From Des Moines TV-8, KCCI News

Could Iowa Film Office Return?

DES MOINES, Iowa -- Could Iowa be getting back into the movie business?

Waterloo Senator Bill Dotzler is the co-leader of the House-Senate Economic Development Sub-Committee.

He said he hopes to re-establish the Iowa Film Office within the state Department of Cultural Affairs, and look at the possibility of setting up direct grants for specific film projects to replace the tax-credit approach.

Gov. Terry Branstad addressed the issue Monday morning during his weekly news conference.

"I do believe that we need a film office and I would like to see that in the Department of Cultural Affairs," said Branstad.

The film tax-credit program is currently suspended through fiscal year 2013. It's expected that lawmakers will vote next session to end the program permanently.

From EasternIowaGovernment.Com

DES MOINES
By Rod Boshart/SourceMedia Group News–
State tax credits for business development and research have spurred jobs and economic growth, but some state legislators were not convinced Wednesday that the activities would not be taking place without the incentives.
Also, members of the Legislative Tax Expenditure Committee said Branstad administration officials have signaled that they want lawmakers next session to end the film tax-credit program currently suspended through fiscal 2013.
Sen. Bill Dotzler, D-Waterloo, co-leader of the House-Senate economic development budget subcommittee, said he hopes to re-establish the Iowa Film Office within the state Department of Cultural Affairs and look at the possibility of setting up direct grants for specific film projects to replace the tax-credit approach.
“That old tax credit program is definitely dead. Drive a stake in its heart and don’t let it out in the sunlight,” he noted. However, Dotzler said he was still interested in trying to revive a way to nurture the film industry and the jobs it could create. “I think we ought to go back and revisit it. I think it was a good idea that went bad.”
Committee co-chairman Rep. Tom Sands, R-Wapello, said the ongoing film tax-credit scandal and related criminal prosecutions have “very possibly damaged the program where it will no longer be back because of public opinion if nothing else.”
During Wednesday’s committee discussion, Tim Whipple of the Iowa Economic Development Authority said the state’s high-quality jobs program has returned two dollars in increased tax revenue to the state treasury and leveraged $19.26 in capital investment for every dollar in state tax incentives that have been provided to qualifying businesses.
Between 2004 and September 2011, 201 projects have received nearly $385.6 million in state tax incentives. Those projects have made more than $7.4 billion in capital investments, created or retained 13,820 jobs and paid wages averaging $21.71 per hour.
In a separate report, Amy Rehder Harris of the state Department of Revenue said Iowa companies claimed $8.3 billion under the federal research activities tax credits in tax year 2008 and $48.6 million in state tax credit claims in tax year 2009 – based on the latest data available. About three-fourth of the state money went to large corporations, overall supported about 13,378 high-paying jobs, and the credits averaged about 4.3 cents on the dollar for the $1.2 billion worth of research activity conducted in Iowa, she told lawmakers.
However, Sen. Herman Quirmbach, D-Ames, said there’s no data that indicated the research and business development activities would not be taking place in Iowa even if the state offered no incentives and the reality is “we don’t know what we’re getting for the money we’re shelling out.”
Sands said he wasn’t sure what the 2012 legislative session will hold in terms of the state tax credit programs because there are some lawmakers who would like to get rid of the tax credits so there would be more money to spend in other areas and there are some lawmakers who would be willing to get rid of the tax credits to do more broad-based tax reform that would benefit all businesses.
Democrats on the interim panel cited a report on the state’s earned income tax credit indicating that 208,000 households filed $28.5 million in claims for tax year 2009 in pushing for another attempt next session to send Gov. Terry Branstad a boost in the credit that aids working families at a time of economic recession. The governor refused to sign a proposed increase in the earned income tax credit from 7 percent to 10 percent that backers said would have benefitted about 240,000 working families making $45,000 or less annually because he wanted it included in a broader package of tax reforms.
Committee co-leader Sen. Joe Bolkcom, D-Iowa City, said Wednesday’s review of the hundreds of millions of dollars Iowa spends in state tax credits was “long overdue.” But he added that the data presented begged the question: “Why does an Iowan making $17,500 a year pay more in state income taxes than some of the largest, most profitable corporations in the world, corporations which are making money in Iowa? In other words, why is Iowa taking from the working poor and giving to rich corporations?”

Final Words

I doubt I will be writing any more blogs or comments about the frozen Iowa film tax credits and the circumstances around them simply because I've said all I have to say about them. Unless something new surfaces from either the film trials or during the next legislative session, I have nothing to add.

I do need to clarify that I am not necessarily totally opposed to film incentives whether they be subsidies or tax rebates. I just think they should be straight forward and understandable to the average Iowa taxpayer with no smoke and mirrors to disguise how they actually work.

I'm sure there are a few people out there who have been wanting me to shut up about this issue, either because they are responsible for how the bill got written or because they think that bringing this issue up will harm the progress of restarting the Iowa Film Office. They will get their wish but this issue shouldn't be totally swept under the rug, because it could cause trouble again if it is ignored. I am surprised that they haven't made their objections known or have made any attempt to correct anything they have issue with. But that is their choice.

I suspect if nothing is done to replace the film tax credits, the legislature will either kill it outright or remove life support so that they can't be used. That is why I make the proposal that they consider making it an actual tax credit - that is, a refund on sales taxes. I think this might make it more palatable to the legislators and give a place for a fresh start with room for upward growth. With the state putting off things like roads and bridges and making cuts to education, I doubt they are going to be too excited to returning to the 50% subsidy they were offering.

We definitely need the Iowa Film Office back no matter what happens and I encourage you to continue sending messages to the governor to encourage that. I do think we need some sort of incentives to encourage producers to shoot in Iowa because without one Iowa is going to be a tough sell. Even if a film does come here, without some sort of incentive producers will not have an incentive (there's that word again) to hire Iowa cast and crew, except for the smallest of jobs.

That's all, unless something new comes up.

Time For A Disclaimer

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I encourage any of you who may be reading my blog to contribute your opinions, but stress that the views expressed in the posts and comments of this blog are the personal opinions of the contributing authors only.

We in the Iowa film community have suffered for several years from lack of creative work and because of this, frustrations have arisen. I would prefer to keep things in an optimistic light and strive towards focusing on positive ideas. It is very important that Iowa Governor Terry Branstad know that we need the Iowa Film Office to return and and we appreciate his long-standing support of film-making in Iowa.

Movies in Iowa

Here is a list of movies that had been shot in Iowa that is from September 18, 2009. There have been some feature films shot here since then, and this list definitely needs to be updated and filled in, and probably annotated but it is an informative one.

The movies made before "Cold Turkey" in 1968 were mostly made under the old studio system. I don't have the information for most of them but I do know that on one of them B-roll footage was shot here with the bulk of the picture shot back in California on sound stages. B-roll footage would be that which wouldn't involve any actors - things like building exteriors and landscape shots. This is probably true for the rest. These movies had a very minimal impact on Iowa's economy and next to none for anything we might consider a "film industry". An item of special note is just how far apart these productions are. There are 2 in the 1930's, 1 in the 1940's and it isn't until the mid 1960's where we see another camera rolling in Iowa.

This changes a bit after "Cold Turkey", the first major studio film to be shot entirely in Iowa, is shot in 1968. Some of it is due to the religious film companies Mark IV and Heartland productions making a series of feature films for the fundamentalist christian church market which the destination of most being church basements. It is still not a lot of films and certainly nothing to build an industry on.

It is with the introduction of the Iowa Film Office that activity picks up for secular entertainment-based features in the state. The gap between studio based productions decreased to approximately 2 to 3 years between films. It was still not enough to base a living on and not often enough to gain any deep experience but it was a definite improvement.

The introduction of the film tax credits in approximately 2007 (will need to research to nail down the date) turned this trickle into a deluge. It didn't last long but at one point, in Des Moines alone, there were 3 feature films shooting simultaneously. Then the bottom dropped off when then governor Chet Culver froze the program without any clear end date because of the discovery of abuse of it. Since then there have been no studio bound feature films shot in Iowa. It has been now two years and any feature films that have been made have been volunteer based efforts.

Our current governor, Terry Branstad, has announced his intention to re-open the Iowa Film Office, possibly housing it within the Department of Cultural Affairs, but has set no date to do this. I've heard that communication from our film community to him has been rather quiet so he has not made this a priority yet. This is a very good cue to you to start communicating.

There are some other things to be learned from this list: One of those things is that for there to be the well-known films that put Iowa on the cultural map (films like "Field of Dreams" and "Bridges of Madison County") there has to be a sufficient quantity of total films being made to allow for the luck that it takes for such films to show up.

Another thing of note is that a significant quantity of the films listed are independent films in the category of "never heard from again." The main reason these films have this status (and this does not just apply to Iowa made films) is that all of the financial resources were poured into the making of the film and little to none into the marketing and selling of the film. Hats off to you if you have managed to make a feature but you aren't going to get very far if you've not thought past your final cut. Most independent filmmakers take their features to film festivals in the hopes of finding a film distributor who they hope will save them. These filmmakers have often put all their financial resources into the one film and aren't in the position to make another one. If they do have the luck to find a distributor to carry their film the deals are often very one sided in favor of the distributor and the producer is lucky to see any profit at all. Not to try to push a book, but as a public service to independent producers, I suggest you read this book: The Big Picture: Money and Power in Hollywood by Edward Jay Epstein. It will tell you a great many things about how the business actually works and many will be eye openers.

I will eventually have this list of movies up to date. Don't give up. All is not lost as far as the movie business in Iowa. Be sure to lobby the governor hard for a new Iowa Film Office. He created the original one so you can be sure he is not against the idea. He just needs to know that you really want it bad. Otherwise he'll set it aside and not deal with it.

Films Made (or at least partially made) in Iowa:
1935 – Penitentiary, Anamosa
1938 – Union Pacific, Council Bluffs
1945 – Keep Your Powder Dry, Des Moines
1966 – The Hostage, Des Moines
1968 – Cold Turkey, Winterset
1968 – Fever Heat, Stuart
1968 – The Warden, Fort Madison
1969 – Gaily Gaily, Dubuque.
1970 – Thief in the Night, Des Moines and Carlisle
1973 – Singin’ Happy, various locations
1974 – Blood on the Mountain, Des Moines
1974 – Survival, Des Moines
1975 – All the King’s Horses, Ivy and Des Moines
1975 – Huckleberry Finn, along Mississippi River
1976 – A Distant Thunder, Des Moines
1976 – A Stranger in the Forest, Des Moines
1976 – Happiness Is … , Des Moines
1977 – F.I.S.T., Dubuque
1977 – Ride the Wind, Des Moines
1977 – Sammy, Des Moines
1978 – Nite Song, Des Moines
1978 – Scoring, Des Moines and Cedar Rapids
1979 – Paradise Trail, Des Moines
1980 – Heaven’s Heroes, Des Moines
1980 – Image of the Beast, Des Moines
1980 – Take This Job and Shove It, Dubuque
1980 – Whitcomb’s War, Des Moines and Jefferson
1981 – Home Safe, Des Moines
1981 – Pennies from Heaven, Dubuque
1982 – Face in the Mirror, Des Moines
1983 – Children of the Corn, Sioux City and Whiting
1983 – Country, Waterloo and Dunkerton
1983 – Prodigal Planet, Des Moines
1984 – Starman, Cedar Rapids
1984 – The Healing, Des Moines
1984 – The Shepherd, Des Moines
1985 – Echoes of War, Des Moines
1985 – Miracle Man, Des Moines
1985 – Rites of Passage, Des Moines and Adel
1986 – Adventures of Huckleberry Finn, northeast Iowa
1986 – Together, various locations
1987 – Miles from Home, Cedar Rapids
1987 – The Geek, Davenport
1988 – Field of Dreams, Dyersville
1988 – Zadar, Cow from Hell, Iowa City
1990 – Bix, Davenport
1990 – Indian Runner, Council Bluffs
1990 – Luther the Geek, various locations
1990 – Where the Night Begins, Davenport
1991 – Brother and Sisters, Davenport
1991 – In the Best Interest of the Children, Cedar Rapids
1991 – Noises Off, Des Moines
1992 – Shimmer, Toledo and Marshalltown
1992 – Whispers in the Dark, Des Moines
1993 – A Childhood Friend, Davenport
1993 – The Program, Iowa City
1993 – The Room Next Door, Davenport
1994 – Omaha, Council Bluffs
1994 – The Bridges of Madison County, Winterset and Adel
1994 – The Puppet Masters, Des Moines
1994 – An American Love, Davenport
1995 – Mommy, Muscatine
1995 – Twister, Eldora
1996 – Citizen Ruth, Council Bluffs
1996 – Michael, Council Bluffs
1996 – Touch, Council Bluffs
1997 – Drive-by Johnny, Bernard
1997 – Love from Ground Zero, Council Bluffs
1997 – The Unspoken, Grand Junction
1997 – The Yoofo Club, Des Moines
1997 – Trekkies, Riverside
1998 – Finest Hours, Fairfield
1998 – The Straight Story, Laurens and Clermont
1998 – Whiteboyz, Davenport
1999 – Cutter, Des Moines
2000 – Rain, State Center and Marshalltown
2000 – Silverwings, Des Moines
2002 – Haunting Villisca, Villisca and Des Moines and Warren County
2002 – Mommy 2, Muscatine
2002 – The Formula, Cedar Rapids
2002 – Yearbook, Bettendorf and Davenport
2003 – Iowa, Centerville
2003 – Magic Moment, Cedar Rapids area
2003 – Vamoose, Des Moines
2004 – Again and Again, Spring Hill and Warren County
2004 – Beneath the Mississippi, Burlington
2004 – Boone Style, Des Moines
2004 – Eliot Ness: An Untouchable Life, Des Moines
2004 – Her Summer, Davenport
2004 – Lights, Camera … Kill!, Ottumwa
2004 – University Heights, Iowa City
2005 – 30, Cedar Rapids and Highway 30
2005 – Bad Kids Volume III, Des Moines
2005 – Dog Jack, Mount Pleasant
2005 – Indelible, Des Moines
2006 – Something Blue, Des Moines
2006 – The Curse, Marshalltown
2006 – The Hideout, Davenport area
2006 – The Final Season, Norway and Cedar Rapids
2007 – Sugar, Davenport, Burlington
2007 – 16 to Life (originally Duck Farm No. 13), McGregor
2008 – Children of the Corn, Lost Nation, Davenport
2008 – South Dakota, Earlham, central Iowa
2008 – Peacock, Odebolt, Greenfield, Lorimor
2008 – 16 to Life, McGregor
2009 – Ticket Out, Des Moines, central Iowa
2009 – The Crazies, Lenox, south western Iowa
2009 – The Offering, Washington, eastern Iowa
2009 – Splatter: Honor, Love, and Paintball, Burlington, south eastern Iowa
2009 – Twelve Thirty, Cedar Rapids, Iowa City
2009 – Sam Steele and the Junior Detective Agency, Des Moines
2009 – The Scientist, Council Bluffs
2009 – Megafault, Davenport
2009 – Ash, Des Moines
2009 – The Experiment, Des Moines
2009 – Janie Jones, Des Moines
2009 – Smitty, Des Moines
2009 – Dylan’s Wake, Des Moines
2009 – Lucky, Council Bluffs
2009 – Fertile Ground, Madrid

From BusinessFacilities.Com

2011 INCENTIVES GUIDE
A comprehensive guide to state incentives offered throughout the U.S.
ALABAMA

INCOME TAX CAPITAL CREDIT: Currently codified as Article 7, Chapter 18, Title 40, Code of Alabama 1975. It is a credit of five percent of the capital costs of a qualifying project, to be applied to the Alabama income tax liability or financial institution excise tax generated by the project income, each year for 20 years. This credit cannot be carried forward or back, and cannot be used to generate a refund to the taxpayer. The capital credit is used only after all other deductions, losses or credits permitted under Titles 40 and 41 of the Code of Alabama 1975. The credit will follow the income generated by the project and, therefore, will be allowed to “pass-through” entities such as: corporations, partnerships, limited liability companies, etc. Types of Capital Credit projects include:

* New Project or Expansion Project: Consists of new investment at a new site in Alabama, or new investment that will expand the capacity and the number of employees at an existing facility. The law allows more than one project on the same site. A company may have any number of projects in Alabama, as long as each project meets the statutory requirements for a qualifying project.

* Small Business Addition: A small business addition is an addition to an existing facility of a small business. A small business is a business located in Alabama that has 100 or fewer full-time employees, prior to the date on which the addition is placed in service.

CERTIFIED CAPITAL COMPANY PROGRAM (CAPCO): Promotes investment in Alabama-based businesses by creating several venture capital funds required to invest in Alabama companies. Businesses that request CAPCO investment funding must meet certain criteria and requirements set by the Alabama Development Office. CAPCO financing, an alternative to conventional bank financing, can accommodate a slightly higher risk profile and provide a more flexible structure for growing businesses. Eligibility requirements include:

* Headquartered in Alabama or will be relocated to Alabama
* Principal business operations in Alabama or will be relocated to Alabama
* Have no more than 100 full-time employees, and 80 percent of employees are in Alabama or 80 percent of payroll is paid to employees in Alabama
* Industries that qualify for the CAPCO program may include manufacturing, processing, or assembling products; conducting research and development; or providing services.

ARIZONA

THE ARIZONA COMPETITIVENESS PACKAGE (HB 2001) is a brand new incentive package which includes the following new incentive programs and updates:

Quality Jobs Tax Credit Program: Beginning July 1, 2011, this new program provides Arizona income tax credits for companies creating new jobs and investing in Arizona. The credit is valued at up to $9,000 over a 3-year period per each new employee and offers a 5-year carry forward provision for any unused tax credits. Eligibility qualifications are different for rural and metro areas. The program is capped at 10,000 new jobs being claimed each year by all participants; whereas a taxpayer is limited to a maximum of 400 new jobs per year.

Job Training Program: Originally set to expire in 2011, the Arizona Competitiveness Package extended the program an additional five years until December 31, 2016 and modified the definition of a “rural area.”

$25 Million deal-closing fund: Arizona has taken a progressive position by offering attraction funds to companies meeting performance measures that benefit both the company and the citizens of Arizona. Utilization of the Arizona Competes Fund will generate investment in business projects that stimulate and promote industries providing high-wage and stable jobs. In order to assure a return on investment to the state, performance safeguards are a requirement of these funds. To request more information as it becomes available, please click here.

Arizona now offers a 100 percent electable sales tax factor for multi-state corporations. The new legislation increases the electable sales factor for multi-state corporations from 80 percent to100 percent. The increase is to occur in equal increments over a four year period, between 2014 and 2017. This provides businesses with the opportunity to reduce their Arizona tax burden.

30 percent Reduction in Arizona’s corporate income tax rate: Corporate Income Tax rates will be decreasing in Arizona from 6.97 percent down to 4.9 percent, between 2014 and 2017. This new 30 percent lower rate makes Arizona’s rate one of the five lowest in the country.

property tax reform:

* Business: Accelerated Depreciation schedules for prospective acquisitions of commercial personal property have also been improved. Five-year accelerated depreciation schedules have been increased to help companies recover their investments even faster.
* Personal Property Tax Exemption: 15 percent increase in personal property exemptions. The exemption on personal property is currently $67,000; it is being increased to $79,000 beginning in 2011 by using the Employment Cost Index (ECI) rather than the Gross Domestic Product Implicit Price Deflator (GDP IPD).
* Commercial Property: Reduced by 10 percent, the commercial property assessment ratio will be 18 percent by 2017. This continues a 10-year trend of reducing property taxes in Arizona.

Extension of the Angel Investment Tax Credit Program: Originally set to expire in 2011, the program is now available until June 30, 2016. Additional improvements to the program include expanded company eligibility and beginning in 2014 elimination of capital gains tax on income derived from investments in companies certified by the ACA.

Enhancement of the Research & Development Tax Credit Program: The R&D program now offers up to a 34 percent Arizona income tax credit for R&D made in conjunction with an Arizona public university. Tax credits are based upon R&D increases over prior years.
ARKANSAS

TARGETED BUSINESS INCENTIVES: “Targeted businesses” may qualify for three special incentives designed to help new, knowledge-based businesses in their early years. These discretionary incentives are for start-up companies in emerging sectors (Advanced materials and manufacturing systems; Agriculture, food and environmental sciences; Biotechnology, bioengineering and life sciences; Information technology; Transportation logistics; and Bio-based products):

* A refund of sales and use taxes paid on the purchase of building materials and machinery and equipment associated with the approved project
* A transferable income tax credit equal to 10 percent of payroll for up to five years
* A transferable income tax credit equal to 33 percent of eligible research and development expenditures

Companies must be less than 5-years old; have an annual payroll between $100,000 and $1 million; show proof of an equity investment of at least $250,000; pay at least 150 percent of the lesser of the state or county average hourly wage where the business is located; and meet requisite payroll thresholds.

RESEARCH AND DEVELOPMENT INCENTIVES:

* University Based Research and Development – An eligible business that contracts with one or more Arkansas colleges or universities in performing research may qualify for a 33 percent income tax credit for qualified research expenditures.
* In-House Research and Development – New and existing eligible businesses that conduct “in-house” research that qualifies for federal research and development tax credits may qualify for in-house research income tax credits. The credit allowed is twenty percent of qualified research expenditures that exceed the base year, for a period of three years and the incremental increase in qualified research and expenditures for the succeeding two years. The income tax credit earned for in-house research and development may be used to offset 100 percent of the businesses’ state income tax liability.
* Research and Development in Area of Strategic Value – For qualifying businesses that invest in: 1) in-house research in an area of strategic value—fields having long-term economic or commercial value to the state, and that have been identified in the research and development plan; or 2) a research and development project offered by the Arkansas Science and Technology Authority. The income tax credit is equal to 33 percent of qualified research expenditures with a maximum of $50,000 per tax year.

TOURISM DEVELOPMENT INCENTIVES: The Arkansas Tourism Development Act provides state sales and use tax credits and income tax credits to businesses initiating approved tourism attraction projects. Sales tax credits shall be determined in accordance with the following criteria:

* Eligible minimum project costs must be $1 million, except in high unemployment counties (Arkansas, Chicot, Clay, Crittenden, Dallas, Desha and Mississippi) where it is $500,000.
* Sales tax credits are calculated based upon 15 percent (25 percent in high unemployment counties) of eligible project cost for projects spending more than $1 million.
* Sales tax credit may be applied against the business’s increased sales tax liability resulting from the project.
* Other review criteria may be requested to determine whether the project meets the intent of the Act.

Additionally, eligible businesses may receive a state income tax credit equal to 4 percent of the annual payroll of each new, full-time, permanent employee. The income tax credits begin in the year in which the new employees are hired.
CALIFORNIA

ENTERPRISE ZONES: Businesses located within the boundaries of an EZ are eligible for tax credits. The first major EZ tax credit is equivalent to the sales and use tax paid on the first $1,000,000 of Personal Income Tax or Corporations can earn sales tax credits on purchases of $20 million per year of qualified machinery and machinery parts. The second major EZ benefit takes the form of a credit equal to a percentage of the wages paid to a qualified employee. The credit is based on the lesser of the actual hourly wage or 150 percent of the state-established minimum wage. The credit is provided over a five-year period with 50 percent of the wages creditable in the first year of employment, 40 percent the second year, 30 percent the third year, 20 percent the fourth year, and 10 percent the fifth year. If the employee stays with the company for the entire 5-year period, the company receives credits totaling nearly $37,440 per qualified employee. If the employee is terminated prior to 270 days of employment, the credit is recaptured.

LAMBRA zones are a companion to EZs. The most notable differences in incentives include enhanced equipment purchase eligibility under the sales and use tax credit; an annual wage limitation of $2 million per year under the hiring tax credit; and redefinition of qualified employees to include displaced military or civilian employees of the former base.

RESEARCH AND DEVELOPMENT TAX CREDIT: Designed to encourage businesses to increase their basic research and development activities in California, the research and development tax credit allows companies to receive a 15 percent credit against their bank and corporation tax liability for qualified in-house research expenses, and a 24 percent credit for basic research payments to outside organizations. This tax credit is applied to a tax payer’s state tax liability. The federal tax credit may be collected for the same research activity. Qualified research expenses generally include wages, supplies and contract research costs. To qualify, a taxpayer’s research must be conducted within California and include basic or applied research of scientific inquiry, original investigation for the advancement of scientific or engineering knowledge or improved function of a business component. The research activity must be conducted in California to qualify for the credit.

EMPOWERMENT ZONES: The federal government has designated sections of several California communities as Renewal Communities, Empowerment Zones and Enterprise Communities (RC, EZs and ECs). The cities of Fresno, Los Angeles, Santa Ana, San Francisco, Orange Cove, Parlier, and the counties of Imperial and Riverside have designated RCs, EZs or ECs. Benefits to businesses locating or expanding in these areas include:

* Employer wage credits of 20 percent for the first $15,000 in wages paid to an individual who resides in the EZ up to $3,000.
* Section 179 deduction allowing businesses to deduct all or part of the cost of eligible property (machinery, furniture, equipment, computers) up to an additional $20,000.
* Availability of low interest rate tax-exempt private activity bonds to finance industrial projects typically between $1-3 million (some zones have substantially larger limits), often with fewer restrictions than those normally associated with tax-exempt bond financing.
* Possible city business tax exemption.
* Postponement of capital gains on the sale of EZ/EC assets.

THE NEW MARKETS TAX CREDIT (NMTC) PROGRAM permits taxpayers to receive a credit against federal income taxes for qualified equity investments in designated Community Development Entities (CDEs). Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. In each of the first three years, the investor receives a credit equal to 5 percent of the total amount paid for the stock or capital interest at the time of purchase. For the final four years, the value of the credit is 6 percent annually.

For a complete list of California incentives, visit: www.business.ca.gov/RelocateorExpand/BusinessIncentives.aspx
DELAWARE

The state of Delaware takes a comprehensive approach in supporting businesses and entrepreneurs of all sizes and has special programs that play to Delaware’s strengths, including:

The DELAWARE STRATEGIC FUND: represents the primary funding source used by the Delaware Economic Development Office (DEDO) to provide customized financial assistance to businesses. For businesses considering locating in the State of Delaware, financial assistance may be provided in the form of low interest loans, convertible loans to grants, or other creative instruments to support the attraction of businesses hiring Delawareans.

SMALL BUSINESS INNOVATION RESEARCH (SBIR): The Delaware Strategic Fund represents the primary funding source used by for SBIR Bridge Grants. The SBIR Matching Grant program provides grants funds to businesses located in the State that have obtained a federal SBIR Grant.

BROWNFIELD GRANT PROGRAM: The Delaware Strategic Fund represents the primary funding source used for the Brownfield Grant program that helps reduce the capital expenditure of redeveloping a Brownfield site where at least five jobs will be created.

TAX CREDITS FROM NEW ECONOMY JOBS PROGRAM: Eligible businesses receive an initial 25 percent rebate on withholding taxes. To qualify, the business must add at least 50 new jobs, each of which must have an annual salary of at least $100,000. Participating businesses may receive a maximum rebate of up to 40 percent after 250 qualifying employees have been hired and the business operates within targeted growth zones, incorporated municipalities or former Brownfields. Qualifying firms are eligible for credits for a ten-year period.

TARGETED INDUSTRY TAX INCENTIVES: Businesses in targeted industries are eligible for tax credits of $400 for every $100,000 of capital investment, as well as $400 for every new job created. This credit can be used for a period of up to ten years. It requires a minimum capital investment of $100,000, which may not exceed 50 percent of annual pre-tax liability. Select commercial businesses may also qualify for a ten-year reduction in gross receipt taxes. Targeted industries include manufacturing, wholesaling, computer Processing, engineering, computer credit, aviation, telecommunications, laboratories and scientific research.

TARGETED LOCATION TAX INCENTIVES: Targeted industries (as defined above) that expand or relocate to targeted locations are eligible for corporate income tax credits of $650 for every $100,000 of capital investment, as well as $650 for every job created. This credit can be used for a period of up to ten years. Select commercial businesses may also qualify for a ten-year reduction in gross receipt taxes. Targeted locations include Targeted Census Tracts*, Government Owned Property, Foreign Trade Zones and Non-profit Owned Property for Economic Development

GREEN INDUSTRIES: Green manufacturers may be eligible for tax credits if they reduce chemical waste by 20 percent, reduce other waste by 50 percent, use 25 percent recycled materials in their manufacturing and take other steps to remove materials from Delaware’s solid waste stream.

BROWNFIELD TAX CREDITS: Businesses that develop property on former Brownfields and make more than a $100,000 capital investment are eligible for tax credits. Brownfields in targeted locations are eligible for a $900 credit for every $100,000 of capital investment and $900 for every job created. Those in non-targeted areas are eligible for a $400 credit for every $100,000 of capital investment and $400 for every job created.

PUBLIC UTILITY TAX REBATES: Tax Credits are available for a rebate of 50 percent of the public utilities tax imposed on new or increased consumption of gas and electricity for five years. The public utilities tax rate is 4.25 percent. The utility tax on the consumption of electric by licensed manufacturers and food or agribusiness processors is reduced to 2 percent. Additionally, electricity consumed in the manufacturing of automobiles is exempt from utility taxes.

BUSINESS FINDERS FEE (BFF): Existing Delaware companies that successfully recruit other companies to the state are eligible for a tax credit of $500 for each new job that the new company brings. This is an innovative new program that will help strengthen local supply networks and sectors.

LIMITED INVESTMENT FOR FINANCIAL TRACTION (LIFT): This loan program allows participating small businesses to defer interest payments on their line of credit for a two-year period. Eligible businesses must meet the following requirements:
· Have been in business for at least three years
· Have an existing line of credit with a Delaware commercial bank
· Have between 3 – 50 employees

SMALL BUSINESS ENERGY AND FACILITIES REVOLVING FUND: Created by a $500,000 grant from the U.S. Department of Commerce and matched with funds from the Delaware Strategic Fund, this fund provides loans at market or below-market interest rates to businesses that will create or retain jobs in industries that promote energy efficiency or recycling.
FLORIDA

QUALIFIED TARGET INDUSTRY TAX REFUND (QTI): Available for new or expanding companies that create high wage jobs in targeted high value-added industries. It includes refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium and certain other taxes. Pre-approved applicants who create jobs in Florida receive tax refunds of $3,000 per net new Florida full-time equivalent job created, $6,000 in an Enterprise Zone or Rural Community (county). For businesses paying 150 percent of the average annual wage, add $1,000 per job; for businesses paying 200 percent of the average annual salary, add $2,000 per job; businesses falling within a designated high impact sector or increasing exports of its goods through a seaport or airport in the state by at least 10 percent in value or tonnage in each year of receiving a QTI refund, add $2,000 per job; projects locating in a designated Brownfield area (Brownfield Bonus) can add $2,500 per job. The local community where the company locates contributes 20 percent of the total tax refund. There is a cap of $5 million per single qualified applicant in all years, and no more than 25 percent of the total refund approved may be taken in any single fiscal year.

CAPITAL INVESTMENT TAX CREDIT (CITC): Used to attract and grow capital-intensive industries, it is an annual credit, provided for up to 20 years, against the corporate income tax. Eligible projects are those in designated high-impact portions of the following sectors: clean energy, biomedical technology, financial services, information technology, silicon technology, transportation equipment manufacturing, or be a corporate headquarters facility. Projects must also create a minimum of 100 jobs and invest at least $25 million in eligible capital costs. Eligible capital costs include all expenses incurred in the acquisition, construction, installation, and equipping of a project from the beginning of construction to the commencement of operations. The level of investment and the project’s Florida corporate income tax liability for the 20 years following commencement of operations determines the amount of the annual credit.

INCUMBENT WORKER TRAINING (IWT): A program that provides training to currently employed workers to keep Florida’s workforce competitive in a global economy and to retain existing businesses. It is available to all Florida businesses that have been in operation for at least one year prior to application and require skills upgrade training for existing employees. Priority is given to businesses in targeted industries, Enterprise Zones, HUB Zones, Inner City Distressed areas, Rural Counties and areas, and Brownfield areas.
GEORGIA

JOB/INVESTMENT TAX CREDITS: Available to a business or to its headquarters engaged in any of the following six categories: Manufacturing, Telecommunications, Warehouse Distribution, Research & Development, Processing and Tourism. Taxpayers may choose between job tax credits or investment tax credits. Job tax credits range from $4,000 to $750 per job each year for 5 years.

QUALITY JOBS TAX CREDIT: Companies that create at least 50 jobs in a 12 month period where each job pays wages at least 110 percent of the county average are eligible to receive a tax credit of $2,500-$5,000 per job, per year, for up to five years, based on a scaled system. New quality jobs created within seven years can qualify for the credit. Credits may be used to offset the company’s payroll withholding once all other tax liability has been exhausted, and may be carried forward for 10 years.

SALES AND USE TAX INVENTORY TAX EXEMPTION: Manufacturing production machinery is exempt from state and local sales tax, as well as machinery or components bought to upgrade or replace existing machinery; additionally, the exemption covers re-manufacturing of aircraft engines and components. This has been extended to warehouses and distribution centers; their primary material handling equipment is exempt from sales tax if the company invests $5 million or more in a new or expanded facility. Computer equipment that is purchased or leased for use at the facilities of a high technology company is exempt when the total purchase (or lease) value exceeds $15 million. Machinery, equipment and materials purchased and used in a clean room of Class 100 or less are exempt. Electricity interacting directly with a manufactured product is exempt if the total cost of the electricity is more than half the cost of all materials used (including electricity) in making the product.
IDAHO

The HIRE ONE TAX CREDIT rewards employers that create new jobs. Business that hire new employees to fill newly created positions can receive a refundable income tax credit for the gross wages paid during the first 12 months of employment. The new employer must make at least $12 an hour in counties where the unemployment level is 10 percent or higher and $15 an hour in counties with unemployment below 10 percent. The amount of the refund is based on the employer’s unemployment insurance tax rating.

Idaho Business Advantage: Businesses that invest a minimum of $500,000 in new facilities and create at least 10 new jobs averaging $40,000 annually, plus benefits qualify for a variety of incentives:

a. An enhanced Investment Tax Credit of 3.75 percent up to $750,000 OR 62.5 percent of tax liability in any one year.

b. A new jobs tax credit starting at $1,500 and climbing to $3,000 per job (note, this section may be used in lieu of the Hire One Tax Credit)

c. A 2.5 percent real property improvement tax credit up to $125,000 in any one year along with a 25 percent rebate on sales tax paid on construction materials for the new facilities

d. Upon request of the company, the respective county commissioners may also authorize a full or partial property tax exemption.

Customized Workforce Training is tailored to the specific needs of the company and designed to develop skills for their precise requirements. Financial reimbursement up to $3,000 per employee is available to eligible companies to cover the cost of training new employees or retaining ones facing permanent layoff.
ILLINOIS

The ECONOMIC DEVELOPMENT FOR A GROWING ECONOMY (EDGE) incentive program encourages companies to locate or expand operations in Illinois when there is active consideration of a competing location in another state. The program can provide tax credits to qualifying companies, equal to the amount of state income taxes withheld from the salaries of employees in the newly created jobs. The non-refundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years.

The EMPLOYER TRAINING INVESTMENT PROGRAM (ETIP) supports companies in retraining their employees to stay competitive. Through the program, Illinois companies are reimbursed for up to 50 percent of eligible training costs. Potential reimbursements include trainers, tuition, trainee wages and fringes, new technology or processes, new machinery, regulatory compliance, and a continuous improvement system.

The LARGE BUSINESS DEVELOPMENT PROGRAM (LBDP) is for companies undertaking a major expansion or relocation. Funds may be used by large businesses for bondable business activities including financing the purchase of land or buildings; building construction or renovation; and certain types of machinery and equipment.

The COMMUNITY DEVELOPMENT ASSISTANCE PROGRAM FOR ECONOMIC DEVELOPMENT (CDAP-ED) is a federally funded program designed to provide grants to units of local government for economic development activities related to private business retention or expansion. Local governments can make their grant funds available as loans to businesses growing or moving to their community. Funds may be used for machinery and equipment, working capital, and building construction and renovation.

Illinois is receiving an allotment of funds to accelerate private investment and ease the credit crunch for small businesses through the federal STATE SMALL BUSINESS CREDIT INITIATIVE of the Small Business Jobs Act of 2010. The particulars of Illinois’ program will be announced in fall 2011. Illinois’ program is expected to feature three programs to spur institutional lending to businesses up to 750 employees, and one program to leverage private venture capital in start-ups and high-growth businesses.

The ANGEL INVESTMENT CREDIT PROGRAM offers a tax credit to interested firms or persons who make an investment in one of Illinois’ innovative, qualified new business ventures. The tax credit may equal 25 percent of up to a $2 million investment made by the private investor.

More details on these programs are available through the Illinois Department of Commerce and Economic Opportunity at www.ildceo.net.
INDIANA

CORPORATE TAX RATE: Indiana’s corporate tax rate was reduced from 8.5 percent to 6.5 percent. This will be phased in from July 1, 2012 to July 1, 2015. The legislature reduced this tax in order to improve upon Indiana’s existing business climate and bring it more in line with rates in other states.

VENTURE CAPITAL INVESTMENT (VCI) TAX CREDIT: The $200 filing fee was eliminated for two years until June 30, 2013. The VCI tax credit cap per qualifying business was raised from $500,000 to $1 million. This change provides greater opportunities for young companies to attract capital and grow in Indiana.

PROPERTY TAX ABATEMENT: The law was changed to allow local governments the flexibility to structure the property tax abatement schedules however they wish over ten years. The previous statute defined the schedule. This will give local economic development leaders more control over the incentive packages they offer to companies.

INDUSTRIAL RECOVERY TAX CREDIT: The General Assembly reduced the statutory thresholds in order to allow more vacant buildings in the state to be eligible for this program. The minimum in-service period for building was reduced from 20 to 15 years. The minimum vacancy period was reduced from two to one year. The minimum square footage for building requirement was reduced from 250,000 square feet (50,000 square feet from 2011 to 2014 and 100,000 square feet starting in 2015). These changes may help bring more vacant facilities back into service by providing an incentive to companies for rehabilitation expenses.
IOWA

The Grow Iowa Values Fund (GIVF) is the state’s premier financial assistance program designed to support innovation and job growth. A variety of business development programs are available as included below:

* DIRECT ASSISTANCE TO A COMPANY: Assistance is provided in the form of loans and/or forgivable loans, based in part on job creation, capital investment, the ability to meet certain regional/county wage standards, quality of employment, and economic benefits for the state and local community. Applications are filed by cities, counties or community colleges on behalf of eligible businesses.
* The GROW IOWA VALUES FINANCIAL ASSISTANCE PROGRAM serves as the funding source for projects that are focused on job creation or retention, value-added agriculture and entrepreneurial efforts. This program, combined with Iowa’s nationally recognized business climate, tax incentives and proactive state government make Iowa a great place to do business.
* The DEMONSTRATION FUND provides financial awards up to $150,000 to encourage commercialization activities by small and medium-sized Iowa companies in the advanced manufacturing, biosciences, and information technology industries. The fund is designed to encourage product refinements, market planning and market entry activities of unique products to foster competitive, profitable companies that create high paying jobs and wealth in Iowa.
* Infrastructure component: Designed to financially assist capital-intensive infrastructure projects that create unique opportunities for quality, high-wage jobs and demonstrate a statewide impact. Both Iowa communities and new or existing businesses are eligible for this innovative program. This program may also be used to remediate contaminated sites that have potential development opportunities contingent on the cleanup. Assistance is provided in the form of loans, forgivable loans and cost indemnification agreements.
* The Public Facilities Set-Aside (PFSA) program provides financial assistance to cities with less than 50,000 in population and to counties for public infrastructure improvements that enable businesses to create new job opportunities. Projects that will create manufacturing jobs, add value to Iowa resources and/or increase out-of-state exports will be given priority. Eligible projects include adding or improving sanitary sewer systems, water systems, streets, roads, and storm sewers.

KANSAS

The PROMOTING EMPLOYMENT ACROSS KANSAS (PEAK) program offers qualified companies the ability to retain 95 percent of their payroll withholding tax for up to five to seven years. PEAK is available to new operations in Kansas as well as relocated operations to the state. In 2013, it will be available for qualifying business retention projects as well. Companies need to create at least 10 new jobs within two years in metropolitan areas or five new jobs within two years in all other counties of the state. High-impact projects that create 100 new jobs within two years can retain 95 percent of payroll withholding tax for up to seven to 10 years. The number of years that the withholding tax can be retained depends on how much the annual median or average wage of the jobs at the Kansas worksite will exceed the current county median wage and the discretion of the Secretary of the Kansas Department of Commerce.

The HIGH PERFORMANCE INCENTIVE PROGRAM (HPIP) provides a 10 percent corporate income tax credit on the qualified capital investment of an eligible company. Qualified capital investment can include such items as the purchase or lease of a facility or equipment, remodeling or build-out costs, fixtures, furniture and computers. Equipment transferred to Kansas from out-of-state is also credited at the original acquisition cost. The 10 percent tax credit is awarded to companies that operate an eligible business, pay above-average wages and invest in employee training. The credits can be used to significantly reduce a company’s corporate income tax liability in a given year. Credits must be used within a consecutive 16 year period. The minimum investment threshold to qualify for HPIP is $1.0M for urban counties of Douglas, Johnson, Sedgwick, Shawnee and Wyandotte. For all other counties, the minimum investment threshold is $50,000.

MACHINERY & EQUIPMENT EXPENSING DEDUCTION: Effective January 1, 2012, Kansas taxpayers will be allowed to claim an expense deduction for business machinery and equipment, placed in service in Kansas during the tax year. The one-time deduction is allowed for each qualified purchase of machinery and equipment in the year that it is placed in service. The expensing deduction is representative of the difference between the cost of the item and the present value of the stream of depreciation deductions allowed under normal federal depreciation rules. Any unused expense deduction may be carried forward until fully claimed in future years. If the property is relocated outside Kansas or disposed of before the end of its federal depreciable life, the amount of the tax liability relieved by the deduction may be subject to repayment.

The RURAL OPPORTUNITY ZONES PROGRAM (ROZ) is designed to reverse dramatic population declines over the past decade in rural areas of Kansas. The program is to spur economic development in and expand job growth in 50 counties around the state. The program has two main incentives:

* A state income tax exemption for up to five years to individuals who move to a ROZs county from outside the state. Individuals must not have lived in Kansas for the past five years, nor have Kansas source income of more than $10,000 per year over the past five years.
* Student loan forgiveness of up to $3,000 per year ($15,000 maximum benefit) for individuals who graduate from an accredited post-secondary institution and move to a ROZs county. The student loan forgiveness portion of the program is a county-state partnership, and counties must opt in to participate.

WIND AND SOLAR BOND FINANCING: This allows for up to $5 million in bond financing per project for eligible wind and solar energy manufacturers. The bonds are paid off from the payroll withholding tax of the new jobs. To qualify, a project must create at least 200 new jobs within five years, pay at least a $32,500 average salary and generate a minimum capital investment of $30 million.

KANSAS ECONOMIC OPPORTUNITY INITIATIVES FUND: The Department of Commerce can provide a zero-percent interest forgivable loan to qualified companies. This loan can offset costs associated with the establishment of a new facility or the expansion of an existing facility. Eligible costs include site improvements, construction, build-out and purchases and relocation of machinery and equipment. The loan is forgiven in 20 percent annual increments over a five-year period based on meeting the job and payroll targets. Approval of funding for this program is based on the number of new jobs created, the level of wages paid to the new employees and the economic impact of the project.
KENTUCKY

The KENTUCKY BUSINESS INVESTMENT (KBI) program provides income tax credits and wage assessments to new and existing agribusinesses, regional and national headquarters, manufacturing companies, and non-retail service or technology related companies that locate or expand operations in Kentucky. Projects locating in certain counties may qualify for enhanced incentives.

The KENTUCKY REINVESTMENT ACT (KRA) provides tax credits to any existing Kentucky company engaged in manufacturing and related functions on a permanent basis for a reasonable period of time who will be investing in eligible equipment and related costs of at least $2,500,000.

The KENTUCKY ENTERPRISE INITIATIVE ACT (KEIA): For new or expanded service or technology, manufacturing, or tourism attraction project in Kentucky. KEIA provides a refund of Kentucky sales and use tax paid by approved companies for building and construction materials permanently incorporated as an improvement to real property. It is also available for Kentucky sales and use tax refunds for eligible equipment used for research and development and data processing equipment.

The KENTUCKY SMALL BUSINESS INVESTMENT CREDIT (KSBIC): program is designed to encourage small business growth and job creation by providing a nonrefundable tax credit to eligible businesses hiring one or more eligible individuals and investing at least $5,000 in qualifying equipment or technology. With certain exceptions, most for-profit businesses with 50 or fewer full-time employees are considered eligible for this program. The KSBIC program is limited to allocating a total of $3 million in tax credits per state fiscal year.
LOUISIANA

LOUISIANA FASTSTART™ is a workforce development program, providing customized workforce recruitment, screening, training development and training delivery to eligible, new or expanding companies – all at no cost. Any manufacturing, corporate headquarters, warehouse and distribution, research and development or other strategic facility must create at least 15 jobs; and, service providers must create at least 50 jobs.

The QUALITY JOBS PROGRAM provides a 5 percent or 6 percent rebate on annual payroll expenses for up to 10 years, and either a 4 percent sales/use tax rebate on capital expenditures or an investment tax credit equal to 1.5 percent of qualifying expenses. A project must create at least 5 jobs, and there are no minimum investment requirements. The program is eligible to businesses that fall within one of the state’s target industries or have total annual out-of-state sales of at least 50 percent.

The DIGITAL MEDIA AND SOFTWARE INCENTIVE provides a 25 percent refundable tax credit on qualified production expenditures and a 35 percent refundable tax credit for Louisiana resident labor expenditures. There are no minimum investment requirements and no cap on costs. The incentive is eligible to digital interactive media productions in Louisiana, excluding largely static Internet sites and products regulated under the Louisiana Game Control Law.

The MEGA-PROJECTS DEVELOPMENT FUND provides grants of up to 30 percent of the total cost of a project that creates or retains at least 500 direct jobs or that provides a major investment in the state. A project must create 500 direct jobs, create or save at least 500 direct jobs at a facility that has been closed or a facility that risks closure, or provide a minimum initial investment of $500 million through the creation of a new facility or the expansion of an existing facility. In addition, the project must provide a substantial return on the investment by the state as measured by projected tax revenues.

The RESEARCH AND DEVELOPMENT TAX CREDIT provides a refundable tax credit of up to 40 percent to businesses that conduct research and development activities (or secure certain federal SBIR/STTR grants) within Louisiana. The tax credit depends on the number of Louisiana resident employees. Companies who incur research and development expenses may be able to receive credits against state income and corporate franchise taxes. Companies whose research and development tax credits exceed their tax liabilities receive a refund from the state.
MARYLAND

INVEST MARYLAND: Designed to unlock capital for early-stage companies, InvestMaryland will fuel investment in our innovation economy, capitalize small and minority businesses, and replenish the DBED-administered Maryland Venture Fund. The program is effective January 2011 with first round of funds available by June 2012. The program will provide $100 million in insurance premium tax credits that will be auctioned to raise venture capital for the State’s entrepreneurs. Two-thirds of the funds will be invested on behalf of the State by private venture capital firms, while the Maryland Venture Fund and the Maryland Small Business Development Financing Authority will administer the remaining one-third. The bill also allocates $250,000 to the Rural Maryland Council, an organization that promotes the State’s natural resource based industries.

STATE SMALL BUSINESS CREDIT INITIATIVE: Passed as part of President Obama’s Small Business Jobs Act of 2010, this initiative awarded Maryland with $23 million to strengthen existing financing programs that support lending to small businesses. The State is allocating the funds to programs that leverage private lending to help finance small businesses that are creditworthy, but are not getting the loans they need to expand and create jobs.

MARYLAND ECONOMIC DEVELOPMENT ASSISTANCE AUTHORITY AND FUND: There are five financing capabilities offered through the Maryland Economic Development Assistance Authority and Fund (MEDAAF), with assistance being provided to the business community and political jurisdictions. To qualify for assistance from MEDAAF, applicants are restricted to businesses located within a priority funding area and an eligible industry sector. With a few exceptions, assistance cannot exceed 70 percent of the total project costs.

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: Provides funding to commercial and industrial economic development projects. Program funds are dispersed to a local jurisdiction in the form of a conditional grant and are then used for public improvements or loaned to a business.

MARYLAND VENTURE FUND: A state-funded seed and early-stage equity fund; an evergreen fund that receives annual allocations from the Maryland State Legislature. The Fund makes direct investments in technology and life science companies and indirect investments in venture capital funds. Approximately 60 percent of the Fund is invested in technology companies in the areas of software, communications, and IT security, and 40 percent of the Fund is invested in life sciences companies in the areas of therapeutics, medical devices, and diagnostics.

CHALLENGE INVESTMENT PROGRAM: Provides financing for seed-stage companies to cover a portion of the initial costs associated with bringing new products to market. Initial investments of $50,000 to $100,000 are made with incremental investments to a maximum of $150,000. These incremental investments are awarded based upon the client’s performance and the client’s ability to achieve milestones set by the Maryland Venture Fund at the time of the initial closing.
MICHIGAN

BUSINESS TAX REFORM: The unpopular Michigan Business Tax (MBT) will be replaced effective January 1, 2012 with a simpler and competitive corporate income tax. What does this mean? All industries are in line for significant tax cuts. Lower rates will tax C corporations at 6 percent on federal taxable income apportioned to Michigan. Other entities—individuals, partnerships and LLCs—have income flow to their personal income tax. It is expected that 100,000 businesses will pay no business taxes. The personal income tax rate remains 4.35 percent and is scheduled to decline to 4.25 percent in 2013. The new simplified tax system eliminates a laundry list of MBT credits and deductions. The alternative business income tax for small business remains intact. When the 2012 tax changes take effect, Michigan is projected to rank #13 in the Tax Foundation’s U.S. overall business tax climate ranking, and #22 for corporate taxes, up from #48.

PURE MICHIGAN BUSINESS CONNECT: Michigan businesses now have new ways to buy and sell, raise capital and connect with one another. Pure Michigan Business Connect is a $3 billion public-private economic gardening initiative matching people with resources and strengthening relationships to fuel economic growth, including:

* venture capital, debt financing, collateral support, other funding assistance
* customized market research
* executive and professional talent search assistance
* training support
* customized site searches
* ombudsman services
* entrepreneur services
* export assistance
* legal services
* matchmaking with Michigan suppliers

NEW INCENTIVE PROGRAMS FOR BUSINESS, COMMUNITY DEVELOPMENT: New economic development and community revitalization programs will provide $100 million in incentives for highly competitive projects in Michigan, beginning on October 1, 2011.

The Michigan Business Development and Michigan Community Revitalization Programs replace the state’s previous MEGA, Brownfield and Historic tax credit programs that were features of the old Michigan Business Tax.

The Michigan Business Development Program will provide grants, loans or other economic assistance of up to $10 million to businesses that are creating qualified new jobs and making new investments in Michigan. Factors to be considered in making these awards include: out-of-state competition, private investment in the project, business diversification opportunities, near-term job creation, wage and benefit levels of the new jobs, and net-positive return to the state. Business retention and retail projects are not eligible for consideration of these incentives.

The Michigan Community Revitalization Program will provide grants, loans, or other economic assistance of up to $10 million to projects that will revitalize regional urban areas, act as a catalyst for additional investment in a community, reuse vacant or historic buildings and promote mixed use and sustainable development.

NEW TALENT PORTAL: Through the MEDC Job Portal, employers can register to post openings and work closely with the MEDC’s Talent Acquisition team to devise strategies to meet their talent needs. Companies posting on the Job Portal will also have access to the MEDC’s other talent acquisition services, including targeted marketing and social media outreach, career events, assistance with identifying relocation services and a triage approach to addressing hard-to-fill positions and hiring challenges. The portal also allows job seekers to search for positions around the state, create profiles and add their resumes to the talent database. The MEDC Job Portal is currently being used in concert with the Michigan Talent Bank. Both systems are working together to effectively connect Michigan’s businesses and job seekers.
MISSISSIPPI

MISSISSIPPI FILM INDUSTRY INCENTIVE: Passed in 2011 and effective immediately, it increases the rebate by 5 percent and expands the definitions of qualified distribution and production to include new technology. The legislation increases the current rebate to 25 percent for qualified local spend and non-resident cast and crew payroll and to 30 percent for Mississippi resident cast and crew payroll. The per project rebate cap remains at $8 million (an approximate $30 million local spend) and the annual cap remains at $20 million. The expanded program added streaming video and Internet delivery as qualified distribution. New technology areas, such as animation, 3D applications, video game cinematics, visual effects and motion capture within the fields of feature film, television, commercials and games, were added as qualified production.
MINNESOTA

DATA CENTER SALES TAX EXEMPTIONS: Enacted in July 2011, Minnesota created a major tax exemption for data center projects. Qualified data centers will receive a 20-year exemption from sales tax on equipment and energy used in the center (Minnesota state sales tax is 6.875 percent.). To be qualified, the data center must be at least 30,000 square feet of new or substantially renovated space, and represent at least $50 million in construction and equipment costs within 24 months. The incentive takes effect July 1, 2012. Minnesota is also blessed with no personal property or inventory tax. Other benefits in Minnesota are cooler climate to reduce cooling costs, low risk for earthquakes and other natural disasters, a robust fiber network, and reasonably priced and abundant energy.
MISSOURI

FILM PRODUCTION TAX CREDIT PROGRAM: Provides a state income tax credit to qualified film production companies up to 35 percent of the company’s expenditures in Missouri for production or production related activities necessary for the making of a film, not to exceed $1 million in tax credits per project. Eligible Applicants include any film production company with an expected instate expenditure budget of at least $100,000 for films over 30 minutes in length and at least $50,000 for films under 30 minutes in length.

LOAN GUARANTEE FEE TAX CREDIT PROGRAM: Provides state tax credits to an eligible small business—defined in Section 44 of the IRS code, must (in the prior tax year) have gross receipts of less than $1 million; or if more than $1 million, less than 30 full time employees—for the amount of a guarantee fee paid to either the U.S. Small Business Administration or the U.S. Department of Agriculture for a small business loan. There is no limit on the amount per business or total amount distributed annually.

ENHANCED ENTERPRISE ZONE: Provides state tax credits to new or expanding businesses in a Missouri Enhanced Enterprise Zone. Can be applied to Ch. 143 Income tax, excluding withholding tax and can only be applied to tax liability for the year in which they were earned. Tax credits will be based on the state economic benefit, supported by the number of new jobs, wages and new capital investment that the project will create. Tax credits issued under this program are limited to $24,000,000 annually.
NEBRASKA

The four-part TALENT & INNOVATION INITIATIVE(TI2) was developed to enhance momentum in Nebraska’s fastest growing industries and others positioned to integrate new technologies:

* Nebraska Internship Program is a partnership with Nebraska businesses to create new, paid internship opportunities for college and university students. The program will create opportunities for 500 to 750 juniors and seniors studying at four-year institutions or students in their second year at a Nebraska community college to gain job experience. Awards will be made on a first-come, first-serve basis to companies creating new internship opportunities, which are capped at 10 per business. Internships will pay at least minimum wage and range from 12 week to year-long programs. Grant amounts are lesser of 40 percent of reimbursable costs or up to $3,500 in non-distressed areas, and lesser of 60 percent of reimbursable costs or up to $5,000 in distressed areas. Nebraska Internship took effect on June 1.
* Business Innovation Act is intended to help businesses develop new technologies to enhance quality job opportunities in the state. It will provide competitive grants for research at Nebraska institutions, new product development and testing, and help expand small business and entrepreneur outreach efforts. It will expand grant opportunities within targeted industries to help businesses providing matching funds with prototype development, commercialization and applied research in the state, and provide assistance for microenterprise projects. The Business Innovation Act takes effect Oct. 1.
* Site & Building Development Fund is intended to help increase industrial and commercial sites available and ready for business development. Communities will provide matching funds toward projects that can involve demolition, new construction and rehabilitation. State funding will be focused on land and infrastructure costs with 40 percent of funding available to non-metro areas. This fund takes effect Oct. 1.
* Angel Investment Tax Credit encourages investment in high-tech and other startup enterprises in Nebraska by providing refundable state income tax credits to qualified investors investing in qualified early-stage companies. Capped at $3 million annually, the program requires a minimum investment of $25,000 for individuals and $50,000 for investment funds. Eligible small businesses must have fewer than 25 employees, with the majority based in the state. Applications begin August 4, and credits are effective after September 1.

The NEBRASKA PROGRESS LOAN FUND (NPLF) will be available for permanent loans to qualifying small businesses, generally, representing existing and startup businesses. The minimum loan to any one business will be $50,000, with a maximum of $2 million. NPLF can also be provided for interim loans to qualifying small businesses for a term not to exceed three years. An interim loan maximum amount is $5 million. Loan terms will be negotiated on a case-by-case basis with a typical loan interest rate ranging from 0 percent to 4 percent. More favorable terms for the business will be a consideration for businesses located in census tracts or counties considered severely distressed. Principal and interest payments may be deferred for three years, with periodic interest payments due until loan maturity.

The NEBRASKA PROGRESS SEED FUND (NPSF) is designed to accelerate private investment in Nebraska-based start-up companies and increase overall investment impact. Through NPSF, Invest Nebraska Corporation will award seed capital funds that match private angel fund investments. The seed capital may be used by the start-up company for advanced intellectual property development and evaluation, including in-depth analysis of market potential, conducting competitive analysis, advanced proof of concept work for scientific discovery, advanced prototype design and development, research and development needed to attract venture capital financing, hiring key personnel, and related activities.
NEVADA

CATALIST FUND: Nevada recently authorized the use of $10 million in general fund money to spur economic development through corporate expansions and relocations in Nevada. Working in connection with local governments, companies can apply to the state with an eligible economic development project for an allocation from the fund. Since this is a new program, the rules and regulations are currently in development and are expected be in place by January 1, 2012.

A SALES AND USE TAX ABATEMENT on eligible machinery and equipment is available to businesses with operations consistent with Nevada’s state plan for economic diversification and development. Qualifying criteria include a commitment to doing business in Nevada, minimum job creation, capital investment, employee heath plans, and wage requirements.

SALES TAX DEFERRAL: The state of Nevada offers a sales & use tax deferment program to qualified industries that purchase capital equipment in excess of $100,000. Taxes can be deferred interest free for up to five years.

An abatement of PERSONAL PROPERTY TAX is available to businesses with operations consistent with Nevada’s state plan for economic diversification and development. Qualifying criteria include a commitment to doing business in Nevada, minimum job creation, employee health plans, minimum capital investment, and wage requirements. Taxes may be abated for up to 50 percent for up to ten years.

RENEWABLE AND ENERGY STORAGE ABATEMENTS are available for companies involved in the production of energy from renewable sources such as wind, solar, and others, or a facility for the production of an energy storage device. The package of abatements includes sales/use tax and real and personal property tax.

MODIFIED BUSINESS (PAYROLL) TAX ABATEMENTS provide partial abatement from the payroll tax for new and expanding businesses. Statutory requirements, which must be met to qualify, include a minimum number of jobs created, a minimum capital investment, and wage and employee health plan requirements. Taxes may be abated by 50 percent for four years.

TRAIN EMPLOYEES NOW (TEN): Nevada offers a customized job training program to qualified businesses that meet established criteria. This program may be used prior to a plant opening and up to 90 days following.

Nevada is authorized to use tax-exempt INDUSTRIAL DEVELOPMENT BONDS (IDBs) to provide low-interest financing of new construction, improvements, rehabilitation, or redevelopment of qualified projects, which include manufacturing facilities and certain other projects organized under Section 501 of the Internal Revenue Service code.
NEW HAMPSHIRE

ECONOMIC REVITALIZATION ZONE TAX CREDITS (erz): Short term, tax credits against the business profits and enterprise taxes. To qualify, the location must meet certain demographic criteria, or be located in an unused or under utilized industrial park, or vacant land, or structures previously used for industrial, commercial, or retail purposes but currently not so used, or Brownfield site. The maximum credit over five years is $200,000, capped at $40,000 per year.

R&D TAX CREDIT: Small and large businesses can apply for tax credit on new research and development costs. The state has set aside $1million a year to fund the credit which is capped at $50,000 for any business that qualifies. This credit may be carried forward for up to five years.

COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG): This assistance can be in the form of a grant to the municipality for the public infrastructure improvements on behalf of an expanding business or a loan to the business itself. The maximum amount of funding available for any given project is $500,000, regardless of size of the community applying for the grant. All grants have a one-year duration, and one job must be created for each $20,000 in CDBG funds granted. The key to this federal program is that a minimum of 60 percent of the jobs created must be filled by low and moderate-income persons.

The JOB TRAINING GRANT PROGRAM is a 50/50 cash match for customized training. There is a $100,000 cap on the training amount. Each application is reviewed on a case by case basis with an emphasis on improving the skills of current or new employees.

The COOS County Job Creation Tax Credit is a tax credit to businesses hiring new employees in COOS County and paying wages equal to or above 200 percent of minimum wage ($7.25 per hour). The credit is $1,000 for any new, full-time, year-round jobs applied to the Business Enterprise Tax, but any unused portion of the credit can be applied to the Business Profits Tax. All new jobs created after the bill’s effective dates are eligible for the credit and there is no cap on the amount of jobs created. The carry forward is five years.

INDUSTRIAL REVENUE BONDS: This program is for manufacturers only – companies which manufacture or produce tangible personal property. At least 75 percent of bond proceeds must be spent on core manufacturing space and equipment. Storage, office and R&D space must be excluded from this calculation. To be cost effective, loans must range between 1.5 and 20 million dollars. The interest rate is about 70 percent of prime and can be used for the purchase of land, buildings, and capital equipment.

NH-CDFA TAX CREDITS: The New Hampshire Community Development Finance Authority (CDFA) awards up to $5 million a year in New Hampshire Tax Credits to nonprofit organizations. These organizations then sell the Tax Credits to New Hampshire businesses as a way to raise needed capital for community projects around the state. In exchange for the contribution, a company can take 75 percent of the donation as a tax credit on their BET, BPT, or Insurance Premium Tax.
NEW JERSEY

NEW JERSEY PARTNERSHIP FOR ACTION: A three-pronged public-private approach to economic development and the starting point for all initiatives, policies and efforts to grow New Jersey’s economy and create quality, sustainable jobs in our communities. The three elements of the Partnership include Choose New Jersey, an independently funded and operated 501(c)(3) nonprofit corporation created to encourage and nurture economic growth throughout New Jersey; the Business Action Center, which reports directly to the Lieutenant Governor and provides the business community with a single point of contact, applying a proactive, customer-service approach to businesses’ interactions with State government; and, the New Jersey Economic Development Authority (EDA), serving as the state’s “bank for business.”

The ECONOMIC REDEVELOPMENT AND GROWTH (ERG) PROGRAM is a reimbursement incentive that enables developers to use up to 75 percent of new State and/or local incremental taxes generated from a project to fund financing gaps. The program provides up to 20 percent of the total project cost, paid out over a period of up to 20 years. Redevelopment projects in qualifying areas that have secured a municipal ordinance and demonstrated sufficient net benefits may be eligible for assistance.

URBAN TRANSIT HUB TAX CREDIT PROGRAM: A financial tool designed to spur private capital investment, business development and employment by providing tax credits for businesses planning a large expansion or relocating to one of New Jersey’s designated Urban Transit Hubs. The program offers developers, owners or tenants up to 100 percent of a qualified capital investment made within an eight period. Taxpayers may apply 10 percent of the total credit amount per year over a ten-year period against their corporate business tax, insurance premiums tax or gross income tax liability. Developers or owners must make a minimum $50 million capital investment in a single business facility, and at least 250 full-time employees must work at that facility. Tenants in a qualified business facility can represent at least $17.5 million of the capital investment in the facility, and up to three tenants may aggregate to meet the 250 employee requirement.

The BUSINESS EMPLOYMENT INCENTIVE PROGRAM (BEIP) is a powerful incentive that encourages businesses to locate and expand in New Jersey. Approved businesses receive annual cash grants based on the number of new jobs created in the State. In order to qualify, businesses must create at least 25 new jobs within a 2-year period; emerging high technology and biotech companies’ eligibility threshold is 10 new jobs. A business must also demonstrate that the BEIP grant is a “material” factor in moving the job expansion or relocation forward in New Jersey, and that it is economically viable. The standard BEIP incentive is limited at 50 percent of the employees’ state income taxes withheld on the newly created jobs; however, companies that meet certain Smart Growth objectives can have their grant boosted to 80 percent. Qualifying businesses may be eligible for up to 10 years worth of grants, though they must maintain the project and the jobs in New Jersey for at least 1.5 times the number of years the grant is in effect.

The BUSINESS RETENTION & RELOCATION ASSISTANCE GRANT (BRRAG) is a recently enhanced program designed to help companies preserve jobs, expand operations and reinvest in New Jersey. The program provides corporate business tax credits to companies that are relocating operations within New Jersey and retaining at least 50 full-time jobs. Up to $2,250 per year for up to six years is now available per each job retained in the State. The award amount is dependent on the application of “bonus credits,” which may be available for the relocation of jobs to urban centers, and/or for a capital investment at least twice that of the value of the awarded credits. The number of times the yearly tax credit amount is awarded is dependent on the number of retained jobs. Companies must commit to remaining in the State for the tax credit term and an additional five years. For leased project locations, the business must sign a written lease for a period of no less than the commitment duration or eight years, whichever is greater. The total amount of credits that can be applied against a single company’s tax liability in a fiscal year may not exceed $10 million.

SALES AND USE TAX EXEMPTION PROGRAM (STX), a program often used in conjunction with BRRAG that offers companies a sales tax exemption certificate which applies only to property purchased for installation at the approved project site. This certificate allows the business to purchase machinery, equipment, furniture, fixtures, and building materials for the project without the imposition of the state’s 7 percent sales tax. Eligible companies must have 1,000 or more employees in New Jersey and relocate 500 or more to a new business location. Life sciences or manufacturing companies may be eligible if they relocate 250 or more employees to a new facility. Companies must maintain the retained full-time jobs in New Jersey for five years.
NEW MEXICO

RESEARCH AND DEVELOPMENT TAX CREDIT: In 2011, the New Mexico Legislature passed House Bill 273, reinstating the bill that would have sunset. This bill extends the eligibility period for the Research and Development Small Business Tax Credit from 2011 until 2015 and limits the credit.

The ALTERNATIVE ENERGY PRODUCT MANUFACTURES TAX CREDIT: In 2011, the legislature passed Senate Bill 233, which amends the alternative energy product manufacturers tax credit act to include a product extracted from or secreted by a single cell photosynthetic organism as an eligible alternative energy product.

LOCOMOTIVE FUEL TAX DEDUCTION: In 2011, the legislature passed House Bill 523, which provides a deduction for locomotive fuel from gross receipts and from compensating tax.
NEW YORK

REGIONAL ECONOMIC DEVELOPMENT COUNCILS: Governor Cuomo’s new Regional Councils represent a fundamental shift in New York State’s approach to economic development, from a top-down development model to a community-based approach that empowers regions to set their own development priorities. Each Regional Council, chaired by Lieutenant Governor Robert Duffy and made up of local industry, academic, and community leaders, will create a plan for the development of their region. Through a new Consolidated Funding Application that combines resources from dozens of existing programs, the Councils will apply for $1 billion in state funding for projects they determine to be part of their regional strategies. To learn more about the Regional Councils, please visit www.nyopenforbusiness.com.

EXCELSIOR JOBS PROGRAM: Governor Cuomo’s 2011-2012 Executive Budget revised the Excelsior Jobs Program to produce better results for New York’s strategic industries through enhanced tax credits, an extended tax benefit period, discounted gas or electric rates from utilities, and increased responsiveness and transparency. The Program provides job creation and investment incentives to firms in such targeted industries as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture and manufacturing. Firms in these industries that create and maintain new jobs or make significant financial investment are eligible to apply for up to four new tax credits. Excelsior encourages businesses to expand in and relocate to New York while maintaining strict accountability standards to guarantee that businesses deliver on job and investment commitments. Program costs are capped at $500 million annually to maintain fiscal affordability and ensure that New Yorkers realize a positive return on their investment. To learn more about the Excelsior Jobs Program, please visit www.esd.ny.gov/BusinessPrograms.html.
NORTH CAROLINA

ARTICLE 3J TAX CREDITS: North Carolina offers several types of tax credits to eligible taxpayers that undertake qualifying initiatives. One class of these credits, the Article 3J Tax Credits, may be used to offset up to 50 percent of the taxpayer’s state income and/or franchise tax liability, and unused credits may be carried forward for up to five years. Article 3J offers credits for:

* Creating jobs – Companies who meet a minimum threshold of new fulltime jobs created during the taxable year may claim a credit.
* Investing in business property – Companies can claim a credit based on a percentage of the cost of capitalized tangible personal property that is placed in service during the taxable year.
* Investment in real property – Companies located in a Tier 1 County (see below) that invest at least $10 million in real property within a three-year period and create at least 200 new jobs within two years are allowed a credit equal to 30 percent of the eligible investment.



CHANGES TO ARTICLE 3J IN 2011:

* Modifies the criteria applicable to companies that take the Article 3A tax credits to allow a company, otherwise required to maintain 200 employees, to take remaining credit installments if employment is above 125 and if the taxpayer makes an investment equal to $5,000,000 or greater than twice the amount of the remaining installments at the facility within two years of the employment level falling below 200.
* Establishment of port enhancement zones within 25 miles from a port allowing an Article 3J credit under certain conditions beginning 7/1/2013. The North Carolina Department of Commerce will publish a list of all PEZ and boundary descriptions annually.

TAX CHANGE FOR SMALL AND START-UP BUSINESS: This applies to calculating the North Carolina taxable income. A taxpayer may now deduct the first $50,000 of net business income the taxpayer receives during the taxable year.

RENEWABLE ENERGY TAX CREDITS: North Carolina’s various renewable-energy tax credits are unified into a statute that addresses nearly all renewables. The statute provides tax credits eligible for the cost of equipment and associated design; construction costs; and installation costs by a taxpayer and placed into service in North Carolina during the taxable year. The credit is subject to various ceilings depending on sector and the type of renewable-energy system. The following credit limits for various technologies and sectors apply:

* A maximum of $3,500 for non-business solar energy equipment for active space heating, combined active space and domestic water-heating systems, and passive space heating;
* A maximum of $1,400 for non-business solar water-heating systems, including solar pool-heating systems;
* A maximum of $10,500 for renewable-energy systems for non-business use;
* A maximum of $8,400 for geothermal equipment installation;
* A maximum of $2,500,000 for solar, wind, hydro, geothermal and biomass applications on commercial and industrial facilities, including photovoltaic (PV), daylighting, solar water-heating and space-heating technologies.

OHIO

Ohio JOB CREATION TAX CREDIT: Provides corporate franchise or state income tax credit for businesses that expand or locate in Ohio for companies that incur tax liability under ORC Sections 5733.06 or 5747.02. Program will provide a tax credit against the Commercial Activity Tax (CAT) beginning on July 1, 2008.Insurance companies that pay the annual franchise tax under ORC Sections 5725.18/5729.03 are eligible for the tax credit beginning July 1, 2005.

Ohio JOB RETENTION TAX CREDIT: Provides corporate franchise or state income tax credit for businesses that commit to retain a significant number of full-time jobs. Program will provide a tax credit against the Commercial Activity Tax (CAT) beginning on July 1, 2008.

Ohio RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDIT: Provides a nonrefundable tax credit against the corporate franchise tax and is designed to encourage Ohio’s corporations to invest in increased research and development activities. The credit equals 7 percent of the excess amount of Qualified Research Expenses.

RESEARCH AND DEVELOPMENT SALES TAX EXEMPTION: Provides an exemption from the usual state and county sales tax for companies that purchase equipment for research and development activities. Exempts business from entire state and county sales tax for purchases of machinery and equipment used primarily for research and development.

MANUFACTURING MACHINERY & EQUIPMENT SALES TAX EXEMPTION: Provides an exemption from state and county sales tax for companies that purchase machinery and equipment for manufacturing activities. Exempts business from entire state and county sales tax for purchases of machinery and equipment used primarily for manufacturing.

TECHNOLOGY INVESTMENT TAX CREDIT: Offers a variety of benefits to Ohio taxpayers who invest in small, research and development and technology-oriented forms. This incentive provides a tax credit for taxpayers that invest in small, Ohio-based technology companies. The amount of the tax credit is 25 percent (or 30 percent in some limited cases) of the amount invested by the taxpayer. The maximum investment to which this credit may be applied is $250,000 (or $300,000). The credit may be claimed against personal income tax, corporate franchise tax, public utility excise tax or the dealers in intangibles tax.
OKLAHOMA

The Quality Jobs 10-Year Cash Incentive provides cash payments of up to 5 percent of new payroll for up to 10 years. To qualify, the company must have an average county wage or $29,745, whichever is lower, achieve $2.5M annual payroll within 3 years, and offer basic health insurance. Target industries include: manufacturing, R&D including wind power manufacturing, corporate services, and data centers.

INVESTMENT/NEW JOBS TAX CREDIT PACKAGE: The program allows a company to choose between a tax credit based on investment or new employees. The 5-year tax credit applies to the greater of 1 percent per year of investment in new depreciable property of $500 per new employee and the credit doubles in Enterprise Zones and if the investment exceeds $40 million. Target industries include manufacturing and aircraft maintenance operations.

The 21st Century Quality Jobs 10-Year Cash Back Incentive requires at least 10 full-time jobs at an annual average wage of the lesser of $94,418 or 300 percent of the county’s average wage. It allows a net benefit rate of up to 10 percent of payroll for up to 10 years. To qualify, out-of-state sales must be at least 50 percent. Target industries include: knowledge-based service industries, including professional, scientific and technical services; music, film and performing arts; and specialty hospitals.

The PrimeWIN Prime Contractor Incentive allows federal prime contractors to be paid for jobs and payroll created by both the prime contractor and a qualifying subcontractor. This incentive offers a cash rebate of up to 2 percent of the Oklahoma workforce loaded labor cost and cash incentives paid quarterly for up to 10 years. OSU-UML, as contract verifier, certifies the qualified labor hours performed under a qualifying federal contract.
OREGON

The Oregon Business Expansion and Retention Program is a new tool that creates a state incentive available to existing companies expanding operations in Oregon or new companies coming in to the state. The program helps innovative, knowledge-based industry companies create more high-paying jobs in Oregon by helping to offset a company’s expansion costs with forgivable loans based on the anticipated increase in income tax revenue due the state from the new jobs created. The program is capitalized with Lottery Funds (up to $4 million for 2011-13 biennium). To be eligible, the company must plan to hire 50+ new employees in Oregon; have 150 or more employees at time of eligibility; have employee wages are 150 percent above state average or county average, whichever is less; and must be in a traded-sector industry (excludes retail businesses);

INDUSTRIAL DEVELOPMENT PROJECTS OF STATE SIGNIFICANCE: This new program sets up a process for identifying up to ten “regionally significant” industrial areas per biennium to further job creation. It also establishes an expedited review process and narrows the grounds for appeal. The intention is to protect those industrial lands with the potential for future economic development and job growth from conversion to residential or commercial zoning.

The Manufacturing Business Energy Tax Credit (BETC) (HB 2523) moves to Business Oregon in 2012. The manufacturing credit has been instrumental in growing Oregon’s expanding renewable energy industry. Oregon facilities that manufacture renewable energy resource equipment may be eligible for the credit, which has proven extremely valuable to offset the costs of large capital investments. Eligible costs may include the building, equipment and machinery and other costs used to manufacture equipment, machinery or products designed exclusively to use a renewable energy resource. The facilities are eligible for a tax credit of 50 percent of eligible costs, up to a maximum of $40 million in eligible costs for each phase of development. HB3672 extended the sunset dates to 2018 for a number of important incentive programs and tax credits that support a range of business development activities across the state. These extensions include: the state’s Research & Development Credit, Long-term Rural Enterprise Zones, Electronic-Commerce Zones, the Film and Video Credit, and Biomass credits. In addition, the Oregon Investment Advantage program was extended to July 1, 2016 for rural and distressed Oregon counties seeking to recruit traded sector company development. More info on these programs can be found here.

A complete list of incentives and business climate information can be found at www.Oregon4biz.com/The-Oregon-Advantage/
PENNSYLVANIA

DISCOVERED AND DEVELOPED IN PA PROGRAM (D2PA): Grant established to build capacity to better support Pennsylvania businesses and to spur creativity and innovation in the provision of economic development services. Eligible uses include: Reasonable salary/personnel expenses; Consultant fees relating to approved programmatic activities; land/building/equipment improvements; Meeting/travel expenses; Costs associated with preparation and publishing of educational/marketing materials. Eligible applicants are private and public sector entities whose mission includes economic development. Competitive projects will include ongoing or innovative new activities, programs or events to promote entrepreneurship, encourage technology transfer, improve capacity building for regional economic development or provide outreach to businesses.

PENNSYLVANIA FIRST: A grant, loan, loan-guarantee funding tool to facilitate increased investment and job creation within the Commonwealth. Eligible applicants include businesses, or IDCs, municipalities or authorities on behalf of businesses, which will create or preserve a significant number of jobs, make a large investment and offer substantial economic impact, either for the Commonwealth as a whole or for the locality or region in which a business will locate or expand. Funds can be used for machinery/equipment; job training; infrastructure; land and building improvements; environmental assessment/remediation; acquisition of land, buildings and right-of-ways; working capital; site preparation, demolition and clearance.

KEYSTONE INNOVATION ZONE TAX CREDIT PROGRAM: Provides tax credits to for-profit companies less than eight years old operating within specific targeted industries within the boundaries of a Keystone Innovation Zone (KIZ) Program. Tax credits must be applied against the tax liability of a KIZ company for the tax year in which the KIZ Tax Credit was issued. A KIZ company may claim a tax credit equal to 50 percent of the increase in that KIZ Company’s gross revenues in the immediately preceding taxable year attributable to activities in the KIZ, over the KIZ Company’s gross revenues in the second preceding taxable year attributable to its activities in the KIZ. The KIZ Tax Credit is limited to $100,000 annually per KIZ company. Applications must be submitted on or before September 15 of each year.
RHODE ISLAND

The Jobs Growth Act allows eligible businesses in any industry to offer their employees an exclusion of 50 percent of performance-based compensation from their Rhode Island gross income. In return, the company pays a 5 percent tax each year on the performance-based income paid that year. In order to qualify, a company must hire 100 new employees in the state and add at least $10 million to its state payroll. Those new workers must earn at least 125 percent o the state’s annual average compensation. Employees must be hired or relocated after June 1, 2005 and cannot have been previously employed by the company. The tax cut applies only to bonus or incentive income, not base salary.

A 22.5 percent RESEARCH & DEVELOPMENT TAX CREDIT is allowed for increases in qualified research expenses—the highest rate in America. If the increase above base period expenditures exceeds $111,111, the credit equals 16.9 percent of the excess. The credit is available against a corporations business tax. Unused credit may be carried forward for up to seven years. A taxpayer is allowed 10 percent tax credit for expenditures paid or incurred during the taxable year for the construction, reconstruction, erection, or acquisition of any property that is used or to be used for the purpose of research and development in the experimental or laboratory sense. The property must be depreciable and have a useful life of three years or more. The credit is available against a corporations business tax. Unused credit may be carried forward for up to seven years.

The job training tax credit grants a credit against the corporate income tax (or the insurance premium tax in the case of insurance companies) equal to 50 percent of the actual training spending, whether for new or existing employees, by companies in accordance with an approved training plan. Plans must be filed with the Rhode Island Human Resources Investment Council for approval prior to the training. The credit allowed is capped at $5,000 for each employee in any three-year period.

Job training grants: Rhode Island offers a unique Human Resources Investment Council training program for business and industry funded through a job development assessment of 0.15 percent on the firm’s taxable payroll to $18,200 per employee. This pool of money is available for industry to create customized training programs tailored specifically for a company and free from restrictions imposed by federally funded programs.

Created in 2010, the Job Creation Guaranty Program authorizes the RIEDC to support critical economic development projects by helping innovative small businesses gain access to private growth capital and credit. The program helps companies with primarily “soft” assets like patents, intellectual properties and licenses expand and create jobs in Rhode Island. Under the program, the RIEDC may provide credit enhancement on bonds or loans privately placed with capital providers and banks. The net proceeds of the bonds would provide the necessary financing to capitalize a company’s growth and expansion in Rhode Island. The state would use its “moral obligation” authority to guarantee debt service payments to the bondholders or lenders.

Industrial Revenue Bonds may be used to finance qualified commercial and industrial projects. The bonds offer a competitive interest rate and state sales tax exemption on building materials, which may be significant for projects involving new construction. Financing is available through the Rhode Island Industrial Facilities Corporation and covers the entire project cost. The project and the credit of the user provide the security for the bonds, which may be issued on the financial strength of the user when the user is appropriately rated. The bonds may also be issued with an enhancement letter of credit from a financial institution.

Tax-exempt “small issue bonds”: interest on certain bonds with face amounts of less than $10 million is excluded from income if at least 95 percent of the bonds proceeds is used to finance manufacturing facilities. Industrial revenue bonds are tax-exempt obligations of the issuer, the interest on which is exempt from federal and state income tax. The interest rate on such obligations is normally below that available for conventional mortgages.

The Small Business Loan Fund (SBLF) provides partial funding for expansion projects that will benefit Rhode Island’s economy by encouraging business development. The program makes loans available with attractive terms for nonspeculative ventures involving the following types of capital investment: acquiring land; purchasing machinery or equipment; constructing new buildings and facilities; providing working capital.
SOUTH CAROLINA

The JOB TAX CREDIT is a statutory incentive offered to companies, both existing and new, that create new jobs in South Carolina. The credit is available to companies that establish or expand manufacturing, distribution, processing, warehousing, research and development, corporate office, tourism and technology intensive facilities. Agribusiness operations are eligible effective January 1, 2011. In certain limited instances, service and retail facilities may also be eligible. The company must create a monthly average of 10 net new full-time jobs at the facility in a single taxable year. If a company has fewer than 99 employees worldwide, it may be eligible for a job tax credit if it creates a monthly average of two or more net new full-time jobs in a single taxable year. In most instances, companies can expect to receive from $1,500 to $8,000 per job depending on the development tier of the county. Credits can be used to offset up to 50 percent of South Carolina income tax in a single year, and unused credits may be carried forward for 15 years.

SINGLE FACTOR SALES APPORTIONMENT: Companies whose primary business in the state is manufacturing, distribution, or selling or dealing in tangible personal property will apportion its income by multiplying the net income remaining after allocation by a fraction consisting of a company’s sales made in South Carolina divided by its total number of sales. This new formula eliminates property and payroll from the equation and is advantageous for a company whose majority of sales occurs outside South Carolina. The new method is being phased in over a five-year period with a 20 percent reduction each year of income attributable to South Carolina which began in 2007. In 2011, the new formula will be fully applicable.

SALES TAX EXEMPTION: South Carolina offers a number of sales tax exemptions for manufacturers including manufacturing production machinery and applicable repair parts; manufacturing materials that become an integral part of the finished product; industrial electricity and other fuels used in manufacturing tangible personal property; research and development equipment; manufacturers’ air, water and noise pollution control equipment; material handling equipment for manufacturing or distribution projects investing $35 million or more; packaging materials; long distance telecommunication services, including 800 services; and parts and supplies used to repair or condition aircraft owned or leased by the federal government or commercial air carriers. An exemption for construction materials used in manufacturing or distribution facilities, investing at least $100 million over 18 months, is being phased in and will be fully implemented July 1, 2011.

PRE-JOB TRAINING PROGRAM: The readysc™ program, offered through the S.C. Technical College System, provides pre-job training at little or no cost for eligible new or expanding companies with curricula tailored to meet a company’s workforce requirements. The comprehensive program includes recruiting, screening, testing, developing customized instruction material along with coordinating and upfitting training space.
SOUTH DAKOTA

The ETHANOL INCENTIVE BILL (SB196) passed during the 2011 legislative session. Through a partnership with the ethanol industry, this legislation repurposes funding to secure additional capital for the Revolving Economic Development Initiative (REDI) Fund. The REDI Fund is one of South Dakota’s primary economic development financing tools. In addition, through an incentive program created by SB196, $3.5 million in funding will be provided to encourage additional ethanol consumption and blender pump installation.

AGRICULTURAL PROCESSING AND EXPORT (APEX): In 2011, the legislature reduced the interest rate on the APEX loan program to 3percent.

MICROLOAN EXPRESS PROGRAM: The GOED recently introduced the MicroLOAN express program which streamlines the MicroLOAN application and approval process.
TENNESSEE

Through the FAST TRACK INFRASTRUCTURE DEVELOPMENT PROGRAM (FIDP), funds are allocated to assist local governments in providing infrastructure to support new or expanding industry. The following types of activities are eligible: water systems, wastewater systems, transportation projects, site improvement, or other specific infrastructure improvements required to support economic growth. Grants are limited to a maximum of $750,000 with amounts determined for individual projects.

The TENNESSEE SMALL BUSINESS ENERGY LOAN PROGRAM is designed to assist in the identification, installation, and incorporation of approved energy-efficiency measures for existing Tennessee businesses. Businesses of fewer than 300 employees or $3.5 million in annual gross sales or receipts can receive loans of up to $300,000. These loans are repaid at 3 percent interest over a period of time not to exceed seven years.

The FASTTRACK JOB TRAINING ASSISTANCE PROGRAM (FJTAP) provides training assistance as an incentive to attract new investment and to encourage existing business and industry to make additional investments in Tennessee. The training assistance is customized to each company’s individual training needs. Levels of training assistance are determined by the amount of the company’s investment, number of new hires, and the skills and knowledge that must be possessed by the prospective or newly hired employees. A customized training plan can be developed in direct coordination with company personnel. The training can be both pre-employment and post employment, including classroom and on the job. Reimbursement of instructional cost by company personnel and selected vendors is eligible for support. The expense of travel, for the purpose of training, is a viable option for the training of new hires and persons who will serve as company instructors.

TENNESSEE JOB SKILLS (TJS) is a work force development program giving priority to the creation and retention of existing jobs while focusing on employers in industries that promote high-skill, high-wage jobs in high technology, demand and emerging occupations. Training grants can be awarded to employers as an incentive for investing in new technologies, with the training being focused on the performance skills of their present employees affected by the introduction of the new technology. Training assistance can also be awarded to employers who certify that a specific job or job openings exist and at the completion of the training project those participants in the project will fill such job openings. The starting wage for a new job created through the project will be equal to or greater than the prevailing starting wage for that occupation in the local labor market.
TEXAS

THE TEXAS EMERGING TECHNOLOGY FUND (ETF) provides Texas with an unparalleled advantage in the research, development, and commercialization of emerging technologies. ETF grants are awarded in the following three areas:

* Commercialization Awards: funds to help companies take ideas from concept to development to ready for the marketplace.
* Matching Awards: funds create public-private partnerships which leverage the unique strengths of universities, federal government grant programs, and industry.
* Research Superiority Acquisition: funds for Texas higher education institutions to recruit the best research talent in the world.

The Emerging Technology Fund (ETF) was created by the Texas Legislature in 2005 at the urging of Gov. Perry to provide Texas with an unparalleled advantage in the research, development, and commercialization of emerging technologies. ETF grants are awarded in the following three areas:

* Commercialization Awards: funds to help companies take ideas from concept to development to ready for the marketplace.
* Matching Awards: funds create public-private partnerships which leverage the unique strengths of universities, federal government grant programs, and industry.
* Research Superiority Acquisition: funds for Texas higher education institutions to recruit the best research talent in the world.

THE TEXAS ENTERPRISE ZONE PROGRAM is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment in economically distressed areas of the state. Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refund is related to the capital investment and jobs created at the qualified business site. For more information, visit www.governor.state.tx.us/ecodev/financial_resources/tax_incentives/

THE DEFENSE ECONOMIC READJUSTMENT ZONE PROGRAM (DERZ) was established as a tool for business recruitment and job creation in adversely impacted defense dependent communities. It is designed to provide assistance to Texas communities, businesses and workers impacted by, or vulnerable to, the closure or realignment of military installations and the reduction of federal defense contracting expenditures. Local communities may also offer benefits to participants under the defense economic readjustment zone program as well. These may include tax abatement, tax increment financing, one-stop permitting and others. For more information, visit: www.governor.state.tx.us/ecodev/financial_resources/tax_incentives/

THE FEDERAL ENTERPRISE ZONE/RENEWAL COMMUNITY PROGRAMS are Federal interagency efforts focused on the creation of self-sustaining, long-term development in distressed urban and rural areas throughout the Nation. The program uses a combination of Federal tax incentives to assist participating communities in development, reinvigoration, and growth. These Federal Designations are recognized through December 31, 2009. For more information, visit: www.governor.state.tx.us/ecodev/financial_resources/tax_incentives/
UTAH

ECONOMIC DEVELOPMENT TAX INCREMENT FINANCING (EDTIF): A post-performance refundable tax credit up to 30 percent of new state revenues (state corporate/partnership income, sales and withholding taxes) over the life of the project (up to 20 years).

RENEWABLE ENERGY DEVELOPMENT INCENTIVE (REDI): A post-performance refundable tax credit for up to 100 percent of new state revenues (state corporate/partnership income, sales and withholding taxes) over the life of the project (up to 20 years) for renewable/alternative energy generation and related manufacturing.

The Private Activity Bond is Utah’s tax-exempt bonding authority creating a lower cost, long-term source of capital.

UTAH RECYCLING MARKET DEVELOPMENT ZONES: Businesses within a Recycling Zone can claim state income tax credits of 5 percent on the investment in eligible equipment for the handling and/or consumption of recycled materials.

LIFE SCIENCE AND TECHNOLOGY TAX CREDITS: Investors in a Utah life science company are eligible for a non-refundable capital gains tax credit of 5 percent of a capital gain after holding the investment for at least two years. Investors are eligible for a non-refundable, post-performance tax credit of up to 35 percent of their investment, paid over three years. Life science and technology companies generating new state revenues are eligible for a post-performance refundable tax credit of up to the amount of new state revenues generated over three years.

MOTION PICTURE INCENTIVE PROGRAM (MPIP): A post performance incentive of up to 25 percent of total dollars spent in the state in the form of a cash grant or refundable tax credit.
VERMONT

The VERMONT EMPLOYMENT GROWTH INCENTIVE ((VEGI) program can provide a cash payment, based on new job and payroll creation, to companies that have been authorized to earn the incentive. The incentive amount is based on the economic and fiscal impact of qualifying new jobs and payroll and capital investments made by the applicant for a period of up to five years. The resulting net revenue impact is used to calculate a percentage, which is then applied against the qualifying new payroll of the net new qualifying jobs, the product of which is the incentive amount for that year.

The VERMONT TRAINING PROGRAM (VTP) promotes expansion and encourages the creation and retention of jobs in Manufacturing, Information Technology, Healthcare, Telecommunication and Environmental Engineering by providing training funds for new and existing businesses thereby increasing the skills of the Vermont workforce, the wages and Vermonters’ standard of living. To be eligible, the company must guarantee that the training requested will supplement, rather than replace, the company’s ongoing, normal training efforts and agree to pay wages equal to at least twice minimum wage ($16.30) at completion of training, if no benefits are provided to the employee.

The DIRECT LOAN PROGRAM is eligible to manufacturing, processing, warehousing, research and development, travel and tourism, information technology, and others as defined in statute. Money can be used for the purchase of land, construction of buildings, purchase and installation of machinery and equipment.

Tax-Exempt Revenue Bonds: Eligible to facilities deemed eligible by the IRS (primarily manufacturers) as 501(c)3 organizations. Bonds can be used for acquisition of land, buildings, and equipment or “exempt facilities” as defined in the federal tax code.

VERMONT JOB START PROGRAM: Applicants must meet income eligibility criteria. Funds may be used to purchase real estate, equipment, inventory or for working capital.

Local Development Corporation Loans: This program provides financing to nonprofit local and regional development corporations to build facilities for lease to identified eligible tenants, or to plan and/or develop industrial parks. All nonprofit local and regional development corporations (LDCs and RDCs) are eligible for the program. Funding can be used for the purchase of land for industrial parks; industrial park planning and development; construction or improvement of speculative buildings; and small business incubator facilities.
VIRGINIA

The GOVERNOR’S OPPORTUNITY FUND (GOF) is designed as a “deal closing” fund to be employed at the governor’s discretion when necessary to secure a company location or expansion in Virginia. The GOF serves as a final resource for Virginia in the face of serious competition from other states or countries. Awards are made with the expectation that the grant to a locality will result in a favorable decision for the commonwealth. Grants are awarded to localities on a local matching basis. Capital is provided for site acquisition and development, transportation access, training, construction or build-out of publicly owned buildings.

VIRGINIA INVESTMENT PARTNERSHIP GRANT AND MAJOR ELIGIBLE EMPLOYER GRANT FUND: A discretionary performance incentive designed to encourage continued capital investment by Virginia companies, resulting in added capacity, modernization, increased productivity, or the creation, development and utilization of advanced technology. The program is targeted to companies that have operated in Virginia for at least five years, and that are proposing expansion projects that meet certain criteria.

VIRGINIA ECONOMIC DEVELOPMENT INCENTIVE GRANT: A discretionary investment performance grant program designed to assist and encourage companies to invest and create new employment opportunities by locating significant headquarters, administrative or service sector operation in Virginia. Eligible projects must meet minimum requirements for capital investment and job creation.

The VIRGINIA JOBS INVESTMENT PROGRAM: (VJIP) offers customized recruiting and training to companies that are creating new jobs or are substantially retraining existing employees. VJIP offers funding and services through three distinct incentive programs that fit a spectrum of training and retraining needs that include the New Jobs Program, the Small Business New Jobs Program and the Retraining Program.

TOBACCO REGION OPPORTUNITY FUND: discretionary cash grant made to a locality in Virginia’s tobacco-producing regions by the Tobacco Indemnification and Community Revitalization Commission (generally in the southern and southwest regions of the state) for assistance with economic development projects.

TECHNOLOGY ZONES: Virginia cities, counties and towns have the ability to establish, by ordinance, one or more technology zones to attract growth in targeted industries. Qualified businesses locating or expanding operations in a zone may receive local permit and user fee waivers, local tax incentives, special zoning treatment or exemption from ordinances. Once a local technology zone has been established, incentives may be provided for up to 10 years. Each locality designs and administers its own program.

SALES AND USE TAX EXEMPTION: Data centers are eligible for sales and use tax exemption if they invest at least $150 million, hire at least 50 employees (direct or indirect) that are paid at least 1.5 times the average prevailing wage in the locality where the center is located, and enter into an MOU with the Virginia Economic Development Partnership. The job threshold may be reduced if the facility is located in an Enterprise Zone or in a severely distressed community as defined by the Virginia Economic Development Partnership (unemployment at least 150 percent of the average statewide unemployment.) This exemption applies to the 5 percent sales tax on servers, server related equipment, chillers, generators and other enabling hardware.
WASHINGTON

COMMUNITY EMPOWERMENT ZONE PROGRAM(CEZ): a competitive program intended to spur neighborhood revitalization and reinvestment. To receive state CEZ designation, the six eligible jurisdictions identified targeted neighborhoods, undertook a planning and public involvement process, and adopted a five-year plan to guide resource investments. The CEZ designation enables qualified businesses to apply to the Washington State Department of Revenue for sales tax deferrals and business and occupation tax credits for a variety of projects. The statutory authority for the CEZ program is found in Chapter 43.31C of the Revised Code of Washington (RCW).

SALES AND USE TAX EXEMPTION for Manufacturing Machinery & Equipment (m&E): Available to manufacturers and processors for hire performing manufacturing and R&D. Testing operation for a manufacturer and processor for hire. To qualify, the manufacturer must purchase qualifying machinery and equipment used directly in a manufacturing operation or research and development performed by a manufacturer, or testing operations performed for a manufacturer.

Rural County/Community Empowerment Zone (CEZ) Incentives:

* Purchases of Server Equipment and Power Infrastructure for use in Eligible Data Centers – Sales/Use Tax Exemption: Available to the owner of an eligible data center with a combined square footage of at least 100,000 square feet and lessees of at least 20,000 square feet within an eligible data center located in a rural county.
* B&O Credit for New Employees in Manufacturing and Research & Development in Rural Counties: Available to manufacturers, R&D laboratories, and commercial testing facilities located in rural counties or within a CEZ. To qualify, the company must create new employment positions/increase instate employment by 15 percent. In turn, this incentive gives a $2,000 credit/position with annual wages/benefits of $40,000 or less; or a $4,000 credit/position with wages/benefits of more than $40,000 annually.

HIGH TECHNOLOGY B&O CREDIT for R&D Spending: Available to:

Businesses conducting research and development (R&D) in Washington State in the research and development fields of advanced computing, advanced materials, biotechnology, electronic device technology and environmental technology.

RENEWABLE ENERGY/GREEN INCENTIVES:

* Solar Energy System and Components of Solar Energy Systems Manufacturers – Reduced B&O Tax Rate available to manufacturers, manufacturers that sell their product at wholesale, and processors for hire of solar energy systems and specified components of solar energy systems using photovoltaic modules or stirling converters.
* Machinery & Equipment Used to Generate Electricity Using Renewable Energy – Sales/Use Tax Exemption available to anyone that generates electricity using fuel cells, sun, wind, biomass energy, tidal and wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas. The refund program expires July 1, 2013.
* Energy Production Using Solar, Methane, & Wind Power – Cost Recovery Program available to individuals, businesses, local government entities that are not in the light and power business or gas distribution business, and participants in a community solar project.

Reduced B&O Tax Rate for Aerospace Businesses: This incentive is available to manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales, and aerospace tooling manufacturers.

For more detailed information about these and additional incentives, visit: www.choosewashington.com/business/incentives
WEST VIRGINIA

SALES TAX EXEMPTION for Certain E-Commerce Businesses: Some computer-related sales of tangible personal property and services are exempt from the consumer sales and services tax.

Sales Tax Exemption for Certain Warehouse and Distribution Centers: Purchases of certain tangible personal property in qualified warehouse and distribution centers may be exempt from the consumers’ sales and service tax.

The Commercial Patent Incentives Tax Credit can offset up to 100 percent of the business franchise tax, corporation net income tax, or in the case of individual taxpayers, the personal income tax. The credit is based on a percentage of royalties, license fees and other consideration for developers of a patent or a percentage of net profit attributable to a patent used in a manufacturing process or product.

HIGH-TECH MANUFACTURING CREDIT: Businesses that manufacture certain computers and peripheral equipment, electronic components or semi-conductors and which create at least 20 new jobs within one year after placement of qualified investment into service, can receive a tax credit to offset 100 percent of the business and occupation tax, business franchise tax, corporate net income tax, and personal income tax on certain pass through income for 20 consecutive years.

HIGH-TECHNOLOGY BUSINESS PROPERTY VALUATION ACT: Tangible personal property, including servers, directly used in a high-technology business or in an internet advertising business is valued for property tax purposes at 5 percent of the original cost of the property. In addition, sales tax is eliminated from all purchases of prewritten computer software, computers, computer hardware, servers, building materials and tangible personal property, for direct use in a high-technology business or internet advertising business.
WISCONSIN

DAIRY 2020 INITIATIVE: Includes two programs to help dairy producers make improvements and increase production.

* The Dairy 2020 Early Planning Grant (EPG) program helps encourage and stimulate the start up, modernization and expansion of Wisconsin dairy farms. It provides grants to dairy producers to pay for professional services such as the preparation of a business plan. The award can be for up to 75 percent of the professional services with a maximum grant of $3,000.
* The Milk Volume Production program allows dairy producers who plan to increase milk production by expanding their dairy herds to obtain equity gap financing.

FOCUS ON ENERGY: Offers financial incentives to eligible Wisconsin business for installing qualifying energy efficiency and renewable energy measures such as energy efficient lighting, compressed air, HVAC equipment and residential solar energy systems. It also includes custom projects such as system or building upgrades or process improvements. Focus information, resources and financial incentives help implement projects that otherwise would not be completed, or to complete projects sooner than scheduled. Its efforts help businesses manage rising energy costs, promote in-state economic development, protect the environment and control the state’s growing demand for electricity and natural gas.

COMMUNITY DEVELOPMENT BLOCK GRANT FOR ECONOMIC DEVELOPMENT REVOLVING LOAN FUND (CDBG-ED/RLF): Funded through the federal Small Cities CDBG Program, provides grants to communities to promote local job creation and retention. Local governments then lend the funds to businesses for start-up, retention and expansion projects through grant funding. Funding levels depend on the number of jobs to be created or retained.

BUSINESS EMPLOYEES’ PROGRAM (BEST): Established by the Wisconsin Legislature to help small businesses in industries that are facing severe labor shortages upgrade the skills of their workforce. Under the BEST program, Commerce can provide applicants with a tuition reimbursement grant to help cover a portion of the costs associated with training employees. Eligible applicants include for-profit businesses that have 25 or fewer full time employees or annual sales of less than $2.5 million and are in one of the following Industrial Clusters: Automation, Agriculture/Food Products, Biotechnology, Information Technology, Manufacturing, Medical Devices, Paper/Forest Products, Printing, Tourism, or Childcare (does not include in-home childcare).
WYOMING

The BUSINESS READY COMMUNITY GRANT & LOAN PROGRAM can provide financing for publicly owned infrastructure that promotes economic development within Wyoming communities. Cities, towns, counties and joint powers boards are the primary applicants for the program. The typical maximum award is $1.5 million with a 10 percent match. Publicly owned infrastructure that facilitates a specific businesses needs.

INDUSTRIAL DEVELOPMENT REVENUE BONDS: Cities and counties may issue tax-exempt industrial development revenue bonds to provide financing for manufacturing and energy generation businesses. These bonds are issued within the State’s IRS allocation of tax-exempt bond financing. The maximum project was increased to $600,000,000 in 2011 and the business must provide a bank “letter of credit” to guarantee payment of the bonds. Interested businesses must apply for an allocation within the State’s volume cap. The Wyoming Business Council will coordinate this process.

WYOMING PARTNERSHIP CHALLENGE LOAN PROGRAM: The Wyoming Business Council can participate with a local lender on a loan to a business. The State’s portion of the participation maybe up to 35 percent of the project (maximum $500,000) in a shared note and collateral position with the local lender. Participation can be increased to 50 percent of the loan or $1,000,000 is the lender has secured a federal guarantee (i.e. SBA, USDA) to guarantee repayment of a loan made to a business.

The MANAGED DATA CENTER COST REDUCTION GRANT PROGRAM (Passed 2009) is a $2.25 million maximum grant that can be used to reimburse accrued utility expenses for power or broadband over 3 years. In exchange for providing these reductions in costs, the applicant (a Wyoming city, county, joint powers board) shall contract with the business to receive direct benefits and indirect economic development benefits including a specific amount of capital investment from business, specific minimum payroll created by the business, the provision of discounted IT services.

DATA CENTER SALES TAX EXEMPTION (originally passed in 2010, amended 2011): Requires a $5 million investment in capital infrastructure (building, walls, engineering, dirt work, etc) in a Wyoming location in addition to a $2 Million or larger investment in data center equipment (servers, peripheral equipment and data center containers) and software purchases. If these thresholds are met the sales tax burden on the qualifying computer equipment is exempt. This exemption can be applied if the data center invests $2M in equipment a calendar year in the future. In 2011, the Wyoming State Legislature added another tier requiring a $50 million capital infrastructure level. This tier also requires the $2 Million in data center equipment purchases. At this tier the qualifying exempt equipment also includes uninterruptable power supplies (UPS), back-up power generation, specialized heating and air conditioning equipment and air quality control equipment.

DATA CENTER PERMIT EXEMPTION (passed 2011): A mega-data center project, which exceeds $178.3 Million in capital investment, would be exempt from the requirement of applying for an Industrial Siting Permit through the Wyoming Department of Environmental Quality. This presents a cost savings of approximately $500,000 associated with permit application preparation, wildlife studies, economic analyses, public meetings, permit hearings, attorney fees, etc.

DATA CENTER INFRASTRUCTURE GRANT FUNDS (passed 2011): A $15,000,000 appropriation to assist Wyoming cities, towns and counties to build necessary public infrastructure for the recruitment and operation of data centers.