Numerous companies are in search of various economic development and incentives that play a part in choosing the right location. Whether they are right or wrong, these economic development and incentives will always be a point of contention. However, until they come to an end companies will always chase after them allowing them to be a part and parcel of this process.
What You Need To Know About Economic Development Incentives
Note that, economic development incentives come in different forms depending on the state, town and municipality. Some of the known forms of these incentives include:
• Utility rate reductions
• Property tax abatements
• Cash grants
• Fee waivers
• Sales tax exemptions
• State tax credits
• Port tax credits
• Building reuse/redevelopment grants
As many as these incentives might be, there true question is whether these companies are actually utilizing the true value of the incentives that have been awarded to them. For instance, the cash grants and the building redevelopment/reuse grants are being used wisely. However, a lot of companies continue to disregard the incentives that need a little extra paperwork or reporting after declaration especially many years after they were initially announced. Many companies have placed ongoing reporting as the lowest priority.
How To Navigate Through The Various Incentives Available
If you are a company representative who has been chosen to choose the site of your business, you might follow the immense learning cure when understanding these incentives and their actual value to your business or company. Note that, alterations are always done to the incentives by various states and communities. Such alterations are dependent on a few factors such as;
• The number of jobs created
• The type of business
• Investment thresholds
• Site location
Most companies used the property tax rebates, cash incentives and property tax reductions since they are easier to report. However, because of the complexities involved, the smaller companies don’t have enough staff to take part in the incentive program. Note that, in some companies, the people chosen to select the site and work with the localities or state might not be the same people in charge of operations.
As such, there will be a huge lack of continuity in understanding the type of reporting required. Most reporting deadlines will be overlooked resulting in delayed grant payments or missing ones altogether. In such cases, companies often receive disqualifications for missing or delaying the filing deadlines for various grants.
The Underutilized Incentives
Most companies take advantage of the incentives that assist with property tax reductions, new infrastructure, payroll tax rebates and any reimbursements for renovations. They often ignore the state income tax credits issues for job creation and investment since they are harder to utilize, unless there is a huge corporate tax liability at play.
Another underutilized incentive is the tax credit issues for increased port traffic or volume. Some companies might have a hard time utilizing this tax credit because of the logistics pattern or the preferred port location. Therefore, any company looking to utilize these incentives needs to take the time to choose the right one to avoid any disappointments in the future.