Client Alert: Business Incentives-Major Legislative Changes Made to Massachusetts' Primary Business Incentive Program

The Massachusetts legislature has passed significant changes to the Commonwealth's Economic Development Incentive Program (EDIP), which was recently signed into law by Governor Deval Patrick and took effect on January 1, 2010. If your company is planning to make a significant investment in real and human capital within Massachusetts during calendar year 2010 or beyond, your corporate investment might be eligible to receive enhanced EDIP state and local tax incentives authorized under these recently approved statutory changes.

Background
Prior to the recently approved legislative changes, qualified and certified projects under the EDIP received favorable state and local tax treatment in the form of a negotiated exemption on local real and personal property taxes as well as a 5% Investment Tax Credit (ITC) on qualifying investments against Massachusetts corporate excise taxes. To receive these benefits, participating companies must commit to expand or relocate operations in state-designated Economic Target Areas (ETAs) and agree to certain job creation capital investment obligations.

The recently passed amendments provide for the following:

  • Increased discretion for state board charged with approval of all EDIP Certified Projects
  • Flexible ITC of up to 10% for projects in ETAs that create at least one net-new job
  • Non-ETA projects that create 100 or more jobs are also eligible to receive 10% ITC
  • Greatly enhanced and potentially refundable ITC of up to 40% for certain manufacturing projects that create or retain a minimum of 100 jobs
  • A $25 million yearly ITC cap, where previously no cap existed

Duff & Phelps Services
Duff & Phelps' Boston-based business incentive advisory (BIA) professionals are uniquely qualified to best position, negotiate and secure enhanced EDIP incentives as well as a variety of other federal, state and local incentives for your company's Massachusetts-based operations.

For further information regarding the Massachusetts EDIP and other available Massachusetts business incentives, please contact Scot Butcher, managing director, at +1 617 378 9406 or Bob Foley, vice president, at +1 617 378 9452.

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