The Economic Development Incentive Program (EDIP): Provides discretionary state and local tax incentives to companies that commit to retaining and/or creating full-time jobs. At the state level, tax credits are awarded typically on a non-refundable and can offset up to 50% of a company’s annual state income tax liability. At the local level, the EDIP program is capable of providing property tax savings to companies investing in real property through tax increment financing incentives.
Massachusetts Life Sciences Initiative: Through the Massachusetts Life Sciences Center, eligible life sciences companies creating at least 10 new jobs statewide are eligible to receive a discretionary tax incentive which is awarded on a per new job basis. The tax incentive award can be monetized by companies through several programs including conversion of existing investment and R&D tax credits into refundable credits at 90% of face value, sales tax exemptions on eligible investments, and extensions of net operating loss carryforwards.
Research and Development Tax Credit: Massachusetts offers a permanent R&D tax credit which is separated into two categories. The first category is a 10% credit designed for qualified expenses. The Commonwealth defines qualified expenses as those which would qualify for the federal R&D tax credit. The second category is a 15% credit available for basic research payments. This provides credit for any costs related to donations and contributions made to research organizations like hospitals and universities. The R&D tax credit may be used to offset a company’s tax liability to the minimum tax of $456.
Massachusetts Investment Tax Credit (ITC): Offers a 3% credit for qualifying businesses for Massachusetts corporate excise tax used during the purchase or lease of a property.
Regional Economic Development Organization (REDO) Grant Program: The REDO grants are used for selected organizations that must support regionally-based efforts to nurture and facilitate economic growth and Prosperity in the Commonwealth. The grant may only supplement budgets, the requested amount should not exceed 50% of the organization’s actual prior-year operation budget.
Massachusetts Transition and Growth Program (MassTAG): Provides grant funding to encourage companies to establish operations in the Commonwealth. Critical objectives for this program are job creation, scientific advancement that will benefit patients and further growth of the Massachusetts life sciences ecosystem. The program focuses on companies that do not initially qualify for the MLSC’s tax incentive program due to a lack of existing operations in the Commonwealth.
Sales & Use Tax Exemptions: All machinery, replacement parts, and materials used by manufacturing and R&D corporations in research and development are exempt.
Property Tax Incentives: Personal property used in the manufacturing process is exempt from local taxation.
Last Updated: March 2022