definitions of qualified distribution and production to include new technology. The legislation increases the current rebate to 25 percent for qualified local spend and non-resident cast and crew payroll and to 30 percent for Mississippi resident cast and crew payroll. The per project rebate cap remains at $8 million (an approximate $30 million local spend) and the annual cap remains at $20 million. The expanded program added streaming video and Internet delivery as qualified distribution. New technology areas, such as animation, 3D applications, video game cinematics, visual effects and motion capture within the fields of feature film, television, commercials and games, were added as qualified production. ADVANTAGE JOBS INCENTIVE PROGRAM: Provides for a rebate of a percentage of Mississippi payroll to qualified employers for a period of up to 10 years. It is available to businesses that promise significant expansion of the economy through the creation of jobs. The jobs must meet or exceed the average annual wage of the state or the county in which the company locates, whichever is lower. Minimum job creation requirements are based on the level of development of the county. BROADBAND TECHNOLOGY TAX CREDIT: Credits provided to entities to encourage the deployment of high-speed Internet access throughout the state, with an emphasis on rural areas. Qualifying equipment used in the deployment of broadband technologies includes asynchronous transfer mode switches, digital subscriber line access multiplexers, routers, servers, multiplexes, fiber optics and related equipment. Annual credit amounts are calculated as a percentage of eligible expenditures, based on equipment location, and is available for 10 years. The credits can be claimed against income or franchise tax, but the total amount of credits taken over the 10 year period cannot exceed 100 percent of the cost of the equipment. The credit percentage amount allowed per year is based on the development ranking of the county. GROWTH AND PROSPERITY PROGRAM (GAP): Designed to encourage development in economically challenged areas of the state. It designates specific counties as GAP counties and provides income, franchise, sales and property tax incentives to companies that locate or expand in these locations. The following businesses that create 10 or more jobs are eligible to participate under the GAP Program:
- Manufacturing, processing, assembling, storing, warehousing, servicing, distributing or selling of any products or goods, including products of agriculture;
- Enterprises for research and development, including, but not limited to, scientific laboratories; or
- Other businesses or industries that will further the public purposes of the GAP Act as determined on a case-by-case basis by MDA, and that create a minimum of ten (10) jobs.
INDUSTRIAL PROPERTY TAX EXEMPTION: Up to a 10 year exemption from property taxes is available to eligible industries that locate or expand in the state. The exemption may be granted for all local property taxes except school district taxes on any property, but may not be granted on finished goods or rolling stock. The exemption usually includes land, buildings, machinery, equipment, furniture, fixtures, raw materials and work in process. The following businesses qualify for this exemption, at the discretion of the county and city government:
- Manufacturers, Processors, and/or Refineries
- Research and Development Facilities
- Warehouse and Distribution Facilities
- Air and Transportation Maintenance Facilities
- Telecommunications Companies
- Data and Information Processing Companies
- Recreational Facilities that Impact Tourism
- Movie Industry Studios
- Technology intensive facilities
JOBS TAX CREDIT: Can be applied to state income tax to reduce an employer’s income tax liability. They are calculated as a percentage of eligible payroll each year for five years, based on job location and wages subject to state income tax. The credits are taken in years two through six after the new jobs are created. The following businesses qualify for these credits: Manufacturers, Wholesalers, Processors, Research and Development, Facilities, Distributors and Warehouses. In addition, the following businesses qualify upon receiving a designation by the Mississippi Development Authority: Air and Transportation Maintenance Facilities, Telecommunications Companies, Data and Information Processing Companies, Computer Software Development Enterprises, Recreational Facilities that impact Tourism, Resort hotels having a minimum of 150 rooms, Movie Industry Studios and Technology intensive facilities. To be eligible for this credit, the employer must create and maintain an annual average employment of the minimum number of jobs required based on the development ranking of the county. MANUFACTURING INVESTMENT TAX CREDIT: Existing manufacturers that have operated in Mississippi for two or more years may be eligible for investment tax credits that can be applied to the entity’s state income tax liability. To qualify, an existing manufacturer must invest $1,000,000 or more in buildings and/or equipment used in the manufacturing operation. The investment credit is calculated as 5 percent of the eligible investment for a project. MOTION PICTURE PRODUCTION TAX INCENTIVE PROGRAM: A rebate program designed to encourage production of motion pictures in Mississippi. It is designed to return a portion of the qualified expenses incurred in the state back to the production company. To qualify, a project must be a nationally distributed feature length film, video, DVD, television series or commercial that is made (in whole or in part) in MS for theatrical or television viewing. The production of news or athletic events do not qualify, nor does any project that contains any material or performance deemed obscene, as defined in Section 97-29-103, Mississippi Code of 1972. MISSISSIPPI AEROSPACE INITIATIVE INCENTIVES PROGRAM: Provides tax incentives to companies that manufacture or assemble components for the aerospace industry or provide research, development or training services for the sector and are looking to locate or expand in the state. These incentives include a 10-year exemption from income and franchise taxes, as well as a sales and use tax exemption for the start-up of the facility. In order to qualify, companies must invest a minimum of $30 million and create at least 100 full-time jobs. MISSISSIPPI CLEAN ENERGY INITIATIVE PROGRAM: Allows the Mississippi Development Authority (MDA) to certify companies that manufacture systems or components used to generate clean, renewable or alternative energy. This includes nuclear, solar, wind and hydro-generation. The program provides qualifying companies with a 10-year exemption from state income and franchise taxes, as well as a sales tax exemption to establish a plant or expand an existing production facility. To qualify, businesses must commit to invest a minimum of $50 million and create 250 full-time jobs. MISSISSIPPI DATA CENTER INCENTIVES: State sales tax exemption for all computing equipment and software used by companies certified as data centers by the MDA. Both new and replacement equipment qualify for the tax exemption. The certification requires a minimum investment of $50 million and the creation of at least 50 new jobs paying 150 percent of the average state wage. NATIONAL OR REGIONAL HEADQUARTERS TAX CREDIT: Equal between $500 and $2,000 per position and can be applied to state income tax to reduce an eligible entity’s corporate income tax liability. These credits are awarded to induce companies to establish a headquarters in Mississippi that includes officers and other high-level employees. Transferring or establishing a national or regional headquarters must create a minimum of 35 qualified jobs within a one year period. These credits can be in addition to Jobs Tax Credits and the combination can be used to offset up to fifty percent of the entity’s state income tax liability. Any unused credits can be carried forward up to five years. NATIONAL OR REGIONAL HEADQUARTERS SALES TAX CREDIT: A sales and use tax exemption is available for eligible businesses that create or transfer their National or Regional Headquarters to the state. This exemption applies to component building materials used in the construction or improvement as well as the machinery and equipment used in the facility. A minimum of 35 new headquarters jobs must be created at the location to qualify for this exemption, as determined by the Mississippi State Tax Commission. PROPERTY TAX EXEMPTION FOR INDUSTRIAL REVENUE BOND FINANCING: An exemption from property taxes on land, building and equipment is available and is valid for up to 10 years on property purchased with industrial revenue bond proceeds from bonds issued by the Mississippi Business Finance Corporation (MBFC). PROPERTY TAX EXEMPTION ON IN-STATE INVENTORY: Local governing authorities may grant a 10-year exemption from property taxes on finished goods inventory that will remain in the state. The exemption may be granted for all local property taxes except school district taxes on any property. PROPERTY TAX EXEMPTION FOR BROADBAND TECHNOLOGY: A property tax exemption is available for eligible telecommunications businesses on the purchase of equipment used in the deployment of broadband technology in the state. RESEARCH AND DEVELOPMENT SKILLS TAX CREDIT: Equal to $1,000 per employee per year for a five year period and can be used to reduce an eligible entity’s income tax liability. These credits are available for any position requiring R&D skills. There is no minimum number of positions that must be created to qualify for this credit and it is awarded in the amount of $1,000 per full-time employee per year for a five year period. These credits can be in addition to Jobs Tax Credits and the combination can be used to offset up to fifty percent of the entity’s state income tax liability. Any unused credits can be carried forward up to five years. SALES & USE TAX EXEMPTION FOR INDUSTRIAL REVENUE BOND FINANCING: To encourage construction and expansion within the state, the Mississippi Business Finance Corporation may issue IRBs for financing approved projects. Once projects are induced in the bond program, a sales tax exemption is available for all purchase made with bond proceeds. SALES & USE TAX EXEMPTION FOR CONSTRUCTION OR EXPANSION: Available for eligible businesses that construct a new facility or expand an existing facility in the state. Eligible businesses include Manufacturers and Custom Processors. In addition, the following businesses qualify upon receiving a designation by the MDA: Data and Information Processing Companies and Technology intensive facilities. The amount of exemption that is allowed depends on the location of the facility. To qualify for this exemption, application must be made to the State Tax Commission prior to beginning the project. SKILLS TRAINING INCOME TAX CREDIT: Can be applied to state income tax to reduce an employer’s income tax liability. These credits are earned by certain types of businesses that offer training to their employees in Mississippi. For expenses to qualify for the Skills Training Credit, the training program must be offered by, or be approved by, the community or junior college in the district where the business is located as well as the State Tax Commission. DEVELOPMENT INFRASTRUCTURE GRANT PROGRAM (DIP): Available to fund publicly owned infrastructure and can be used by municipalities and counties to assist with the location or expansion of businesses. Usage of the funds must be directly related to the construction, renovation, or expansion of industry. JOB PROTECTION GRANT PROGRAM: Available to fund “at risk” industries that have been operating in the state for at least three years and that have lost jobs or are at risk to lose jobs because such jobs have been outsourced. “Outsourced” means Mississippi jobs are being lost and relocated to industries in foreign countries. The funding can be used by “at risk” industries that retain jobs in MS and improve productivity. ENERGY INVESTMENT LOAN PROGRAM: Provides loans to businesses that are increasing energy efficiency in their buildings, equipment and processes. Eligible industries include manufacturers, warehouses and distribution centers, research and development facilities, retail, telecommunications and data processing facilities and national or regional headquarters. MINORITY BUSINESS MICRO LOAN PROGRAM: Provides loans to socially and economically disadvantaged minority and women owned businesses as designated by the Minority and Small Business Development Division of the MDA. Eligible uses of loan proceeds include inventory purchase, working capital, machinery and equipment. RESEARCH & DEVELOPMENT LOAN PROGRAM: Available to provide loans to qualified companies designated by the MDA. R&D companies must be meet minimum criteria before they apply, including that at least 10 percent of the workers at the facility must be scientists, engineers or computer specialists and the average wage of all workers at the facility must be at least 150 percent of the state average annual wage. A basic health care plan must be provided to all employees.
MISSOURI – updated for 2014
For a list of state economic development agencies, click this link.
Action Fund Loan: Provides a loan to certain types of for-profit companies that need funds for start-up or expansion and have exhausted other sources. Projects can only be in a “non-entitlement” area—a city under 50,000 in population or a county under 200,000 in population.
Brownfield Redevelopment Program: Provides financial incentives for the redevelopment of commercial/industrial sites that are contaminated with hazardous substances and have been abandoned or underutilized for at least three years.
BUILD: Provides a financial incentive for the location or expansion of large business projects. The incentives are designed to reduce necessary infrastructure and equipment expenses if a project can demonstrate a need for funding. An eligible industry in manufacturing, processing, assembly, R&D, agricultural processing or services in interstate commerce must invest a minimum of $15 million; or $10 million for an office industry (regional, national or international headquarters, telecommunications operations, computer operations, insurance companies or credit card billing and processing centers) in an economic development project; and create a minimum of 100 new jobs for eligible employees at the project or a minimum of 500 jobs if the project is an office industry or a minimum of 200 new jobs if the project is an office industry located within a distressed community as defined in Section 135.530, RSMo. Retail, health or professional services, intra-state relocations or replacement facilities are ineligible. The minimum bond issue is $500,000. The bonds may be used to finance public or private infrastructure to support the project, or the new capital improvements of the business at the project location. Bond proceeds may not be used for working capital, inventory or other operating costs of the business or another entity. This tax credit can be applied to:
- Ch. 143 – Income tax, excluding withholding tax
- Ch. 148 – Bank Tax, Insurance Premium Tax, Other Financial Institution Tax
Industrial Infrastructure Grant: Assists local governments in the development of public infrastructure that allows industries to locate new facilities, expand existing facilities, prevent the closing of a facility or the relocation of a facility outside the state. Projects can only be in a “non-entitlement” area—a city under 50,000 in population or a county under 200,000 in population. More than one business must potentially benefit from the facilities to be funded. For-profit manufacturing, processing and assembly companies that will have wages above the county average and provide medical benefits are prioritized. Grant funds may be used for public streets, water or sewer lines, engineering and other public facilities necessary to support the project. A public entity must own the facilities to be funded.
Work Opportunity Tax Credit: Provides a federal income tax credit to businesses for hiring from nine targeted groups with barriers to employment. The Internal Revenue Service specifies that the State Workforce Agency (SWA) is responsible for administering the Work Opportunity Tax Credit Program. The Missouri Department of Economic Development, through the Division of Workforce Development, administers the program in the state of Missouri. Eligible applicants include any private, for-profit business. There is no limit on the number of qualifying new hires per business or total amount of tax credits distributed per year.
Small Business Incubator Tax Credit: Generates private funds to be used to establish a “protective business environment” (incubator) in which a number of small businesses can collectively operate, fostering growth and development during a business’ start-up period. The overall maximum amount of tax credits that can be authorized under this program in any one calendar year is $500,000. This 50% tax credit can be applied to:
- Ch. 143 – Income tax, excluding withholding tax
- Ch. 147 – Corporate franchise tax
- Ch. 148 – Bank Tax, Insurance Premium Tax, Other Financial Institution Tax
Chapters 100 Sales Tax Exemption, Personal Property: Provides a sales tax exemption on tangible personal property purchased through Chapter 100 bonds for non-manufacturing purchases. Any company for which Chapter 100 bonds are issued that purchases personal property is eligible. Companies eligible for Chapter 100 bond financing include manufacturing, warehousing, distribution, office, research and development, agricultural processing, and services in interstate commerce. Retail, services in intrastate commerce and others are not eligible. The project cannot have been announced; bonds already approved/issued; or personal property already purchased. The project must:
- Involve competition with another state; therefore, a comprehensive state/local incentive proposal will be involved in an attempt to win the project;
- Have above-average wages with benefits, or be in an economically distressed or blighted area;
- Include local incentives provided to the project commensurate with the state incentives, relative to the new state/local tax revenues created by the project;
- Have a positive state fiscal benefit, including all the state incentives proposed for the project; and
- Have an indication that the city and county have approved the local sales tax exemption. (The local sales tax exemption may also be provided independent of the state sales tax)
Automotive Manufacturing Jobs Program: Allows a qualified automotive manufacturing company, beginning January 1, 2012, upon approval of a notice of intent by the department, to retain 100% of the withholding taxes from full-time jobs at the facility for 10 years if it manufactures a new product, or to retain 50% of withholding taxes from full-time jobs for seven years if it modifies or expands the manufacture of an existing product. Also allows a qualified supplier, upon approval of a notice of intent by the department, to retain 100% of the withholding taxes from new jobs for three years. If the qualified supplier pays wages for the new jobs that are equal to or greater than 120% of the county average wage for Missouri as determined by the department using NAICS industry classifications, it can retain the withholding taxes for five years. Limits the amount of retained withholding taxes authorized under the Act for any one qualified manufacturing company to $10 million per year and limits the aggregate amount of retained withholding taxes authorized under the Act to $15 million per year.
Missouri Works: Facilitates the creation of new jobs by targeted business projects for for-profit and non-profit businesses (except for gambling, retail trade, food and drinking places, public utilities, educational services, religious organizations, ethanol distillation or production facilities, biodiesel production facilities, healthcare, and public administration companies or businesses that are delinquent in non-protested taxes or other payments or any company that has filed for or has publicly announced its intention to file for bankruptcy). Headquarters, administrative offices and R&D of otherwise excluded businesses that serve a multi-state area may qualify in some cases. The average wage of the new jobs must equal or exceed 90% of the county average wage (as published by DED), and the company must offer health insurance and pay at least 50% of the premium for all full time employees in MO. The business must create a minimum number of 10 new jobs at the project facility prior to the “deadline” date. There is no annual cap on the retained withholding taxes.
Missouri Works New Jobs Training Program: Provides assistance in reducing the cost associated with expanding a workforce or locating a new facility in the state of Missouri through training services—training customized to the specific needs of the industry and general occupational skill training. Businesses with a sound credit rating currently located in or locating to MO that are creating a substantial number of new jobs in Missouri by locating a new facility or expanding an existing workforce in the state.
Missouri Works Job Retention Training Program: Provides assistance in reducing the cost associated with retraining an existing workforce for the purpose of retaining jobs in the state of Missouri through training services—training designed for the specific needs of the industry and general occupational skill training. Businesses with a sound credit rating currently located in Missouri that have retained at that site the level of employment for at least one year, and a minimum of 100 employees for two consecutive calendar years preceding the year in which the application for the program was made. In addition, the business must make a capital investment of at least one million dollars to acquire long-term assets.
Missouri Works Customized Training Program: Provides assistance to eligible Missouri businesses to reduce training costs and improve productivity. An eligible project may be located anywhere within the state of Missouri. Individual businesses creating net new jobs in the state or retaining existing jobs in Missouri as a result of a substantial capital investment are eligible. Funding for this program is contingent on the availability of funds.
BIG SKY ECONOMIC DEVELOPMENT TRUST FUND (BSTF) RELOCATION GRANT: A state-funded program that awards up to $5,000 to an eligible project for each new eligible job to be created. Funds may be used for relocation costs from outside of the state to Montana. Eligible jobs must be new positions that average 35 hours/week on an annual basis and pay at or above average county wages, not including benefits. Statutory requirements for these funds include net new, full-time job creation and a $1 for $1 match requirement. WORKFORCE TRAINING GRANT PROGRAMS
- STATE WORKFORCE TRAINING PROGRAM: Up to $5,000 per employee is available and the match requirement is one dollar of private funds for every three dollars of state workforce grant funds. The maximum award amount depends on the number of jobs to be trained and availability of funding. Minimum compensation for an eligible employee varies by county. Businesses can apply directly to the Department of Commerce when funding is available.
- DEPARTMENT OF LABOR’S INCUMBENT WORKFORCE TRAINING GRANT PROGRAM: Available to businesses with no more than 50 employees in the State and no more than 20 at any one location. Training is available to employees that have passed the company’s probationary period with up to $2000 available for full-time employees and $1000 for part-time employees. Typical match rates are 4:1. Training grant dollars may be used for approved training, travel or instructional materials. See www.nwmontanabusiness.com/index.php/business-services/training/.
- BIG SKY ECONOMIC DEVELOPMENT TRUST WORKER TRAINING GRANT: A state-funded program designed to aid in the development of good paying jobs for Montana residents and promote long-term stable economic growth in the state.
- BIG SKY ECONOMIC DEVELOPMENT LOANS: A state-funded program with up to $5,000 awarded to an eligible project for each new eligible job to be created. Funds may be used as a loan or grant for the purchase of machinery, equipment and/or working capital. Eligible jobs must be new positions that average 35 hours/week on an annual basis and pay at or above average county wages, not including benefits. Flathead County’s average wage for 2009 was $15.45. Statutory requirements for these funds include net new, full-time job creation and a $1 for $1 match requirement.
- A number of business development loan programs to stimulate economic development activity by assisting the private sector to create or retain jobs are available. Montana West Economic Development has several loan programs to offer to new and expanding businesses in the form of gap financing in partnership with local lending institutions. These loans are available to small businesses in Lake, Lincoln, Sanders and Flathead counties in northwest Montana. The loan dollars are eligible to be used for a variety property and equipment investment, infrastructure and technical assistance. The interest rate and requirements for these loans vary by project with a fixed interest rate in the 3 to 7 percent range. Loan sources include:
o COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM: Includes funding of grants to local units of government for economic development, downtown development, blight elimination and planning.
o INTERMEDIARY RELENDING PROGRAM (IRP): Provides 1 percent loans to nonprofit development organizations for establishment of revolving loan programs for loans to small businesses. Applications from each state are selected for funding through a nationwide competition. Assistance is limited to areas with a population of less than 25,000. To be eligible, the nonprofit development corporations (intermediaries) and their loan applicants must be unable to obtain financing elsewhere at reasonable rates and terms. Additional loans can be requested until the maximum loan amount to intermediaries is determined each fiscal year. The maximum loan amount in years past was $750,000. Intermediaries can use the funds to make loans of up to $150,000 to private or public organizations and other local businesses.
o MONTANA WEST ECONOMIC DEVELOPMENT REVOLVING LOAN FUND
- ALTERNATIVE ENERGY REVOLVING LOAN PROGRAM (AERLP): Provides a financing option to install alternative energy systems. The program has traditionally been funded by air quality penalties collected by the Department of Environmental Quality (DEQ). Energy from these renewable systems is intended for use by the owner, although net-metering is allowed for systems that generate electricity. Energy conservation measures installed in conjunction with an alternative energy project may be funded through the program, limited to 20 percent of the loan amount.
MONTANA BOARD OF INVESTMENTS FINANCE & LOAN PROGRAMS The Montana Board of Investments is attached to the Department of Commerce. The Board does not lend directly to businesses. The business finance programs discussed below are accessed through banks and approved lending institutions. Businesses should first contact and work through their local bank(s). MBOI programs typically enable businesses to access lower, fixed rate financing for viable bank-approved projects. The business infrastructure program is included here because it provides a substantial potential benefit to eligible businesses and local governments for projects requiring large investments in infrastructure.
- INFRASTRUCTURE LOAN PROGRAM: Loans to local government for infrastructure improvement used by basic-sector businesses. The infrastructure improvements are essentially a grant to the business as a direct reduction of project development costs. The business must create at least 15 full-time jobs. The loan is sized at the number of jobs x $16,666 (minimum loan size $250, 000). The business pays local government use fee, which is assigned to the Board for loan repayment. Use fee can be totally credited against Montana income taxes paid by business. Total amount available for this program is $80.0 million
- VALUE-ADDED BUSINESS LOAN: Has a maximum 15-year loan term. 10-14 jobs created/retained qualifies for a loan rate at 4 percent for 5 years. 15 jobs created/retained qualifies for a loan rate at 2 percent for five years. The interest rate will be at the posted interest rate until the required jobs are created/retained and are set at the lowest rate for the first 5 years, 6 percent for the second 5 years the Board posted rate at the time of application for the remaining term. The jobs created/retained must be by a business adding value to material/products. The Board participates with lender in 75 percent of the funding, risk, collateral and other security. The minimum loan size is $250,000; maximum is approximately $7.5 million.
- BUSINESS LOAN PARTICIPATION PROGRAM: Offers fixed-rate financing up to 25 years with interest rates posted weekly. Job creation credits may reduce posted interest rate up to 2.5 percent.
- GUARANTEED LOAN PURCHASE PROGRAM: Offers fixed-rate financing up to 30 years with interest rates posted weekly. The Board purchases 100 percent of the guaranteed portion of the loan. Job creation credits may reduce posted interest rate up to 2.5 percent. No detailed credit review by Board.
Montana Dept. of Commerce TRADE SHOW ASSISTANCE PROGRAM (TSAP): Assists companies in exploring new domestic and international wholesale markets. TSAP funds are available to Montana businesses attending any given trade show for the first time. See http://www.madeinmontanausa.com/tradeshowinfo.asp Eligible applicants will be reimbursed for 50 percent of qualifying expenses that include:
- Booth/space rental or US Commercial Services Gold Key fee
- Booth equipment, furniture and carpeting rental
- Booth utility costs
- Promotional materials (product flyer specific to show, booth signage, etc.)
- Shipping, storage, drayage (cost of moving freight at exhibition site) and show labor
TAX CREDITS, ABATEMENTS AND EXEMPTIONS
- NEW OR EXPANDING INDUSTRY WAGE CREDIT: A new or expanding manufacturing corporation in Montana may receive a corporation license tax credit of 1 percent of wages paid to new employees for the first three years of operation and expenses.
- PROPERTY TAX ABATEMENTS: Property tax abatement is available to certain new or expanding businesses. The governing body of the affected county or the incorporated city or town must approve by resolution the abatement. The tax benefit received is a percentage multiplier applied to the increase in taxable value of the qualifying improvements or modernized processes. The tax benefit applies to the number of mills levied and assessed for high school district and elementary school district purposes and to the number of mills levied and assessed by the local governing body approving the benefit. New/expanding industries will be taxed at 50 percent of taxable value for the first five years after a construction permit is issued. The tax rate is raised incrementally over the next five years to 100 percent.
- ALTERNATIVE FUELS PROPERTY TAX EXEMPTION: Provides an exemption from property assessment for qualifying non-fossil fuel energy generating systems installed. The maximum exemption amount per year is $100,000 for a commercial property. The value of the qualifying non-fossil fuel energy generating system must be included in the assessed value of the property prior to its exemption. The exemption lasts for a period not to exceed 10 years from the year of installation.
- ALTERNATIVE ENERGY INVESTMENT TAX CREDIT: Commercial and net metering alternative energy investments of $5,000 or more are eligible for up to 35 percent tax credit against individual or corporate tax on income generated by the investment. The credit may only be taken against net income produced by the eligible equipment or by certain associated business activities. Associated facilities, manufacturing plants producing alternative energy equipment and new or expanded businesses using the energy generated by the alternative energy investment may use the tax credit. The credit must be taken the year the equipment is placed in service; however, any portion of the tax credit that exceeds the amount of tax to be paid may be carried over and applied against state tax liability for the following 7 years. A project of 5 MWs or larger on a reservation may carry the credit over for 15 years, if it has an employment agreement with the tribal government.
- NEW MARKET TAX CREDITS: Can help communities attract capital to good projects on favorable terms. The program provides an incentive to debt and equity investors in the form of a 39 percent federal income tax credit for investing capital into qualified projects in eligible low-income areas. Eligible investment types include most real estate projects and operating businesses (with some exceptions). See www.mtcdc.org/index.php?option=com_content&view=article&id=111&Itemid=195
o Total project size of at least $3 million.
o Project in a designated low-income census tract with either a poverty rate of 20 percent or greater or Gross Median Income of 80 percent of less of the state average.
o Strong economic development and/or community impact, such as helping to create or retain jobs; acting as the catalyst for larger development, infusing sources of new investment capital into an under-served, low-income area; and creating new access to community services such as education, healthcare, child & elder care and retail services.
SMALL BUSINESS INNOVATION RESEARCH PROGRAM (SBIR): Helps Montana companies compete for more than one billion dollars in federal grants that have been earmarked to fund R&D. The program offers free counseling assistance to any individual or small business that wants to explore SBIR grant opportunities. To win a SBIR grant, a business owner must have an innovative idea and the savvy to compete and win in the competitive federal arena of the SBIR Program. MONTANA SBIR/STTR MATCHING FUNDS PROGRAM (MSMFP): Fosters job creation and economic development in the state by providing matching funds to eligible businesses meeting the criteria set forth in the guidelines. It is designed to grant funds to Montana companies that have been awarded a Small Business Innovation Research Program or Small Business Technology Transfer Program (Federal SBIR/STTR Program) Phase I award and that, if the opportunity to do so is available, intend to apply for a Federal SBIR/STTR Phase II award. See http://businessresources.mt.gov/MSMFP/default.mcpx. The Federal SBIR/STTR Program provides for funding competitions in two phases that are relevant to the Montana Program:
- Phase I – to conduct feasibility research
- Phase II – to expand and develop Phase I results and develop commercially viable innovations
NEBRASKA – updated for 2014
For a list of state economic development agencies, click this link.
Talent & Innovation Initiative (TI2): Four parts, it was developed to enhance momentum in Nebraska’s fastest growing industries and others positioned to integrate new technologies:
- Nebraska Internship Program: The Intern Nebraska (InternNE) program connects college students and employers from across the state, providing a unique opportunity for them to co-invest in the future. The InternNE Grant Program provides financial assistance to companies in Nebraska who are creating new internships. The Program was established in 2011 and will undergo significant changes this fall through the passage of LB476. Starting October 1, 2013 the Program may provide grants up to 50% of the cost of the internship for eligible projects, up to $5,000. Businesses that hire students receiving Pell Grants will be eligible to receive up to 75% and up to $7,500 per internship. Businesses may be awarded up to five interns per location and up to 10 company-wide per year. Applications will be reviewed on a competitive bi-monthly cycle; review will begin the first day of all odd-numbered months. Businesses must apply to the InternNE Grant Program prior to hiring interns. For businesses with 100 or more employees each position must be newly created (cannot have existed during prior year). All internships must pay at least minimum wage and be of a sufficient duration to allow students to gain valuable work experience. Internships cannot constitute more than 50% of the company’s Nebraska workforce or be for the purpose of meeting required residency or clinical hours for the intern.
- Business Innovation Act: Intended to help businesses develop new technologies to enhance quality job opportunities in the state. The program provides capital to Nebraska’s start-ups and technology-related businesses through competitive grants, equity financing and debt financing. The capital can be used for market potential research at Nebraska post-secondary educational institutions, new product development and testing, prototype development, and commercialization. Various matching requirements apply depending on the program under the Act.
- Site & Building Development Fund: Intended to help increase industrial and commercial sites available and ready for business development. Communities will provide matching funds toward projects that can involve demolition, new construction and rehabilitation. State funding will be focused on land and infrastructure costs with 40% of funding available to non-metro areas.
- Angel Investment Tax Credit: Encourages investment in high-tech and other startup enterprises in Nebraska by providing refundable state income tax credits to qualified investors investing in qualified early-stage companies. Capped at $3 million annually, the program requires a minimum investment of $25,000 for individuals and $50,000 for investment funds. Eligible small businesses must have fewer than 25 employees, with the majority based in the state. The application cycle begins each January 1 and applications are accepted on a continuous basis throughout the year. Applications for the next calendar year are accepted starting December 1 of the prior year.
FINANCING Nebraska Progress Loan Fund (NPLF): Makes loans to qualifying small businesses, generally representing existing and start-up businesses experiencing financing challenges. The minimum loan to any business is $50,000, with a maximum of $2 million. The NPLF also can apply for interim loans to qualifying small businesses for a term not to exceed three years. An interim loan maximum amount is $5 million with longer terms negotiated on a case-by-case basis. Funding must be matched 1 to 1 by private sources. Nebraska Angel Sidecar Fund: Encourages greater private investment in Nebraska-based start-up companies thereby increasing the overall investment impact. Invest Nebraska Corporation will award seed capital funds that match private angel fund investments. Seed capital may be used by the start-up company for advanced intellectual property development and evaluation, advanced proof of concept work for scientific discovery, advanced prototype design and development, key personnel hires, and related activities. Community Development Block Grant (CDBG) Program: Loans designed to create quality jobs and promote new investment. CDBG funds must be used to benefit low-to-moderate income persons, aid in the prevention or elimination of slums or blight, or meet other community development emergency needs. CDBG funds can be used to purchase machinery, equipment and inventory, meet working capital needs, develop community infrastructure, construct or renovate existing buildings and real estate. Rural Enterprise Assistance Project (REAP) Loan Programs: Focus on providing loan capital to rural Nebraska based microenterprises and existing businesses. Its loan products are coupled with business technical assistance and counseling to clients to help them prosper in their business. TAX INCENTIVES Nebraska Advantage Act: Contains six tiers of benefits:
- TIER 1: Nebraska Small Business Advantage—Businesses that invest $1 million and create 10 new jobs are eligible for a refund of half of the sales tax paid for qualified property purchases at the project, the full sliding scale wage credit of 3% to 6% depending on wage level, and a 3% investment tax credit. This tier is available to manufacturers, R&D or testing businesses, and listed technology related services where at least 75% of the sales and licensing are to out-of-state customers or to the federal government.
- TIER 2: Businesses that invest $3 million and create 30 new jobs qualify for sales tax refunds for capital purchases at the project, the sliding scale wage credit, and a 10% investment credit.
- TIER 2 DATA CENTER: $200 million investment and creation of 30 new jobs at data center are eligible for sales tax refunds for capital purchases at the project, the sliding scale wage credit, 10% investment credits, and a 10-year exemption on all personal property.
- TIER 3: Jobs-only tier—Businesses that create 30 new jobs can receive the sliding scale wage credit. No capital investment is required to qualify.
- TIER 4: Businesses that invest $12 million and create 100 new jobs receive a personal property tax exemption for turbine-powered aircraft, mainframe computers, agricultural product processing machinery, and personal property used in a distribution facility for up to 10 years. This is in addition to qualifying for the sales tax refund, jobs credit, and the investment credit.
- TIER 5: Investment-only tier. This requires $37 million in new investment. Companies receive a refund of sales taxes paid on eligible property with the project.
- TIER 6, NEBRASKA SUPER ADVANTAGE: Specifically rewards all non-retail companies that create higher-paying jobs. To qualify, the new jobs must pay at least 150% of the state average wage, or 200% of the county average, whichever is greater. Companies that create 75 new jobs and make a $10-million capital investment—or 50 new jobs and a $109-million investment—can receive a sales and use tax refund on capital purchases; a 10% wage credit on new employee compensation; a 15% investment tax credit; and a 10-year exemption on all personal property.
R&D Credit: Offers a refundable tax credit for qualified research and development activities undertaken by a business entity for 21 years. The credit is equal to 15% of the federal credit allowed under Section 41 of the Internal Revenue Code of 1986 for R&D. The credit is increased to 35% of the federal credit allowed under Section 41 of the Internal Revenue Code of 1986 for expenditures on the campus of a college or university in Nebraska or a facility owned by a college or university in Nebraska. Renewable Energy Credit: Businesses that produce electricity for sale by using renewable energy resources may qualify for Nebraska Advantage incentive benefits. A project may qualify under Tier 5 with a minimum investment in qualified property of $20 million and maintain employment at the renewable energy project. A renewable energy project may also be including in any other tier, except Tier 1, by meeting applicable investment and employment thresholds. Nebraska Microenterprise Partnership Fund: Provides a 20% refundable tax credit to micro businesses on increased compensation for employees or increased investment in targeted communities. Microenterprise applicants, companies with five or fewer employees at the time the application is filed, including start-ups, may qualify for a maximum of $10,000 throughout the life of the program. Credits are earned on increased expenditures for wages, buildings, certain expenses, and non-vehicle depreciable personal property. Tax Increment Financing (TIF): Primarily designed to finance the public costs associated with a private development project. Essentially, the property tax increases resulting from a development are targeted to repay the public investment required by a project. WORKFORCE DEVELOPMENT Nebraska Customized Job Training Advantage: Provides a flexible and discretionary job training program for projects that offer an opportunity for economic development in Nebraska. Use of the funds is limited to eligible companies and eligible training projects.
CATALIST FUND: Nevada recently authorized the use of $10 million in general fund money to spur economic development through corporate expansions and relocations in Nevada. Working in connection with local governments, companies can apply to the state with an eligible economic development project for an allocation from the fund. Since this is a new program, the rules and regulations are currently in development and are expected be in place by January 1, 2012. A SALES AND USE TAX ABATEMENT on eligible machinery and equipment is available to businesses with operations consistent with Nevada’s state plan for economic diversification and development. Qualifying criteria include a commitment to doing business in Nevada, minimum job creation, capital investment, employee heath plans, and wage requirements. SALES TAX DEFERRAL: The state of Nevada offers a sales & use tax deferment program to qualified industries that purchase capital equipment in excess of $100,000. Taxes can be deferred interest free for up to five years. An abatement of PERSONAL PROPERTY TAX is available to businesses with operations consistent with Nevada’s state plan for economic diversification and development. Qualifying criteria include a commitment to doing business in Nevada, minimum job creation, employee health plans, minimum capital investment, and wage requirements. Taxes may be abated for up to 50 percent for up to ten years. RENEWABLE AND ENERGY STORAGE ABATEMENTS are available for companies involved in the production of energy from renewable sources such as wind, solar, and others, or a facility for the production of an energy storage device. The package of abatements includes sales/use tax and real and personal property tax. MODIFIED BUSINESS (PAYROLL) TAX ABATEMENTS provide partial abatement from the payroll tax for new and expanding businesses. Statutory requirements, which must be met to qualify, include a minimum number of jobs created, a minimum capital investment, and wage and employee health plan requirements. Taxes may be abated by 50 percent for four years. TRAIN EMPLOYEES NOW (TEN): Nevada offers a customized job training program to qualified businesses that meet established criteria. This program may be used prior to a plant opening and up to 90 days following. Nevada is authorized to use tax-exempt INDUSTRIAL DEVELOPMENT BONDS (IDBs) to provide low-interest financing of new construction, improvements, rehabilitation, or redevelopment of qualified projects, which include manufacturing facilities and certain other projects organized under Section 501 of the Internal Revenue Service code. PORTFOLIO ENERGY CREDITS (PEC): Allows renewable energy generators to sell PECS to the state’s utilities. One PEC is equal to one kWh of electricity generated, though photovoltaic projects generate 2.4 PECs for each kWh generated. PROPERTY TAX ABATEMENTS FOR RENEWABLE ENERGY: Provides partial abatement of real and personal property taxes for businesses that produce electricity from renewable sources, including biomass, solar energy or wind. PROPERTY TAX ABATEMENT FOR RECYCLING: Partial abatement of real and personal property taxes for recycling is available to companies who locate or expand their business in Nevada and can be up to 50 percent of the tax due up to 10 years. Applicant must apply not more than one year before the business begins to develop for expansion or operation. Applications are due at least 30 working days prior to the Commission meeting. The business must either recycle at least 50 percent of the product onsite or primarily generate electricity from recycled material—industrial, domestic, agricultural or municipal waste as defined by NRS 701A.210(4). The primary purpose must be for the conservation of energy or the substitution of other sources of energy for fossil fuel. The company will provide a medical insurance plan for all employees (including an option for dependent health insurance coverage), pay at least 25 percent of the employee premium cost and maintain the business in Nevada for five years. Audits will be done by the Nevada Department of Taxation after two and five years to ensure compliance. Two of the following three criteria must be met for eligibility:
- Wage requirement. The company’s average hourly wage at the Nevada facility must equal or exceed 100 percent of the county average or statewide average hourly wage, whichever is less. For new businesses, compliance with this criteria is required.
- Jobs requirement. For counties/cities with a population of more than 100,000/60,000 a minimum of 75 full-time permanent jobs and populations of less than 100,000/60,000 a minimum of 15 full-time permanent jobs in Nevada is required by the fourth quarter of operation and continues to employ at least the minimum. For an expansion, the company must increase the number of employees on the payroll by 10 percent or six employees, whichever is greater.
- Capital Investment Requirement. For counties/cities with a population of more than 100,000/60,000, the business will make a capital investment of $50 million if the business is an industrial or manufacturing business or at least $5 million if the business is not an industrial or manufacturing business. For counties/cities with a population of less than 100,000/60,000, the business will make a capital investment of $5 million if the business is an industrial or manufacturing business or at least $500,000 if the business is not an industrial or manufacturing business. For new businesses, compliance with this criteria is required. In cases of expansion, the capital investment must equal at least 20 percent of the value of tangible property possessed by the business.
INTELLECTUAL PROPERTY ABATEMENTS: Partial abatement of sales tax, modified business tax and personal property tax is available to intellectual property development companies who locate or expand their business in Nevada. Applicant must apply not more than one year before the business begins to develop for expansion or operation. Applications are due at least 30 working days prior to the Commission meeting. The business must further the development and refinement of intellectual property, a patent or copyright into a commercial product. The company will provide a medical insurance plan for all employees (including an option for dependents), pay at least 25 percent of the employee premium cost and maintain the business in Nevada for five years. Audits will be done by the Nevada Department of Taxation after two and five years to ensure compliance. Two of the following three criteria must be met for eligibility:
- The company’s average hourly wage at the Nevada facility must equal or exceed 100 percent of the county average or statewide average hourly wage, whichever is less. For new businesses, compliance with this criteria is required.
- A minimum of 10 full-time permanent jobs in Nevada is required by the fourth quarter of operations and continues to employ at least the minimum.
- The business will make a capital investment of $500,000.
RENEWABLE ENERGY SYSTEMS PROPERTY TAX EXEMPTION: Exempts qualifying renewable energy projects from 100 percent of the property tax on the value added by the energy system. Eligible technologies include: solar, wind, geothermal, solid waste and hydroelectric systems. The exemption applies for all years, once the project is installed. SILVER STATE WORKS PROGRAM: An initiative introduced in July 2011 to encourage employers to train or hire now-unemployed job seekers in the community. The program uses the Nevada JobConnect network to search for available talent, connect businesses with employees, get qualified workers back into the work force and offer financial incentives to employers to hire. Employers have three options for receiving the incentive and the only requirements to participate are a valid business license and a verified paid-to-date unemployment insurance account. The employer can offer training or employment depending on the program that works best for the business.
- Employer-based training. In this option, businesses train workers who qualify for unemployment insurance benefits for 24 hours per week up to six weeks at no cost to the employer while the workers continue job hunting. The trainee will continue to receive unemployment benefits and a training allowance of $200 every two weeks, which can include assistance with transportation while they learn new skills or freshen current skills. After the training period, the trainee will receive a certificate of training that would be valuable to their job search or the business may hire them.
- Employer incentive job program. In this scenario, employers enter a contract that establishes a wage, a number of hours to master tasks, and a maximum amount of reimbursement based on the wage paid. Employers will be reimbursed up to 50 percent of the participant’s initial agreed-upon gross wage for up to 40 hours per week. For this program, you will hire and train the new employees and add them to your payroll. Silver State Works will reimburse you with an incentive check at the end of the training.
- Incentive-based employment. This supports employers who hire and retain eligible individuals in full-time employment (30 hours or more per week) by providing a hiring and retention incentive based on the time the qualified individual remains employed. Upon completion and satisfying certain requirements, the employer may receive a wage retention supplement for retaining the employee on average up to $2,000.
NEW HAMPSHIRE – updated for 2014
For a list of state economic development agencies, click this link.
New Hampshire Procurement Technical Assistance Program (NH-PTAP): A cooperative program of the State of New Hampshire Business Resource Center and the US Department of Defense, Defense Logistics Agency. It provides specialized and professional assistance to businesses seeking assistance with contracting and subcontracting opportunities with the Department of Defense (DOD), other federal agencies or state and local governments. New Hampshire Office of International Commerce: Plans, develops and administers programs for international trade promotion and foreign market development for New Hampshire companies. The center also works closely with the U.S. Department of Commerce, the U.S. Export-Import Bank, the U.S. Small Business Administration, the NH Small Business Development Center, the U.S. Agency for International Development, and the New Hampshire International Trade Association. FINANCING Community Development Block Grant (CDBG): This assistance can be in the form of a grant to the municipality for the public infrastructure improvements on behalf of an expanding business or a loan to the business itself. The maximum amount of funding available for any given project is $500,000, regardless of size of the community applying for the grant. All grants have a one-year duration, and one job must be created for each $20,000 in CDBG funds granted. The key to this federal program is that a minimum of 60% of the jobs created must be filled by low- and moderate-income persons. Industrial Revenue Bonds: This program is for manufacturers only—companies which manufacture or produce tangible personal property. At least 75% of bond proceeds must be spent on core manufacturing space and equipment. Storage, office and R&D space must be excluded from this calculation. To be cost effective, loans must range between 1.5 and 20 million dollars. The interest rate is about 70% of prime and can be used for the purchase of land, buildings, and capital equipment. TAX INCENTIVES Economic Revitalization Zone Tax Credits (ERZ): Short term, tax credits against the business profits and enterprise taxes. To qualify, the location must meet certain demographic criteria, or be located in an unused or under utilized industrial park, or vacant land, or structures previously used for industrial, commercial, or retail purposes but currently not so used, or Brownfield site. The maximum credit over five years is $200,000, capped at $40,000 per year. R&D Tax Credit: Small and large businesses can apply for tax credit on new research and development costs. The state has set aside $1million a year to fund the credit, which is capped at $50,000 for any business that qualifies. This credit may be carried forward for up to five years. Coos County Job Creation Tax Credit: A tax credit to businesses hiring new employees in COOS County and paying wages equal to or above 200% of minimum wage ($7.25 per hour). The credit is $1,000 for any new, full-time, year-round jobs applied to the Business Enterprise Tax, but any unused portion of the credit can be applied to the Business Profits Tax. All new jobs created after the bill’s effective dates are eligible for the credit and there is no cap on the amount of jobs created. The carry forward is five years. NH-CDFA Tax Credits: The New Hampshire Community Development Finance Authority (CDFA) awards up to $5 million a year in New Hampshire Tax Credits to nonprofit organizations. These organizations then sell the Tax Credits to New Hampshire businesses as a way to raise needed capital for community projects around the state. In exchange for the contribution, a company can take 75% of the donation as a tax credit on their BET, BPT, or Insurance Premium Tax. WORKFORCE DEVELOPMENT Job Training Grant Program: is a 50/50 cash match for customized training. There is a $100,000 cap on the training amount. Each application is reviewed on a case-by-case basis with an emphasis on improving the skills of current or new employees. New Hampshire On-The-Job-Training (OJT) Program: Offers assistance for those unemployed in New Hampshire long term (at least 18 weeks). The state will pay a company up to 90% of the training wages up to six months, depending on the size of the company and complexity of the training.
- 1-50 employees = up to 90% of wage rate
- 51–250 employees = up to 75% of wage rate
- 251 or more employees = up to 50% of wage rate
New Hampshire Return to Work Program: Allows unemployment claimants to continue to receive their unemployment benefits while receiving up to six weeks of on site training at a business who has the option to hire them long term. This program will provide the opportunity for your business to verify that the applicant is a good fit for the job and the company, as well as an opportunity for the applicant to verify it is a good fit for them and to show your business what they can do. Workers’ Compensation coverage is provided by the state through the duration of the program.
NEW JERSEY PARTNERSHIP FOR ACTION: A three-pronged public-private approach to economic development and the starting point for all initiatives, policies and efforts to grow New Jersey’s economy and create quality, sustainable jobs in our communities. The three elements of the Partnership include Choose New Jersey, an independently funded and operated 501(c)(3) nonprofit corporation created to encourage and nurture economic growth throughout New Jersey; the Business Action Center, which reports directly to the Lieutenant Governor and provides the business community with a single point of contact, applying a proactive, customer-service approach to businesses’ interactions with State government; and, the New Jersey Economic Development Authority (EDA), serving as the state’s “bank for business.” The ECONOMIC REDEVELOPMENT AND GROWTH (ERG) PROGRAM is a reimbursement incentive that enables developers to use up to 75 percent of new State and/or local incremental taxes generated from a project to fund financing gaps. The program provides up to 20 percent of the total project cost, paid out over a period of up to 20 years. Redevelopment projects in qualifying areas that have secured a municipal ordinance and demonstrated sufficient net benefits may be eligible for assistance. URBAN TRANSIT HUB TAX CREDIT PROGRAM: A financial tool designed to spur private capital investment, business development and employment by providing tax credits for businesses planning a large expansion or relocating to one of New Jersey’s designated Urban Transit Hubs. The program offers developers, owners or tenants up to 100 percent of a qualified capital investment made within an eight period. Taxpayers may apply 10 percent of the total credit amount per year over a ten-year period against their corporate business tax, insurance premiums tax or gross income tax liability. Developers or owners must make a minimum $50 million capital investment in a single business facility, and at least 250 full-time employees must work at that facility. Tenants in a qualified business facility can represent at least $17.5 million of the capital investment in the facility, and up to three tenants may aggregate to meet the 250 employee requirement. The BUSINESS EMPLOYMENT INCENTIVE PROGRAM (BEIP) is a powerful incentive that encourages businesses to locate and expand in New Jersey. Approved businesses receive annual cash grants based on the number of new jobs created in the State. In order to qualify, businesses must create at least 25 new jobs within a 2-year period; emerging high technology and biotech companies’ eligibility threshold is 10 new jobs. A business must also demonstrate that the BEIP grant is a “material” factor in moving the job expansion or relocation forward in New Jersey, and that it is economically viable. The standard BEIP incentive is limited at 50 percent of the employees’ state income taxes withheld on the newly created jobs; however, companies that meet certain Smart Growth objectives can have their grant boosted to 80 percent. Qualifying businesses may be eligible for up to 10 years worth of grants, though they must maintain the project and the jobs in New Jersey for at least 1.5 times the number of years the grant is in effect. The BUSINESS RETENTION & RELOCATION ASSISTANCE GRANT (BRRAG) is a recently enhanced program designed to help companies preserve jobs, expand operations and reinvest in New Jersey. The program provides corporate business tax credits to companies that are relocating operations within New Jersey and retaining at least 50 full-time jobs. Up to $2,250 per year for up to six years is now available per each job retained in the State. The award amount is dependent on the application of “bonus credits,” which may be available for the relocation of jobs to urban centers, and/or for a capital investment at least twice that of the value of the awarded credits. The number of times the yearly tax credit amount is awarded is dependent on the number of retained jobs. Companies must commit to remaining in the State for the tax credit term and an additional five years. For leased project locations, the business must sign a written lease for a period of no less than the commitment duration or eight years, whichever is greater. The total amount of credits that can be applied against a single company’s tax liability in a fiscal year may not exceed $10 million. SALES AND USE TAX EXEMPTION PROGRAM (STX), a program often used in conjunction with BRRAG that offers companies a sales tax exemption certificate which applies only to property purchased for installation at the approved project site. This certificate allows the business to purchase machinery, equipment, furniture, fixtures, and building materials for the project without the imposition of the state’s 7 percent sales tax. Eligible companies must have 1,000 or more employees in New Jersey and relocate 500 or more to a new business location. Life sciences or manufacturing companies may be eligible if they relocate 250 or more employees to a new facility. Companies must maintain the retained full-time jobs in New Jersey for five years. BOND FINANCING: A creditworthy manufacturing company, a 501(c)(3) not-for-profit organization or an exempt facility in New Jersey can apply for long-term financing under the Bond Financing Program. $500,000 to $10 million in tax-exempt bonds for for-profit companies, with either a fixed or variable interest rate, and terms up to 20 years for real estate and 10 years for equipment. Or, $500,000 with no dollar limit in tax-exempt bonds for qualified not-for-profit organizations. Tax-exempt bonds for eligible for-profit companies can be used to finance capital improvements and expansions, including real estate acquisitions, new equipment, machinery, building construction, and renovations. Tax-exempt bonds for not-for-profit organizations seeking capital to expand community services can be used to finance land and building acquisitions, new construction and renovations, equipment purchases, debt refinancing and working capital. Government tax-exempt bonds can be used for projects that are owned and operated for the benefit of local, county and state government bodies. SMALL BUSINESS FUND: An expedited approval process provides financial assistance to qualified businesses through direct loans or guarantees, with the choice of a variable or fixed interest rate. A small, minority-owned or women-owned business in NJ in operation for at least one full year or not-for-profit corporation in operation for at least three full years may qualify for up to $300,000 for credit scores greater than or equal to 700; up to $125,000 for credit scores greater than or equal to 650; and up to $300,000 for Not-for-Profits with 1.1X historical debt service coverage. It may be used for fixed assets and working capital. ENERGY EFFICIENCY REVOLVING LOAN FUND (EE RLF): New Jersey-based commercial, institutional or industrial entities (including 501(c)(3) organizations) that have received an approved Energy Reduction Plan under the NJ Board of Public Utilities’ Pay for Performance program may be eligible for supplemental financing through the EE RLF. Also eligible are those entities participating in the NJ Board of Public Utilities’ Large Energy Users Pilot Program. Financing, in the form of low-interest loans, can be used to support up to 80 percent of total eligible project costs, not to exceed $2.5 million or 100 percent of total eligible project costs from all public State funding sources. Funds can be used for whole-building energy improvements. NEW JERSEY BUSINESS GROWTH FUND: A joint program of the EDA and PNC Bank. Small or mid-sized companies that are creating or retaining jobs in NJ can apply for financing of up to a $3 million bank loan with a 25 percent or 50 percent EDA guarantee. The maximum EDA guarantee is $1.5 million. It can be used for the funding of real estate or equipment. Companies must commit to create one full-time job in NJ for every $50,000 of guarantee provided by the EDA with the exception of manufacturers, which must commit to maintain one existing full-time job in New Jersey per $50,000. EDISON INNOVATION CLEAN ENERGY MANUFACTURING FUND (CEMF): Provides support for manufacturers that need to identify a manufacturing site, perform site improvements, construct a facility and/or purchase equipment. Organizations awarded a grant under CEMF are automatically certified as a NJ manufacturer through New Jersey’s Renewable Energy Manufacturing Incentive (REMI) program. REMI provides rebates to New Jersey residents, businesses, local governments and not-for-profit organizations that purchase and install solar panels, inverters and racking systems manufactured in NJ. A qualified manufacturer of Class I renewable energy or energy efficiency systems, products or technologies may be eligible for up to $3.3 million in grants and loans for project assessment and design, and project construction and operation associated with a new manufacturing line or the material expansion of an existing line of a New Jersey manufacturing facility. EDISON INNOVATION ANGEL GROWTH FUND: Leverages private angel investors in support of early-stage, emerging technology businesses in a less dilutive manner than equity. An angel supported NJ-based technology company with minimum trailing 12 month commercial revenues of $500,000 derived from core business activities, such as the sale of technology products can apply for growth capital of up to $250,000 to be used for key hires, product rollout, product enhancement and marketing/sales. MAIN STREET BUSINESS ASSISTANCE PROGRAM: Provides financial support to commercial banks in New Jersey to provide financial assistance to small and mid-sized businesses and not-for-profit organizations with projects in NJ. It can provide direct loans, bank term loan participations and/or guarantees and line of credit guarantees for small or mid-sized business or not-for-profit organizations in operation in NJ for at least two years. Can be used for fixed assets, refinancing of debt or working capital.
RESEARCH AND DEVELOPMENT TAX CREDIT: In 2011, the New Mexico Legislature passed House Bill 273, reinstating the bill that would have sunset. This bill extends the eligibility period for the Research and Development Small Business Tax Credit from 2011 until 2015 and limits the credit. The ALTERNATIVE ENERGY PRODUCT MANUFACTURES TAX CREDIT: In 2011, the legislature passed Senate Bill 233, which amends the alternative energy product manufacturers tax credit act to include a product extracted from or secreted by a single cell photosynthetic organism as an eligible alternative energy product. LOCOMOTIVE FUEL TAX DEDUCTION: In 2011, the legislature passed House Bill 523, which provides a deduction for locomotive fuel from gross receipts and from compensating tax. HIGH WAGE JOBS TAX CREDIT: A taxpayer who is an eligible employer may apply for and receive a tax credit for each new high wage economic-base job. The credit amount equals 10 percent of the wages and benefits paid for each new economic-base job created. Qualified employers can take the credit for 4 years. The credit can be applied to the state portion of the gross receipts tax, compensating tax and withholding tax. Any excess credit will be refunded to the taxpayer. The credit shall not exceed $12,000 per year, per job. Qualified employees must be a resident of New Mexico and cannot be a relative of the employer or own more than 50 percent of the company Qualified jobs:
- Pays at least $28,000/year in a community with a population of less than 40,000
- Pays at least $40,000/year in a community with a population of 40,000 or more
- Occupied for at least 48 weeks by the employee
- Made more than 50 percent of its sales to persons outside NM during the most recent 12 months of the employer’s modified combined tax liability reporting periods ending prior to claiming this credit
- Are eligible for the Job Training Incentive Program
- Are growing with employment greater than the previous year
INVESTMENT TAX CREDIT FOR MANUFACTURERS (Investment Credit Act): Manufacturers may take a credit against gross receipts, compensating or withholding taxes equal to 5 percent of the value of qualified equipment imported and put into use in a manufacturing plant in New Mexico, provided the manufacturer meets the criteria of hiring additional workers to earn the credit, as follows: For Claims one new worker employed for each:
- 0-$30,000,000: $500,000 qualified equipment;
- Over $30,000,000: $1 million in qualified equipment.
The credit may (also) be claimed for equipment acquired under an IRB. This is a double benefit because no gross receipts or compensating tax was paid on the purchase or importation of the equipment. The manufacturer simply reduces its tax payment to the state (by as much as 85 percent per reporting period) until the amount of investment credit is exhausted. There also are provisions for issuing a refund when the credit balance falls under $500,000. The credit does not apply against local gross receipts taxes. RURAL JOBS TAX CREDIT: Can be applied to taxes due on (state) gross receipts, corporate income or personal income tax. Rural New Mexico is defined as any part of the state other than Los Alamos County; certain municipalities: Albuquerque, Rio Rancho, Farmington, Las Cruces, Roswell and Santa Fe; and a 10-mile zone around those select municipalities. Companies that manufacture or produce a product in NM, non-retail service companies that export a substantial percentage of services out of state (50 percent or more revenues and/or customer base) and certain green industries are eligible. A qualifying job is a job filled by an eligible employee for 48 weeks in a 12-month qualifying period. The credit may be carried forward for up to 3 years. The rural area is divided into two tiers:
- Tier 2 = Non-metro area municipalities that exceed 15,000 in population: Alamogordo, Carlsbad, Clovis, Gallup, and Hobbs;
- Tier 1 = Everywhere else in a rural area
The maximum tax credit amount with respect to each qualifying job is equal to:
- Tier 1: 25% of the first $16,000 in wages paid for the qualifying job (may be taken for four years)
- Tier 2: 12.5% of the first $16,000 in wages paid for the qualifying job (may be taken for two years)
NEW MARKET TAX CREDITS: Designed to help low income communities develop business that provide economic development and jobs, including tribal areas with high levels of unemployment and poverty. The credit is taken over a seven year period, five percent in each of the first three years and six percent in each of the final four years for a total of 39 percent of the original investment amount. NMFA (New Mexico Finance Authority) has received an allocation of $110 million and eligible activities may include:
- Loans or investments located in low-income census tracts
- Development of commercial, industrial and retail real estate projects (including community facilities) in low income census tracts
- Development of for-sale housing in low-income census tracts
GROSS RECEIPTS TAX DEDUCTION FOR SERVICES SOLD OUT-OF-STATE: Services that are exported from the state are not subject to New Mexico gross receipts tax. These services must be produced by a business with a New Mexico office, sold to an out-of-state buyer and delivered and initially used out-of-state. DOUBLE WEIGHT SALES FACTOR: A corporation (or family of corporations filing together) with income from sources within New Mexico as well as from sources outside the state, apportions the income based on a three-factor formula. New Mexico taxes the total corporate income multiplied by the average proportion of corporate sales, payroll and property in NM. The three factors (sales, payroll and property) have equal weight (33.33 percent each) in the formula. For purposes of electing the four-factor apportionment method, “manufacturing” excludes construction, farming, power generation and processing of natural resources, while allowing certain natural-gas-fired, wholesale power plants to qualify. The taxpayer, having elected to use the double-weighted formula, must use it for at least three consecutive years. JOB TRAINING INCENTIVE PROGRAM (JTIP): Funds classroom and on-the-job training for newly created jobs in expanding or relocating businesses for up to six months. It reimburses 40 to 70 percent of employee wages. Custom training at a NM public educational institution may also be covered. Companies that manufacture or produce a product in New Mexico, non-retail service companies that export a substantial percentage of services out of state (50 percent+ of revenues and/or customer base) and certain green industries are eligible. The company must be financially sound and creating new jobs as a result of expansion or relocation to NM. Businesses in certain industries are not eligible (e.g., agriculture, construction, gambling, health care and retail). Jobs eligible for funding must be full time (min. 32 hours per week), year-round and directly related to the creation of the product or service. Trainees must be guaranteed full-time employment upon successful completion of the training program. To be eligible for funding, trainees must be new hires to the company, have been residents of the state for at least one year at any time prior to employment in an eligible position and not have left high school in the three months prior to employment, unless they have graduated or completed a GED. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND (CDRLF): Loans are available for projects which stimulate job creation and prosperity and may be used for infrastructure improvements, acquisition of real property, construction, rehabilitation, equipment, public facilities and other real property investments. Terms of repayment are negotiable, not to exceed 10 years. The interest rate is set at half the 10-year Treasury Bond equivalent rate. Private property may not benefit directly from this program. The political subdivision must pledge a revenue stream to repay the loan. PUBLIC PROJECT REVOLVING LOAN FUND (PPRF): The New Mexico Finance Authority’s flagship program funds infrastructure and capital equipment projects with low-cost and low-interest rate loans. The key characteristics of the PPRF is that all participating borrowers, regardless of their creditworthiness, receive ‘AAA’ insured interest rates; among the lowest interest rates available in the market. LOCAL GOVERNMENT PLANNING FUND (LGPF): Provides up-front capital that can be used for water and wastewater projects, long-term master plans, conservation and economic development plans. The planning money comes in the form of a loan which may be forgiven when the final project is financed through NMFA. STATEWIDE ECONOMIC DEVELOPMENT PROGRAM (SWEDFA): The NMFA with the Economic Development Department (NMEDD) are partners in this lending program for private businesses and non-profit companies. SWEDFA offers a variety of financing strategies to help fund small business including bank participations, direct loans, loan guarantees and taxable and tax-exempt bonds.
REGIONAL ECONOMIC DEVELOPMENT COUNCILS: Governor Cuomo’s new Regional Councils represent a fundamental shift in New York State’s approach to economic development, from a top-down development model to a community-based approach that empowers regions to set their own development priorities. Each Regional Council, chaired by Lieutenant Governor Robert Duffy and made up of local industry, academic, and community leaders, will create a plan for the development of their region. Through a new Consolidated Funding Application that combines resources from dozens of existing programs, the Councils will apply for $1 billion in state funding for projects they determine to be part of their regional strategies. To learn more about the Regional Councils, please visit www.nyopenforbusiness.com. EXCELSIOR JOBS PROGRAM: Governor Cuomo’s 2011-2012 Executive Budget revised the Excelsior Jobs Program to produce better results for New York’s strategic industries through enhanced tax credits, an extended tax benefit period, discounted gas or electric rates from utilities, and increased responsiveness and transparency. The Program provides job creation and investment incentives to firms in such targeted industries as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture and manufacturing. Firms in these industries that create and maintain new jobs or make significant financial investment are eligible to apply for up to four new tax credits. Excelsior encourages businesses to expand in and relocate to New York while maintaining strict accountability standards to guarantee that businesses deliver on job and investment commitments. Program costs are capped at $500 million annually to maintain fiscal affordability and ensure that New Yorkers realize a positive return on their investment. To learn more about the Excelsior Jobs Program, please visit www.esd.ny.gov/BusinessPrograms.html. COMMERCIAL DISTRICT REVOLVING LOAN TRUST FUNDS: ESD has capitalized over $600,000, making funds available to five community-based corporations to administer and make loans to small retail and service businesses in their service areas. The two primary forms of assistance are:
- Working capital loans of up to $15,000 for up to 5 years. Loans may be used for, but not limited to: upgrading display lighting; advertising and promotion; payroll for additional staff and training; purchase of computers to enhance inventory control; and the purchase of display cabinets, furniture and fixtures.
- Fixed asset loans of up to $20,000 for terms not to exceed 7 years. Loans may be used for, but not limited to: acquisition or improvement of real property, including interior improvements and remodeling, building façade improvements and signage.
Eligible applicants include for-profit retail, professional or commercial service businesses with 50 or fewer full-time equivalent employees, located within the specific service delivery area served by the administering corporation. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION ASSISTANCE PROGRAM (CDFI): Provides micro-loans to businesses who often do not qualify for bank loans, as well as one-on-one counseling and business development assistance to facilitate credit-readiness. ECONOMIC DEVELOPMENT FUND (EDF): Offers financial assistance for projects that promote the economic health of New York State by facilitating the creation and or retention of jobs or the increase of business activity in the State. EDF funds assist with construction, expansion and rehabilitation of facilities; acquisition of machinery and equipment; working capital; and the training of full-time permanent employees. ENTREPRENEURIAL ASSISTANCE PROGRAM (EAP): Establishes Entrepreneurial Assistance Centers in local communities to provide instruction, training, technical assistance and support services to individuals who have recently started their own business or are interested in starting a business. INDUSTRIAL EFFECTIVENESS PROGRAM (IEP): To provide technical and financial assistance to help New York State manufacturing firms address competitiveness issues that increase productivity, efficiency and market share. The award evaluation will be based on demonstrated need, company size, willingness to share costs of technical expertise and contribute resources, involvement of employees and commitment to self-improvement. The maximum award is a $50,000 grant. JOB DEVELOPMENT AUTHORITY (JDA) DIRECT LOAN PROGRAM: Provides Direct Loans for the growth of manufacturing and other eligible businesses within New York State by assisting in financing a portion of the cost of acquiring and renovating existing buildings or constructing new buildings (“Real Estate” projects) or for purchasing machinery and equipment (“M&E” projects). Funds to make Loans are derived from the sale of State-guaranteed bonds. In most cases, JDA Loans can be for up to 40 percent of the total project cost of Real Estate projects or M&E projects. Loans may be up to 60 percent for projects located in Empire Zones or economically distressed area. The combination of a bank loan and a JDA Loan allows up to 90 percent financing of a project. JOBS NOW: Offers financial assistance for major business expansion and attraction efforts that will create or attract significant numbers of permanent, full time private sector jobs in New York State. It is primarily directed toward large projects that create a minimum of 300 new full-time jobs. ESD may provide assistance for projects that create fewer than 300, but at least 100 new, permanent, full-time, private sector jobs, within the State. Funding assists businesses with construction and expansion of facilities; acquisition of machinery and equipment; to offset a portion of state and local taxes incurred by the expansion; and the recruitment, hiring and training of full-time permanent employees. MINORITY AND WOMEN-OWNED BUSINESS (MWBE) DEVELOPMENT & LENDING PROGRAM: Provides financial assistance to Minority and Women-Owned Business Enterprises (MWBE) in the State, as well as to projects and programs that assist the development of entrepreneurship among minority persons and women in New York State. Assistance is offered through:
- Lending in conjunction with local, community and regionally-based entities
- Lending for certified government contractors and eligible government contractors
- Direct financial assistance
- Incubator assistance
- Technical assistance
TRANSPORTATION CAPITAL ASSISTANCE PROGRAM: ESD administers this loan program for the New York State Department of Transportation (NYSDOT). It provides government contractor working capital loans to small business enterprises and NYS-certified minority and women-owned business enterprises (MWBEs) that have transportation-related construction contracts with NYSDOT or who are subcontractors of contractors having transportation-related contracts with NYSDOT. The program offers loans from $20,000 to $500,000, with a prime interest rate fixed at closing. Contractors that have been awarded a contract but have not yet begun work on the contract are eligible. Applications are accepted continuously. WORLD TRADE CENTER JOB CREATION & RETENTION PROGRAM (JCRP): Encourages companies to commit to creating a minimum of 75 new jobs, or retaining at least 200 jobs, in Lower Manhattan. NEW MARKETS TAX CREDIT: Program that subsidizes long-term capital investment in order to foster job creation and community development in Low-Income Communities throughout New York State. Empire State Development (ESD) has available interest-only loans at below-market rates, a portion of which may be forgiven upon maturity. NEW YORK STATE FILM PRODUCTION CREDIT PROGRAM: Established to attract and grow the film and television production industries throughout New York State (NYS). It offers a fully refundable 30 percent tax credit on qualified production costs incurred in NYS and is funded at $420 million per year for each of the calendar years 2010-2014. Eligible productions include:
- Feature films
- Episodic television series
- Television pilots and presentations
- Television movies and miniseries
NEW YORK STATE FILM POST PRODUCTION CREDIT PROGRAM: Created to support and grow the post production industry in New York State. Many projects, whose location shooting was done elsewhere, will take advantage of New York’s abundant post-houses and bring the project to NYS for their post production work. Up to $7 million per year for calendar years 2010-2014 inclusive will be available. This program is entirely separate from the New York State Film Production Credit program, and applicants to that program may NOT apply to both programs for the same project. The NYS Post Production credit is a fully refundable 10 percent tax credit on qualified post production costs paid in the production of a qualified film at a qualified post production facility in New York State. There are no per-project caps, and there is rollover in the annual $7 million allocation going forward until 2014.
NORTH CAROLINA – updated for 2014
For a list of state economic development agencies, click this link.
FINANCING Job Development Investment Grant: Awards a limited number of cash grants directly to new and expanding businesses that will provide economic benefits to the State, and need the grant to carry out the project in North Carolina. Grants are based on the job creation and investment commitment made by companies in their formal applications to the State prior to a location decision. Grant funds are disbursed annually to approved companies based on a percentage of withholding taxes paid by new employees, following satisfaction of performance criteria set out in grant agreements. One North Carolina Fund: Awards grants for job creation and/or retention in conjunction with local government matches. Job Maintenance and Capital Development Fund: Provides a limited number of grants to businesses located in Development Tier 1 counties, where the business is a major employer and has at least (i) 2,000 employees, and invests at least $200 million in capital improvements, or a business that is a large manufacturing employer and has at least (ii) 320 employees, and invests at least $65 million in capital improvements to convert its manufacturing process to change the product it manufactures. Site and Infrastructure Grant Fund: Provides assistance for site development and infrastructure improvements for very high-impact projects. Industrial Revenue Bond (IRB) Program: Assists private business development and expansion by issuing low-interest tax-exempt bonds. It offers qualified manufacturing facilities and certain solid waste disposal facilities convenient, long-term, flexible financing. The Industrial Facilities and Pollution Control Financing Authority of each county issues these bonds in the county where the project is located. IRBs can be either tax-exempt or taxable and can be used to finance an entire project, including the cost of land, construction of new or expanded facilities, acquisition and installation of depreciable property such as equipment, and construction period interest. Industrial Road Access Program: Administered by North Carolina’s Department of Transportation (DOT), this program provides funds for the construction of roads to provide access to new or expanded industrial facilities. An access review committee comprised of representatives of the Department of Transportation performs a technical review of a requested project and makes recommendations about traffic and safety concerns and approval is based upon the resulting economic benefits of the project including the number of new jobs created, the amount of capital investment, highway’s use and the area’s economic conditions. Industrial Rail Access System: Administered by the North Carolina DOT for businesses that want to locate or expand their facilities in NC. This program ensures that industries have the tracks needed to transport freight and materials and also assists in refurbishing tracks. Grant funding is contingent upon approval prior to the company making a decision to locate or expand in North Carolina and a private and/or local source match of funds. Approval is also based upon the economic benefits of the project including the number of new jobs created, the amount of capital investment, rail use and the area’s economic conditions. Foreign Trade Zones (FTZ): Neutral, secured areas legally outside of the U.S. customs territory that offer economic advantages for businesses involved in international trade. There are six FTZs in North Carolina; several subzones are also approved for use by individual manufacturers. TAX INCENTIVES On July 23, 2013, Governor Pat McCrory signed new tax reform legislation into law. The plan provides fiscally responsible tax relief to all North Carolina taxpayers. Income tax rates for all taxpayers will be lowered to a uniform rate of 5.8% in 2014 and 5.75% in 2015. The corporate income tax will be reduced to 6% in 2014 and 5% in 2015. If the state meets revenue targets, the corporate income tax will drop to 4% in 2016 and 3% in 2017. Article 3J Tax Credits: Provide tax credits to qualifying businesses for job creation, investment in business property and in some cases investment in real property. This Article is repealed effective for business activities that occur on or after January 1, 2014. Interactive Digital Media Tax Credit: Provides tax credit for developing interactive digital media. This credit is repealed effective for taxable years beginning on or after January 1, 2014. N.C. Ports Tax Credits: Provide tax credits toward income taxes paid by businesses or individuals using North Carolina Ports facilities at Morehead City and Wilmington. This credit is repealed effective for taxable years beginning on or after January 1, 2014. Renewable Energy Property Tax Credit: Provides a tax credit of 35% of the cost of renewable energy property. Research and Development Tax Credit: Businesses with qualified NC research expenses are allowed a tax credit equal to a percentage of those expenses. The allowable credits are determined by:
- Small Business: Qualified small businesses on the last day of the taxable year are allowed a credit of 3.25%.
- Low-tier research: For expenses for research performed in a Tier 1 county, a business is permitted a credit of 3.25%.
- Other research: For expenses not cover under small business or low-tier, the credits below apply to qualified research expenses during the taxable year (click table to open new window and see detail):
PROPERTY TAX EXEMPTION: Any new or expanding business project may be granted a property tax exemption for up to five years. All buildings, structures or improvements used in, or necessary to, the operation of the project qualify. The structure might be the project’s buildings or the project’s quarters within a larger building. Land does not qualify for an exemption. Two extensions are available:
- Agricultural processors may be granted a partial or full exemption for up to five additional years.
- A project located on property leased from a government entity qualifies for an exemption for up to five additional years upon annual application by the project operator.
In addition to, or instead of, an exemption, local governments and any project operator may negotiate payments in lieu of property tax for a period of up to 20 years from the date project operations begin. WIND TURBINE ELECTRIC GENERATION PROPERTY TAX REDUCTION: A property tax reduction applies to a centrally assessed wind turbine electric generation unit—a unit that produces electric power for public use—with a nameplate generation capacity of 100 kilowatts or more. For an eligible wind turbine on which construction is completed before January 1, 2015, the taxable value is calculated at 3 percent of assessed value instead of at 10 percent which applies to other centrally assessed property. The taxable value is calculated at 1.5 percent of assessed value if:
- construction of the wind turbine is completed after June 30, 2006, and before January 1, 2015, or
- a purchased power agreement was executed after April 30, 2005, and before January 1, 2006, and the construction of the wind turbine was completed after April 30, 2005, and before July 1, 2006.
SALES TAX EXEMPTIONS
- AGRICULTURAL COMMODITY PROCESSING PLANT CONSTRUCTION MATERIALS: Construction materials used to construct an agricultural commodity processing facility are exempt from sales and use taxes.COAL MINE MACHINERY OR EQUIPMENT: A sales and use tax exemption may be granted for machinery or equipment used to produce coal from a new mine in North Dakota. The exemption for each new mine is limited to the first $5 million of sales and use tax paid. The exemption extends to replacement machinery or equipment if the capitalized investment in the new mine exceeds $20 million.
- COMPUTER & TELECOMMUNICATIONS EQUIPMENT: For primary sector businesses other than manufacturers and recyclers, a sales and use tax exemption is allowed for purchases of computer and telecommunications equipment. To qualify, the equipment must be an integral part of a new primary sector business or create an economic expansion of an existing business, and the primary sector business must be certified by the Department of Commerce Division of Economic Development and Finance. The exemption does not extend to the purchase of replacement equipment.
- ELECTRICAL GENERATING FACILITIES—COAL-POWERED: An exemption may be granted for purchasing building materials, production equipment and other tangible personal property used in the construction or expansion of coal-powered electrical generating facilities. To qualify, the facility must convert beneficiated coal or coal from its natural form into electrical power and have at least one single electrical generation unit with a capacity of 50,000 kilowatts or more.
- ELECTRICAL GENERATING FACILITIES—WIND-POWERED: An exemption is allowed for purchasing building materials, production equipment, and other tangible personal property used in the construction or expansion of wind-powered electrical generating facilities between July 2001 and January 2015. To be eligible, a facility must have at least one single electrical energy generation unit with a nameplate capacity of 100 kilowatts or more.
- ELECTRICAL GENERATING FACILITIES—OTHER: An exemption may be granted for purchasing building materials, production equipment and other tangible personal property used in the construction or expansion of an electrical generating facility other than a coal- or wind-powered facility. To qualify, the facility must produce electricity for resale or for consumption in a business activity and have at least one single electrical generation unit with a capacity of 100 kilowatts or more.
- GAS PROCESSING FACILITIES: An exemption may be granted for purchasing building materials, equipment and other tangible personal property used in the expansion or construction of a gas processing facility. Also, tangible personal property used to construct or expand a system to compress, process or gather gas recovered from an oil or gas well in ND may qualify for an exemption. In addition, purchases of machinery, equipment and related facilities for environmental upgrades that exceed $100,000 and that reduce emissions, increase efficiency or enhance reliability of equipment may also qualify for an exemption.
- MANUFACTURING, AGRICULTURAL OR RECYCLING EQUIPMENT: A new or expanding plant may exempt machinery or equipment from sales and use taxes if it is used primarily for manufacturing or agricultural processing, or used solely for recycling. The expansion must increase production volume, employment or the types of products that can be manufactured or processed.
- OIL REFINERIES: An exemption may be granted for building materials, equipment and other tangible personal property used to expand or construct an oil refinery in North Dakota. To qualify, the facility must have a nameplate capacity of processing at least 5,000 barrels of oil per day. In addition, purchases for environmental upgrades that exceed $100,000 and that reduce emissions, increase efficiency or enhance reliability of equipment may also qualify for an exemption.
- TELECOMMUNICATIONS INFRASTRUCTURE: An exemption may be granted through December 31, 2012 for purchasing tangible personal property used to construct or expand telecommunications service infrastructure within the state. To qualify, the property must be incorporated into a telecommunications service infrastructure owned by a telecommunications company.
- BIODIESEL EQUIPMENT: The sale of equipment not installed by the seller to a facility licensed under N.D.C.C. § 57-43.2-05 to enable the facility to sell diesel fuel containing at least 2 percent biodiesel fuel or green diesel fuel by volume is exempt from sales tax.
- CARBON DIOXIDE FOR ENHANCED OIL & GAS RECOVERY: The sale of carbon dioxide to be used for enhanced recovery of oil or natural gas is exempt from sales and use tax.
- HYDROGEN GENERATION FACILITY: Sales of hydrogen used to power an internal combustion engine or fuel cell are exempt from sales tax. Equipment used directly and exclusively in the production and storage of this hydrogen by a hydrogen generation facility is also exempt from sales tax.
INCOME TAX EXEMPTION: A primary sector or tourism business may qualify for an income tax exemption for up to five years. “Primary sector” refers to a business that adds value to a product, process or service that produces new wealth in ND. Eligibility is limited to a new business or existing business that expands its operations in the state. A business is not eligible for the exemption if it has received a property tax exemption under tax increment financing; there is an outstanding recorded lien for delinquent property, income, sales or use taxes against the business; or the exemption fosters unfair competition or endangers existing business. AGRICULTURAL COMMODITY PROCESSING FACILITY INVESTMENT CREDIT: An income tax credit may be allowed for investing in an agricultural commodity processing facility—a livestock feeding, handling, milking or holding operation that uses as part of its operation a by-product produced at a biofuels production facility—in ND certified by the Dept. of Commerce Division of Economic Development and Finance (EDF). An investment may consist of a direct cash payment, a transfer of a fee simple interest in ND real property or a direct transfer of cash from a retirement plan for which the investor controls where the plan’s assets are invested. The credit is equal to 30 percent of the investment. No more than $50,000 of the credit may be used in any year. An unused credit may be carried forward up to ten years. A taxpayer is allowed no more than $250,000 in credits for all years. ANGEL FUND INVESTMENT CREDIT: An income tax credit is allowed for investing in an angel fund in ND certified by the Department of Commerce EDF. The credit is equal to 45 percent of the investment, up to a maximum credit of $45,000 per year. An unused credit may be carried forward up to seven tax years. For credits based on investments made on or after January 1, 2011, a taxpayer is allowed no more than $150,000. AUTOMATION CREDIT: Allowed only for the 2013, 2014 and 2015 tax years, it is an income tax credit for purchasing machinery and equipment for the purposes of automating a manufacturing process in ND. The credit is equal to 20 percent of the cost of the machinery and equipment approved by the Department of Commerce EDF. The business must be certified by EDF as a primary sector business to be eligible for the credit. An unused credit may be carried forward up to five tax years. In the case of a passthrough entity, such as a partnership or S corporation, the credit is passed through to its owners in proportion to their ownership interests. Total credits are limited to $2 million in any calendar year. RESEARCH EXPENSE CREDIT: An income tax credit for conducting research in North Dakota. The credit is equal to a percentage of the excess of qualified research expenses in ND over the base amount in North Dakota. The applicable percentage is 25 percent for the first $100,000 of excess expenses in a tax year. For excess expenses over $100,000 in a year, the applicable percentage for tax years 2007 through 2016 is:
- 20 percent, if qualified research in North Dakota first begins in 2007 through 2010, or
- 7.5 percent for 2007, 11 percent for 2008, 14.5 percent for 2009, and 18 percent for 2010 through 2016, if qualified research in North Dakota began before 2007, or
- 8%, if qualified research in North Dakota first begins after 2010.
For tax years after 2016, the applicable percentage for excess expenses over $100,000 in a year is 8 percent for all taxpayers, regardless of when qualified research first begins. SEED CAPITAL INVESTMENT CREDIT: An income tax credit for investing in a business certified by the Department of Commerce EDF. The credit is equal to 45 percent of the investment. No more than $112,500 of the credit may be used in any year. An unused credit may be carried forward up to four tax years. Only the first $500,000 of eligible investments in the business are eligible for the tax credit. The total amount of tax credits allowed for investments made in all certified businesses in any calendar year is limited to $3.5 million. WAGE & SALARY CREDIT: A corporation doing business in North Dakota for the first time is allowed an income tax credit if it did not receive a property or income tax exemption under N.D.C.C. ch. 40-57.1; was not created from a reorganization or acquisition of an existing ND business; and is engaged in assembling, fabricating, manufacturing, mixing or processing of an agricultural, mineral or manufactured product. The credit is equal to:
- 1 percent of wages and salaries paid during the tax year for each of the first three tax years of operation, and
- ½ percent of wages and salaries paid during the tax year for the fourth and fifth tax years.
WORKFORCE RECRUITMENT CREDIT: If extraordinary recruitment methods are used to hire employees for hard-to-fill positions in ND, an income tax credit equal to 5 percent of the compensation paid during the first 12 consecutive months to the employee hired is allowed in the first tax year following the tax year in which the employee completes the 12 consecutive month employment period. Unused credit may be carried forward up to four tax years. To qualify, an employer must pay an annual salary that is at least 125 percent of North Dakota’s average wage and must have employed all of the following recruitment methods for at least six months to fill a position for which the credit is claimed:
- Contracted with a professional recruiter for a fee;
- Advertised in a professional trade journal, magazine or publication directed at the trade or profession;
- Provided employment information on a web site for a fee; and
- Paid a signing bonus, moving expenses or atypical fringe benefits.
In addition, if an employer claims the credit, the employee hired in the hard-to-fill position is allowed a deduction for the signing bonus, moving expenses, or atypical fringe benefits paid by the employer that are included in the employee’s federal taxable income.
Ohio JOB CREATION TAX CREDIT: Provides corporate franchise or state income tax credit for businesses that expand or locate in Ohio for companies that incur tax liability under ORC Sections 5733.06 or 5747.02. Program will provide a tax credit against the Commercial Activity Tax (CAT) . Insurance companies that pay the annual franchise tax under ORC Sections 5725.18/5729.03 are eligible for the tax credit. Ohio JOB RETENTION TAX CREDIT: Provides corporate franchise or state income tax credit for businesses that commit to retain a significant number of full-time jobs. Program will provide a tax credit against the Commercial Activity Tax (CAT). Ohio RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDIT: Provides a nonrefundable tax credit against the corporate franchise tax and is designed to encourage Ohio’s corporations to invest in increased research and development activities. The credit equals 7 percent of the excess amount of Qualified Research Expenses. RESEARCH AND DEVELOPMENT SALES TAX EXEMPTION: Provides an exemption from the usual state and county sales tax for companies that purchase equipment for research and development activities. Exempts business from entire state and county sales tax for purchases of machinery and equipment used primarily for research and development. RESEARCH & DEVELOPMENT INVESTMENT LOAN FUND: Provides loan financing of between $1 million and $5 million for projects primarily engaging in R&D activity. Rates are fixed (at or below market rates) with terms similar to those of commercial bank financing. Companies receive a dollar-for-dollar, non-refundable Ohio commercial activity tax credit for all principal and interest payments during the year. MANUFACTURING MACHINERY & EQUIPMENT SALES TAX EXEMPTION: an exemption from state and county sales tax for companies that purchase machinery and equipment for manufacturing activities. Exempts business from entire state and county sales tax for purchases of machinery and equipment used primarily for manufacturing. WAREHOUSE MACHINERY & EQUIPMENT SALES TAX EXEMPTION: Exempts business from entire state and county sales tax for purchases of eligible machinery and equipment. Includes machinery and equipment used primarily (51 percent) in storing, transporting, mailing or handling inventory in a warehouse, distribution center or similar facility if the inventory handled by the facility is primarily distributed outside Ohio to retail stores owned by the business or affiliated group that owns the Ohio facility or distributed by means of direct marketing. TECHNOLOGY INVESTMENT TAX CREDIT: Offers a variety of benefits to Ohio taxpayers who invest in small, research and development and technology-oriented forms. This incentive provides a tax credit for taxpayers that invest in small, Ohio-based technology companies. The amount of the tax credit is 25 percent (or 30 percent in some limited cases) of the amount invested by the taxpayer. The maximum investment to which this credit may be applied is $250,000 (or $300,000). The credit may be claimed against personal income tax, corporate franchise tax, public utility excise tax or the dealers in intangibles tax. ENTERPRISE ZONES: Provides real property tax incentives for businesses that expand or locate in Ohio (may provide personal property tax incentives for those qualifying businesses that continue to pay personal property tax). OHIO HISTORIC PRESERVATION TAX CREDIT: Provides a tax credit for the rehabilitation expenses to owners of historically significant buildings. Funding is provided through competitive rounds based on economic benefit and regional distributive balance. The tax credit subsidy is 25 percent of qualified rehabilitation expenditures (QRE) not to exceed the QRE estimates in the application, with an application cap of $5 million. COMMUNITY REINVESTMENT AREAS: Provides local real-property tax incentives for residents and businesses that invest in designated areas of Ohio—up to 100 percent exemption of the improved real property tax valuation for up to 15 years depending on the project. RAPID OUTREACH GRANT: Funds are used for the acquisition of machinery and equipment, new building construction, building acquisition, on- or off-site infrastructure improvements and other fixed asset investments, manufacturing, research and development, high technology, corporate headquarters, and distribution. Given the demand for limited grant funds, qualified projects must involve substantial job creation or retention. ROADWORK DEVELOPMENT (629) ACCOUNT: Available for public roadway improvements, including engineering and design costs. Funds are available for projects primarily involving manufacturing, R&D, high technology, corporate headquarters and distribution activity. Projects must typically create or retain jobs. Grants are usually provided to the local jurisdiction and require local participation. INNOVATION OHIO LOAN FUND: Provides loans for acquisition, construction and related costs of technology, facilities and equipment purchase. It was created to assist existing Ohio companies in developing next-generation products and services within Targeted Industry Sectors. OHIO ADVANCED ENERGY FUND: Administered by the Ohio Energy Office, connects companies and communities with financial and technical resources to deploy energy efficiency and renewable energy technologies, and to support advanced energy economic development. OHIO ENTERPRISE BOND FUND: Provides revenue bond financing through an S&P rated fund whereby proceeds from the sale of bonds is loaned to companies for fixed-rate, long-term capital asset financing. Rates are fixed prior to funding, depending on the type of bond issued, with terms between seven to 10 years for equipment and 15 to 20 years for real estate. Up to $10 million in financing is available through the Program. OHIO JOB READY SITES PROGRAM: Created to bolster Ohio’s inventory of available facility locations served by utility and transportation infrastructure. Sites improved under the program are kept ready for future business prospects seeking locations for new or expanded operations. The grants may be used to offset costs traditionally incurred in industrial and commercial site development, from acquisition of real property to utility upgrades to construction build-out of speculative facilities. RURAL INDUSTRIAL PARK LOAN: Provides direct loans to rural, distressed local communities and applicants committed to creating well-planned industrial parks. URBAN REDEVELOPMENT LOAN: Provides low-interest loans to municipalities or designated nonprofit economic development organizations to acquire real estate for assembly into developable parcels and remediate any Brownfield contamination site to entice private business investment in distressed urban locations. WORKFORCE DEVELOPMENT FUNDING WORKFORCE GUARANTEE PROGRAM: Supports companies that are making investments in facilities, equipment and training that result in the retention and creation of jobs for Ohioans. It provides direct financial support to employers for training, paying for a portion of instructor salaries, materials, travel and special needs. INVEST OHIO: Provides a non-refundable personal income tax credit to investors that infuse new equity (cash) into Ohio small businesses to acquire an ownership interest in the company. The small business is required to reinvest that infusion of cash into one of five categories of allowable expenses within six months of its receipt. The investor must retain his or her ownership interest for a two-year holding period before the tax credit may be claimed. The small business must similarly retain the property that it purchased from the cash infusion for the entire two-year holding period. LOCAL GOVERNMENT INNOVATION FUND (LGIF): Established to provide financial assistance to Ohio political subdivisions for planning and implementing projects that are projected to create more efficient and effective service delivery within a specific discipline of government services for one or more entities. Through this program, the Ohio Department of Development seeks to promote efficiency, collaboration, merger and shared services among local governments. Projects are also expected to facilitate improved business environments and promote community attraction. The LGIF program will award up to $100,000 in grant funds per feasibility study, up to $100,000 in loan assistance per entity for demonstration projects and up to $500,000 in loan assistance for collaborative demonstration projects. Award amounts for applicants with collaborative partners are limited to $100,000 per applicant and $100,000 for each collaborative partner up to $500,000. Grant funds will be awarded biannually and loan funds will be awarded quarterly through a competitive and open selection process. OHIO NEW MARKETS TAX CREDIT PROGRAM: Provides investors with state tax credits in exchange for delivering below-market -rate investment options to Ohio businesses, sparking revitalization in Ohio’s low-income communities. OHIO MOTION PICTURE TAX CREDIT: Provides a refundable credit against the corporation franchise or income tax for various Ohio productions. The tax credit is available to applicants making eligible productions as certified by the Director of Development. The tax credit is equal to 25 percent of non-wage and nonresident wage Ohio production expenditures and 35 percent of Ohio resident wage production expenditures. VOLUME CAP: Provides a federal tax benefit by allowing eligible issuers to issue tax exempt Private Activity Bonds up to a state limit known as the “Volume Cap.” The State of Ohio’s allocation of Volume Cap is determined annually by the Internal Revenue Service on a per capita basis, and may be used for projects consisting of multi-family housing, single-family housing, exempt facilities, manufacturing and student loan bonds.
The QUALITY JOBS 10-YEAR CASH INCENTIVE provides cash payments of up to 5 percent of new payroll for up to 10 years. To qualify, the company must have an average county wage or $29,745, whichever is lower, achieve $2.5M annual payroll within 3 years, and offer basic health insurance. Target industries include: manufacturing, R&D including wind power manufacturing, corporate services, and data centers. INVESTMENT/NEW JOBS TAX CREDIT PACKAGE: The program allows a company to choose between a tax credit based on investment or new employees. The 5-year tax credit applies to the greater of 1 percent per year of investment in new depreciable property of $500 per new employee and the credit doubles in Enterprise Zones and if the investment exceeds $40 million. Target industries include manufacturing and aircraft maintenance operations. The 21ST CENTURY QUALITY JOBS 10-YEAR CASH BACK INCENTIVE requires at least 10 full-time jobs at an annual average wage of the lesser of $94,418 or 300 percent of the county’s average wage. It allows a net benefit rate of up to 10 percent of payroll for up to 10 years. To qualify, out-of-state sales must be at least 50 percent. Target industries include: knowledge-based service industries, including professional, scientific and technical services; music, film and performing arts; and specialty hospitals. The PRIMEWIN PRIME CONTRACTOR INCENTIVE allows federal prime contractors to be paid for jobs and payroll created by both the prime contractor and a qualifying subcontractor. This incentive offers a cash rebate of up to 2 percent of the Oklahoma workforce loaded labor cost and cash incentives paid quarterly for up to 10 years. OSU-UML, as contract verifier, certifies the qualified labor hours performed under a qualifying federal contract. The OKLAHOMA QUICK ACTION CLOSING FUND: Established in the 1st Session of the 53rd Oklahoma Legislature in House Bill 1953, it can be expended by the Governor for economic development and related infrastructure development to locate a high-impact business project or facility in Oklahoma or retain such a facility in the State. The business making an application must be engaged in a business activity that is eligible for Oklahoma Quality Jobs Program Act incentive payments (68 O.S. § 3603) or in a “basic industry” as set forth in the 21st Century Quality Jobs Incentive Act (68 O.S. § 3913). STATE SMALL BUSINES CREDIT INITIATIVE: The State of Oklahoma was awarded $13,168,350 by the U.S Treasury for the State Small Business Credit Initiative. The award will be used to make capital investment in new and expanding small businesses in Oklahoma. i2E will manage the funds on behalf of the State of Oklahoma. For more information please contact i2E at (405) 235- 2305 or www.i2e.org. OKLAHOMA QUALITY EVENTS PROGRAM: If incremental sales taxes are greater in a community as the result of hosting a quality event, this incentive program allows the Oklahoma Tax Commission to make a payment of no more than $250,000 to the host community for eligible expenses resulting from hosting the Quality Event. “Quality Event” is a meeting of the members for a nationally recognized organization. Additionally, in order to be considered a quality event for the incentive, the site selection process must be a competitive process in which at least one site not located in Oklahoma was considered by the organization. Eligible expenses are those expenses that are:
- Paid by the local government entity from the general revenue fund or a locally imposed tax.
- Paid to either the certified sponsor of the Quality Event or paid to a for-profit or nonprofit entity through the certified sponsor.
- Used for advertising, promoting, organizing or otherwise supporting the Quality Event.
If the host community meets the other statutory requirements, it is eligible to be reimbursed for the eligible expenses from incremental state sales tax revenue collected from a period of up to 2 days prior to and to 2 days after the last day of the Quality Event. Additionally, the state sales taxes that are captured for reimbursement must occur no more than 13 miles from the property lines of the primary property for the Quality Event. OKLAHOMA COMMUNITY ECONOMIC DEVELOPMENT POOLED FINANCE: Creates a financing incentive that targets job creation and infrastructure development; and a foundation of ensuring Oklahoma’s infrastructure is high quality for attracting and retaining jobs. A $100 million Infrastructure Pool is created for public financing to local governments issued through the Oklahoma Development Finance Authority. The Infrastructure Pool revenue must be used for infrastructure development. Bonds issued from the Infrastructure Pool are financed or repaid from taxes voted on by local community. A $100 million Economic Development Pool is created for public finance to local governments in conjunction with a for-profit entity through ODFA. The Economic Development Pool shall be used for economic development projects in the state. Debt issued from the Economic Development Pool may be paid from withholdings taxes, and other revenue, at the for‐profit entity benefitted by the financing. For debt obligations issued under this act, there is a maximum maturity of 25 years and a maximum coupon rate of 14 percent. 65 percent of the net proceeds from both the Infrastructure Pool and the Economic Development Pool shall be used by ODFA for municipalities that do not exceed 300,000 people. The remaining 35 percent may be used by the ODFA for any eligible local government. Effective September 1, 2010 an evergreen clause permits the renewal of issuing capacity by ODFA. AD VALOREM TAX EXEMPTIONS: Certain new and expanding manufacturers, research and development companies, certain computer services and data processing companies with significant out-of state sales, aircraft repair companies, oil refineries, and certain windpower generators may be eligible for ad valorem tax exemptions for up to five years. SIC Industry Group Numbers 5112 and 5415 and NAICS Numbers 334611, and 519130 must have out-of-state sales of at least 50 percent. SIC Industry Group Number 5142 must have out-of-state sales of at least 80 percent. Computer data processing classified in SIC Industry Group 7374 and NAICS 514210 may also be eligible based on payroll or capital investment. Threshold requirements are an investment of at least $250,000 and an addition of $250,000 in annual payroll in counties with a population of 75,000 or less. If the company is located in a larger county, an additional annualized payroll of at least $1,000,000 is required. Firms must make an annual application to the County Assessor by March 15th of the year in which the exemption is requested. ALTERNATIVE ENERGY SOURCES TAX CREDITS: Oklahoma encourages alternative, zero-emission fuel production by providing tax credits to producers of electricity utilizing such sources and to small wind turbine manufacturers. Tax credits accrue and may be claimed beginning January 1, 2011. Producers may receive 75 one-hundredths of one cent per kilowatt-hour. Credits may be earned for 10 years once production begins, and earned credits may be carried forward 10 years. Non-taxable electric producers may transfer the credits. Small wind turbine manufacturers may earn a credit of $25 per square foot of rotor swept area starting in 2003. The credits are freely transferable and may be carried forward 10 years. FOREIGN TRADE ZONES: U.S. Customs Duty Management Program where manufacturers and distributors located in Foreign Trade Zones—since for Customs purposes, are considered to reside outside the U.S.—benefit from cost savings and flexibility. Businesses engaged in international trade within these Zones benefit from special customs procedures when importing and when warehousing, manufacturing or assembling with imported goods that remain in bond under Customs Control. Subzones may be established for single purpose manufacturing/fabricating and distribution operations. There are four Zones in Oklahoma: Port of Muskogee (FTZ #164) and the Tulsa Port of Catoosa (FTZ #53), which are both on the McClellan Kerr Arkansas River Navigation System, providing rail, barge and truck transportation services from Oklahoma to ports throughout the world; the Port Authority at Will Rogers World Airport of the Greater Oklahoma City Area (FTZ #106), Oklahoma City; and the International Business Park in Durant (FTZ #227). OKLAHOMA FILM ACT: The Oklahoma Film Enhancement Rebate Act allows a rebate of up to 37 percent of qualified expenditures made in Oklahoma that are directly attributable to film, television production, television commercial and theater. Qualifying Expenditures for productions include the cost of construction and operations, photography, sound synchronization, wages and wardrobe, facilities and related services. The minimum budget for the project shall be $50,000 with a minimum of $25,000 spent in Oklahoma. In addition to the rebate, the State of Oklahoma offers a Point-of-Purchase sales tax exemption to qualifying productions on sales tax paid for property or services to be used in productions. The POP Sales Tax Exemption cannot be used in conjunction with the rebate, and there is no minimum budget or expenditure requirement. SALES/INCOME TAX CREDIT FOR TOURISM ATTRACTION PROJECTS: The Oklahoma Tourism Development Act provides an incentive for qualified new or expanding tourism facilities and attractions. Approved companies are issued a credit against either income tax or sales tax liability that results from expenditures for projects that attract more tourists to Oklahoma. The credit is calculated based on a percentage of the attraction’s development costs. The company and the Director of the Department of Tourism and Recreation must enter into a tourism attraction development agreement with a 10-year term before any credits may be issued. OKLAHOMA CAPITAL ACCESS PROGRAM: The Oklahoma Capital Investment Board (OCIB) manages this easy-to-use economic service program that encourages additional business lending activity. It provides a “credit insurance” reserve for Oklahoma banks through a fee matching arrangement for loans enrolled in the program. It gives banks additional resources to finance economic development and community reinvestment activities. For more information visit www.OCIB.org.
The OREGON BUSINESS EXPANSION AND RETENTION PROGRAM is a new tool that creates a state incentive available to existing companies expanding operations in Oregon or new companies coming in to the state. The program helps innovative, knowledge-based industry companies create more high-paying jobs in Oregon by helping to offset a company’s expansion costs with forgivable loans based on the anticipated increase in income tax revenue due the state from the new jobs created. The program is capitalized with Lottery Funds (up to $4 million for 2011-13 biennium). To be eligible, the company must plan to hire 50+ new employees in Oregon; have 150 or more employees at time of eligibility; have employee wages are 150 percent above state average or county average, whichever is less; and must be in a traded-sector industry (excludes retail businesses); INDUSTRIAL DEVELOPMENT PROJECTS OF STATE SIGNIFICANCE: This new program sets up a process for identifying up to ten “regionally significant” industrial areas per biennium to further job creation. It also establishes an expedited review process and narrows the grounds for appeal. The intention is to protect those industrial lands with the potential for future economic development and job growth from conversion to residential or commercial zoning. The MANUFACTURING BUSINESS ENERGY TAX CREDIT (BETC) (HB 2523) moves to Business Oregon in 2012. The manufacturing credit has been instrumental in growing Oregon’s expanding renewable energy industry. Oregon facilities that manufacture renewable energy resource equipment may be eligible for the credit, which has proven extremely valuable to offset the costs of large capital investments. Eligible costs may include the building, equipment and machinery and other costs used to manufacture equipment, machinery or products designed exclusively to use a renewable energy resource. The facilities are eligible for a tax credit of 50 percent of eligible costs, up to a maximum of $40 million in eligible costs for each phase of development. HB3672 extended the sunset dates to 2018 for a number of important incentive programs and tax credits that support a range of business development activities across the state. These extensions include: the state’s Research & Development Credit, Long-term Rural Enterprise Zones, Electronic-Commerce Zones, the Film and Video Credit, and Biomass credits. In addition, the Oregon Investment Advantage program was extended to July 1, 2016 for rural and distressed Oregon counties seeking to recruit traded sector company development. More info on these programs can be found here. OREGON BUSINESS DEVELOPMENT FUND (OBDF): A revolving loan fund that provides term fixed-rate financing for land, buildings, equipment, machinery and permanent working capital. Participants must create or retain jobs and must typically be a traded-sector business in manufacturing, processing or distribution. The program gives preference to projects located in rural and distressed areas and to small businesses with fewer than 100 employees. Loans have a maximum amount of $700,000; a maximum term and amortization of 20 years or the useful life of the project and/or collateral; a fixed interest rate of U.S. treasury Bills plus 1 percent APR (4 percent minimum APR); and a 1.5 percent loan origination fee. OREGON CAPITAL ACCESS PROGRAM (CAP): Helps lenders (banks and credit unions) make more commercial loans to small businesses and provides capital for start-up or expansion. It is designed for non-profit and for-profit businesses seeking funds for most business purposes. All types of loans and lines of credit are eligible. Lenders build a loan-loss reserve each time they enroll a loan. Contributions to the loan-loss reserve account are matched by Oregon Capital Access Program. CAP loans have enrollment fees between 3 percent and 7 percent as determined by the financial institution; will receive a match on the enrollment fee of up to $35,000 per borrower; and have rates and terms for repayment determined by the lender. OREGON CREDIT ENHANCEMENT FUND (CEF): A loan insurance program available to lenders to assist businesses in obtaining access to capital. The fund guarantees loans made by lenders providing working capital or fixed-asset loans to businesses. The program is available for traded-sector manufacturing, production, processing and distribution companies; can assist most business located in a designated distressed area; can assist businesses that are using proceeds to clean up a brownfield site; can include loans used for fixed assets, working capital or export financing; can insure term loans and lines of credit and; has an enrollment fee typically between 1.25 percent and 3.0 percent of the insured amount based on the term of the credit facility. Loan guarantees are typically up to 80 percent of the loan amount, up to $2,000,000 exposure for term loans. OREGON INDUSTRIAL DEVELOPMENT BONDS: Tax-exempt bonds issued by the state of Oregon, designed to help Oregon manufacturers grow. They finance job creation and business growth for Oregon traded-sector, value-added manufacturers and processors by providing long-term debt financing for land, buildings and other fixed assets at a rate below prime. Affordable interest rates and tax-exempt status assist in lowering capital expenses. The bonds generally provide the greatest benefit to the borrower for bonds of $5 million or more. OREGON EXPRESS BOND PROGRAM: Uses much less paperwork and highly standardized documents to save borrowers time and money during the tax-exempt bond borrowing process. Business Oregon has selected a bond counsel firm with a pre-approved fee schedule. Express Bonds are placed with the borrower’s bank and may be feasible for financing smaller projects, particularly within the $500,000 to $5 million cost range. ENTREPRENEURIAL DEVELOPMENT LOAN FUND (EDLF): Provides direct loans to help start-ups, micro-enterprises and small businesses expand or become established in Oregon. This fund fills a niche not provided through traditional lending markets. Loans are a maximum amount of $50,000 with a maximum term and amortization of 5 years and a fixed interest rate of Prime plus 2 percent APR. Participants must meet one, or both, of the following criteria:
- have revenues of less than $500,000 in the previous 12 months or
- be a business owned by a severely disabled person.
BROWNFIELDS REDEVELOPMENT FUND: A Brownfield is property where expansion or redevelopment is complicated by actual or perceived environmental contamination. Oregon’s Brownfields Program is available to provide financing for the full range of environmental activities—assessment through cleanup—associated with Brownfields redevelopment. The department works with the OR Department of Environmental Quality to ensure that a project’s scope of work will achieve environmental compliance and meet the needs of the redevelopment project. The BUILDING OPPORTUNITIES FOR OREGON SMALL BUSINESS TODAY (BOOST) FUND offers two independent resources, direct loans and grants, to small business owners in Oregon.
- The BOOST LOAN PROGRAM is a revolving loan fund that provides term fixed-rate financing for small businesses in need of operating capital. Loan proceeds may be used to support daily operations (i.e., rent or mortgage payments, utilities, marketing expenses, employee expenses, accounts receivable/payable, small equipment purchases, etc). Participants must be a small business with 100 or fewer employees and must be a traded-sector business in manufacturing, processing or distribution. A BOOST loan applicant will need to demonstrate a reasonable capacity to create or retain jobs, provide adequate collateral for the loan and demonstrate a reasonable prospect of repayment.
- The BOOST GRANT PROGRAM will award and make grants as an incentive to Oregon businesses that create new, full-time jobs in Oregon. Applicants must be businesses with 100 or fewer employees, must create and retain new full-time jobs for a period of at least 6 months, must be a traded-sector business in manufacturing, processing or distribution, and must demonstrate that comparable wages are provided to their employees. Up to $2,500 may be awarded to an applicant for each full time job created and retained with an annual maximum of $50,000 per applicant in a calendar year.
TAX INCENTIVES Oregon offers globally competitive tax incentives to help encourage businesses to locate in Oregon, and existing Oregon businesses to grow and prosper.
- ENTERPRISE ZONES (EZs): In exchange for locating or expanding in an enterprise zone, businesses receive exemption from local property taxes on new plant and equipment for at least three years (but up to five years) in the standard program. In addition, some zones can offer special incentives for investments in long-term rural facilities or electronic commerce operations.
- The OREGON INVESTMENT ADVANTAGE: This income tax exemption program helps businesses start or locate in a number of Oregon counties by providing a multi-year deduction for all income-based taxes related to the new business operations, potentially eliminating state business tax liability during that multi-year period.
- STRATEGIC INVESTMENT PROGRAM: Exempts a portion of very large capital investments from property taxes. The program is available statewide.
- RESEARCH TAX CREDITS: Corporate tax credit for qualified research and basic research conducted in Oregon, as a state-level extension of federal R&D tax credits.
- CONSTRUCTION-IN-PROCESS: With timely filing for each of up to two years, unfinished improvements to a business facility may be exempt from local property taxes statewide. (In an EZ, most authorized business firms can receive essentially the same but somewhat broader tax abatement using another form.)
- EMPLOYER-PROVIDED DEPENDENT CARE TAX CREDIT: A 50 percent credit for the annual cost of assisting employees with childcare and similar needs.
- FILM & VIDEO INCENTIVES: Oregon offers a host of incentive programs for film and video productions taking place in the state. Incentive programs rebate:
o 20 percent of the production’s Oregon-based goods and services o An additional cash payment of up to 16.2 percent of wages paid to production personnel
Unlike other states’ programs, these incentives are cash rebates as opposed to tax credits. This simplifies and speeds up the rebate process. RENEWABLE ENERGY INCENTIVES
- BUSINESS ENERGY TAX CREDIT: Offered by Business Oregon to companies that invest in renewable energy-related manufacturing.
- RURAL RENEWABLE ENERGY DEVELOPMENT ZONES: A three to five year exemption from property taxes on new investments in wind energy farms, biofuel production and other eligible projects in a designated county.
- STATE ENERGY LOAN PROGRAM (SELP): For renewable energy, including manufacturing facilities. Loans have been as short as 10 years and as long as 30 years, depending on the borrower’s need and financial situation, and have been as large as $20 million. The Oregon Department of Energy finances these low-interest loans through the issuance of state general obligation bonds.
A complete list of incentives and business climate information can be found at www.Oregon4biz.com/The-Oregon-Advantage/
PENNSYLVANIA – updated for 2014
For a list of state economic development agencies, click this link.
Pennsylvania offers several forms of financial and business assistance including loans, training, tax credits and technical assistance through a variety of incentives programs. Visit www.newPA.com/business for more program details. Digital & Robotic Technology: The Technology Collaborative (TTC) was formed in 2005 through the merger of the Pittsburgh Digital Greenhouse and the Robotics Foundry. TCC is a statewide economic development organization whose mission is to help increase PA’s technology-based economy through the development of collaborative industry clusters that leverage the region’s world-class assets in advanced electronics, cyber security and robotics. It helps to create an ideal environment for business expansion through leverage of the region’s high-tech base, along with resources and support from local universities, private foundations, regional development organizations, federal, state and local government, and industry. As a member-driven initiative, TTC delivers high-value-add programs and services that start-up and expansion businesses need such as collaborative research, education and training, extensive business support, networking opportunities and employee recruitment services. FINANCING Ben Franklin Technology Development Authority (BFTDA):
- BFTDA Venture Investment Program: Investment in venture capital partnerships investing in early-stage PA technology companies. Venture capital partnerships and angel investment groups are eligible. Funding is variable.
- BFTDA Technology Development Grant: Grants to help groups or consortia of Pennsylvania companies position themselves at the cutting edge of emerging technologies and establish a competitive advantage through the use of advanced e-business systems. Not-for-profit organizations and Community groups are eligible. Funding is variable.
- BFTDA Alternative Energy Development Program (AEDP): Provides funds to businesses through the four Ben Franklin Technology Partners for access to capital, business expertise, technology commercialization services to advance the development of new technologies and for the generation, conservation and transportation of alternative and clean energy. The BFTDA Centers receive funding to award to entrepreneurs, start-up & early-stage companies, established companies, investors, higher education & research and BFTP alumni companies.
Discovered In PA-Developed In PA: Grant program established by the Corbett Administration to build capacity to better support Pennsylvania businesses and to spur creativity and innovation in the provision of economic development services. Eligible applicants are private and public sector entities whose mission includes economic development. Competitive projects include ongoing or innovative new activities, programs or events to promote entrepreneurship, encourage technology transfer, improve capacity building for regional economic development or provide outreach to businesses. PA First Program: Funding was increased in FY 2013-14 to $37.8 million. Created by the Corbett Administration, PA First is a grant and loan funding tool to facilitate increased investment and job creation within the commonwealth. Eligible applicants include businesses, or IDCs, municipalities or authorities on behalf of businesses, which create or preserve a significant number of jobs, make a large investment and offer substantial economic impact. Funds can be used for machinery/equipment; job training; infrastructure; land and building improvements; environmental assessment/remediation; acquisition of land, buildings and right-of-ways; working capital; and site preparation. Business In Our Sites Grants & Loans: A $300 million statewide loan pool, created by the issuance of bonds. This money will be made available to communities statewide to help them develop shovel-ready sites to accommodate expanding businesses, thus building the local and regional economy and ultimately creating jobs. Emphasis will be given to communities that lack the resources necessary to invest in site preparation. Funds may be used to acquire land, conduct environmental assessment and remediation and perform demolition. The funds may also be used for site preparation activities and installation of infrastructure, including but not limited to, sewer, water, storm water, utilities and telecommunications, both on site and as needed to bring service to the site. They may also be used for access roads or other necessary on-site and off-site transportation improvements. These include rail, costs associated with engineering, legal and professional services; and other activities necessary to make a specific site ready for reuse. Building PA: Provides $150 million in funding for the development of real estate assets within the commonwealth to be matched by private investors looking to facilitate projects within the commonwealth. This public/private partnership has resulted in a $300 million fund that will provide mezzanine capital for developers seeking to redevelop and revitalize real estate assets. Small Business First: Funding for small businesses, including low-interest loan financing for land and building acquisition and construction, machinery and equipment purchases and working capital. Loans are up to $200,000 or 50% of total eligible project costs, whichever is less; maximum loan amount for working capital is $100,000 or 50% of total eligible project costs, whichever is less. Alternative & Clean Energy Program: Administered jointly by the Dept. of Community and Economic Development (DCED) and the Dept. of Environmental Protection (DEP), under the direction of the Commonwealth Financing Authority, it provides financial assistance in the form of grant and loan funds that will be used by eligible applicants for the utilization, development and construction of alternative and clean energy projects in the Commonwealth.
- Loans for manufacturers of alternative and/or clean energy generation equipment or components shall not exceed $40,000 for every new job created within three years after approval of the loan. Loans for any alternative energy production or clean energy project shall not exceed $5 million or 50% of the total project cost, whichever is less.
- Grants for manufacturers of alternative and/or clean energy generation equipment or components shall not exceed $10,000 for every job projected to be created by the business within three years after approval of the grant. Grants for any alternative energy production or clean energy project shall not exceed $2 million or 30% of the total project cost, whichever is less.
Business Opportunities Fund (BOF): Installment loans, lines of credit and technical assistance for minority business enterprises, women-owned business enterprises and small businesses. There are no minimum or maximum loan sizes and funds may be used for cash flow (working capital), equipment, leasehold improvements and acquisition of owner-occupied real estate. Community Economic Development Loan Program: Low-interest loans for projects in distressed communities. Loans are available up to $100,000 or 50% of total eligible project cost (whichever is less), and can be used for land and building acquisition; building, construction and renovation; machinery and equipment acquisition and installation; and working capital. For-profit small businesses (100 employees or less) that are located in a DCED designated distressed community or Keystone Opportunity Zone is eligible. Export Financing Program: Funding for small business for export activities. Maximum loan amount is $350,000. For-profit businesses with no more than 250 full-time employees exporting products manufactured or assembled at facilities located in PA or for services that originate from facilities located in PA are eligible. First Industries Fund: Administered by the Commonwealth Financing Authority (CFA) and the Dept. of Community and Economic Development, it is a loan and loan guarantee program aimed at strengthening PA’s agriculture and tourism industries. Uses include: land and building acquisition and construction, machinery and equipment purchase and upgrades and working capital. Market Access Grant (MAG): Designed to enhance the capability of small and mid-sized PA companies to increase export sales, it is a valuable tool available to qualifying companies seeking financial assistance and foreign market entry support. The 1:1 matching grant has a maximum annual award of $3,000 per company. Valid uses include overseas trade show participation, overseas trade mission participation, foreign market sales trip, and subscription to US DOC services. High Performance Building Program: Provides financial assistance in the form of grants and loan funds to underwrite the cost premiums associated with the design and construction or major renovation of high performance buildings in the Commonwealth. Loans for high performance building projects for small businesses shall not exceed $2 million or 50% of total project cost, whichever is less. Grants for high performance building projects shall not exceed $500,000 or 10% of the total eligible building construction/renovation costs (whichever is less). Innovation Grant (IG): Provides funding to encourage the technology transfer and commercialization of intellectual property between Pennsylvania’s technology-oriented businesses and entrepreneurs and academic medical institutions, non-profit research institutions and Pennsylvania Institutions of Higher Education (IHEs) with preference given to Keystone Innovation Zone-participating IHEs. It is a companion program to the Keystone Innovation Zone (KIZ) program. Each Grant request may not exceed $100,000 and must be matched dollar-for-dollar by resources other than the Commonwealth of Pennsylvania. Grants to IHEs, academic medical centers and non-profit research institutions are to facilitate technology transfer, including patent filings, technology licensing, intellectual property and royalty agreements and other designated resource needs. Marketing to Attract Tourists: Provides funding to support and develop heritage assets, enhance outdoor recreation and support the growth or development of various events. A primary goal of the program is to promote overnight stays. Applicants should, as part of the project narrative, explain how their project will meet this goal. Non-profit organizations with a significant interest in the development of tourism product that provides a visitor experience to a tourist region, destination and/or attractions are eligible to apply. Funds may be used to support events, facility enhancements, new construction and/or renovations or for the development of marketing, advertising and public relations campaigns to build attendance. Pennsylvania Capital Access Program (PennCAP): PennCAP is a loan guarantee program that provides banks with a flexible and non-bureaucratic tool to make business loans that are somewhat riskier than conventional bank loans, in a manner consistent with safe and sound bank regulations. PennCAP’s loan guarantee program operates on a portfolio basis rather than a guarantee on loans made. The maximum guarantee is $500,000. Pennsylvania Community Development Bank (PCD Bank): The PCD Bank’s purpose is to assist and expand Community Development Financial Institutions (CDFIs). CDFIs make loans and investments and perform other community development functions in distressed communities and for disadvantaged borrowers. CDFIs have demonstrated an ability to lend prudently and productively in unconventional markets often overlooked by conventional financial institutions. PCD Bank offers a Loan Program to assist and grow CDFIs. Second Stage Loan Guarantee Program (Second Stage): The Second Stage Loan Guaranty Program is a loan guaranty program that offers guarantees for bank loans to second stage manufacturers, advanced technology, and life sciences businesses to support growth in these vital sectors. The loan guarantees are primarily for working capital, but are also available to finance the asset needs of life sciences, advanced technology, or manufacturing businesses that have been in existence for at least two, but no more than seven, years at the time of application. The maximum guarantee is $1,000,000. TAX INCENTIVES Innovate In PA: Designed specifically to address the seed capital needs of start-up companies and small businesses that are growing and expanding and will facilitate job growth, new patents and products, and increased tax revenues for the commonwealth. The program will utilize $100 million in deferred tax credits to insurance companies in the state. Funds raised over multiple years will be directed to the Ben Franklin Technology Development Partners, three Life Sciences Greenhouses and Venture Capital investment program, the Commonwealth’s most powerful instrument for supporting entrepreneurial and early-stage business growth. A working group is currently working on the guidelines for this new and innovative program. Job Creation Tax Credits (JCTC): A $1,000-per-job tax credit to approved businesses that agree to create at least 25 new jobs (or expand the existing workforce by at least 20%) within three years; 25% of the tax credits allocated each year must go to businesses with less than 100 employees. Tax credits may not be utilized by a business until the jobs are actually created. The Corbett Administration increased the tax credit amount from $1,000 to $2,500 per job for employers who create a new job that is filled by an unemployed individual. Keystone Opportunity Zones (KOZ): Provide certain state and local tax abatements to businesses and residents locating in designated zones. Eligibility for benefits is based upon annual certification. In order to receive benefits, any entity applying must be compliant with all local and state taxes and building and zoning codes. The Corbett Administration amended the KOZ program to create new zones, expand existing zones and continue promoting job creation through targeted tax reductions, credits, and exemptions. PA Resource Manufacturing Tax Credit (PRM): Beginning in 2017, any manufacturer purchasing natural gas containing ethane as a petrochemical feedstock at a facility within the commonwealth could be eligible for a PRM Tax Credit equal to five cents per gallon ($2.10 per barrel) of ethane purchased and used in manufacturing ethylene, so long as the company makes a capital investment of at least $1 billion and creates the equivalent of at least 2,500 full-time jobs while constructing the facility. Effective for ethane purchased between Jan. 1, 2017 and Dec. 31, 2042. Research and Development Tax Credit: Allows companies holding qualifying Research and Development Tax Credits to apply for approval to sell those tax credits and assign them to the buyer(s). The Corbett Administration increased the annual cap to $55 million of tax credits available annually and removed the 2015 sunset provision of the program. Educational Improvement Tax Credit Program (EITC): Tax credits to eligible businesses contributing to a Scholarship Organization, an Educational Improvement Organization and/or a Pre-Kindergarten Scholarship Organization. Tax credits equal to 75% of its contribution up to a maximum of $750,000 per taxable year—can be increased to 90% of the contribution, if business agrees to provide same amount for two consecutive tax years. The annual cap has been increased to $100 million in tax credits available annually. Keystone Innovation Zone Tax Credit Program: Provides tax credits to for-profit companies less than eight years old operating within specific targeted industries within the boundaries of a Keystone Innovation Zone (KIZ) Program. Tax credits must be applied against the tax liability of a KIZ company for the tax year in which the KIZ Tax Credit was issued. A KIZ company may claim a tax credit equal to 50% of the increase in that KIZ Company’s gross revenues in the immediately preceding taxable year attributable to activities in the KIZ, over the KIZ Company’s gross revenues in the second preceding taxable year attributable to its activities in the KIZ. The KIZ Tax Credit is limited to $100,000 annually per KIZ company. Applications must be submitted on or before September 15 of each year. Pennsylvania Economic Development Financing (PEDFA):
- PEDFA Tax Exempt Bond Program: Tax-exempt and taxable bonds, both in pooled transactions and stand-alone transactions, to be used to finance land, building, equipment, working capital and refinancing. Loans are no less than $400,000 and no more than $10 million for manufacturers (with no upper limit for other projects)—up to 100% of project costs. Eligible businesses include manufacturing, nonprofit 501(c) (3), energy, solid waste disposal, wastewater treatment, transportation facilities and assisted living/housing.
- PEDFA Taxable Bond Program: Tax-exempt and taxable bonds, both in pooled transactions and stand-alone transactions, to be used to finance land, building, equipment, working capital and refinancing. Loans no less than $400,000; up to 100% of project costs
Film Tax Credit Program: $60 million in tax credits is available in an effort to expand the activity of film, television and other production companies in the state. A project is eligible if at least 60% of the project’s total production budget is used for Qualified Pennsylvania production expenses. The amount of tax credits available is equal to 25% of Qualified Pennsylvania production expenses for the project. Neighborhood Assistance/Enterprise Zone Tax Credit (NAP/EZP): Provides tax credits to private companies investing in rehabilitating, expanding or improving buildings or land located within designated enterprise zones. Uses include real property improvements such as rehab, expansion or physical improvements to buildings or land resulting in jobs created or retained. Tax credits equal 25% of amount invested, up to $500,000 total tax credits per project. Tax Increment Financing Guarantee Program (TIF): The TIF was designed to promote and stimulate the general economic welfare of various commonwealth regions and communities, and to assist in the development, redevelopment and revitalization of Brownfield and Greenfield sites in accordance with the TIF Act. The program is part of an effort by DCED to provide credit enhancement for TIF projects to improve market access and lower capital costs through the use of guarantees of up to $5,000,000 to issuers of bonds or other indebtedness. WORKFORCE DEVELOPMENT Job Gateway: launched in July 2012 to keep up with the increasingly mobile and technologically advanced society. This initiative revolutionizes the way job seekers find family-sustaining employment and employers find the skilled candidates that they need—all at no cost to the job seeker or employer. Keystone Works: A $1 million job training program focused on matching newly unemployed individuals to high priority occupations. Unemployment Compensation benefits continue to be paid during training period. Monetary incentive to businesses hiring trainees of $375 every four weeks employed up to $1,500 total (16 weeks). Employers can filter their candidate referrals by education, job type, location, occupation and salary. Guaranteed Free Training Program (GFT-WEDnetPA): Basic skills (up to $450 per trainee and $75,000 per company) and IT training (up to $850 per trainee and $50,000 per company) for eligible employees of new and expanding businesses. Trainees must be PA residents, employed in PA, permanent full time employees and earn at least 150% of current federal minimum wage. Basic Skills: must be front-line employee or first level supervisor. Information Technology: must be technical worker, IT professional or front-line employee/first level supervisor of a manufacturing company who is limited to receiving advanced applied manufacturing training only. See at www.wednetpa.com.
The JOBS GROWTH ACT allows eligible businesses in any industry to offer their employees an exclusion of 50 percent of performance-based compensation from their Rhode Island gross income. In return, the company pays a 5 percent tax each year on the performance-based income paid that year. In order to qualify, a company must hire 100 new employees in the state and add at least $10 million to its state payroll. Those new workers must earn at least 125 percent o the state’s annual average compensation. Employees must be hired or relocated after June 1, 2005 and cannot have been previously employed by the company. The tax cut applies only to bonus or incentive income, not base salary. Created in 2010, the JOB CREATION GUARANTY PROGRAM authorizes the RIEDC to support critical economic development projects by helping innovative small businesses gain access to private growth capital and credit. The program helps companies with primarily “soft” assets like patents, intellectual properties and licenses expand and create jobs in Rhode Island. Under the program, the RIEDC may provide credit enhancement on bonds or loans privately placed with capital providers and banks. The net proceeds of the bonds would provide the necessary financing to capitalize a company’s growth and expansion in Rhode Island. The state would use its “moral obligation” authority to guarantee debt service payments to the bondholders or lenders. JOBS DEVELOPMENT ACT (Corporate Income Tax Reduction for Job Creation): Provides an incremental reduction in the corporate income tax rate (currently 9 percent) to companies that create new employment in Rhode Island over a three year period. The reduction equals:
- A quarter percentage point (0.25 percent) for every 10 new jobs created, for those companies having a baseline employment below 100; or
- A quarter percentage point (0.25 percent) for every 50 new jobs created, for those companies having a baseline employment above 100.
The corporate income tax may be reduced to as low as 3 percent. The rate reduction is permanent as long as the company maintains the same level of employment that it had at the end of the third year following the company’s self-selected base period. New employees must be paid at least 250 percent of the state minimum wage (current state minimum wage is $7.40/ hour.). This benefit is subject to a finding of revenue neutrality and vote of the RIEDC Board. NATURAL DISASTER REBUILDING: Manufacturers who have lost 60 percent or more of their facilities due to a natural disaster, resulting in the inability of active employees to continue production, may qualify for corporate income tax rate reductions under the Jobs Development Act for jobs retained or added. Damaged businesses may also qualify for a sales tax exemption on reconstruction materials that are not reimbursed by insurance. HIRING OF UNEMPLOYED OR LOW-INCOME RESIDENTS: A tax credit of 40 percent of a newly-hired employee’s first year wages (up to a maximum of $2,400) is allowed for individuals or businesses that employ and retain RI residents who were previously unemployed or receiving public assistance. Cannot be taken against the taxpayers personal income tax. The business must seek certification of the employee’s unemployment status from the Department of Labor and Training within 30 days of hire. Each eligible employee must:
- have been a Rhode Island resident for at least 52 consecutive weeks prior to the date of hire; and
- previously unemployed for at least 26 consecutive calendar weeks immediately prior to the date of hire; and
- either: (1) received public assistance for at least one year preceding the date of hire or (2) have received unemployment benefits from RI or any other state at any time during the 52 weeks prior to the date of hire.
JOB TRAINING & EDUCATION
- The JOB TRAINING TAX CREDIT grants a credit against the corporate income tax (or the insurance premium tax in the case of insurance companies) equal to 50 percent of the actual training spending, whether for new or existing employees, by companies in accordance with an approved training plan. Plans must be filed with the Rhode Island Human Resources Investment Council for approval prior to the training. The credit allowed is capped at $5,000 for each employee in any three-year period.
- JOB TRAINING GRANTS: Rhode Island offers a unique Human Resources Investment Council training program for business and industry funded through a job development assessment of 0.15 percent on the firm’s taxable payroll to $18,200 per employee. This pool of money is available for industry to create customized training programs tailored specifically for a company and free from restrictions imposed by federally funded programs.
- ADULT EDUCATION TAX CREDIT (RIGL 44-46): Available for Rhode Island companies filed as a C-corporation, it allows for a tax credit of 50 percent of the direct costs for worksite and non-worksite based vocational training or basic education, up to a maximum of $300 per employee. The maximum overall credit is $5,000 per employer per calendar year. The employee must remain employed by the business for 13 consecutive weeks and a minimum of 455 hours of paid employment before the credit can be claimed. Credits cannot be carried forward.
- EMPLOYER’S APPRENTICESHIP TAX CREDIT: Employers of registered full-time apprentices in the metal and plastic industries are eligible for an annual corporate tax credit of 50 percent of the actual wages paid to the qualifying apprentice, or $4,800, whichever is less. The number of apprenticeships for which tax credit is allowed must exceed the average number of apprenticeships begun during the five preceding income years. Eligible trades: machinist, toolmaker, model-maker, gage maker, pattern-maker, plastic process technician, tool & machine setter, die-sinker, mold-maker, tool & die maker, machine tool repair.
- EDUCATIONAL ASSISTANCE & DEVELOPMENT CREDIT: Under RIGL 44-42, a contribution to a Rhode Island institution of higher education is allowed a tax credit of 8 percent for the amount above $10,000. The contribution, which can include qualified tangible personal property, must be for the establishment or maintenance of a faculty chair, department, work fellowship or program of scientific research or education. The credit is applied against the Corporate Income tax, the Bank Excise tax or the Insurance Companies tax. Unused credits may be carried forward up to five years.
ENTERPRISE ZONE BUSINESS TAX CREDIT: Firms that locate in a state designated enterprise zone and increase employment at registered enterprise zone locations by at least 5 percent annually may be eligible for a state business tax credit equal to 75 percent of the total wages paid to employees living in an enterprise zone or 50 percent of wages paid to workers not living in an enterprise zone. The maximum credit is $5,000 per resident new hire and $2,500 per non-enterprise zone new hire. All new hires must be RI residents and the jobs must be classified as full-time. Earned but unused enterprise zone credits may be carried forward for up to three years. FOREIGN TRADE ZONE 105: A specially designated area in or adjacent to a U.S. Customs Port of Entry, but which considered to be outside the Customs territory of the United States. FTZ # 105, originally designated in 1984 and expanded in 1997, consists of three different geographic locations in the state of Rhode Island:
- 32 acres at the Port of Providence, a 185-acre commercial and industrial inter-modal facility owned and operated by Waterson Terminal Services, LLC;
- A 43-acre area at the Airport Business Park adjacent to T.F. Green Airport in Warwick, Rhode Island and;
- The Quonset Business Park, an 880-acre area within the EDC’s premier 3000-acre Quonset Business Park in North Kingstown, RI. Its strategic location, situated between New York and Boston and at the entrance of Narragansett Bay, provides one of the best deep-water ocean ports on the East Coast. Major cargo arriving at the port includes automobiles, quarried stone, seafood products and general cargo. The Port offers three major piers with over 6,800 lineal feet of deep water dockage.
HISTORIC PRESERVATION INVESTMENT TAX CREDIT: Buildings that are listed on the National Register of Historic Places or which are located within a National Register Historic District (and contribute to the district’s significance, or if it is part of a local historic district) are eligible. The credit equals 30 percent of the cost of approved rehabilitation work. Exterior and interior rehab qualifies as long as the work meets the Secretary of the Interior’s Standards for Rehabilitating Historic Properties. Eligible projects include work on the roof, exterior walls, windows, foundations, structure, heating, plumbing, electrical system and interior improvements that are capitalized to the building. In order to qualify, the project must cost at least half the value of the building (50 percent of adjusted basis). The entire credit may be claimed when the project is completed. The state tax credits may be combined with federal tax credits for historic preservation and affordable housing. Unused portions of the credit may be taken over a 10-year period. Also, the owner does not have to use the credit him/herself, but instead can sell the credit to another individual or to a corporation. Non-profit owners can qualify for the credit and assign or sell it to a tax-paying partner or investor. INDUSTRIAL REVENUE BONDS may be used to finance qualified commercial and industrial projects. The bonds offer a competitive interest rate and state sales tax exemption on building materials, which may be significant for projects involving new construction. Financing is available through the Rhode Island Industrial Facilities Corporation and covers the entire project cost. The project and the credit of the user provide the security for the bonds, which may be issued on the financial strength of the user when the user is appropriately rated. The bonds may also be issued with an enhancement letter of credit from a financial institution. TAX-EXEMPT “SMALL ISSUE BONDS”: interest on certain bonds with face amounts of less than $10 million is excluded from income if at least 95 percent of the bonds proceeds is used to finance manufacturing facilities. Industrial revenue bonds are tax-exempt obligations of the issuer, the interest on which is exempt from federal and state income tax. The interest rate on such obligations is normally below that available for conventional mortgages. SMALL BUSINESS INCENTIVES
- THE SMALL BUSINESS LOAN FUND (SBLF) provides partial funding for expansion projects that will benefit Rhode Island’s economy by encouraging business development. The program makes loans available with attractive terms for nonspeculative ventures involving the following types of capital investment: acquiring land; purchasing machinery or equipment; constructing new buildings and facilities; providing working capital.
- SMALL BUSINESS CAPITAL INVESTMENT TAX INCENTIVES: Small business entities or venture capital partnerships that are certified by the Rhode Island Economic Development Corporation may be eligible for two types of special incentives:
o Deductions or Modifications: The deduction or modification is equal to the taxpayer’s qualifying investment in a certified venture capital partnership or equal to the entrepreneur’s investment in a qualifying business entity. Restrictions prohibit the deduction of modification from reducing the business corporation tax, public service corporation tax or bank excise tax to less than the minimum tax. This tax credit cannot be taken against a taxpayers personal income tax. The amount of unused deductions or modifications may not be carried over to following years.
o Capital Gains Exclusion: The calculation of the business corporation tax, public service corporation tax, or bank excise tax may exclude long term capital gains from sale or exchange of an interest in a qualifying business entity or certified venture capital partnership if: (1) it is recognized by a partner in a certified venture capital partnership from the sale or exchange of an interest in the partnership, or (2) it is a partner’s distributive share (from a certified venture capital partnership) of a long term capital gain recognized by the partnership from the sale or exchange of an interest in a qualifying business entity; or (3) it is recognized by an entrepreneur from the sale or exchange of an interest in a qualifying business entity. Taxpayers must provide proof of the date and amount of the investment in the qualifying business entity or certified venture capital partnership.
- DISABLED ACCESS CREDIT FOR SMALL BUSINESS: A tax credit of up to $1,000 is available to small businesses— one that, for the preceding year, had 30 or fewer full-time employees, or $1 million or less in gross receipts—that incur expenses in complying with federal or state laws protecting the rights of persons with disabilities. The credit is equal to 10 percent of the total amount expended up for removing architectural, communication, physical or transportation barriers; providing qualified interpreters or other effective methods of delivering aurally delivered materials to persons with hearing impairments; providing readers, tapes, or other effective means of making visually delivered materials available to persons with visual impairments; providing job coaches or other effective means of supporting workers with sever impairments in competitive employment; providing specialized transportation services to employees or customers with mobility impairments; buying or modifying equipment for persons with disabilities; and providing similar services, modifications, material or equipment for persons with disabilities.
CHILD & ADULT DAYCARE TAX CREDIT: A Rhode Island taxpayer that purchases or provides for adult or child day care services for adult family members or dependent children of the taxpayer’s employees or to employees of its commercial tenants is allowed a tax credit in the amount of:
- 25 percent of the total amount expended during the taxable year for services purchased and 25 percent of the total amount expended during the taxable year for the establishment and/or operation of a day care facility by the taxpayer alone or in conjunction with others. Credits may not exceed the Rhode Island tax liability.
- 30 percent of the total amount foregone in rent/lease payments related to the dedication of rental/lease space to day care services. The amount forgone shall be the difference between fair market rental and actual rental. The maximum credit allowed is $30,000 and unused credit may be carried forward five years.
- Credits for child daycare require confirmation that the facility agrees to accept children for whom the services are paid by Rhode Department of Human Services.
MOTION PICTURE PRODUCTION TAX CREDIT: A transferable 25 percent tax credit against the corporate or personal income tax for all certified costs (including salaries) associated with Rhode Island primary locations of feature-length film, video, video games, television series or commercial. There are no caps on the amount of certified costs that are eligible for the credit. A “primary location” means the locations within which at least 51 percent of the motion picture principal photography days are filmed. Unused credits can be carried forward for up to three years. Must have a minimum budget of $300,000. INNOVATION TAX CREDIT: Encourages investment in high-growth, high-wage innovation industries. Investors can receive up to a 50 percent credit with a maximum tax credit of $100,000. To be eligible, a company must produce traded goods or services, have annual gross revenues of less than $1 million in the prior two calendar years and be categorized as one of the following innovation industries: Biotechnology and Life Sciences; Communication and IT; Financial Services; Marine and Defense Manufacturing; Professional, Technical and Educational Services; Industrial and Consumer Product Manufacturing and Design. The credit may be carried forward for a period not to exceed three years. Companies must apply for the credit prior to making an investment. Once an application is approved, the company has up to 12 months to make the investment and provide proof of investment back to the EDC board of directors. Upon completion of this process, EDC will certify the investor’s eligibility for the credit with the Rhode Island Division of Taxation. RESEARCH & DEVELOPMENT
- A 22.5 percent RESEARCH & DEVELOPMENT TAX CREDIT is allowed for increases in qualified research expenses—the highest rate in America. If the increase above base period expenditures exceeds $111,111, the credit equals 16.9 percent of the excess. The credit is available against a corporations business tax. Unused credit may be carried forward for up to seven years. A taxpayer is allowed 10 percent tax credit for expenditures paid or incurred during the taxable year for the construction, reconstruction, erection or acquisition of any property that is used or to be used for the purpose of R&D in the experimental or laboratory sense. The property must be depreciable and have a useful life of three years or more.
- R&D PROPERTY CREDIT: A taxpayer is allowed a 10 percent tax credit for expenditures paid or incurred for the construction, reconstruction or acquisition of any property which is principally used or to be used for R&D in the experimental or laboratory sense. Leased property is not eligible. The property must be depreciable and have a useful life of three years or more. This credit is available Rhode Island companies filed as a C-corporation. Unused credit may be carried forward for up to seven years.
- ELECTIVE DEDUCTION FOR R&D FACILITIES: In lieu of depreciation or the investment tax credit, a taxpayer is allowed a one year write-off for expenditures paid or incurred during the taxable year for the construction, reconstruction or acquisition of all qualifying depreciable tangible property, including buildings, which is used or to be used for the purpose of R&D in the experimental or laboratory sense. The deduction is allowed under the corporate income tax.
- R&D SALES TAX EXEMPTIONS: Sales or use of scientific equipment, computers, software and related items to a qualifying firm to be used predominantly for R&D purposes are exempt from Rhode Island Sales and Use Tax.
- MANUFACTURING INVESTMENT TAX CREDIT: A manufacturer is allowed a 4 percent tax credit against the Rhode Island corporate income tax on buildings and structural components, as well as machinery and equipment, which are owned or leased and are principally used in the production process (including storage). Property principally used for administration and distribution purposes is not eligible. The investment tax credit may not reduce the taxpayer’s liability below the minimum business tax. Unused credits may be carried forward for up to seven years.
- HIGH PERFORMANCE MANUFACTURING INVESTMENT TAX CREDIT: High-performance manufacturers are allowed a 10 percent investment tax credit against their corporate tax on the cost or qualified lease amounts for tangible personal property or other tangible property, as well as buildings and structural components owned, leased to own, or leased for at least 20 years. Under current law, credits are transferable between related entities. Unused credits may be carried forward up to 15 years for biotechnology firms and up to seven years for other types of manufacturers. The firm must be in SIC codes 28, 30, 34 to 36, or SIC 38, and the employer’s median annual wage paid to its full-time equivalent employees must be greater than the average annual wage paid by all RI employers in the same two-digit SIC. In addition, the company must meet at least one (1) of the following three criteria:
o The employer’s median annual wage paid to its full-time equivalent employees is greater than or equal to 125 percent of the average annual wage paid by all employers in the state, or
o The average annual wage paid to the employer’s full-time equivalent employees classified as production workers (defined by the Department of Labor and Training) is greater than the average annual wage paid to all production workers in the state in the same two-digit SIC Code; or
o The firm invests at least 2 percent of total payroll costs in worker training or retraining.
- BUSINESS INCOME APPORTIONMENT FOR MANUFACTURERS: Affiliated multi-state corporations may file single, separate state corporate tax returns or file a consolidated return. In either case, the corporate net income/net worth is subject to RI apportionment using the average of a three-factor formula (property, receipts, and payroll). For tax years beginning on or after January 1, 2005, the alternate apportionment formula allows for a 25 percent property factor, a 25 percent payroll factor and a 50 percent receipts factor.
- APPORTIONMENT EXCLUSION FOR MEDICAL & PHARMACEUTICAL MANUFACTURERS: A Rhode Island manufacturer of Medical Instruments, Supplies or Pharmaceuticals whose facility is registered and certified by the U.S. Food & Drug Administration may modify the RI business income apportionment formula for the current tax year.
o The property value portion in the numerator may be reduced by the increase in book value of tangible personal property in Rhode Island in the current taxable year over the previous year.
o The wage value portion in the numerator may be reduced by the increase in total qualified payroll in Rhode Island in the current taxable year over the previous year.
- ACCELERATED AMORTIZATION FOR DEFENSE INDUSTRY MANUFACTURERS: Qualified corporations which have annually produced goods worth at least $10,000,000 at facilities located in RI, over a period of five consecutive years, may accelerate the amortization of depreciation of their depreciable assets over a five year period if an average of at least 80 percent of that production has been for sale to a branch of the U.S. Armed Services. The company must anticipate the need to reduce its reliance on such sales in order to qualify.
INVESTMENT TAX CREDIT: NON-MANUFACTURING FIRMS: Firms in certain non-manufacturing industries are also able to take the 10 percent investment tax credit on owned or leased tangible personal property and other tangible property placed in service on or after January 1, 1998. The credit is not allowed on buildings, structural components, motor vehicles and furniture for non-manufacturing firms. The investment tax credit may not reduce the taxpayer’s liability below 50 percent of the taxpayer’s total tax liability before credits for that year. Unused credits may be carried forward up to seven years. RENEWABLE ENERGY FUND: Provides grants, loans and other financing for renewable energy projects that produce electricity in a cleaner, more sustainable manner and stimulate job growth in Rhode Island’s economy. The REF provides incentives for the following activities:
- Business, commercial and institutional projects;
- Affordable housing developments;
- Municipal renewable energy projects;
- Technical and feasibility studies.
The JOB TAX CREDIT is a statutory incentive offered to companies, both existing and new, that create new jobs in South Carolina. The credit is available to companies that establish or expand manufacturing, distribution, processing, warehousing, research and development, corporate office, tourism and technology intensive facilities. Agribusiness operations are eligible effective January 1, 2011. In certain limited instances, service and retail facilities may also be eligible. The company must create a monthly average of 10 net new full-time jobs at the facility in a single taxable year. If a company has fewer than 99 employees worldwide, it may be eligible for a job tax credit if it creates a monthly average of two or more net new full-time jobs in a single taxable year. In most instances, companies can expect to receive from $1,500 to $8,000 per job depending on the development tier of the county. Credits can be used to offset up to 50 percent of South Carolina income tax in a single year, and unused credits may be carried forward for 15 years. SINGLE FACTOR SALES APPORTIONMENT: Companies whose primary business in the state is manufacturing, distribution, or selling or dealing in tangible personal property will apportion its income by multiplying the net income remaining after allocation by a fraction consisting of a company’s sales made in South Carolina divided by its total number of sales. This new formula eliminates property and payroll from the equation and is advantageous for a company whose majority of sales occurs outside South Carolina. The new method is being phased in over a five-year period with a 20 percent reduction each year of income attributable to South Carolina which began in 2007. In 2011, the new formula will be fully applicable. SALES TAX EXEMPTION: South Carolina offers a number of sales tax exemptions for manufacturers including manufacturing production machinery and applicable repair parts; manufacturing materials that become an integral part of the finished product; industrial electricity and other fuels used in manufacturing tangible personal property; research and development equipment; manufacturers’ air, water and noise pollution control equipment; material handling equipment for manufacturing or distribution projects investing $35 million or more; packaging materials; long distance telecommunication services, including 800 services; and parts and supplies used to repair or condition aircraft owned or leased by the federal government or commercial air carriers. An exemption for construction materials used in manufacturing or distribution facilities, investing at least $100 million over 18 months, was fully implemented July 1, 2011. PRE-JOB TRAINING PROGRAM: The readysc™ program, offered through the S.C. Technical College System, provides pre-job training at little or no cost for eligible new or expanding companies with curricula tailored to meet a company’s workforce requirements. The comprehensive program includes recruiting, screening, testing, developing customized instruction material along with coordinating and upfitting training space. JOB DEVELOPMENT CREDIT (JDC): A discretionary, performance-based incentive that rebates a portion of new employees’ withholding taxes that can be used to address the specific needs of individual companies. A company must meet certain business requirements and the amount a company receives depends on the company’s pay structure and location. ECONOMIC DEVELOPMENT SET-ASIDE PROGRAM: Assists companies in locating or expanding in South Carolina through road or site improvements and other costs related to business location or expansion. Overseen by the Coordinating Council for Economic Development, it is the Council’s primary business development tool for assisting local governments with road, water/sewer infrastructure or site improvements related to business location or expansion. ENTERPRISE ZONE RETRAINING PROGRAM: Helps existing industries maintain their competitive edge and retain their existing workforce by allowing them to claim a Retraining Credit for existing production employees. If approved, companies can reimburse themselves up to 50 percent of approved training costs for eligible production workers (not to exceed $500 per person per year). RURAL INFRASTRUCTUR FUND (RIF): Assists qualified counties in the state’s rural areas by providing financial assistance for infrastructure and other activities that enhance economic growth and development. It can be used for job creation and/or product development. Qualified counties are designated as “Tier III” or “Tier IV” by the Department of Revenue and have received approval for an economic development strategic plan by the Coordinating Council for Economic Development. PORT VOLUME INCREASE CREDIT: A possible credit against income taxes or withholding taxes to entities that use state port facilities and increase base port cargo volume by 5 percent over base-year totals. To qualify, a company must have 75 net tons of non-containerized cargo or 10 loaded TEUs transported through a SC port for their base year. The total amount of tax credits allowed to all qualifying companies is limited to $8 million per calendar year. TOURISM INFRASTRUCTURE DEVELOPMENT GRANT: Supports new or expanding tourism or recreation facilities or designated development areas primarily through infrastructure projects. This program is generated from a share of the state admissions tax on qualified tourism and recreation establishments and is overseen by the Coordinating Council for Economic Development. The COORDINATING COUNCIL FOR ECONOMIC DEVELOPMENT was established by the General Assembly in response to a general need for improved coordination of economic development efforts by those state agencies involved in the recruitment of new business and the expansion of current enterprises throughout the state. ECONOMIC IMPACT ZONE INVESTMENT CREDIT: Allows manufacturers locating in Economic Impact Zone (EIZ) counties a one-time credit against a company’s corporate income tax of up to 5 percent of a company’s investment in new production equipment. The actual value of the credit depends on the applicable recovery period for property under the Internal Revenue Code. CORPORATE HEADQUARTERS CREDIT: Provides a 20 percent credit based on the cost of the actual portion of the facility dedicated to the headquarters operation or direct lease costs for the first five years of operation. The credit can be applied against either corporate income tax or the license fee. These credits are not limited in their ability to eliminate corporate income taxes and can potentially eliminate corporate income taxes for as long as 10 years from the year earned. Eligibility is determined by meeting a number of specific criteria. RESEARCH & DEVELOPMENT TAX CREDIT: A credit equal to 5 percent of the taxpayer’s qualified research expenses in the state. The credit taken in any one taxable year may not exceed 50 percent of the company’s remaining tax liability after all other credits have been applied. Any unused portion of the credit can be carried forward for 10 years from the date of the qualified expenditure.
The ETHANOL INCENTIVE BILL (SB196) passed during the 2011 legislative session. Through a partnership with the ethanol industry, this legislation repurposes funding to secure additional capital for the Revolving Economic Development Initiative (REDI) Fund. The REDI Fund is one of South Dakota’s primary economic development financing tools. In addition, through an incentive program created by SB196, $3.5 million in funding will be provided to encourage additional ethanol consumption and blender pump installation. AGRICULTURAL PROCESSING AND EXPORT (APEX): A loan program designed to assist companies in communities with a population of 25,000 or less, which add value to raw agricultural products through processing, or export a minimum of 75 percent of its product to entities outside the State of South Dakota or replace an import. It is open to for-profit businesses and local economic development corporations. This program may provide up to 75 percent of the total project cost and requires the applicant to secure the other funds before applying for the APEX loan, including a 10 percent minimum equity contribution. The maximum loan amount available from the APEX program is up to $250,000. Eligible project costs include the purchase of land and the associated site improvements, the purchase and installation of machinery and equipment, the construction, acquisition or renovation of a building, and fees, services and other costs associated with construction. In 2011, the legislature reduced the interest rate on the APEX loan program to 3 percent. MICROLOAN SD: A partnership with the South Dakota Development Corporation, and Governor’s Office of Economic Development (GOED). These loans are made available to small businesses within the borders of South Dakota and South Dakota residents, including main street and retail operations, for working capital, equipment, real estate or other fixed asset project costs. MICROLOAN EXPRESS PROGRAM: Introduced by the GOED to streamline the MicroLOAN application and approval process. It offers access to working capital for small enterprises and may be used for fixed assets. The MicroLOAN Express operates in the same fashion as the MicroLOAN, with the following exceptions:
- If an applicant qualifies under the policies and procedures of the MicroLOAN and they receive bank or credit union approval, approval under the MicroLOAN Express will be automatic as long as the MicroLOAN Express portion is in a pro-rata first collateral position with the bank or credit union.
- The bank or credit union must file all of the documents it requires of the applicant, as well as all internal documents relating to the loan with the Governor’s Office of Economic Development in order to receive the paperwork relating to the MicroLOAN Express loan.
REVOLVING ECONOMIC DEVELOPMENT & INITIATIVE (REDI) FUND: Provides permanent financing for land, building, machinery and equipment and associated installation costs. Designed to help promote job growth in South Dakota, this low-interest loan fund is available to start-up firms, businesses that are expanding or relocating and local economic development corporations. The REDI Fund provides up to 45 percent of a project’s total cost. Companies should secure interim (construction) financing, matching funds for permanent financing and be able to provide a 10 percent minimum equity contribution before applying to the Board of Economic Development for a REDI Fund loan. It offers fixed rate interest which is currently 2 percent. Loans may be amortized up to 20 years on land and buildings and up to 10 years on equipment, with a balloon payment due after five years. SMALL BUSINESS ADMINISTRATION (SBA) 504: Offers subordinated, long-term fixed rate financing (10-20 years) at reasonable rates (near long-term U.S. Treasury bond rates) to healthy and expanding small businesses. The 504 Program is available for fixed asset purchases only: land, building, and equipment with a useful life of 10 years or more. Working capital, inventory, and venture capital are NOT eligible. SBA 504 financing is “permanent” take-out mortgage financing. Interim or construction financing must be utilized to complete the project. The net worth of an eligible business may not exceed 8.0 million. Its net profit after taxes must not have exceeded an average of $3.0 million during the previous two years. Should a company fail to meet these standards, the company will still be considered a small business if it meets size requirements, based on the number of employees, which vary among the different industries depending on NAICS codes. BOND FINANCING: Provides small businesses with access to the public bond market. VALUE-ADDED AG SUBFUND: In 1999, a $3 million fund was created specifically to assist in funding feasibility and marketing studies for prospective value-added ag business. This Subfund of the REDI Fund is just one step toward improving value-added ag in South Dakota. The goal is threefold:
- To find niche markets that will add value to South Dakota ag commodities
- To help fund marketing and feasibility studies
- To help assemble the right people, capital and labor to ensure a successful project.
Any for-profit business, nonprofit cooperative or group that forms an eligible legal entity may apply for a loan from the subfund. Loans cannot exceed more than 45 percent of the total eligible project costs for marketing or feasibility study expenses. Applicant must provide equity contribution of at least 10 percent of the total project cost for marketing and/or feasibility study expenses. Applications can be submitted at any time. The staff of the GOED will screen all applications for completeness and eligibility requirements within 30 days of receiving it. Loan proceeds may be used for salaries, consultant contracts, supplies and necessary services for feasibility or marketing studies. The maturity of a VASF loan may not be more than five years with regular payments amortized over not more than 20 years. WORKFORCE DEVELOPMENT TRAINING: Provides matching grants to assist companies with up to 50 percent of eligible training expenses. COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG): Provides matching grants to local governments, municipalities and counties. The program allows the state to fund a variety of different projects in small cities and rural areas. All projects must meet one of HUD’s national objectives, with the primary objective to benefit people of low-moderate income (LMI). SOUTH DAKOTA WORKS: Business/commercial loans for businesses needing working capital. The term is one to five years and the loan amount is up to $1 million with a minimum amount of $20,000. Eligible borrowers include businesses seeking new financing and certified development financial institutions that meet US Treasury guideline and only have one WORKS loan program at a time for a company. Funds can be used for business purposes such as startup costs, working capital, payroll, inventory needs and new construction loans.
TENNESSEE – updated for 2014
For a list of state economic development agencies, click this link.
State Industrial Access Program: Funds the construction of roadways to support industrial areas based on project type, economic benefit, physical constraints and available funding. Tennessee Valley Authority: The Tennessee Valley Authority offers a number of incentives and services, including:
- TVA Valley Investment Initiative: electricity bill credits to qualified power customers who make significant commitments to invest in the Tennessee Valley.
- TVA Economic Development Loan Funds: loans with below-market interest rates to financially sound companies which are relocating or expanding their operations in the Tennessee Valley.
- TVA Special Opportunities Counties Fund: a revolving loan fund which can be de ployed in the Valley’s most economically distressed counties for buildings, equipment, real estate, industrial parks and building development.
Local Incentives: Negotiated by local communities at their discretion and on a case-by-case basis. Examples include:
- Payment in Lieu of Taxes (PILOT) Program: Industrial Development Boards (IDBs) can provide reduced or fully abated taxes for real and/or personal property.
- Tax Increment Financing (TIF): Communities can establish TIFs, which provide non-recourse loans to a developer that is secured by incremental local tax revenues.
- Grants: Communities can provide companies with grants for various expenditures; these grants are most often awarded as matching funds for state FastTrack Infrastructure and Training grants.
- Land: Communities can provide companies with free or below market-rate land, which is often located in a community’s industrial or technology park.
FINANCING FastTrack Economic Development Fund: Grant covering relocation expenses, temporary office space, capital improvements, retrofitting and other expenditures not covered by infrastructure or job training grants. It is only used in exceptional cases where a company’s impact on a given community is significant. FastTrack Infrastructure Program: Infrastructure grants for rail, roadway, port, airport, water, sewer, gas, telecommunication or other site improvements. Grantees are local communities only; must be for public infrastructure improvements benefiting a specific company generating new jobs and investment; requires local matching funds. TAX INCENTIVES Job Tax Credit: Credit of $4,500 per job to offset up to 50% of franchise and excise (F&E) taxes in any given year with a carry forward for up to 15 years. Eligible businesses must create at least 25 new jobs within a 36 month period and invest at least $500,000 in a qualified business enterprise. Enhanced Job Tax Credit: Allows an additional annual credit for locations/expansions in designated Tier 2 and Tier 3 Enhancement Counties. Enhanced JTC can offset up to 100% of F&E liability for either a three or five year period as determined by the Tier. Eligible companies must create at least 25 new jobs within a 36 month period and invest at least $500,000 in a qualified business enterprise.
- Tier 2: $4,500 job tax credit plus additional three years annual credit at $4,500 per year with no carry
- Tier 3: $4,500 job tax credit plus additional five years annual credit at $4,500 per year with no carry forward.
Super Job Tax Credit: Credit of $5,000 per new job to offset up to 100% of F&E tax liability for a period of three to 20 years, depending on investment amount; no carry forward.
- A business must invest $100 million or more and create a minimum of 100 new jobs paying at least 100% of TN’s average occupational wage; OR
- Establish or expand a headquarters location, invest at least $10 million and create 100 new HQ jobs paying at least 150% of TN’s average occupational wage.
Industrial Machinery Tax Credit: Credit of 1% to 10% for the purchase, third-party installation and repair of qualified industrial machinery.
- Manufacturing: includes purchases for machinery; apparatus and equipment with parts; appurtenances and accessories; repair parts and labor; computer; network; software or peripheral computer devices.
- Warehousing and distribution: includes material handling equipment and racking systems with a minimum $10M capital investment within 36 months; computer; network; software or peripheral computer devices.
- Headquarters, data centers, call centers: includes computer; network; software or peripheral computer devices.
Manufacturing Sales and Use Tax Exemptions: State sales tax exemption for industrial machinery and reduced state sales tax rate for utilities at qualified manufacturing facilities. Exemptions include industrial machinery, repair parts, industrial supplies, water, gas, electricity and various energy sources used in the manufacturing process. Reductions include: 0-1.5% tax on water depending on use and 0-1.5% on gas, electricity and various energy sources depending on use. Headquarters Sales and Use Tax Exemptions: Reduced state sales tax rate for qualified personal property purchased for a qualified headquarters facility. Investment period begins one year prior to construction/expansion and ends one year after construction/expansion has concluded, but can be extended to six years with permission from the state. HQs receive a non-expiring sales tax credit for 6.5% for qualified personal property directly related to job creation. Warehouse/Distribution Sales and Use Tax Exemptions: State sales tax exemption for certain equipment purchased for a qualified warehouse or distribution center. Investment of $10 million or more, including the purchase of new equipment, made during a three year period. Exemptions include equipment purchased for use in the storage, handling or movement of personal property. Call Center Sales and Use Tax Exemptions: Tax exemption on any sales of interstate telecommunication and international telecommunication services to a business for use in the operation of one or more qualified call centers. Must have at least 250 jobs engaged primarily in call center activities. Data Centers Sales and Use Tax Exemptions: State sales tax exemption for certain hardware and software purchased for a qualified data center. Minimum capital investment of $250 million and 25 new jobs paying at least 150% of the state’s average occupational wage; investment must be made during a three year period, but can be extended to five years for investments under $1 billion or seven years for investments exceeding $1 billion with the state’s permission. Exemptions include computers, computer systems, and computer software used in qualified data centers. Reduction includes a 1.5% tax rate on electricity. WORKFORCE DEVELOPMENT FastTrack Training Program: Grant assisting companies with training expenses and the development of customized training plans. Funding levels are based on the number of new jobs created, the amount of capital invested, wages and types of skills/knowledge needed. Applicant Recruitment and Screening: Free assistance with the recruitment and screening of job applicants based on a company’s specific job requirements. There are more than 70,000 potential employees in the statewide database.
TEXAS – updated for 2014
For a list of state economic development agencies, click this link.
FINANCING Texas Enterprise Fund: The largest “deal-closing” fund of its kind in the nation. The fund is a cash grant used as a financial incentive tool for projects that offer significant projected job creation and capital investment and where a single Texas site is competing with another viable out-of-state option. Projects that are considered for TEF support must demonstrate a project’s worthiness maximize the benefit to the state and realize a significant rate of return of the public dollars being used for economic development in Texas. Capital investment; job creation; wages generated; applicant’s financial strength; applicant’s business history; analysis of the relevant business sector; and federal and local government and private sector financial support of a project are all significant factors in approving the use of TEF. Texas Emerging Technology Fund: The $200 million Texas Emerging Technology Fund (TETF) is designed to help Texas create jobs and grow the economy over the long-term by expediting the development and commercialization of new technologies and attracting and creating jobs in technology fields that form the backbone of our economy. The program works through partnerships between the state, higher education institutions, and the private industry to focus greater attention on the research, development, and commercialization of emerging technology. TETF is dedicated to three areas:
- Regional Centers of Innovation and Commercialization. These centers are concentrated with applied research and development activities, are incubators (including specialized workforce training) for startup firms, and encourage expansion of existing companies resulting from commercializing their developments.
- Matching grant funds. Applied technology research and development projects that accelerate commercialization into production and have a demonstrated ability to receive or have received federal grants or non-state grants may apply for matching dollars from the Emerging Technology Fund. Grants such as Small Business Innovation Research grants, Small Business Technology Transfer grants, etc.
- Attracting research talent. The state will help Texas public universities attract highly renowned research teams from universities and institutions in other states.
Skills Development Fund: An innovative program created to assist Texas public community and technical colleges finance customized job training for their local businesses. Grants are provided to help companies and labor unions form partnerships with local community colleges and technical schools to provide custom job training. Average training costs is $1,400 per trainee; grants for a single business may be limited to $500,000. Self-Sufficiency Fund: A job-training program that is specifically designed for individuals that receive Temporary Assistance for Needy Families (TANF). The program links the business community with local educational institutions and is administered by the Texas Workforce Commission. The goal of the Fund is to assist TANF recipients become independent of government financial assistance. The Fund makes grants available to eligible public colleges or to eligible private, nonprofit organizations to provide customized job training and training support services for specific employers. Texas Capital Fund Real Estate Development Program: Designed to provide financial resources to rural communities. Funds must be used for real estate development (acquisitions, construction and/or rehabilitation) to assist a business, which commits to create and/or retain permanent jobs, primarily for low- and moderate-income persons. This program encourages business development and expansions located in rural communities. The minimum award is $50,000 and the maximum is $750,000. Texas Industry Development Revolving Loan Program: Provides capital to Texas communities at favorable market rates. The program supports eligible tax exempt public purpose projects that stimulate economic development within the community. TID loans can be used for a variety of purposes, including the purchase of land, buildings, construction, machinery and equipment. Industrial Revenue Bonds: Tax-Exempt Industrial Revenue Bonds are designed to provide tax-exempt financing to finance land and depreciable property for eligible industrial or manufacturing projects. The maximum bond amount is $20 million. Texas Product/Business Funds: Provides financing to existing technology-focused companies that create products or do business within the state. Financing is done in the form of direct asset-based loans with a competitive variable interest rate tied to LIBOR. Loans can be amortized up to the life of the asset. Texas companies or out-of-state/international companies doing business in the state are eligible to apply. Funding preferences will be given to emerging technologies including semiconductors, nanotechnology, biotechnology and biomedicine, renewable energy, agriculture and aerospace. Moving Image Industry Incentive Program: Provides grants to promote industry growth in Texas and can be made to applicant production companies. For film and television projects, the incentive is available in the form of a cash production grant equal to between 5 and 29.25% of qualified in-state spending. Commercial and video game projects are eligible for 5% of eligible spending in the form of a cash production grant. TAX INCENTIVES State Sales & Use Tax Exemptions: Leased or purchased machinery, equipment, replacement parts and accessories that have a useful life of more than six months, and that are used or consumed in the manufacturing, processing, fabricating or repairing of tangible personal property for ultimate sale, are exempt from state and local sales and use tax.
- Texas companies are exempt from paying state sales and use tax on electricity and natural gas used in manufacturing, processing or fabricating tangible personal property if at least 50% of the electricity or natural gas consumed by the business directly causes a physical change to a product.
- Texas provides 100% exemption on sales tax for computers, equipment, cooling systems, power infrastructure, electricity and fuel for Data Centers meeting the minimum thresholds of $200 million in capital investment, 20 new jobs, and an average salary at least 120% of the county average salary.
Texas Enterprise Zone Program: An economic development tool for local communities to partner with the State of Texas to promote job creation and significant private investment that will assist economically distressed areas of the state. Approved projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The refund can be an amount ranging from a minimum of $2,500 per job to a maximum of $7,500 depending on the size of the capital investment and the number of jobs created/retained. Texas Research & Development Tax Credit: In 2013, the 83th Texas Legislature enacted House Bill 800 creating a Research & Development tax credit effective Jan. 1, 2014. Providing companies a choice between a franchise tax credit and a sales tax exemption for materials, software, and equipment used for R&D purposes. Tax Code Chapter 171, subchapter M effectively establishes the qualifications, definitions and eligibility criteria for the credit. Property Tax Value Limitation: Encourages large-scale manufacturing, research and development, renewable energy, nuclear and integrated gasification combined cycle electric generation facilities capital investment projects in the State of Texas. It requires companies to invest a specified amount of money to qualify for a tax credit and an eight year limitation on the appraised value of a property for the maintenance and operations portion of the school district property tax. The local school district must elect to participate in order for the company to recognize this benefit. Renewable Energy Incentives: Tax Code Section 171.056 extends a franchise tax exemption to manufacturers, sellers, or installers of wind or solar energy devices. The state also permits a corporate deduction from the state’s franchise tax for renewable energy sources. Business owners may deduct the cost of the system from the company’s taxable capital or deduct 10% from the company’s income. Texas property tax code also permits a 100% exemption on the appraised value of solar, wind or biomass energy devices installed or constructed for the production and use of energy on-site. For more information visit www.TexasWideOpenForBusiness.com
ECONOMIC DEVELOPMENT TAX INCREMENT FINANCING (EDTIF): A post-performance refundable tax credit up to 30 percent of new state revenues (state corporate/partnership income, sales and withholding taxes) over the life of the project (up to 20 years). RENEWABLE ENERGY DEVELOPMENT INCENTIVE (REDI): A post-performance refundable tax credit for up to 100 percent of new state revenues (state corporate/partnership income, sales and withholding taxes) over the life of the project (up to 20 years) for renewable/alternative energy generation and related manufacturing. The PRIVATE ACTIVITY BOND is Utah’s tax-exempt bonding authority creating a lower cost, long-term source of capital. UTAH RECYCLING MARKET DEVELOPMENT ZONES: Businesses within a Recycling Zone can claim state income tax credits of 5 percent on the investment in eligible equipment for the handling and/or consumption of recycled materials. LIFE SCIENCE AND TECHNOLOGY TAX CREDITS: Investors in a Utah life science company are eligible for a non-refundable capital gains tax credit of 5 percent of a capital gain after holding the investment for at least two years. Investors are eligible for a non-refundable, post-performance tax credit of up to 35 percent of their investment, paid over three years. Life science and technology companies generating new state revenues are eligible for a post-performance refundable tax credit of up to the amount of new state revenues generated over three years. MOTION PICTURE INCENTIVE PROGRAM (MPIP): A post performance incentive of up to 25 percent of total dollars spent in the state in the form of a cash grant or refundable tax credit. RURAL FAST TRACK PROGRAM: A post-performance grant available to small companies in rural Utah. Requirements:
- Be located in a county with a population less than 30,000 and average household income less than $60,000
- Have been in business in the state for at least two years
- Have at least two employees
- Enter into an incentive agreement with GOED which specifies performance milestones
- Demonstrate how the business development project will promote business and economic development in a rural county
*Up to $50,000 for a qualifying business development project
- Create and retain for at least 12 months new high-paying jobs in a rural county
*$1,000 for each new job that pays over 110 percent of the county average wage *$1,250 for each new job that pays over 115 percent of the county average wage *$1,500 for each new job that pays over 125 percent of the county average wage
INDUSTRIAL ASSISTANCE FUND (IAF): A post-performance grant for the creation of high-paying jobs in the state. Eligible companies must create at least 50 new jobs, pay at least 125 percent of urban county average wage or 100 percent of rural county average wage, demonstrate company stability and profitability, secure commitment from local community to provide a local incentive, demonstrate competition with other locations and enter into an incentive agreement with GOED that specifies performance milestones. ENTERPRISE ZONES: Under the program, certain types of businesses locating to, or expanding in a designated zone may claim state income tax credits provided in the law. Any city or county in the state of Utah may be eligible for enterprise zone designation. Application for designation must be made by a city with 10,000 or less population located in a county with 50,000 or less population or an Indian Tribe for tribal lands.
The VERMONT EMPLOYMENT GROWTH INCENTIVE ((VEGI) program can provide a cash payment, based on new job and payroll creation, to companies that have been authorized to earn the incentive. The incentive amount is based on the economic and fiscal impact of qualifying new jobs and payroll and capital investments made by the applicant for a period of up to five years. The resulting net revenue impact is used to calculate a percentage, which is then applied against the qualifying new payroll of the net new qualifying jobs, the product of which is the incentive amount for that year. The VERMONT TRAINING PROGRAM (VTP) promotes expansion and encourages the creation and retention of jobs in Manufacturing, Information Technology, Healthcare, Telecommunication and Environmental Engineering by providing training funds for new and existing businesses thereby increasing the skills of the Vermont workforce, the wages and Vermonters’ standard of living. To be eligible, the company must guarantee that the training requested will supplement, rather than replace, the company’s ongoing, normal training efforts and agree to pay wages equal to at least twice minimum wage ($16.30) at completion of training, if no benefits are provided to the employee. TAX-EXEMPT REVENUE BONDS: Eligible to facilities deemed eligible by the IRS (primarily manufacturers) as 501(c)3 organizations. Bonds can be used for acquisition of land, buildings, and equipment or “exempt facilities” as defined in the federal tax code. VERMONT JOB START PROGRAM: Applicants must meet income eligibility criteria. Funds may be used to purchase real estate, equipment, inventory or for working capital. The DIRECT LOAN PROGRAM is eligible to manufacturing, processing, warehousing, research and development, travel and tourism, information technology, and others as defined in statute. Money can be used for the purchase of land, construction of buildings, purchase and installation of machinery and equipment. SMALL BUSINESS LOAN PROGRAM: Available to assist growing Vermont small businesses that are unable to access adequate sources of conventional financing. This program may make loans of up to $350,000 for fixed asset acquisition or for working capital purposes. As a general rule, a small business working capital loan may not exceed 50 percent of the project cost, and a fixed asset loan may not exceed 40 percent of project cost. However, in certain instances loans (not to exceed $50,000) may be made for up to 75 percent of the cost of a project. Borrowers are required to provide at least 10 percent of the project cost in the form of equity capital. Eligible applicants must be U.S. citizens or 51 percent-owned by U.S. citizens, and unable to access conventional credit; and must demonstrate potential to create/retain employment opportunities for Vermonters. VERMONT SBA 504 LOAN PROGRAM: The Vermont 504 Corporation, with SBA’s approval, makes SBA 504 loans to eligible and qualified borrowers. To fund these loans, the SBA guarantees debentures, which are sold to private investors. The proceeds of the debenture are subsequently loaned to the borrower. SBA 504 loans are made in conjunction with a “third party lender” (i.e., a Bank) that normally provides financing for 50 percent of the project. The SBA 504 loan lends up to 40 percent of the Project amount in a lien position that is junior to the third party lender, leaving as little as a 10 percent equity requirement from the Borrower. Eligible borrowers include for-profit businesses whose net worth cannot exceed $15 million and whose average net profit after taxes cannot exceed $5 million for previous two years. They must be located, or planning to locate, in the U.S. and the owner-user of the project being financed (51 percent occupancy minimum if existing building; 60 percent occupancy if new construction). TECHNOLOGY LOAN PROGRAM (TLP): Companies whose major activity is offering technology-based goods and services to customers located both inside and outside Vermont are eligible. Proceeds can be used for the purchase of capital assets and/or for working capital and to refinance existing company debt or assets in certain cases. The Vermont Economic Development Authority (VEDA) may not fund more than 90 percent of the cost of the project. Typically, the borrower will be required to provide the remaining 10 percent of the total project cost. The maximum amount of any TLP loan is $250,000. LOCAL DEVELOPMENT CORPORATION LOANS: This program provides financing to nonprofit local and regional development corporations to build facilities for lease to identified eligible tenants, or to plan and/or develop industrial parks. All nonprofit local and regional development corporations (LDCs and RDCs) are eligible for the program. Funding can be used for the purchase of land for industrial parks; industrial park planning and development; construction or improvement of speculative buildings; and small business incubator facilities. BROWNFIELDS REVITALIZATION FUND (BRF): Administered by the Agency of Commerce and Community Development (ACCD), it provides eligible applicants with loans up to $250,000 at attractive rates and terms to use for the initial assessment, categorization, planning and clean-up process. Grants may also be available. NATURAL GAS VEHICLE (NGV) AND INFRASTRUCTURE FUNDING: The Clean Energy Development Fund provides funding for projects that involve the purchase of dedicated NGVs and development of natural gas fueling infrastructure. To qualify for funding, the NGV must produce fewer emissions than commercially available vehicles using conventional fuel, and fueling infrastructure must deliver natural gas without interruption. (Reference Vermont Statutes Title 10, Chapter 157, Section 6523) ALTERNATIVE FUEL AND ADVANCED VEHICLE RESEARCH & DEVELOPMENT TAX CREDIT: Vermont businesses that qualify as a high-tech business involved exclusively in the design, development and manufacture of alternative fuel vehicles, hybrid electric vehicles, all-electric vehicles or energy technology involving fuel sources other than fossil fuels are eligible for up to three of the following tax credits: 1) payroll income tax credit; 2) qualified research and development income tax credit; 3) export tax credit; 4) small business investment tax credit; and 5) high-tech growth tax credit. Certain limits and restrictions apply. (Reference Vermont Statutes Title 32, Chapter 151, Section 5930a, c, f, g, and k) VERMONT CAPITAL ACCESS PROGRAM (VCAP): Utilizes a pooled reserve concept and is designed to enable small businesses to access commercial credit. This program replaces the Financial Access Program. A bank may participate in this program by signing a “Master Agreement” with VEDA. A Reserve Fund, established with premiums paid by the borrower and/or the Bank and matched by VEDA, is set up for each bank to insure loans enrolled in the program. This Fund is available to cover losses incurred by the lender on any of its enrolled loans. Corporations, partnerships, joint ventures, sole proprietorships, cooperatives or other entities, whether profit or nonprofit, that are duly authorized to conduct business in Vermont are eligible. Proceeds cannot be used for the construction or purchase of residential housing or to finance passive real estate ownership and cannot be used to refinance a loan made by the same bank not previously enrolled in the program. Interest rate, term, down payment, collateral, etc. are determined by the participating lender; and The loan must have a principal balance of $500,000 or less. SCIENCE, TECHNOLOGY, ENGINEERING AND MATHEMATICS (STEM) INCENTIVE: Pays new hires at Vermont companies $1500 cash annually for each year they are employed up to five years. The incentive is taxable income and goes directly to the individual. Eligible applicants must:
- Have graduated from an accredited educational institution with an Associate’s Degree or higher;
- Have been conferred the degree not more than 18 months before the date of hire by a qualified employer—new hires must apply within 30 days of their start date;
- Be employed by a qualified employer for a position in Vermont that meets the STEM definition and for which the total annual compensation (including the value of benefits, FICA payments, company pension and 401(k) contributions and other direct compensation paid to the employee) is $50,000 or greater; and
- Have outstanding student loans with a lending institution.
Eligible positions include occupations like engineers, technicians and more. VERMONT SUSTAINABLE JOBS FUND (VSJF): Created by the Vermont Legislature in 1995 to accelerate the development of Vermont’s green economy. It provides early stage grant funding, technical assistance and loans to entrepreneurs, businesses, farmers, networks and others interested in developing jobs and markets for sustainably produced goods and services.
VIRGINIA – updated for 2014
For a list of state economic development agencies, click this link.
Technology Zones: Virginia cities, counties and towns have the ability to establish, by ordinance, one or more technology zones to attract growth in targeted industries. Qualified businesses locating or expanding operations in a zone may receive local permit and user fee waivers, local tax incentives, special zoning treatment or exemption from ordinances. Once a local technology zone has been established, incentives may be provided for up to 10 years. Each locality designs and administers its own program. Economic Development Access Program: Administered by the Virginia Department of Transportation, it assists localities in providing adequate road access to new and expanding basic employers. Enterprise Zones: Provides state and local incentives to businesses that invest and create jobs within Virginia’s enterprise zones, which are located throughout the state. Foreign Trade Zones: Virginia offers six foreign trade zones designed to encourage businesses to participate in international trade by effectively eliminating or reducing customs duties. Also, numerous subzones are provided and additional ones can be designated to enhance the trade capabilities of specific companies. Defense Production Zones: Virginia authorizes its communities to establish local defense production zones to benefit businesses engaged in the design, development or production of materials, components or equipment required to meet the needs of national defense. Companies deemed ancillary to or in support of the aforementioned categories would also apply. FINANCING Governor’s Opportunity Fund: Discretionary funds available to the Governor to secure a business location or expansion project for Virginia. Grants are awarded to localities on a local matching basis with the expectation that the grant will result in a favorable location decision for the Commonwealth. The Governor’s Opportunity Fund is a vital, proven deal-closing incentive that Virginia and its communities have successfully used for almost two decades. Virginia Investment Partnership (VIP) Grant Fund/ Major Eligible Employer Grant (MEE): Discretionary performance incentives designed to encourage continued capital investment by existing Virginia companies, resulting in added capacity, modernization, increased productivity or the creation, development and utilization of advanced technology. Clean Energy Manufacturing Incentive Grant: Designed to provide financial incentives to companies that manufacture or assemble equipment, systems, or products used to produce renewable or nuclear energy or products used for energy conservation, storage, or grid efficiency purposes. Virginia Economic Development Incentive Grant: A discretionary investment performance grant program designed to assist and encourage companies to invest and create new employment opportunities by locating significant headquarters, administrative or service sector operation in Virginia. Eligible projects must meet minimum requirements for capital investment and job creation. Tobacco Region Opportunity Fund: A discretionary cash grant made to a locality in Virginia’s tobacco-producing regions by the Tobacco Indemnification and Community Revitalization Commission (generally in the southern and southwest regions of the state) for assistance with economic development projects. Transportation Partnership Opportunity Fund (TPOF): Provides grants, revolving loans or other financial tools and equity contributions to encourage the development of transportation projects and to provide monies to address the transportation aspects of economic development opportunities. Rail Industrial Access Program: Helps connect businesses to freight rail service by funding the construction or improvement of railroad tracks and facilities to serve industrial or commercial sites where freight rail service is currently needed or anticipated in the future. This grant program supports localities, businesses or industries seeking to provide freight rail service between the actual site of an existing or proposed commercial facility and common carrier railroad tracks. Virginia Small Business Financing Authority (VSBFA): Offers programs to provide businesses with access to capital needed for growth and expansion. Port of Virginia Economic and Infrastructure Development Zone Grant Program (POV Zone Grant): The POV Zone Grant provides a grant to certain Qualified Companies to incentivize companies to locate new maritime-related employment centers or expand existing centers in specified localities in order to encourage and facilitate the growth of the Port of Virginia in accordance with criteria established by legislation. TAX INCENTIVES Sales & Use Tax Exemptions: Data centers are eligible for a sales and use tax exemption if they invest at least $150 million, hire at least 50 employees (including dedicated, full time contract employees), pay at least 1.5 times the average prevailing wage in the locality where the center is located, and enter into an MOU with the Virginia Economic Development Partnership. The job threshold may be reduced if the facility is located in an Enterprise Zone or in a severely distressed community as defined by the Virginia Economic Development Partnership (unemployment at least 150% of the average statewide unemployment). This exemption applies to the 5.3% – 6.0% (depending upon the locality) sales tax on servers, server related equipment, chillers, generators and other enabling hardware. Property Tax Exemptions: Virginia does not tax intangible property, manufacturers’ inventory, and manufacturers’ furniture, fixtures and corporate aircraft. Corporate Income Tax Credits: Virginia offers a variety of tax credits that are available for use against a company’s corporate tax liability:
- Major Business Facility Job Tax Credit
- Recycling Equipment Tax Credit
- Day Care Facility Investment Tax Credit
- Worker Retraining Tax Credit
- Virginia Port Tax Credit Programs
- Research and Development Tax Credit
- Green Job Creation Tax Credit
WORKFORCE DEVELOPMENT Virginia Jobs Investment Program: A program that offers customized recruiting and training assistance to companies that are creating new jobs or experiencing technological change.
COMMUNITY EMPOWERMENT ZONE PROGRAM(CEZ): a competitive program intended to spur neighborhood revitalization and reinvestment. To receive state CEZ designation, the six eligible jurisdictions identified targeted neighborhoods, undertook a planning and public involvement process, and adopted a five-year plan to guide resource investments. The CEZ designation enables qualified businesses to apply to the Washington State Department of Revenue for sales tax deferrals and business and occupation tax credits for a variety of projects. The statutory authority for the CEZ program is found in Chapter 43.31C of the Revised Code of Washington (RCW). SALES AND USE TAX EXEMPTION for Manufacturing Machinery & Equipment (m&E): Available to manufacturers and processors for hire performing manufacturing and R&D. Testing operation for a manufacturer and processor for hire. To qualify, the manufacturer must purchase qualifying machinery and equipment used directly in a manufacturing operation or research and development performed by a manufacturer, or testing operations performed for a manufacturer. Rural County/Community Empowerment Zone (CEZ) Incentives:
- Purchases of Server Equipment and Power Infrastructure for use in Eligible Data Centers – Sales/Use Tax Exemption: Available to the owner of an eligible data center with a combined square footage of at least 100,000 square feet and lessees of at least 20,000 square feet within an eligible data center located in a rural county.
- B&O Credit for New Employees in Manufacturing and Research & Development in Rural Counties: Available to manufacturers, R&D laboratories, and commercial testing facilities located in rural counties or within a CEZ. To qualify, the company must create new employment positions/increase instate employment by 15 percent. In turn, this incentive gives a $2,000 credit/position with annual wages/benefits of $40,000 or less; or a $4,000 credit/position with wages/benefits of more than $40,000 annually.
HIGH TECHNOLOGY B&O CREDIT for R&D Spending: Available to businesses conducting research and development (R&D) in Washington State in the research and development fields of advanced computing, advanced materials, biotechnology, electronic device technology and environmental technology. RENEWABLE ENERGY/GREEN INCENTIVES:
- Solar Energy System and Components of Solar Energy Systems Manufacturers – Reduced B&O Tax Rate available to manufacturers, manufacturers that sell their product at wholesale, and processors for hire of solar energy systems and specified components of solar energy systems using photovoltaic modules or stirling converters.
- Machinery & Equipment Used to Generate Electricity Using Renewable Energy – Sales/Use Tax Exemption available to anyone that generates electricity using fuel cells, sun, wind, biomass energy, tidal and wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas. The refund program expires July 1, 2013.
- Energy Production Using Solar, Methane, & Wind Power – Cost Recovery Program available to individuals, businesses, local government entities that are not in the light and power business or gas distribution business, and participants in a community solar project.
REDUCED B&O TAX RATE FOR AEROSPACE BUSINESSES: This incentive is available to manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales, and aerospace tooling manufacturers. For more detailed information about these and additional incentives, visit: www.choosewashington.com/business/incentives
WEST VIRGINIA – updated for 2014
For a list of state economic development agencies, click this link.
FINANCING Linked Deposit Loan Program: Allows small, for-profit state employers with 50 or fewer employees and gross annual receipts of $5 million or less to apply for a linked deposit loan with an interest rate of 1% above published New York Prime, up to $250,000. Special Rates of Electric Power for Industrial Consumers: The West Virginia Public Service Commission may establish special rates that in its judgment are necessary or appropriate for the continued, new or expanded operation of energy-intensive industrial consumers. In order to qualify for a special rate, an industrial facility, plant or enterprise shall enter into negotiations with the utility; having a contract demand of at least 50,000 kilowatts of electric power at its West Virginia facilities under normal operating conditions; create or retain at least 25 full time jobs in the state; have invested not less than $500,000 in fixed assets in the state; and provide reasonable evidence that without the special rate, the operation is threatened or not economically viable. Tourism Matching Advertising Partnership Program: Provides reimbursable matching funds for direct advertising. Business applicants and their partners must provide a minimum of 50% of the total cost for programs at the $10,000 + level. For programs not exceeding $7,500, business applicants must provide 25% of the total cost. Direct Loan Programs: The West Virginia Economic Development Authority can provide up to 45% in financing fixed assets by providing low-interest, direct loans to expanding state businesses and firms locating in West Virginia. Loan term is generally 15 years for real estate intensive projects and five to 10 years for equipment projects. Loan proceeds may be used for the acquisition of land, buildings and equipment. Working capital loans and the refinancing of existing debt are not eligible. Indirect Loans: The West Virginia Economic Development Authority provides a loan insurance program through participating commercial banks to assist firms that cannot obtain conventional bank financing. This program insures up to 80% of a bank loan for a maximum loan term of four years. Loan proceeds may be used for any business purpose except the refinancing of existing debt. Industrial Revenue Bonds: This program provides for customized financing through federal tax-exempt industrial revenue bonds. Of the state’s bond allocation, $59,757,600 is reserved for small manufacturing projects; $17,073,600 for qualifying projects in Enterprise Communities, and $93,904,800 for exempt facility projects. West Virginia Infrastructure and Jobs Development Council: The fund can be used for financial assistance to public utilities, county development authorities and private companies for infrastructure improvements to support economic development projects. West Virginia Capital Company Act: The West Virginia Economic Development Authority administers a program that provides for debt and equity venture capital investment to small business. A number of firms are qualified in West Virginia to make venture capital investments and their contact information may be found at www.wveda.org. West Virginia Jobs Investment Trust (JIT): A a public venture capital fund created to develop, promote and expand West Virginia’s economy. The program makes investment funds available to eligible businesses, thus stimulating economic growth and providing or retaining jobs within the state. TAX INCENTIVES “Five for Ten” Program (Fractionating Plants and Secondary Plants): Special property tax valuation applies for 10 years to real property (excluding the value of unimproved land) and personal property of facilities that are or will be classified under the North American Industry Classification System (NAICS) with the six digit code number 211112 (natural gas liquid extraction “fractionating” plants) and to manufacturing facilities that use products produced at a facility with a 211112 NAICS code. The special property tax valuation applies to qualified capital additions of more than $10 million made to pre-existing manufacturing facilities that have a value in place before the capital addition of more than $20 million. The special property tax valuation is 5% of the cost of the qualified property instead of fair market value. In the absence of a pre-existing manufacturing facility owned or operated by the person making the capital addition, multiple party projects may be established to meet the $20 million pre-existing investment requirement. “Five for Twenty-Five” Program ($2 Billion Primary (Fractionating) Plants, Secondary Plants And Tertiary Plants): Special property tax valuation applies for a period of 25 years to real property (excluding the value of unimproved land) and personal property having a combined original cost of which exceeds $2 billion to be constructed, located or installed at a facility, or a combination of facilities by a single entity or combination of entities engaged in a unitary business that:
- Is or will be classified under the North American Industry Classification System with a six digit code number 211112 (a primary facility), and;
- To manufacturing facilities that use one or more products produced at a facility with code number 211112 (secondary facilities) and;
- To manufacturing facilities that use products produced at a secondary facility.
The special property tax valuation is 5% of the cost of the qualified property instead of fair market value. Sales Tax Exemption for Certain E-Commerce Businesses: Some computer-related sales of tangible personal property and services are exempt from the consumer sales and services tax. Sales Tax Exemption for Certain Warehouse and Distribution Centers: Purchases of certain tangible personal property in qualified warehouse and distribution centers may be exempt from the consumers’ sales and service tax. Commercial Patent Incentives Tax Credit: Can offset up to 100% of the business franchise tax, corporation net income tax, or in the case of individual taxpayers, the personal income tax. The credit is based on a percentage of royalties, license fees and other consideration for developers of a patent or a percentage of net profit attributable to a patent used in a manufacturing process or product. High-Tech Manufacturing Credit: Businesses that manufacture certain computers and peripheral equipment, electronic components or semi-conductors and which create at least 20 new jobs within one year after placement of qualified investment into service, can receive a tax credit to offset 100% of the business and occupation tax, business franchise tax, corporate net income tax, and personal income tax on certain pass through income for 20 consecutive years. High-Technology Business Property Valuation Act: Tangible personal property, including servers, directly used in a high-technology business or in an Internet advertising business is valued for property tax purposes at 5% of the original cost of the property. In addition, sales tax is eliminated from all purchases of prewritten computer software, computers, computer hardware, servers, building materials and tangible personal property, for direct use in a high-technology business or internet advertising business. Film Industry Investment Act: Up to 31% of direct production and post-production expenditures can be converted to transferable tax credits to offset state taxes. Also, purchases and rentals of tangible personal property and purchases of services (excluding gasoline or special fuel, food or beverages) directly used in the activity of manufacturing a motion picture, TV program, music video, or commercial are exempt from the consumers sales and service tax and use tax. Corporate Headquarters Credit: Companies that relocate their corporate headquarters to WV are eligible for tax credits if 15 new jobs (including relocated employees) are created within the first year. The credit can offset up to 100% of the tax liability for business and occupation tax, business franchise tax, corporate net income tax and personal income tax on certain pass through income, for a period of up to 13 years. Economic Opportunity Credit: For qualified companies that create at least 20 new jobs within specified time limits (10 jobs in the case of qualified small business) as a result of their business expansion project, the State’s Economic Opportunity Tax Credit can offset up to 80% of specified business taxes for a period of up to 13 years. If a qualified company that creates the requisite number of jobs pays an annual median wage higher than the statewide average non-farm payroll wage, then the qualified company can offset up to 100% of the specified taxes for up to 13 years. For qualified businesses creating less than 20 new jobs within specified time limits, or for a qualified small business creating less than 10 new jobs, a $3,000 credit is allowed per new full time job for five years, providing the new job pays at least $32,000 per year and the employee has employer-provided health insurance benefits. The $32,000 figure is adjusted annually for cost-of-living. Manufacturing Investment Credit: A tax credit is allowed against up to 60% of corporate net income tax and business franchise tax based on qualified investment in eligible manufacturing property, with no new job creation required. Manufacturing Inventory Credit: Offsets the business franchise tax and corporate net income tax in the amount of property tax paid on raw materials, goods in process and finished goods manufacturing inventory. Strategic R&D Credit: Can offset up to 100% of corporate net income tax and business franchise tax, based on qualified expenditures for R&D projects. Aircraft Valuation: Aircraft owned or leased by commercial airlines, charter carriers, private carriers and private companies are valued for property tax purposes at the lower of fair market salvage value or 5% of the original cost of the property. Manufacturing Sales Tax Exemption: Purchases of materials and equipment for direct use in manufacturing are exempt from the 6% state sales and use tax, including building materials and process equipment purchased for construction of a manufacturing facility. Research & Development Sales Tax Exemption: Purchases of tangible personal property and services directly used in research and development are exempt from the consumers’ sales tax. Property Tax Increment Financing (TIF): Property Tax Increment Financing allows increases in property tax based on the improvement associated with qualified economic development and public improvement projects to assist with their long-term financing. Sales TIF: County and Municipal Economic Opportunity Districts (Sales Tax Increment Financing)-County Commissions and Municipalities are eligible to seek designation for a County or Municipal Economic Opportunity Development District, or Sales Tax Increment Financing (Sales TIF). This is a program whereby increases in sales tax collections in designated district may be used to either pay debt service or to “pay as you go” for public infrastructure projects that support economic development in the District. The minimum amount of private investment necessary to receive such a designation is $75 million. The Freeport Amendment: Exempts property from the West Virginia ad valorem property tax in two ways:
- Manufactured products produced in West Virginia and stored in the state for a short time before moving into interstate commerce are exempt from property tax.
- Goods transported into West Virginia from outside of the state, which are held for a short time in a warehouse and then shipped to a destination outside of West Virginia, are exempt from the property tax.
The exemption does not apply to inventories of raw materials or goods in process WORKFORCE DEVELOPMENT Governor’s Guaranteed Work Force Program: Flexible, customized training program that offers assistance to eligible companies and businesses by providing funding that directly supports the transfer of knowledge and skills. Companies must create a minimum of 10 net new jobs within a 12-month period. Workforce Investment Act (WIA) Program: Customized training program available to employers that hire individuals that meet specific program requirements. The program targets job seekers that are either economically disadvantaged or displaced due to job shifting in the region. West Virginia Advance Program: Offers customized job training awards to new and existing businesses. It supplies development and delivery of training services that will support a company’s startup and ongoing employee development initiatives through a local Community and Technical College. WorkKeys® Career Readiness Certificates: The nationally-recognized WorkKeys® Career Readiness Certificates from WorkForce West Virginia aid in the process of matching qualified job seekers with jobs while assuring businesses that the State of West Virginia has a ready and skilled work force.
DAIRY 2020 INITIATIVE: Includes two programs to help dairy producers make improvements and increase production.
- The Dairy 2020 Early Planning Grant (EPG) program helps encourage and stimulate the start up, modernization and expansion of Wisconsin dairy farms. It provides grants to dairy producers to pay for professional services such as the preparation of a business plan. The award can be for up to 75 percent of the professional services with a maximum grant of $3,000.
- The Milk Volume Production program allows dairy producers who plan to increase milk production by expanding their dairy herds to obtain equity gap financing.
FOCUS ON ENERGY: Offers financial incentives to eligible Wisconsin business for installing qualifying energy efficiency and renewable energy measures such as energy efficient lighting, compressed air, HVAC equipment and residential solar energy systems. It also includes custom projects such as system or building upgrades or process improvements. Focus information, resources and financial incentives help implement projects that otherwise would not be completed, or to complete projects sooner than scheduled. Its efforts help businesses manage rising energy costs, promote in-state economic development, protect the environment and control the state’s growing demand for electricity and natural gas. COMMUNITY DEVELOPMENT BLOCK GRANT FOR ECONOMIC DEVELOPMENT REVOLVING LOAN FUND (CDBG-ED/RLF): Funded through the federal Small Cities CDBG Program, provides grants to communities to promote local job creation and retention. Local governments then lend the funds to businesses for start-up, retention and expansion projects through grant funding. Funding levels depend on the number of jobs to be created or retained. BUSINESS EMPLOYEES’ PROGRAM (BEST): Established by the Wisconsin Legislature to help small businesses in industries that are facing severe labor shortages upgrade the skills of their workforce. Under the BEST program, Commerce can provide applicants with a tuition reimbursement grant to help cover a portion of the costs associated with training employees. Eligible applicants include for-profit businesses that have 25 or fewer full time employees or annual sales of less than $2.5 million and are in one of the following Industrial Clusters: Automation, Agriculture/Food Products, Biotechnology, Information Technology, Manufacturing, Medical Devices, Paper/Forest Products, Printing, Tourism, or Childcare (does not include in-home childcare). CUSTOMIZED LABOR TRAINING FUND: Provides training grants to businesses that are implementing new technology or production processes. The program can provide up to 50 percent of the cost of customized training if it is not available from the Wisconsin Technical College System. The program’s primary goal is to help Wisconsin manufacturers maintain a workforce that is on the cutting edge of technological innovation. EARLY PLANNING GRANT PROGRAM (EPG): Helps individual entrepreneurs and small businesses throughout Wisconsin obtain the professional services necessary to evaluate the feasibility of a proposed start up or expansion. It provides grants to entrepreneurs and small businesses to help offset a portion of the cost of hiring an independent third party to develop a comprehensive business plan. ENTERPRISE DEVELOPMENT ZONE PROGRAM: Promotes a business start-up or expansion on a particular site in any area of the state that suffers from high unemployment, declining income and property values and other indicators of economic distress. The program offers tax credits for such activities as hiring disadvantaged workers and undertaking environmental remediation. Tax credits can be taken only on income generated by business activity in the zone. The maximum amount of tax credits per zone is $3 million. TAX INCREMENT FINANCING (TIF): Helps cities in Wisconsin attract industrial and commercial growth in underdeveloped and blighted areas. A city or village can designate a specific area within its boundaries as a TIF district and develop a plan to improve its property values. Taxes generated by the increased property values pay for land acquisition or needed public works. INDUSTRIAL REVENUE BONDS (IRBs): A means of financing the constructing and equipping of manufacturing plants and a limited number of non-manufacturing facilities. The municipality is not responsible for debt service on IRBs, nor is it liable in the case of default. IRBs are also exempt from federal income tax. More than $265 million is available to assist small manufacturers with expansion projects through low-interest financing. The Department of Commerce grants the bonding authority (volume cap allocation) to cities, villages, counties and towns to issue the bonds on behalf of a business. This site provides business representatives, municipal officials, bond counsel and others with up-to-date information on the IRB program, the process of applying for volume cap, the availability of volume cap and the latest forms. RURAL ECONOMIC DEVELOPMENT (RED) PROGRAM: Makes individual awards up to $30,000 for feasibility studies and other professional assistance to rural businesses with fewer than 25 employees. Businesses that have completed their feasibility evaluations are eligible for individual micro loans up to $25,000 for working capital and the purchase of equipment. TECHNOLOGY DEVELOPMENT FUND: Established to help Wisconsin businesses research and develop technological innovations that have the potential to provide significant economic benefit to the state, it helps businesses finance Phase I product development research. Firms completing Phase I projects can receive Phase II product-commercialization funding. WISCONSIN TRANSPORTATION FACILITIES ECONOMIC ASSISTANCE AND DEVELOPMENT PROGRAM: Funds transportation facilities improvements that are part of an economic development project. It provides 50 percent state grants to governing bodies, private businesses and consortiums for road, rail, harbor and airport projects that help attract employers to Wisconsin, or encourage business and industry to remain and expand in the state. ANGEL INVESTMENT TAX CREDIT: Angel investors and angel investor networks that invest in Qualified New Business Ventures may be eligible to claim an income tax credit on that investment, up to 25 percent of the investment amount. Angel investors are accredited (sophisticated) investors, for the purposes of this program, as determined by the Department of Commerce, whose cash investment in a Qualified New Business Venture is made in exchange for common stock, a partnership or membership interest, preferred stock or an equivalent ownership interest that is acceptable to Commerce. An angel investment network is a group of accredited (sophisticated) investors organized for the sole purpose of investing in a single Qualified New Business Venture. EARLY STAGE SEED INVESTMENT CREDIT: Designed to encourage investment in small, high-technology businesses that have high growth potential and is for payments made to certified fund managers to invest in qualified new business ventures. Wisconsin’s FILM TAX CREDIT PROGRAM provides two types of tax credits with a total of $500,000 in credits available each fiscal year. All credits are refundable and non-transferable:
- FILM PRODUCTION SERVICES CREDIT: Provides tax credits for hiring Wisconsin residents to work on an accredited production, and also for incurring certain production expenditures. To qualify, the production must be pre-accredited by the department.
- FILM PRODUCTION COMPANY INVESTMENT CREDIT: Provides tax credits to new and existing film production companies in Wisconsin that expand.
WISCONSIN MEAT PROCESSING FACILTY INVESTMENT CREDIT: A refundable tax credit for taxpayers who have invested to modernize or expand meat processing facilities in the state during taxable years that begin after December 31, 2008, and before January 1, 2017. Businesses engaged in processing livestock into meat products or processing meat products for sale commercially may be eligible to apply for the tax credits. “Livestock” means domesticated food animals, other than fish and wild game animals. “Meat product” means a value-added, saleable and edible stand-alone product resulting from processing meat or another meat product by a USDA- or state-inspected facility and does not include sandwiches, spreads, appetizers, soups, salads, dinners, pizzas, pasties or any other product that uses meat in any manner other than as the predominant ingredient. “Process” means to cut, grind, manufacture, compound, intermix or prepare meat or meat products for human consumption. FOOD PROCESSING PLANT & FOOD WAREHOUSE INVESTMENT CREDIT: A refundable tax credit for businesses that have invested to modernize or expand food processing plants or food warehouses in Wisconsin. “Used exclusively” means used to the exclusion of all other uses except for use not exceeding 5 percent of total use. Businesses can earn up to 10 percent of the eligible expenses spent in the taxable year with the maximum amount a claimant can receive over the life of the program being $200,000. The Department has $700,000 for each fiscal year. The Department may prorate some or all of the allocations in order to broaden the potential for promoting economic development. DAIRY MANUFACTURING FACILTY INVESTMENT CREDIT: Provides refundable credits for businesses that have invested to modernize or expand dairy manufacturing facilities in Wisconsin. Businesses can earn up to 10 percent of the amount spent in a taxable year. The maximum lifetime amount a business can receive is $200,000 for each of the entity’s manufacturing facilities. The Department has $657,100 available annually for eligible businesses other than dairy cooperatives. A total of $700,000 is available annually for dairy cooperatives. Businesses that are engaged in the processing of milk into dairy products or processing dairy products for sale commercially are eligible to apply for tax credits under this program. WOODY BIOMASS HARVESTING & PROCESSING INVESTMENT CREDIT: A refundable tax credit for businesses that have invested to modernize or expand Woody Biomass Harvesting and Processing Operations in Wisconsin. Woody biomass means “trees and woody plants, including limbs, tops, needles, leaves, and other woody parts, grown in a forest or woodland or on agricultural land.” Businesses can earn up to 10 percent of the eligible expenses with the maximum amount a claimant can receive over the life of the program being $100,000. The Department has $900,000 for each fiscal year. The Department shall allocate $450,000 in tax credits to businesses that individually have no more than $5,000,000 in gross receipts from doing business in Wisconsin for the taxable year in which the credit is claimed. The MINORITY BUSINESS DEVELOPMENT PROGRAM: Designed to generate and foster the growth of minority businesses in Wisconsin. The WEDC provides services to minority business owners, entrepreneurs and resource organizations.
The BUSINESS READY COMMUNITY GRANT & LOAN PROGRAM can provide financing for publicly owned infrastructure that promotes economic development within Wyoming communities. Cities, towns, counties and joint powers boards are the primary applicants for the program. The typical maximum award is $1.5 million with a 10 percent match. Publicly owned infrastructure that facilitates a specific businesses needs. INDUSTRIAL DEVELOPMENT REVENUE BONDS: Cities and counties may issue tax-exempt industrial development revenue bonds to provide financing for manufacturing and energy generation businesses. These bonds are issued within the State’s IRS allocation of tax-exempt bond financing. The maximum project was increased to $600,000,000 in 2011 and the business must provide a bank “letter of credit” to guarantee payment of the bonds. Interested businesses must apply for an allocation within the State’s volume cap. The Wyoming Business Council will coordinate this process. WYOMING PARTNERSHIP CHALLENGE LOAN PROGRAM: The Wyoming Business Council can participate with a local lender on a loan to a business. The State’s portion of the participation maybe up to 35 percent of the project (maximum $500,000) in a shared note and collateral position with the local lender. Participation can be increased to 50 percent of the loan or $1,000,000 is the lender has secured a federal guarantee (i.e. SBA, USDA) to guarantee repayment of a loan made to a business. The MANAGED DATA CENTER COST REDUCTION GRANT PROGRAM (Passed 2009) is a $2.25 million maximum grant that can be used to reimburse accrued utility expenses for power or broadband over 3 years. In exchange for providing these reductions in costs, the applicant (a Wyoming city, county, joint powers board) shall contract with the business to receive direct benefits and indirect economic development benefits including a specific amount of capital investment from business, specific minimum payroll created by the business, the provision of discounted IT services. DATA CENTER SALES TAX EXEMPTION (originally passed in 2010, amended 2011): Requires a $5 million investment in capital infrastructure (building, walls, engineering, dirt work, etc) in a Wyoming location in addition to a $2 Million or larger investment in data center equipment (servers, peripheral equipment and data center containers) and software purchases. If these thresholds are met the sales tax burden on the qualifying computer equipment is exempt. This exemption can be applied if the data center invests $2M in equipment a calendar year in the future. In 2011, the Wyoming State Legislature added another tier requiring a $50 million capital infrastructure level. This tier also requires the $2 Million in data center equipment purchases. At this tier the qualifying exempt equipment also includes uninterruptable power supplies (UPS), back-up power generation, specialized heating and air conditioning equipment and air quality control equipment. DATA CENTER PERMIT EXEMPTION (passed 2011): A mega-data center project, which exceeds $178.3 Million in capital investment, would be exempt from the requirement of applying for an Industrial Siting Permit through the Wyoming Department of Environmental Quality. This presents a cost savings of approximately $500,000 associated with permit application preparation, wildlife studies, economic analyses, public meetings, permit hearings, attorney fees, etc. DATA CENTER INFRASTRUCTURE GRANT FUNDS (passed 2011): A $15,000,000 appropriation to assist Wyoming cities, towns and counties to build necessary public infrastructure for the recruitment and operation of data centers. FARMERS MARKET PROMOTIONAL GRANT: The Wyoming Business Council offers a $400 reimbursable grant for advertising and promotional materials to Wyoming farmers markets that can be used by a local Wyoming government agency, a Wyoming association, a Wyoming nonprofit organization (e.g. Chamber of Commerce) or a Wyoming Producer Association that conducts a farmers’ market. ORGANIC CERTIFICATION REIMBURSEMENT PROGRAM: Funded by the U.S. Department of Agriculture, in conjunction with the Wyoming Business Council, it is designed to help Wyoming processors with the costs associated in becoming organically certified. Two kinds of Organic Certification Reimbursement Grants are available. Wyoming businesses (organic processors) and Wyoming farms/ranches (organic producers) are eligible to apply. WORKFORCE TRAINING GRANTS (WDTF): Created by the 1997 Wyoming Legislature and administered by the Wyoming Department of Workforce Services, it assists new and existing industries in the state with the training needs of newly hired or current employees. Grants are available for up to $4,000 per trainee. COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM: Administered by the Wyoming Business Council, it provides grants to local governments for community and economic development projects and makes convertible loans based on job creation as well as other tools that may assist businesses. MANUFACTURING SALES TAX EXEMPTION: The sales tax burden is exempt on the sale or lease of machinery to be used in the State of Wyoming directly and predominately in manufacturing tangible personal property. SALES TAX EXEMPTION ON ELECTRICITY USED IN MANUFACTURING: The sales tax burden is exempt on sales of power or fuel to a person engaged in the business of manufacturing, processing or agriculture when the same is consumed directly in manufacturing process. MARKETING ASSISTANCE Sales are directly tied to marketing Wyoming companies’ services and products. The Wyoming Business Council offers help through several programs.
- COOOPERATIVE ADVERTISING: The Business and Industry Division offers economic development groups and businesses the opportunity to join cooperative advertising in national publications.
- COOPERATIVE MARKETING PROGRAM: The Business Council secures booth space at trade and selling events to share, at minimum cost, with WY businesses and local economic development groups.
- MARKETING CONSULTING/MEDIA TRAINING: Consulting and training helps Wyoming businesses fine tune their marketing and public relations efforts to reach their target audience.
- TRADEMARK LICENSING PROGRAM: The Business Council has an agreement with the Secretary of State to use the Bucking Horse and Rider logo.
- TRADE SHOW INCENTIVE GRANT PROGRAM: Encourages state businesses to promote and sell their WY-made products to statewide, national and international audiences with grants to help offset the costs of the trade events. It is a reimbursable grant; and as such, the applicant must pay all expenditures before the grant award can be disbursed. The business shall function independently in performing this activity and shall assume sole responsibility of any debts or liabilities that may be incurred in regard to this trade event.
- WYOMING FIRST PROGRAM: Assists Wyoming companies with the identification and promotion of their Wyoming-made products and services. Participants can use “Bucking Horse and Rider” design stickers and hang tags and have their companies featured in a catalogue and a Web site.
- WYOMING MARKET RESEARCH CENTER (WMRC): Provides low to no cost market information to Wyoming businesses including competitive analysis, marketing lists, custom demographic and psychographic analysis, industry trends, government regulations, geographic information services, marketing material evaluations and original research.
SMALL BUSINESS NON-PROFIT ENERGY AUDIT PROGRAM: A matching grant that provides 50 provides for a level 2 energy audit up to a maximum of $2,500. A Level 2 Energy Audit will include quantification of energy users and losses through a detailed review and analysis of equipment, systems and operational characteristics. After the energy audit is conducted, the remainder of the grant may be used to pursue energy retrofits identified in the audit. Retrofit and audit funds are up to a maximum total of $5,000 with a 50 percent reimbursement. Manufacturers may use the audit to qualify for a sales tax abatement on the energy used in the manufacturing process.