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Taxes and Incentives: Getting the Full Benefit of Government Funding

As states and municipalities face budget shortfalls, companies must commit more resources to securing tax exemptions and financial incentives - but the potential benefits are too large to ignore.

Joseph Calvanico, National Director for Property Tax and Valuation Services, Crowe Horwath and Dan Megathlin, Director, Crowe Horwath (March 2011)
As the economy continues to show encouraging signs of a long-term recovery, savvy manufacturers are continuing to evaluate how to reduce their operating costs. Government funds - in the form of tax exemptions, credits, and incentives - can deliver a substantial boost to an organization's bottom line and free up resources for other initiatives. While state and local governments offer a wide range of assistance, the environment is constantly evolving, presenting a complex, moving target for manufacturers that operate in multiple jurisdictions. Executives who understand the landscape, sources of funding, and available exemptions can capture the full benefit of government funding and gain a competitive advantage.


Click on any state in the above map for links to updated business incentives and tax resources

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If you have questions about state-level tax exemptions and financial incentives, submit them below to Ask Area Development and the article authors will respond.
Recent Trends in Government Exemptions
Over the past couple of decades, state and local governments have increasingly offered a range of exemptions and incentives to lure manufacturers to their jurisdictions, retain facilities, and encourage hiring. Several competing factors have combined to create a highly fluid business landscape.

Rising competition among states - Government officials across the country have implemented policies to create a business-friendly environment to attract companies. Even during the recession, states and municipalities moved forward aggressively to offer exemptions, credits, and incentives as part of a long-term economic development strategy. For example, in 2009, Georgia reduced its application requirements for qualifying for the manufacturing exemption and significantly expanded the scope of machinery and equipment eligible for a sales and use tax exemption in an effort to gain an advantage over neighboring states.

Heightened commitment to the environment - To encourage manufacturing companies to adopt practices that protect the environment, state and local governments have instituted new exemptions for the purchase of equipment and machinery that reduces emissions and curbs water, air, and noise pollution. States from Connecticut to California are also offering credits for recycling, clean energy, and other sustainable practices. Despite budget shortfalls, these exemptions enjoy support from both parties.
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Ask the Author
Have questions, comments or concerns about this article? Submit to Ask Area Development here and the author or an expert from our network of site selection and facility planning professionals will answer:
How is state-level budget uncertainty regarding taxes affecting site selection?
Site selection by businesses looking to relocate or start a new operation has been impacted by those states that have higher tax burdens as compared to their competitors. More
- Dan Megathlin, Director, Crowe Horwath
Are any states initiating new or expanded incentive programs? If so, which ones?
Many states have been aggressive. More
- Dan Megathlin, Director, Crowe Horwath
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