State and local governments tend to enact a variety of growth policies designed to encourage businesses to relocate, expand, or stay in their respective areas. Your business can take advantage of these local incentives and can potentially recoup hundreds of thousands of project dollars. Projects such as the development of manufacturing and technology facilities and addition of corporate headquarters or distribution centers can all qualify for local incentives.
There are generally two types of incentives that state and local governments make available, one of which includes statutory incentives. Statutory incentives consist mainly of tax credits applied towards franchise or state income tax. These credits can be offered for a variety of activities such as research and development, job creation, and capital expansion.
Discretionary incentives, also known as negotiated incentives, take the form of funds or grants linked to several pre-negotiated conditions. These incentives can include:
- Low-interest financing
- Property tax relief
- Fee waivers
- Utility rate reductions
- Services for site preparation
- Employee hiring/training support
Negotiated incentives are usually formalized with an agreement contingent upon the company’s capital spending and hiring commitments. These incentives have clawback provisions if commitments are not met. The financial benefit from this process can prove to be very significant to a company, especially when evaluating an expansion project’s return on investment.
When it comes to negotiated incentives, TRCG can provide you thorough diligence to identify and pursue all incentives available to your Company. TRCG can help you:
- Determine project qualification for various incentives
- Develop and deliver all necessary presentations to the governing authorities
- Structure and negotiate the discretionary incentives
- Apply for and calculate all applicable tax credits and exemptions
- Ensure all incentive benefits are realized and the agreements are met