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MassEcon

Business Resources | Incentives

The Majority of Incentives are run from the Massachusetts Office of Business Development and MassEcon can put you in touch with the right person to take advantage of the incentives listed below.

Tax Incentives

Financing Solutions

Workforce Training

Infrastructure Financing Solutions


Tax Incentives

The Economic Development Incentive Program (EDIP)

See a Map of Economic Target Areas

Overview

The Economic Development Incentive Program (EDIP) is a tax incentive program designed to foster full-time job creation and stimulate business growth throughout the Commonwealth. Participating companies may receive state and local tax incentives in exchange for full-time job creation, manufacturing job retention, and private investment commitments.

As of January 1, 2010, the Economic Assistance Coordinating Council (EACC) may certify three categories of project for companies that generate substantial sales outside of the Commonwealth and are seeking the EDIP Investment Tax Credit (ITC): full-time job creation and investment projects within Economic Target Areas, projects with exceptional employment growth across the Commonwealth and finally, projects within gateway communities that sustain and grow manufacturing jobs.

The EACC continues to make determinations on Economic Target Area (ETA) and Economic Opportunity Area (EOA) applications and considers applications seeking the Abandoned Building Renovation Deduction and municipally supported local real estate tax incentive applications for projects that are not seeking an EDIP-ITC.

Certified Expansion Project (EP):

In return for full-time job creation and private investment commitments, the EACC may certify Expansion Projects (EP) within Economic Target Area communities and award up to a 10% EDIP- Investment Tax Credit (ITC) to support the project. EP are most similar to those EDIP Projects certified prior to January 1, 2010, however EP must have substantial sales outside of the Commonwealth. A municipally driven, three-stage process is required for an EP (the first two stages may have been completed ahead of the project application):

  • The city or town must be an ETA community
  • The proposed project location must be within an EOA
  • The project must receive municipal approval of local tax incentives (either Tax Increment Financing (TIF) or a Special Tax Assessment (STA)) and municipal approval of the Certified EP prior to being considered by the EACC.

Enhanced Expansion Project (EEP):

The EACC may certify Enhanced Expansion Projects (EEP) that will create at least 100 new full-time, permanent jobs in the Commonwealth within two years of receiving an EDIP-ITC incentive. EEP that will strengthen the Massachusetts economy and contribute to the Commonwealth’s fiscal health may be considered for an EDIP-ITC incentive of up to 10% eligible capital investment. The project may also seek local tax incentives if proposed in an ETA community or if a non-ETA community supports an Exceptional Opportunity TIF.

Manufacturing Retention Project (MRP):

The EACC may certify Manufacturing Retention Projects (MRP) that will retain at least 50 and / or create at least 25 full-time, permanent manufacturing jobs in a gateway community. The project must receive municipal approval of the MRP prior to being considered by the EACC and may also seek local tax incentives from the city or town.

The Job Creation Incentive Program (state)

Overview

Qualifying biotechnology and medical device manufacturing companies are eligible to receive incentive payments for new job creation. Massachusetts already has a leading concentration of biotechnology and medical device manufacturers located within its boundaries.

Are You Eligible?

The jobs incentive payment for newly created manufacturing jobs is available to corporations engaged primarily in the research, development, production or provision of biotechnology, or manufacturers engaged in the production of products for a medical device manufacturing business primarily engaged in manufacturing medical or surgical instruments, surgical appliances or supplies, or electromedical devices.

How It Works

A qualifying biotechnology or medical device manufacturing company that creates 10 or more eligible jobs in the Commonwealth during a single calendar year shall be entitled to an incentive payment equal to 50% of the eligible jobs’ salary multiplied by the applicable Massachusetts income tax rate of the newly hired persons.


The Research & Development Tax Credit (state)

Overview

Massachusetts offers a tax credit for research and development investment for both manufacturers and R&D companies. This tax credit was designed to reduce obstacles to R&D investment and spur growth and innovation.

Are You Eligible?

The R&D tax credit is available to any foreign or domestic corporation subject to the corporate excise under Chapter 63 Massachusetts Laws.

How It Works

The Massachusetts R&D Tax Credit is divided into two categories:

  • The first credit category is designed for Qualified Expenses which are defined as any research expense incurred which would qualify for the Federal R&D tax credit. This credit is computed at 10%.
  • The second credit is available to Basic Research Payments and is computed at 15%. This credit is available for any costs related to donations and contributions made to research organizations such as hospitals and universities.

Although Massachusetts’ R&D tax credit closely parallels the federal credit program, it offers qualifying companies some unique features including:

  • Massachusetts credit is permanent, while other states have temporary credits
  • The R&D tax credit can be taken in conjunction with the state’s Investment Tax Credit of 3% (or 5% as part of the Economic Development Incentive Program).
  • Unlike some of the other credits, the R&D tax credit may reduce the corporation’s tax to the minimum tax of $456.

The Investment Tax Credit (state)

Overview

The Massachusetts Investment Tax Credit (ITC) offers a 3% credit for qualifying businesses against their Massachusetts corporate excise tax. The credit is to be used for the purchase and lease of qualified tangible property used in the course of business operations.

Are You Eligible?

The Massachusetts Investment Tax Credit is available to manufacturers, certain research and development corporations and corporations engaged primarily in agriculture or commercial fishing.

How It Works

The ITC is 3% of the cost (or other basis for federal income tax purposes) of qualifying tangible property acquired, constructed, reconstructed, or erected during the taxable year, after federal tax deductions are taken on the property. Qualifying property includes tangible personal property and other tangible property, including buildings and structural components of buildings acquired by purchase. The ITC also applies to property used by a leasee under an operating lease. An operating lease is defined as any agreement to rent, lease, or license the right to use personal property, other than agreements that are considered purchases for federal tax purposes. (Property acquired under a capital lease qualifies for the credit as well). Unused credits may be carried over to subsequent years.


Single Sales Factor (state)

Overview

Massachusetts offers an attractive tax environment for businesses. In particular, the Single Sales Factor reduces the tax burden for manufacturers and other qualifying companies.

Are You Eligible?

Manufacturing companies, qualifying defense contractors, and qualifying financial services providers, who have multi-state tax filings, are eligible for single sales factor Massachusetts income tax apportionment.

How It Works

Single sales factor apportionment is the ratio of Massachusetts sales to overall sales. Net income subject to Massachusetts tax is determined by multiplying overall net income by the apportionment factor. Many other states use three-factor apportionment which weighs the state sales, property and payroll as a percent of overall sales, property and payroll.


Sales & Use Tax Exemption (state)

Overview

Massachusetts exempts manufacturing equipment and R&D equipment from sales and use tax.

Are You Eligible?

The companies that are eligible are those who purchase equipment primarily for use in R&D and/or manufacturing in Massachusetts, regardless of where the equipment was purchased.

How It Works

If a company purchases equipment in Massachusetts for the primary purpose of using it for R&D and/or manufacturing in Massachusetts, it would not pay the standard 5% MA sales tax on the purchase. If a company purchases equipment outside of Massachusetts for the primary purpose of using it for R&D and/or manufacturing in Massachusetts, then the company is not liable for the standard 5% use tax.


100% Personal Property Tax Exemption (local)

Overview

Companies that are classified as manufacturing corporations are exempt from paying local personal property tax on tangible, depreciable assets (with a small number of exceptions).

Are You Eligible?

Company must be classified as a manufacturing corporation.

How It Works

Company must provide documentation to the local municipality establishing that it is a manufacturing corporation to avoid assessment of personal property tax liability.


Financing Solutions

MassDevelopment (MDFA)

Overview:

MassDevelopment provides real estate and equipment financing at low interest rates through direct loans or through its Emerging Technology Fund. Direct loan caps are $3 million for real estate and $500,000 for equipment. ETF cap for real estate or equipment is $2.5 million or 25% of total project cost. MDFA also provides tax exempt bond financing to manufacturers to be used for the purchase, construction, or renovation of facilities to be used for the purchase, construction, or renovation of facilities. The tax exempt bond financing means lower interest rate and longer termwhile the ETF provides capital access to emerging technology companies at below market interest rates through a simple and fast application and approval proces.

Are you Eligible?

To qualify for an ETF loan, your company must:

  • Be ready to grow in Massachusetts.
  • Be engaged primarily in the biotechnology, medical devices, telecommunications, advanced materials, electronics, environmental or other emerging technology based industry.
  • Have at least two at-risk parties, in addition to MassDevelopment.
  • Have a strong management team.
  • Be able to demonstrate technical feasibility, market demand for your end products and a feasible loan repayment plan.

To qualify for a tax exempt bond:

You must be a manufacturer that is making an investment in a capital project in Massachusetts that is in the public interest.

How it works:

Applications for loans can be obtained by calling (800) 445-8030. Applications are approved by the MassDevelopment Board.


Workforce Training

Safety Training Grants

Overview

In an effort to prevent worker injuries and help employers lower worker’s compensation costs, the Commonwealth administers a safety training grant program. $800,000 in grant funding is awarded each fiscal year to various organizations throughout the state. Grants help fund a wide array of safety training programs selected by the company that improve workplace safety, including ergonomics, hazardous material handling and proper heavy lifting techniques to name a few.

Are you Eligible?

Any company, regardless of size, may receive one grant per fiscal year. Applicant companies, consulting staff and those receiving training must be covered by Massachusetts Worker’s Compensation.

How it Works:

The application process (dates are subject to change):

  • October – Grant application released
  • March – Application deadline
  • June – Awards announced
  • July: Funding begins once final documentation is processed

The maximum award amount is $25,000. The funding only applies to approved applications. Training vendor and/or training curriculums must be obtained by the employers requesting funding.


One-Stop Career Centers

Overview

For employers seeking a skilled, motivated and adaptable workforce to meet current or emerging labor needs.

Are you Eligible?

All employers in the Commonwealth can access services through One-Stop Career Centers.

How it Works

There are a number of services for employers, including the ability to list job openings, help in planning a job fair, prescreen and refer potential job applicants, resources to help train, maintain and grow workforces, and provide research on the Commonwealth’s labor market.


Infrastructure Financing Solutions

These programs assist municipalities in funding transportation infrastructure for the purpose of stimulating economic development.

Community Development Action Grant (CDAG)

Overview

Under Massachusetts General Law Chapter 121B Section 57A, the Community Development Action Grant (CDAG) Program is authorized to fund community development projects to revitalize and redevelop decadent, substandard and blighted open areas for public benefit, in the public interest, and for a public purpose consistent with the sound needs of communities

Are You Eligible?

Any Massachusetts city or town, or under special circumstances two or more communities working together to address regional economic development needs, may submit an application.

How It Works

The State Legislature funds the CDAG Program through the Housing Bond Bill. Though the availability of CDAG funding is based on an annual allocation of bond funds the program has been consistently supported by the legislature and successive Governors.


Public Works Economic Development Grant (PWED)

Overview

The PWED program was created by the legislature to assist municipalities in funding transportation infrastructure that will stimulate economic development.

Are You Eligible?

Any Massachusetts city or town, or under special circumstances two or more communities working together to address regional economic development needs, may submit an application.

How It Works

Municipalities apply for PWED grants. These applications are reviewed by the Office of Commonwealth Development and funds allocated based upon the economic development and smart growth merits of the application. Grants can be up to a maximum of $2 million per municipality per project.


The District Improvement Financing Program (DIF)

Overview:

The District Improvement Financing Program (DIF) is a public financing alternative available to all cities and towns in the Commonwealth. The DIF enables municipalities to fund public works, infrastructure, and development projects by allocating future, incremental tax revenues collected from a predefined district to pay project costs.

Are you Eligible?

DIF is available to all cities and towns in the Commonwealth of Massachusetts that have projects meeting DIF regulations and guidelines.

How it works:

DIF is locally driven and must be approved by the municipality and the state’s Economic Assistance Coordinating Council (EACC). The municipality must define the district and document a development program describing, among other things, how the DIF will encourage increased residential, commercial and industrial activity within the district. It must also detail the project improvements, financing plans, and community benefits. After the local public hearings and approvals, the municipality must submit an application to the EACC for final approval prior to implementing the program.