Ranked #6: Tax Exemptions
Area Development's 2006 Corporate Survey respondents are so familiar with the benefits of TAX EXEMPTIONS for both economic development and other purposes that they have ranked this factor high in importance.
Michael R. Press, Business Incentives Advisory, Duff & Phelps (Jun/Jul 07)
(page 2 of 2)
As an economic developer in city government
years ago, I favored tax exemptions over project grants because they
were much easier to put through the political process.
increment financing: While certain types of incentives can be regional
or state-specific in their use, tax exemptions are virtually ubiquitous
across the country. By comparison, tax increment financing (usually a
property tax abatement that is funded by tax revenues derived from
neighboring properties) is widely used in the Midwest, but it is not
that common in the Northeast or the West.
grants and tax increment financing are used less frequently outside the
realm of economic development. In contrast, tax exemptions are
frequently used for non-economic development policy purposes, most
notably environmental, public health, educational, and religious
purposes. In fact, the most rapidly growing use of tax exemptions at
the state level is in support of the environment. Many states have
enacted or expanded tax exemptions related to "renewable energy"
equipment and energy efficiency over the last several years.
Tax exemptions are so common in virtually every state - and within
and outside of the realm of economic development - that most of the
survey respondents are quite familiar with them and may be aware that
they benefit greatly from them - hence the high ranking of this factor
in Area Development's Annual Corporate Survey.