Share
In this section we will discuss some of the most common EDO grants and incentives. For the commercial broker it is important to be familiar with the different grants & incentives that are available. A thorough understanding will help offer a more comprehensive service to their clients and can also provide an edge in negotiating by securing better terms for their clients.
Share
- Tax Credits: Tax credits are a powerful tool for companies looking to benefit from government incentives. When considering tax credits, it is crucial to ensure they are realizable, refundable, or transferable. Refundable tax credits are the best option, as they provide a direct cash benefit to companies that do not have liabilities to offset. Transferable credits can also be beneficial, as they can be sold on the open market or transferred to related entities or other tax bases within the state. The bottom line is that you want to secure a credit you can confidently utilize.
- Tax Rebates: Tax rebates were created to help people and businesses make the most of their tax credits, which often go unused. If you do something that helps your community, like creating jobs or making your property more energy-efficient, you might be eligible for a tax rebate. This is a way for the government to encourage businesses and individuals to take actions that benefit everyone.
- Real and personal property tax abatements: Property tax abatements are a common way to offer economic incentives. This incentive can reduce property taxes on real estate and personal property by about 50%. The length of this tax break varies depending on where you live. Some states may not be able to provide a direct property tax abatement, so they use bond transactions with payments-in-lieu-of-taxation to achieve similar savings. This means that a governmental entity will own the property and, as a result, is not taxed.
- Sales Tax Benefits: In some states, there are certain things you do not have to pay sales tax on, like manufacturing equipment. But if you buy something that typically has a sales tax, there might be a way to get it exempted or reimbursed through negotiation. And if a project makes a lot of sales tax money, there could be a chance to share that money with others.
- Training Grants: Different regions have different ways of supporting employee training. Some areas offer free training services, while others may provide financial assistance for training expenses if you enroll in a local educational institution. Financial grants may also be given for training expenses, but it can be challenging to comply with the rules and regulations for reimbursement. Reimbursements may only cover the trainer's salary and the cost of educational materials, but not the trainee's salary. In addition, the trainer may need to be someone from outside the company. So, it's essential to understand all the rules before deciding to apply for financial assistance because the cost of compliance may not be worth it.
- Cash Grant and Forgivable Loans: Many EDOs offer incentives to attract new businesses, and these can be very helpful if you need to invest money in your facility, equipment, or training. For instance, in some cities, companies can receive cash grants for creating new jobs. These grants can be as much as $10,000 per job, depending on the city and the wages paid. The most common type of incentive is an upfront payment to help offset the costs of starting a new project. However, some communities offer such assistance over a more extended period based on performance. Another popular type of incentive is loan forgiveness or reduced financing costs, provided that the project meets specific criteria.'
- Utility discounts and rebates: Utility companies can offer special discounts on their services or help businesses needing infrastructure. This can be especially useful for companies that use a lot of power, like data centers or factories. Some utilities may even give out grants to businesses that create jobs and invest in their communities.
- Real Estate Infrastructure Grants: Communities often offer free land or buildings to businesses in exchange for investment and job creation. These properties are usually owned by the city or economic development group. Some communities even build facilities in advance and offer them to companies rent-free for a certain period. They may also provide funding for infrastructure improvements such as fiber optic internet, increased power supply, roadway improvements, and building access.
- Priority Permitting and Fee Waivers: Most construction projects must go through a process of getting permits and paying fees to the government. This can cause delays and can be expensive. However, there are ways to reduce or waive these fees and even speed up the process. By doing this, you can save time and money while getting your project approved quickly.
- Tax-Free Zones: In some states, you can eliminate some or all your taxes by creating jobs in specific areas. These areas are often economically struggling, so checking the work conditions is essential.
