THE GOVERNOR’S CUP
THE BEST INCENTIVES, PROGRAMS AND ADVANTAGES OFFERED BY AMERICA’S LEADING ECONOMIC DEVELOPERS
We all know business can be as competitive as any full contact sport, but the most vigorous battles likely take place during the location process. That’s because of the immense economic impact each new employee brings to a given city, estimated to be between $500,000 and $700,000, and what local and state governments are willing to offer to attract job-creating companies such as yours.
From tax credits to job training to export assistance, incentives can and should be a big part of your site selection process. To help you get started, we’ve selected 31 incentives offered by economic development companies large and small from across America and compiled them into this report. So what city, county and state EDCs are making their governors proud and pulling the right levers to rack up jobs for their states? Read on and compare the areas that meet your needs with the tools they are offering your business to ensure success.
ADVANTAGE JOBS PROGRAM
Mississippi Works | mississippi.org
Businesses that create new jobs that meet or exceed the average annual wage of Mississippi or the county in which the company locates are eligible for a rebate of a percentage of payroll to qualified employers for a period of up to 10 years. The business must create 25 new, full-time jobs with annual wages that are 110 percent of the average for the state or county the company is locating in (whichever is less). Employee benefits not subject to Mississippi income taxes are excluded.
BUSINESS COOPERATION PROGRAM
City of San Diego, California | sandiego.gov
The cost of doing business in California can be staggering (just ask those brand-new Texans at Toyota). But San Diego believes at least part of that can be due to businesses paying out more than they really have to. The BCP was created to reduce the cost of doing business by preventing the annual loss of millions of dollars in sales and use tax revenue due to misallocation. Financial incentives available through the BCP encourage businesses with significant equipment expenditures to take part in the program to support proper allocation of sales and use taxes to the city. The BCP can provide a tax rebate of up to 50 percent of the local 0.1 percent use or sales tax paid in connection with San Diego-based operations.
BUSINESS DEVELOPMENT LOAN PROGRAM
Birmingham Office of Economic Development | birminghamal.gov
Birmingham’s loan initiative allows developers and entrepreneurs to apply for loans of $100,000 to $1 million for maximum terms not to exceed 24 months. Economic Development’s Revolving Loan Fund Program extends direct loans to businesses in the Alabama city for the purchase of land, buildings, machinery, equipment and new expansion. Industrial Revenue Bond Financing can be used for real property acquisition, construction or renovation of facilities or the purchase of equipment and machinery for eligible businesses.
Amarillo Economic Development Corp. | amarilloedc.com
Amarillo maintains one of the most stable and affordable real estate markets in the nation. Commercial and residential values have climbed over the past four years due to a steady influx of relocating businesses and expanding companies in the Texas city. Amarillo Economic Development Corp. directs prospective businesses to CenterPort, a 440-acre business park, PRANA/Amarillo EastPort Business Park, Point West Business Campus and other commercial and industrial properties.
CONSUMABLES GROSS RECEIPTS TAX DEDUCTION
New Mexico Economic Development Department | gonm.biz
A seller can deduct 100 percent of receipts from sales to a manufacturer of tangible personal property in New Mexico that becomes an ingredient or component part of a manufactured product. The deduction applies to personal property incorporated into, destroyed, depleted or transformed in the process of manufacturing a product, including electricity, fuels, water, manufacturing aids and supplies, chemicals, gases, repair parts, spare parts and other tangible items. For components manufacturers, it’s a great reason to consider New Mexico.
Tusla Economic Development Corp. | tedcnet.com
The northeastern Oklahoma city offers TEDC Creative Capital (a.k.a. non-traditional lending programs) to help entrepreneurs start or expand companies. Among those that can receive these direct loans, which the EDC partners with other financial institutions to provide, are small business projects that fall short of conventional lending standards. Special consideration is given to companies that locate in targeted areas and create and retain jobs as well as to entrepreneurs who have traditionally faced barriers to capital access.
DIRECT FINANCIAL INCENTIVES
McKinney Economic Development Corp. | mckinneyedc.com
Based on a business’ job creation, capital investment and impact on the north Texas city’s economy, McKinney EDC offers forgivable loans, tax abatements, emerging technology assistance—to go along with its enterprise zones, regional airport program and a triple Freeport inventory tax exemption. Those can be on top of state incentives such as grants, financing and various funds directed at attracting new or relocating companies. And those can be on top of guaranteed Lone Star State incentives like no personal income tax, no corporate income tax and business friendliness, pardner!
DIRECT INCENTIVE PROGRAM
City of Sugar Land Economic Development | sugarlandtx.gov
Cash grants are awarded to qualifying projects and companies in the eastern Texas city based on an applicant’s capital investment, financial stability, business history, status compared to others in that business sector and total expected job creation and wages. A performance agreement is required with the Sugar Land Development Corp., which can also steer applicants to tax abatements offered by the city and county, especially to new green-energy projects.
ECONOMIC DEVELOPMENT LOAN FUND
Salt Lake City, Utah | slcgov.com
By making loans to businesses, this fund aims to stimulate business development and expansion, create employment opportunities, encourage private investment, promote economic development and enhance neighborhood vitality and commercial enterprise in the Utah city. These loans are available to: startups, existing businesses, those relocating or expanding in SLC and companies impacted by construction. Loans can be used for: building retrofits, energy-efficiency upgrades, real estate acquisition, construction/tenant improvement, signage, retail presentation, display work, fixtures, furnishings, equipment, inventory, working capital and marketing.
Wisconsin Economic Development Corp. | wedc.org
Delivered by a partnership of the Wisconsin Economic Development Corp. and the Wisconsin Center for Manufacturing and Productivity, this export acceleration program helps companies expand their global market reach by marrying them with coaches, consultants and experts on the ground in various international markets. Does it work? Graduates have achieved international sales increases averaging $600,000–$900,000 within 12 months of completing ExporTech.
San Antonio Economic Development Foundation
The City of San Antonio, Bexar County that encompasses the south Texas city and some independent school districts allow a personal property tax exemption to companies that deal with goods in-transit or inventories used in manufacturing. To qualify, inventory must be used to assemble, store, make, process or fabricate, and it must be transported to destinations outside Texas no later than 175 days after the date acquired in or imported into the state. The city also offers bonds and tax breaks as well as specific incentives for companies in industrial districts, certain sub-zones and its foreign trade zone.
FREE SHOVEL-READY LAND
GoTopeka Economic Partnership | gotopeka.com
Free land in the northeastern Kansas city’s industrial parks is offered to qualifying companies. The package includes a 10-year, 100 percent property tax abatement on real property as well as other incentives, and the sites have all utilities in place. Site selection assistance earned Topeka a spot on Global Trade’s 2015 list of “America’s Best Cities for Global Trade.”
GOVERNMENT PROPERTY LEASE EXCISE TAX
Arizona Commerce Authority | azcommerce.com
Established by state law as a redevelopment tool, the excise tax aims to reduce a project’s operating costs by taking the place of real property tax. It is granted based on a building’s type of use and is calculated on the structure’s gross square footage. The excise tax rate can be abated for the first eight years after a certificate of occupancy on the building is issued if the property is located within a Central Business District and a Redevelopment Area.
HIGH IMPACT PERFORMANCE INCENTIVE GRANT
Enterprise Florida | enterpriseflorida.com
These grants are provided to pre-approved applicants in advanced manufacturing, clean energy, corporate headquarters, financial services, life sciences, semiconductors and transportation equipment manufacturing. Within three years of approval, these projects must be created in Florida, have at least 50 new full-time equivalent jobs (or 25 if it’s a R&D facility) and have made a cumulative investment in the state of at least $50 million (or $25 million if it’s a R&D facility).
HOOSIER BUSINESS INVESTMENT TAX CREDIT
Indiana Economic Development Corp. | iedc.in.gov
The non-refundable corporate income tax credit is aimed at businesses that support jobs creation, capital investment and improvement of the standard of living for Indiana residents. The incentive is calculated as a percentage of the eligible capital investment to support the project. It can be certified annually, based on the phase-in of eligible capital investment, over two full calendar years from the commencement of the project. To be eligible, the project must be economically sound and result in net new jobs that were not previously performed by the applicant’s employees.
INCUMBENT WORKER TRAINING
CareerSource Broward | careersourcebroward.com
On its incentives page, Greater Fort Lauderdale Alliance (gflalliance.org) refers to Broward’s WorkForce One providing the Employed Worker Training Program, but the names have actually changed to CareerSource Broward and Incumbent Worker Training (IWT) respectively. Businesses that have operated in Broward County, Florida, for at least a year can acquire a grant to upgrade the skills of full-time employees and/or reimburse the company for training-related costs. CareerSource can also help tap into the knowledge of a network of experts in various industries.
INDUSTRIAL ASSISTANCE FUND
Utah Governor’s Office of Economic Development | business.utah.gov
If your business has received a commitment for incentives from a local government entity in Utah, don’t stop there. You can also tap into this fund if your business creates at least 50 jobs with wages 110 percent of the average in the specific urban or rural county it is located in. The company must also be stable, profitable and competing with other locations. You remain eligible if you also receive other state incentives.
INDUSTRIAL REVENUE BONDS
Albuquerque Economic Development | abq.org
Developers or companies can enjoy significant real and personal property tax abatement and compensating tax exemptions through IRBs. Essentially, instead of buying a property directly in the New Mexico city, the Albuquerque City Council or Bernalillo County Commission is the owner that leases the property to the pre-approved company, which buys that property at the end of the lease. The tax savings continue to flow after the purchase, and the property owner can later arrange for an IRB for a subsequent buyer. Equipment can also be acquired under an IRB through the state’s Manufacturing Investment Tax Credit.
The pilot program provides up to $25,000 in financing to help small businesses purchase technical assistance and services necessary to advance research, development or commercialization of new or innovative products and services. Qualifying companies receive vouchers that can be redeemed with approved public universities, colleges, technical schools and nonprofits in Minnesota.
Arkansas Economic Development Commission | arkansasedc.org
Sales and use tax credits are available to businesses that are established in Arkansas for at least two years and have invested at least $5 million in a single plant location or equipment for new construction, expansion or modernization. But the business must first receive AEDC approval as well as a direct-pay sales and use tax permit from the state. The InvestArk credit is earned in the year the eligible expenditure is made and can be applied against the business’ state direct-pay sales and use tax liability in the year following the year of the expenditure. Unused credits can be carried forward for up to five years.
LAND, BUILDING AND EQUIPMENT ASSISTANCE
Cedar Hill Economic Development Corp. | cedarhilltx.com
Assistance with land, buildings, equipment, facilities, improvements and expenditures is offered to new businesses in the northeastern Texas city. You must be purchasing build-to-suit property with an assessed valuation of at least $3 million for land, building and equipment. Or you must have an employee base of at least 25 full-time jobs (with benefits) or 50 part-time jobs.
MERCER COUNTY INDUSTRIAL GROWTH FUND
Penn-Northwest Development Corp. | penn-northwest.com
Administered by the PNDC in partnership with the Shenango Valley Enterprise Zone Corp., this multimillion-dollar fund can be accessed by new and expanding value-added industrial, manufacturing, warehouse, distribution and advanced technology firms in Pennsylvania’s Shenango Valley and Mercer County. Eligible users can use the funds for: land acquisition, preparation and associated expenses; building acquisition, renovation or additions; machinery and equipment purchases (new and used); and limited working capital, soft costs of engineering and legal fees.
MICHIGAN MANUFACTURING TECHNOLOGY CENTER
Michigan Economic Development Corp. | michigan.org
Accredited by the International Association for Continuing Education and Training, the MMTC offers direct technical assistance so small and medium-sized manufacturers and food processors can learn the best manufacturing practices and technologies. This includes assistance in product and process innovation, lean manufacturing and continuous improvement, quality systems, ISO 14001, costing systems, management training, matchmaking and business development services.
NO TAX ON MANUFACTURING EQUIPMENT
Virginia Beach Department of Economic Development | vbgov.com
The only place in the Commonwealth to eliminate the tax on machinery and tool equipment, Virginia’s southernmost city offers the incentive to manufacturers without applications or approvals being necessary. Combined with other state and local incentive programs—including grants and state corporate income tax credits designed specifically for Port of Virginia users—Virginia Beach is extremely cost-competitive for manufacturers directly engaged in global trade.
OHIO INTERNATIONAL MARKET ACCESS GRANT FOR EXPORTERS (IMAGE)
Ohio Development Services Agency | development.ohio.gov
Designed to increase exports and create jobs, IMAGE grants help small businesses promote their products and services in international markets. This includes: trade show registration fees; printing costs for trade show materials; booth space rental, design and construction; and freight costs to ship a booth and materials.
PAYMENT IN LIEU OF TAX (PILOT)
Economic Development Growth Engine (EDGE) for Memphis and Shelby County | growth-engine.org
Projects involving large capital investment and high levels of job creation in Memphis or Shelby County that surrounds the Tennessee city may qualify for the PILOT property tax freeze. Approval is based on a variety of performance standards, including the number and type of jobs created, annual base wage, capital investment in real and personal property and the project location. Property taxes are frozen at the pre-development level.
PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY
Pennsylvania Department of Community & Economic Development | dced.pa.gov
Low-interest loans and lines of credit are offered to eligible businesses in manufacturing, industrial, agricultural, research and development, hospitality, defense conversion, recycling, construction, child day-care, retail and service, export and computer-related service enterprises. The assistance can be used for land and building acquisitions; construction and renovation costs; machinery and equipment purchases; and working capital and accounts receivable lines of credit. Repayment terms are up to 10 years for machinery and equipment purchases and 15 years for land and building acquisitions and construction/renovation projects. Working capital and accounts receivable lines of credit have one-year terms that are renewable.
PUBLIC-PRIVATE PARTNERSHIP PROGRAM
Dallas Office of Economic Development | dallascityhall.com
Companies considering a relocation/expansion or new commercial development in the north Texas metropolis may be eligible for a grant in lieu of tax abatement or to defray such project costs as land purchase, building costs, public infrastructure costs, development fees, right of way abandonment fees, loan guarantees, training costs, relocation costs and more.
QUALITY JOBS TAX CREDIT
Georgia Department of Economic Development | georgia.org
This tax credit rewards companies that within a 12-month period create at least 50 jobs that pay wages at least 10 percent higher than the average of the Georgia county the company is locating in. The amount of the credit escalates the higher that percentage over the county average is. For instance, a job that pays 110 to 120 percent of the county average can earn a company a $2,500 credit for five years, 120 to 150 percent gets a $3,000 credit, 150-175 percent earns a $4,000 credit, 175-200 percent shoots to $4,500 and 200 percent or greater enjoys a $5,000 credit. Companies that do not qualify for this incentive can still receive a regular old state job tax credit.
TAX EXEMPT BOND FINANCING
City of Marietta, Georgia | Marietta.gov
Marietta offers bond financing for qualifying businesses locating or expanding in the Georgia city. This tax-exempt financing reduces local ad valorem tax assessments, and the resulting property taxes increase in benefit based upon the level of investment and the length of the leaseback program. Financing industrial projects using private activity bonds can lead to cost savings and additional benefits over traditional debt instruments. The Marietta Development Authority can also assist in finding developed industrial sites and navigating the government permitting/approval process.
TEXAS ENTERPRISE FUND
TexasOne | texasone.us
Cash grants are awarded to projects that offer significant projected job creation and capital investment and have a single Texas site competing with another viable out-of-state option. Since its inception in 2004, the TEF has awarded over 100 grants totaling more than $500 million across a wide variety of industries and projects. But don’t worry about breaking the Lone Star State bank: The funding model ensures Texas receives a full return on its investment. n
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