States May Retract Tax Incentives During Down Economies
States facing tough economic times as well as a lack of new private
investment and new revenues can choose one of three options as it relates to state
tax incentives. They can do nothing, leaving current programs intact. They can
expand targeted incentive programs, using taxation (or the lack thereof) to drive
certain desired behaviors in the private sector, or they can reduce the availability
of state tax incentives in a perceived effort to save tax dollars. USA Today
recently ran an article online reviewing several states that are or may be shrinking
their offering of tax incentives in an attempt to save tax dollars. It’s an
interesting read, especially since it focuses on states other than the well publicized
California. Monitoring expanding and retracting state tax incentive programs
can be challenging, but are certainly necessary for taxpayers serious about using
these tools to assist with investment and job creation.
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