Massachusetts Direct Financial Incentives 2012
Massachusetts' economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include the Massachusetts Economic Development Incentive Program (EDIP), Massachusetts Opportunity Relocation & Expansion (MORE) Jobs Program, and the Brownfield Redevelopment Program.
The Economic Development Incentive Program (EDIP) is a tax incentive program designed to foster full-time job creation and stimulate business growth throughout the Commonwealth. Participating companies may receive state and local tax incentives in exchange for full-time job creation, manufacturing job retention, and private investment commitments. There are three categories of projects for companies that generate substantial sales outside of the Commonwealth and are seeking the EDIP Investment Tax Credit (ITC): full-time job creation and investment projects within Economic Target Areas, projects with exceptional employment growth across the Commonwealth and finally, projects within gateway communities that sustain and grow manufacturing jobs. Additionally municipalities have the ability to grant local real estate tax incentive applications for projects that do not seek an EDIP-ITC.
State tax incentives:
• Zero to 40 percent Investment Tax Credit for qualifying tangible, depreciable assets
• 10 percent Abandoned Building Tax Deduction for costs associated with renovation of an abandoned building (defined as a building located within an Economic Opportunity Area that has been at least 75 percent vacant for at least two years)
Municipal property tax incentives:
• Tax Increment Financing: A five- to 20-year property tax exemption based on the increased value of the project property due to new construction or significant improvements. Personal property taxes are not automatically exempt but are negotiable.
• Special tax assessment: A phased-in assessment of the total value of the project property; where no property taxes are paid in year one, and the following schedule is used: year two, 25 percent; year three, 50 percent; year four, 75 percent; year five, 100 percent.
Investment tax credit:
A 3 percent investment tax credit is available to any manufacturer or research and development company located in the state. The credit applies to buildings, structural components, and depreciable property.
Research and development tax credit:
Massachusetts has increased its R&D tax credit to make it one of the highest in the nation, with permanent 10 percent and 15 percent credits with a 15-year or indefinite carry-forward provision. It is available to companies investing in research and development.
Credits against excise:
Domestic and foreign corporations are allowed a credit against excise equal to 30 percent of the cost incurred for the purchase or lease of company shuttle vans. Costs of solar or wind-powered devices may be deducted from net income in determining the excise tax. These facilities are exempt from property taxation for 10 years.
Tax-exempt and taxable bond financing:
For the purchase of land, buildings, and new equipment; to construct or renovate existing buildings; and to refinance existing asset-based, conventional, or tax-exempt debt.
Capital Access Program:
Encourages participating Massachusetts financial institutions to make loans of up to $500,000 to businesses unable to obtain financing through conventional means.
Emerging Technology Fund:
Provides financial participation in a loan or a co-lending agreement with another lending institution for the financing of technology-based companies.
Brownfields Redevelopment Program:
Finances the remediation of a contaminated site that is being redeveloped into an economically viable project. Provides state-subsidized environmental insurance and secured creditor insurance for Brownfields projects.
Seafood Loan Program:
Provides direct loans for fixed-asset financing, including the purchase of land, buildings, and equipment and the construction of facilities related to the seafood industry.
Massachusetts Opportunity Relocation & Expansion (MORE) Jobs Program:
Provides grant funding to help finance the public infrastructure associated with business development projects. Grants must be used for infrastructure improvements, such as water and sewer connections, roadway enhancements, and utility upgrades. Businesses and municipalities must submit joint applications to the state to participate in the program.
Workforce Training Fund General Program:
Provides companies with training grants that range from $5,000 to $250,000 for programs that train current employees, allowing a company to maintain its economic strength.
Hiring Incentive Training Grant:
The Hiring Incentive Training Grant Program is open to all employers. It provides training grants of up to $2,000 per employee and up to $30,000 a year per company. This program assists in paying training costs for newly hired employees who have been unemployed over a year and that do not have a call-back date from their last employer.
Expedited Permitting Program:
Recently new streamlined permitting legislation was enacted:
• Municipalities have the ability to designate priority development sites that require that all municipal permits for projects on those sites to be reviewed within 180 days. If the municipality does not meet the six month deadline to render all permitting decisions on those sites, the permits are deemed approved.
• At the state level, both the Massachusetts Environmental Policy Act reviews and Massachusetts Historical Commission reviews are to be completed within 120 days concurrent with the municipal permit review. An interagency board has been created to monitor the permitting process and to expedite the state permitting process on priority development sites.
• Finally a permitting ombudsman has been established to work with permit seekers, municipalities, and the state to resolve permitting issues.
Massachusetts State Contact:
Massachusetts Office of Business Development
10 Park Plaza, Suite 3730
Boston, MA 02116
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.