In Citrin Cooperman’s latest Manufacturing and Distribution (M&D) Pulse Survey Report, respondents noted that they anticipate significant job creation, business expansion, and additional capital investment to take place over the next three years. This industry momentum, coupled with a national effort to attract and re-shore production of essential products and services to the U.S., has caused states and localities to “up their games” in terms of the potential tax benefits and incentives offered to expanding or relocating M&D businesses. Companies contemplating such an expansion or relocation should explore the prospective incentive opportunities available to ensure they are taking advantage of the different financing and savings options that exist for projects already under consideration.

State and local governmental benefits or incentives may include tax credits, cash grants, various tax exemptions, preferential financing, and workforce training grants to name a few.

Some benefits are available without prior approval if the business undertakes the qualifying activity and completes the required forms or documentation. Other, usually more lucrative, benefits require some form of prior application and approval, which often includes a certification that the incentive(s) played an essential role in a company’s location or investment decision. Advanced planning and ensuring that no leases, purchase agreements, or binding commitments are executed prior to incentive application and agreement are necessary steps for M&D businesses to follow.

A summary of the current state and local tax credits and incentives available to M&D companies is outlined in the following chart.

How Citrin Cooperman can help

Citrin Cooperman’s State and Local Tax (SALT) Practice can help your M&D business:

• Identify and apply for any potential state tax benefits or other state and local incentives;
• Estimate the value of the state and local tax incentives or other benefits;
• Identify potential monetization strategies for the incentives;
• Navigate any technical issues or questions related to program rules and policies; and
• Complete any required compliance or documentation necessary to secure the incentives.

To explore the potential SALT credits and incentives available to your M&D business, please contact your Citrin Cooperman advisor or Jaime Reichardt at jreichardt@citrincooperman.com.