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Know Full Incentive Offer When Weighing Tax Burdens
Consider when incentives outweigh an undesirable tax climate, but be aware of the full details of the incentive offer.
When can incentive offers outweigh an undesirable tax climate?
 

Michael McDermott, Associate, Strategic Consulting Group, Grubb & Ellis
On the simplest level, an incentive outweighs an undesirable tax climate when it negates the unfavorable tax. A good example is personal property tax abatement. However, if the incentive lasts only several years, the company will feel the full brunt of the tax in the future. It is a best practice to calculate cost of doing business figuring in the incentive’s term against the expected length of time in the market. Compare this cost of doing business against that of a lower tax-burden state with lesser incentives.
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About the Author

Michael McDermott, Associate, Strategic Consulting Group, Grubb & Ellis
Michael McDermott is a member of Grubb & Ellis Company’s Strategic Consulting Group, responsible for performing business location analysis, incentives research and negotiation, as well as portfolio analysis to fulfill client engagements. He has also assisted in the development of the company’s proprietary planning tools, including the Thinking Tool and Portfolio Pulse.

More articles by Michael McDermott

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