Massachusetts Extends Tax Credits For Job Creation
Massachusetts, like many states, offers tax credits to businesses in exchange for creating jobs. The jobs bill passed last summer made some changes to one of the state’s primary economic development tools.
The Economic Development Incentive Program in Massachusetts allows companies to claim state and local tax breaks in exchange for creating new jobs, retaining jobs in the manufacturing sector and committing to other private investments. It is a $30 million a year program.
Massachusetts Economic Development Secretary Greg Bialecki said the 20-year-old program has been modified several times in the last five years to reflect changes in the state’s economy and to make it more effective.
"The return on the investment to us is how many jobs are being created, so we fine tuned it to make sure we get the most job creation per taxpayer dollar invested."
The latest changes made as a result of the Economic Development Bill signed earlier this year make more tax credits available for job creation in the state’s so-called Gateway Cities – older cities that have lagged the state as a whole in job growth—including Springfield, Holyoke and Pittsfield.
Companies can receive a tax credit of up to $1,000 per job created, but up to $5,000 per job in a Gateway City.
Bialecki said the tax credit program no longer requires companies to make a significant real estate investment to go along with the new jobs.
"Some of the new innovation economy employers are hiring a lot of people, but not investing a lot in plant and equipment, so we modified the program so that employers adding a 100 or more people are eligible for a smaller tax credit."
Cities and towns have more flexibility to give a local property tax break to a business to create jobs. The state must still sign off on the local tax break, but a corresponding state tax credit for the project is no longer required.
Springfield Chief Development Officer Kevin Kennedy said the recent state approval of a property tax break for an office expansion will bring more than 50 jobs to downtown Springfield.
"We are thrilled with the idea of this kind of growth in the downtown."
The Massachusetts Economic Assistance Coordinating Council approved an agreement between the city of Springfield and Freedom Credit Union for a five-year tax break valued at $90,000 for a $2.2 million expansion of the credit union’s Main Street headquarters.
The company plans to relocate 42 employees and hire 13 new people to staff the new facility.
The state economic development agency approved $29.3 million in tax credits for 53 projects in 2013. This resulted in more than 5,000 new jobs, and 13,600 jobs retained, according to the Patrick administration.