5 Best States for Manufacturing Incentives | Five Points Strategic Advisors

Choosing the right state to locate a manufacturing facility involves evaluating many factors, and state and local incentives often play a significant role. These incentives can reduce upfront costs, improve long-term profitability, and provide a competitive edge. Here are five of the best states for manufacturers seeking favorable state and local incentive programs:

1. Texas

Texas consistently ranks as one of the top states for manufacturers due to its pro-business climate and extensive incentive programs. Key incentives include:

Texas Enterprise Fund (TEF): Offers grants to companies that commit to creating jobs and investing in the state.
Sales Tax Exemptions: Manufacturers can benefit from exemptions on equipment and machinery used in production.
Freeport Exemptions: Tax exemptions on goods that are transported out of state within 175 days.

Additionally, Texas boasts no corporate income tax, which further enhances its appeal to manufacturers.

2. Tennessee

Tennessee has become a manufacturing hub in recent years, thanks to its strategic location and generous incentives. Highlights include:

FastTrack Job Training Assistance Program: Provides funding for customized workforce training.
Tennessee Industrial Infrastructure Program: Offers grants for infrastructure improvements to support new or expanding facilities.
Property Tax Abatements: Local governments can provide abatements to attract manufacturing investments.

With its central location and business-friendly policies, Tennessee is a strong contender for manufacturers.

3. Georgia

Georgia’s commitment to economic development makes it a standout state for manufacturing incentives. Key programs include:

Job Tax Credits: Businesses in certain industries, including manufacturing, can earn tax credits for job creation, with additional benefits for locating in less-developed areas.
Investment Tax Credits: Manufacturers can claim credits for investments in equipment and facilities.
Quick Start Training Program: One of the nation’s top workforce training programs, providing free, customized training for manufacturers.

Georgia’s robust logistics network, including the Port of Savannah, adds to its attractiveness.

4. Indiana

Indiana offers a low-cost environment and a variety of incentives to support manufacturers. Notable programs include:

Hoosier Business Investment (HBI) Tax Credit: Provides tax credits for capital investments that result in job creation.
Skills Enhancement Fund (SEF): Offers training grants to help companies upskill their workforce.
Industrial Recovery Tax Credit: Targets the redevelopment of older industrial sites, making it easier for manufacturers to repurpose existing facilities.

With one of the lowest corporate tax rates in the country, Indiana is a financially attractive option for manufacturers.

5. South Carolina

South Carolina’s focus on manufacturing and export-oriented industries makes it a top choice for manufacturers. Key incentives include:

Job Development Credits: Rebates on payroll taxes for companies that create jobs in the state.
Economic Development Bonds: Provide funding for infrastructure improvements tied to new facilities.
Sales Tax Exemptions: Exemptions on manufacturing machinery, raw materials, and energy used in production.

The state’s strong emphasis on workforce development, coupled with its proximity to the Port of Charleston, enhances its appeal.

Conclusion

For manufacturers, state and local incentives can significantly impact the decision of where to locate a facility. States like Texas, Tennessee, Georgia, Indiana, and South Carolina stand out for their comprehensive programs, which range from tax credits and abatements to workforce training and infrastructure support. These incentives, combined with favorable business climates, make these states some of the best options for manufacturers looking to expand or establish operations. Carefully evaluating these opportunities can ensure a strong foundation for long-term success.