STATE AND LOCAL cREDITS AND INCENTIVES

Recent headlines surrounding the potential relocation of the Chicago Bears to Indiana have highlighted the competition among states to attract business investment. While high-profile incentive packages often dominate the news, state and local credits and incentives (“C&I”) remain an underutilized tool for middle-market companies and growing businesses.

 Most states offer tax credits, grants, financing programs, and workforce development incentives to encourage in-state investment. In addition, municipalities and economic development organizations frequently provide targeted incentives to attract businesses to specific regions. When properly leveraged, these programs can significantly reduce capital expenditures and improve cash flow.

 Although large corporations often benefit from sophisticated advisory teams that identify these opportunities, many incentive programs are available to businesses of all sizes that meet eligibility requirements.

 
KEY CONSIDERATIONS FOR 2026:

States and local governments continue to compete aggressively to attract and retain employers through:

• Tax credits tied to job creation and capital investment

• Grants and low-interest financing programs

• Workforce training subsidies

• Sales tax exemptions on construction materials

 Even though large multinational companies frequently receive media attention, incentive programs are widely available to:

• Expanding small and mid-sized businesses

• Companies relocating or opening new facilities

• Businesses investing in equipment, workforce, or property improvements

 Cash Flow and ROI Impact

Properly structured incentives can provide:

• Immediate cash grants or forgivable loans

• Sales and use tax savings on construction materials

• Reduced financing costs

• Workforce funding that offsets payroll expenses

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