Capital Investment Incentive Planning
Every state and jurisdiction has to compete to attract new businesses. Many offer incentives, ranging from tax credits to cash grants, to stimulate capital investment. But companies need to plan ahead to capitalize on these opportunities. These incentives must be negotiated in advance, and companies usually have to prove there is out-of-state competition in order to qualify. Often, the number of jobs associated with the investment determines the size of the incentive offered.
The rules around these incentives vary from jurisdiction to jurisdiction, and they are sometimes negotiated on a case-by-case basis. RSM has worked with companies in a wide range of industries in locations across the country to capitalize on these opportunities. We have developed an approach that aligns with the capital investment lifecycle from planning through execution.
In addition to statutory investment incentives, many states offer discretionary investment tax credits negotiated directly with companies to encourage investments in their communities. RSM can help you identify and negotiate these opportunities to improve the overall return on your capital investments.
Taxation of internally-generated profits varies. Capital investment in products, services or facilities can create tax opportunity or risk.
Businesses expanding or increasing activity in their current state or in new states should consider the benefits of state tax credits.
Companies that negotiate their own credits and incentives often miss opportunities and create compliance issues.
Learn key items to keep in mind related to state and federal tax credits and incentives available to government contractors.
The vast array of state and local incentives available to attract and retain businesses is an important tool in a portfolio company’s growth strategy.