Discretionary Incentives

overview

How To Identify Discretionary Incentives

Discretionary incentives can include all types of business incentive opportunities such as employment, property and capital investments, research and development, and training.  In addition, you will find opportunities that go beyond any published programs.  It is not uncommon for a discretionary incentive opportunity to include special tax treatment for a business, cash grants, free or discounted property or financing benefits.  As jurisdictions compete for your business, a variety of different benefits may be offered.  Discretionary incentives tend to provide the most substantial benefits claimed by businesses.

Discretionary incentive programs only provide these benefits if it is reasonably certain that the proposed project or investment will not become a reality “but for” the existence of the incentives.  Therefore, a common element of discretionary incentive programs is that they will be a subjective element for qualification or some type of application or approval process that a business must go through to obtain these benefits.  Discretionary incentives are commonly associated with a “Site Selection” incentives analysis where a business is looking to find a location to expand (open new location or move an existing location).  You will also see discretionary incentive opportunities in a situation where two businesses merge or a business is considering closing a location.  Many discretionary incentive opportunities aid with retaining existing investment in addition to growing the business.

It’s important to focus on the business' future to proactively identify the opportunities to capture and act accordingly to secure the available benefits.  It is a recommended practice to consider the value of the available incentives as an element/variable in the overall investment decision of the business.  Although the incentives will not carry equal weight to other key factors such as availability of staff, logistic considerations, etc., it is an element to include calculating the expected return on investment.

The discretionary incentives require a more comprehensive approach to secure since it often deals with multiple jurisdictions.  It is important to identify opportunities that are more relevant to the business such as focusing on above the line benefits such as tax credits, depending on the tax circumstances of the business.

Many eligible businesses overlook these programs simply because they are unaware they qualify or receive only a portion of their eligible benefit by failing to identify all the available programs or fully capturing the benefit for the programs they do identify.

Please refer to our Incentives by State Map to identify some specific Discretionary Incentive programs.

WOTC Tax Credit Calculator

All businesses that pay income tax in the U.S. qualify for the federal Work Opportunity Tax Credit (WOTC). To quickly estimate your company’s WOTC, fill out the fields below.

Your Comprehensive Guide To Location-Based Tax Incentives  Find out what incentives your company is eligible to receive. Download Guide

Our Blog