Incentives

Profitability is the #1 goal of business; reducing costs is one great way to boost the bottom line. The incentive programs noted below are just some of the ways we can help reduce your expenses.  There are also a variety of resources available to assist you with training and workforce development.  We're here to help you make the most of your business - let us know what we can do for you.

TAX ABATEMENTS

Industrial property tax abatements provide incentives for eligible businesses to make new investment in Michigan. These abatements encourage Michigan manufacturers to build new plants, expand existing plants, renovate aging plants, or add new machinery and equipment.  Facilities used for warehousing, distribution or logistics purposes may also be eligible if they locate in specific border counties. (Berrien and Cass Counties are included) At least 90% of the property, excluding the surrounding green space, must be used for warehousing, distribution, logistics or communications center and occupy a building or structure that is more than 100,000 square feet.

Industrial Facilities Tax Abatement (P.A. 198 1974, as amended)

TAX CREDITS

MEGA Tax Credits
The Michigan Economic Growth Authority (MEGA) program has generated billions of dollars in private investment and created over 120,000 jobs since 1995. There are a number of MEGA programs (see below) each with statutory requirements. Credits may be awarded for up to 20 years and for up to 100 percent depending on job creation, capital investment, and other considerations. Companies eligible for a MEGA Employment Tax Credit are those engaged in manufacturing, mining, research and development, wholesale and trade, film and digital media, office operations, or certain tourism projects. As of 2009, companies may include employer-paid health care benefits as part of wage requirements.

Standard MEGA Tax Credits are available to companies creating at least 50 new jobs by the first year of the credit as determined by the MEGA. The new jobs must be in addition to those existing during the year preceding application for the credit and previously existing base jobs must be maintained for the life of the credit.

Rural MEGA Tax Credits are available to companies in counties with populations less than 90,000 (Cass County has approximately 51,000). The job creation requirement for the Rural MEGA is five new jobs by the first year of the credit and 25 new jobs by the fifth year of the credit, as determined by MEGA, along with the maintenance of the base employment level.

High-Tech MEGA Tax Credits are available to promote the development of high-tech businesses in both traditional and emerging industries by providing a tax credit against the Michigan Business Tax (MBT) and assist in the diversification of Michigan's economy. The High-Tech Mega Employment Tax Credits require that companies meet the definition of a "high-technology company" as defined under the Act and as determined by the Michigan Economic Development Corporation (MEDC).  The statute now allows a qualified high-technology business to collect 200 percent of the sum of the payroll and health care benefits for the first three years of the credit, multiplied by the personal income tax rate on qualified new jobs. Businesses that receive the 200 percent credit under this accelerated scenario are limited to a maximum seven-year credit.

High-Wage MEGA Tax Credits are available to businesses that create jobs paying a minimum of 300 percent of the Federal Minimum Wage to each and every employee for which the business will receive a tax credit. The company must pay an average of 300 percent of the Federal Minimum Wage for all its employees. Job creation objectives are identical to the High-Tech MEGA Tax Credit program.

High-Tech and High-Wage MEGA Tax Credits are designed to attract innovative and cutting-edge companies that specialize in new technologies. They are available to firms doing advanced computing, biotechnology, electronic device technology, engineering and laboratory testing related to product development, medical device technology, product research and development, advanced vehicle technology or technology that assists in the assessment or prevention of threats or damage to human health or the environment.

Retention MEGA Tax Credits are designed to assist Michigan companies that are facing a business closure. Eligible companies include those engaged in manufacturing, mining, research and development, wholesale and trade, film and digital media, office operations, and certain tourism projects. Depending on the overall investment, each credit may be awarded for up to 20 years and up to 100 percent of the wages and employer-paid health care benefits multiplied by the personal income tax rate in effect at the beginning of the company tax year. The amount of the credit is based on the amount of the investment per job and utilizes a formula specific to the MBT Act.

OTHER INCENTIVES

Infrastructure Development
Many communities are able to update and expand important infrastructure capacities to accommodate the changing needs of business through a variety of state and federal programs. These programs can provide assistance for road construction, water capacity enhancement, wastewater treatment facilities, rail access, and road construction. The Michigan Department of Transportation (MDOT) and the Michigan Economic Development Corporation (MEDC) administer these programs in cooperation with local partners such as the Southwestern Michigan Economic Growth Alliance. Grants may cover between 50 and 90 percent of public infrastructure development costs and up to 50 percent of eligible rail costs.

For more information go to:  http://www.themedc.org/  or contact the Southwestern Michigan Economic Growth Alliance (269-683-1833).

MEDC Programs A-Z