Navigating Economic Development Incentives in the U.S.

The United States continues to be one of the leading destinations for foreign direct investment. For international investors considering investing in the U.S., understanding the unique and intricate landscape of economic development incentives is crucial. In the United States, various entities offer economic development incentives, including the government, development partnerships, and utility companies. Their incentive programs are designed to attract new investment and job creation, streamline the launch of new projects, and ultimately promote economic growth.

Understanding the Incentive Programs

Economic development incentive programs in the U.S. are typically administered at three distinct levels: federal, state, and local. Each level provides specific opportunities to offset different types of taxes, reducing your overall tax burden and supporting business growth. Federal programs commonly have broad eligibility criteria but can only be used to reduce federal tax liabilities, not state or local taxes.

States often compete with each other to attract businesses by offering lucrative incentives. Each state offers its own set of incentive programs, which can vary widely and are administered in various ways, such as tax credits and grants. Each program has unique eligibility requirements. For example, many states provide tax credits to businesses once they create the minimum required number of jobs or make the minimum required capital investments. Additionally, many incentive programs target specific geographical regions and industries. Discretionary incentives can also be granted on a case-by-case basis.

Local entities (counties, cities, municipalities, and regional development authorities) also provide incentive programs to attract and retain businesses. These incentives typically offset local taxes such as property taxes, business license fees, and sales and use taxes. Common types of incentives include property tax abatement, Tax Increment Financing (TIF), local grants and loans, and enterprise zones.

Maximizing Benefits from Incentive Programs

Understanding and navigating the multi-layered incentive landscape in the U.S. can be challenging and time-consuming but highly rewarding. Each program requires unique, detailed compliance reporting and thorough documentation to fully realize its benefits.

Whether it’s your client’s first time in America, they are exploring new investment opportunities, or are existing investors seeking credits and incentives opportunities, McGuire Sponsel’s Location Advisory Services team is here to help you navigate the identification of potential opportunities, incentive negotiation, and compliance reporting to ensure your clients receive the maximum benefits available.

This blog has been translated from English to Chinese.

美国仍然是外国直接投资的主要目的地之一。对于考虑在美国投资的国际投资者而言，了解经济发展激励措施的独特而复杂的情况至关重要。在美国，各种实体都会提供经济发展激励措施，包括政府、发展伙伴关系和公用事业公司。其激励计划旨在吸引新的投资和创造就业机会、简化新项目启动流程，并最终促进经济增长。

了解激励计划

美国的经济发展激励计划通常通过三个级别进行实施：联邦、州和地方。每个级别都提供特定的机会来抵消不同类型的税收，从而减轻您的整体税收负担并支持业务增长。联邦计划通常有广泛的资格标准，但只能用于减少联邦税收负债，而不能用于州或地方税收。

各州经常通过提供利润丰厚的激励措施来相互竞争，以吸引企业。每个州都会提供自己的一套激励计划，这些计划差异很大，以各种方式进行实施，例如税收抵免和补助。每项计划都有独特的资格要求。例如，许多州在企业创造要求的最低数量的就业机会或进行要求的最低资本投资后，就会向其提供税收抵免。此外，许多激励计划针对特定的地理区域和行业。还可以根据具体情况给予酌情激励。

地方实体（县、市、自治市和区域发展当局）也提供激励计划以吸引和留住企业。这些激励措施通常会抵消地方税，例如房产税、营业执照费以及销售和使用税。常见的激励措施类型包括房产税减免、税收增量融资 (TIF)、地方补助和贷款以及创业园。

从激励计划中获得最大利益

了解和确定美国的多层次激励情况可能具有挑战性且耗时，但回报率很高。每项计划都需要独特、详细的合规报告和全面的文档，以充分实现其优势。

无论是您的客户首次来美国、他们正在探索新的投资机会，还是现有投资者寻求信贷和激励机会，McGuire Sponsel 的位置咨询服务团队都可以随时帮助您确定潜在机会、激励谈判和合规报告，以确保您的客户获得最大利益。