Chris Carmen / March 31, 2017
There isn’t a state in the U.S. that isn’t competing to strengthen its economy. The competition? Every other state in the union. The prize? Companies….which bring jobs, keeping the populous happily employed and creating a tax base that supports state and local infrastructure and services.
The key to winning the competition is creating the most favorable business climate. This can come in the form of labor availability and cost, taxation, state and local regulation, as well as a number of other factors that impact a company’s general cost of operations. The competition is so fierce that states now have to complete just to retain businesses, which are inevitably being pursued by other states.
One of the game changers in the competition for companies is incentives. Incentives can be the deal breaker or maker, enticing companies to relocate to a state or remain in another. Incentives can come in many forms. Some of the most popular incentives are property tax abatement, income tax abatement, investment tax credits, and job training grants. The State of New York promotes 10-year income tax abatement for companies making their home there. New York has been so aggressive in its attempts to attract new business, it’s offering this incentive in national television advertisements.
But incentives are also used to mask issues a state might have in other key areas of consideration for a business looking to put down roots. For example, below the surface of its television ads, New York is one of the highest taxed and regulated states in the U.S. In fact, according to a study done by the American Legislative Exchange Council, 2015 State Economic Competitiveness Rankings Reveal Which States Are Poised for Growth, New York ranks dead last among states in the U.S. for overall economic outlook. Yes, a company may find New York’s 10-year income tax abatement attractive, but most companies will likely be running out the door to relocate elsewhere once the real taxes and regulation hit them over the head.
Incentives are great but they have to match with a sound state fiscal policy and an educated human resource poll to stand the test of time. After all, you’re looking to put down roots. Once you commit to a state, you’ve got to be sure it can sustain your growing business.
But what about Indiana state business tax incentives? This is a state ranked #3 among all 50 states in economic competitiveness and poised for growth, according to the same American Legislative Exchange Council study. Indiana is successful in attracting and retaining businesses because, through its economic development arm, the Indiana Economic Development Corporation, the state has assembled attractive incentive packages to entice companies to relocate to Indiana, but has done so coupled with a sound state fiscal policy, an educated workforce, and a cultural environment attractive to business in growth industries, especially in healthcare and information technology.
We saw the strength of Indiana firsthand when our client, American Specialty Health, was considering relocation of its corporate headquarters from Southern California to the Indianapolis area, specifically Carmel, Ind. Along with one of the most innovative mayors in the U.S., Carmel Mayor James Brainard, the Indiana Economic Development Corporation, and Governor Mike Pence crafted an aggressive incentive package that targeted the needs of our client. When combined with Indiana’s low cost of living and availability of affordable housing, high level of education, and the cultural environment of Carmel, Ind., a compelling case was made for American Specialty to relocate to Central Indiana.
Carmen believes in the power of Indianapolis’ attraction for businesses. Let us help you start the search for space with our free assessment:
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