Since January, the Economic Development Incentive Program (EDIP) has approved 29 economic development projects creating 1,604 new jobs, retaining 2,481 existing jobs, and leveraging $375.8 million in private investment.
This initiative, managed by the Massachusetts Office of Business Development (MOBD) — part of the Executive Office of Housing and Economic Development (EOHED) — is designed to foster economic growth and job creation in the Commonwealth. Significant changes to the program’s structure in 2010 and 2014 have allowed tax credits to flow to those companies that drive economic development.
What Tax Incentives Are Available Through the EDIP?
Businesses that participate in EDIP may receive several types of tax credits, including local incentives, property, and personal tax breaks. Tax credits issued by the Commonwealth apply against a company’s excise obligations. Of the projects approved in 2015, awards ranged from $25,000 to $2,250,000.
What Are the Types of EDIP Project Categories?
Five main types of EDIP projects are available to businesses operating in Massachusetts. There are specific guidelines for each EDIP project type, so organizations should carefully review the requirements for job creation and investment before beginning the application process for a particular category. Briefly, the types are:
- Expansion Projects (EP) — Businesses interested in this designation have to create full-time jobs and make a capital investment into their community, usually by purchasing or renovating a property. These projects must also involve local incentives, but there is no minimum on the number of jobs that need to be created.
- Enhanced Expansion Projects (EEP) — These projects require organizations to create at least 100 full-time jobs within two years, retain them for a minimum of five years, and make a capital investment.
- Manufacturing Retention and Job Growth Projects (MRP) — Organizations that are located in a Gateway City (a municipality with between 35,000 and 250,000 residents with a median household income and educational attainment below the Massachusetts average) and either create at least 25 manufacturing jobs, or retain at least 50 and make a capital investment, can benefit from this incentive.
- Job Creation Projects (JCP) — Businesses that create at least 100 jobs within two years, where the capital expenditure does not significantly increase the assessed value of the property, may qualify for this category. Businesses located in Gateway Cities may receive a credit of up to $5,000 per job, while businesses in other communities may receive up to $1,000 per job. The incentive is capped at $1 million. The jobs must be retained for five years.
- Local Incentive Only Projects — Businesses may pursue this option at the municipal level, though it must also be approved by the Commonwealth. Local incentive projects require approval at a Town Meeting or from the City Council. They are agreements between the company and the municipality where it intends to operate that provide for exemption or reduction in property and/or personal property taxes.
How Can Businesses Apply for the EDIP?
- Contact the Regional MOBD Director — Each region of Massachusetts has a dedicated MOBD Regional Director, listed on the Office’s website, who can help businesses learn the various requirements of each program type and choose which project(s) they are eligible for.
- Submit a Letter of Intent — After a business has chosen to apply, a letter of intent must be submitted to the MOBD Director and the municipality where the project would be located.
- Submit a Preliminary Application — The preliminary application includes information like the business’s history, project timeline, expected investment, number of jobs to be created, and which incentives the company is seeking. Additional information, such as proof of good tax standing, must also be provided.
Qualified applicants will then receive a supplemental application to go on to the next stage of the process, which must be filed before the posted deadline. Businesses should use the checklist for EDIP applications to be sure their submissions are complete.
Once the application and corresponding documentation is reviewed, the project will be presented to the EACC for approval of the local incentive, the state EDIP project, and a determination on the amount of tax credits to be awarded.
When Massachusetts businesses are strong, the Commonwealth succeeds. Consider whether the EDIP can help your business grow — talk to your Regional MOBD Director for more information.
Questions about the EDIP? Have plans to expand your business in Massachusetts? Comment below or tweet @MassGov.
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