The Massachusetts Office of Business Development (MOBD) assists businesses relocating to Massachusetts as well as businesses wishing to expand their current operations, with specific attention being paid to jobs created, jobs retained, and capital invested. MOBD also administers tax incentive/credit programs and grant programs to assist businesses in the state.
Tax Incentive/Credit Programs
- Massachusetts Economic Development Incentive Program – Participating companies may apply for state and local tax incentives in exchange for full time job creation, job retention and private investment commitments. Companies can also request local Tax Increment Financing (TIF) agreements with specific municipalities.
The Preliminary and Local Only Applications can be found on this page:
- Massachusetts Vacant Storefronts Program– This competitive program helps municipalities revitalize their downtowns and commercial areas. Municipalities may apply to the Economic Assistance Coordinating Council (EACC) for certification to designate a defined downtown or other commercial area, as a Certified Vacant Storefront District. After achieving the designation, as well as a commitment of local matching funds, businesses or individuals may apply to the EACC for refundable Economic Development Incentive Program (EDIP) tax credits for leasing and occupying a vacant storefront in that district. The amount of tax credits awarded will match municipal support and may be up to $10,000 in refundable tax credits.
Approved Vacant Storefront Districts (full list)
M3 Corridor Certified Districts: Downtown Lowell
- Life Sciences Tax Incentive Program – Awarding up to $25 million in tax incentives each year, the Massachusetts Life Sciences Center provides tax incentives to Massachusetts-based companies engaged in life sciences research and development, commercialization and manufacturing.
- 3% Manufacturers Investment Tax Credit – A company is eligible to claim a 3% ITC on depreciable assets as a DOR registered manufacturer. Manufacturing entities most likely will be eligible to take advantage of the 3% Investment Tax Credit. The credit is calculated by computing 3% of the total capital investment in qualified equipment and facility leasehold improvements. This amount can be applied directly against any Massachusetts tax obligation. The maximum amount of credits, otherwise allowable in any one taxable year to a corporation, may not exceed fifty per cent of its excise. A corporation may carry over and apply to its excise for one or more of the next succeeding three taxable years the portion of those credits, as reduced from year to year.
- 10% Research & Development Tax Credit – Massachusetts has a 10% R&D Tax Credit, and the % can increase with collaboration with a local college or university. In Massachusetts, any costs which would qualify for the Federal R&D tax credit are eligible for a 10% R&D Tax Credit. This credit can be used in addition to Investment Tax Credits. Further, a 15% R&D Tax Credit is available for costs related to donations and contributions made to research organizations such as hospitals and universities. The R&D credit is permanent but cannot reduce a corporation’s tax liability below the minimum of $456 and cannot reduce any tax liability over $25,000 by more than 75%. However, a corporation may carry forward for an unlimited period of time any portion of the R&D credit which cannot be allowed in a particular tax year because of this limit.
- Sales and Use Tax Exemption: Materials, tools, fuel, machinery and replacement parts used in manufacturing and research and development may qualify for exemption from sales and use taxes.
- Single Sales Tax Treatment: Massachusetts single weights sales when assessing apportionment taxes for manufacturers. The 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. This is advantageous for companies with significant property and employees, as it won’t be a factor in determining the amount of tax. Additionally, this provision does not penalize companies for continual investment in the business or for hiring more employees.
- Additional information for these incentives: https://www.mass.gov/regulations/830-CMR-5821-manufacturing-corporations-0