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Relocating Your Business to Massachusetts – Tax Credits and State Resources Await!

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Insights  <  Relocating Your Business to Massachusetts – Tax Credits and State Resources Await!

Lifelong Bay Staters are likely familiar with the term “Taxachusetts.” The moniker was certainly once commonplace in the Commonwealth-and, in the past, the state’s tax rates may have been an important factor for companies considering a move of their business to Massachusetts.

However, thanks to various business-friendly organizations and recent legislative and policy efforts by statewide and local elected leaders, the unflattering nickname is quickly becoming more and more obsolete as Massachusetts proves itself time and time again as being open for business.

This article will address the various resources available to assist businesses with their relocation. I will also address some of the tax incentives and credits Massachusetts offers its local businesses.

Business-Friendly Resources

There are numerous organizations, both public and private, that support new businesses as they explore opportunities in Massachusetts. The Massachusetts Office of Business Development is a one-stop source for businesses looking to relocate to Massachusetts, and can help companies working with both the public and private sector. For Life Science companies, the Massachusetts Life Sciences Center offers an array of incentives, including several for early stage companies.

These incentives are very important to the state’s overall business development goals, as Massachusetts attracts a significant number of Biotech Research & Development companies. With an abundance of local colleges and universities as well as the top four hospitals funded by the National Institutes of Health, Massachusetts is a leader in the Biotech arena. In addition, Massachusetts has a number of BioReady Communities-areas of the state with built-in policies already in place that ease the way for the construction of new biotech facilities.

There are also a number of private organizations and trade groups that can assist businesses looking to expand in Massachusetts. MassEcon works closely with both the private and public sector and can serve as a valuable peer resource. MassBio is a not-for-profit organization established to provide resources and support for Life Science companies and is committed to the success of the biotech industry in Massachusetts.

Massachusetts Tax Incentives and Credits for Businesses

Massachusetts has also implemented a number of tax incentives for businesses, as well as workforce training grants and financing programs. These include:

  • Economic Development Incentive Program (EDIP)
  • Job Creation Incentive Program
  • Research and Development Tax Credit
  • Investment Tax Credit
  • Single Sales Factor for Apportionment
  • Sales and Use Tax Exemption
  • Personal Property Tax Exemption

The above incentives can be very beneficial for manufacturing companies and research and development companies. A manufacturing company based in Massachusetts can have a very low effective state tax rate, especially if a majority of their property and payroll is in Massachusetts. With the use of the single sales factor in Massachusetts, as well as available investment credits and research credits, the overall Massachusetts tax liability can be significantly reduced. In addition, the construction of facilities in localities that qualify for the Economic Development Incentive Program can generate additional tax credits.

These business-friendly organizations and tax incentives-combined with the state’s built-in business advantages-make Massachusetts a very attractive place to move your business.

Disclaimer: Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statues, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law.

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