State and local business tax incentives are powerful tools that can significantly reduce a company’s tax burden and influence business decisions. Every U.S. state offers some form of incentive to attract or retain businesses, from tax credits and exemptions to cash grants and property tax abatements. For experienced tax professionals, understanding these incentives is crucial for effective tax planning and helping clients maximize savings. Below are ten key things to know about state and local business incentives, along with real-world examples and actionable insights. We’ll also wrap up with essential dos and don’ts when advising clients on these programs.
Contracts, Signing Bonuses, and the Substantial Presence Test
Amber Gray-Fenner, EA NTPI Fellow USTCP
In tighter job markets, recruits are often offered signing bonuses (and sometimes moving expenses) to join a firm. Sometimes construction workers temporarily relocate to jobs in other states while they are employed by the company that hired them in their home state. This article reviews some of the foundational tax concepts to consider when evaluating sourcing of income for state tax purposes.
