Each state government offers its own array of business tax credits and incentives to encourage economic development. Some tax incentives compete directly with those of other states to target job growth and encourage businesses to invest in their state. Other incentives seek to boost economic development in key geographic areas to distribute economic growth across the state.

Whatever the ultimate purpose of governments, businesses can often claim multiple tax benefits if they qualify. For example, some states grant incentives to specific industries, tying them to job creation, job retention, or overall investment. If your industry is supported, and your business is willing to invest in a defined tax district, you may be able to meet both qualifications in some cases.

In recent years, states have increased reporting requirements to verify that agreed upon goals have been met. Identifying possible tax credits and incentives and accurately documenting qualified activity to the state require businesses become knowledgeable of changing legislation in the state they operate.

The A&M Research Credits and Incentives Service (RCIS) team uses extensive knowledge of state and local regulations, incentive legislation, and reporting deadlines for all 50 states to help businesses claim all the benefits for the which they qualify.

Who can benefit from State Tax Credits and Incentives?

Companies want to ensure they are claiming the available credits and incentives they qualify for in the various states in which they have a presence. Businesses of all sizes can benefit from these programs. For small- and medium-sized companies, these incentives can help organizations grow at a crucial time in their lifecycle.

There are a number of business activities that will drive state and local incentives. Expansion or relocation, green initiatives, and new jobs are just some of the activities that commonly drive tax incentives. The timeframe to claim these incentives if often limited, so it’s important that companies are regularly reviewing business initiatives for potential credit opportunity.

What are the benefits of claiming State Tax Credits and Incentives?

Companies may be able to take advantage of the following:

• Awareness: Companies may not know all the credits and incentives they qualify for in any given state. These benefits can change from year to year, making it difficult to stay current over time.
• Reduced tax liability: Most state credits and incentives are designed to help make it easier for companies to do business in the state or to encourage certain behaviors by reducing tax liability for qualifying candidates.
• Increased cash flow: Refundable credits can help add liquidity to the business, providing a needed boost of cash flow into the business.

Why should you use A&M’s RCIS team?

Many Clients rely on A&M year after year to ensure they are getting all the benefits they’re entitled to under each state’s credit and incentive program. You can depend on our decades-long experience and a deep knowledge of changing legislation in all 50 states to uncover and claim benefits with dependable results. Rely on us for:

• Knowledge base: A&M’s RCIS team regularly monitors changes to tax incentive in all 50 states. Most businesses struggle to keep up with continuously changing legislation.
• Benefit discovery: Most companies don’t fully understand whether they are qualifying for all credits and incentives available to them, or what may be available in geographies where they want to expand or relocate.

Did you know?

State and local governments spend a minimum of $30 billion annually on tax incentives for businesses.

Princeton University’s Economics Department

Find out if your state offers an R&D tax credit >