State Manufacturing Incentives Guide for 2025 | Five Points Strategic Advisors

Choosing the right state for a manufacturing facility involves evaluating the available state and local incentives. These programs can help offset costs, improve profitability, and foster growth. Here’s a comprehensive state-by-state guide to some of the most notable incentives available for manufacturers:

Alabama

Alabama actively supports manufacturing through a combination of tax incentives, workforce training programs, and infrastructure development grants. Key programs include:

Alabama Industrial Development Training (AIDT): Offers no-cost workforce training services to companies creating new jobs. Eligibility typically requires the creation of a minimum number of jobs, which varies by industry.
Investment Credit: Provides a credit of up to 1.5% of qualified capital investment costs annually for 10 years. Companies must meet job creation thresholds, often requiring at least 50 new jobs.
Property Tax Abatements: Exempts non-educational property taxes for up to 10 years on new facilities, with minimum investment requirements that vary by region.

Arizona

Arizona combines tax credits and exemptions with incentives for renewable energy and advanced manufacturing industries. Programs include:

Quality Jobs Tax Credit Program: Provides $9,000 per new job over three years for manufacturers creating at least 25 new jobs paying above the state median wage.
Renewable Energy Tax Incentives: Targets manufacturers in the renewable energy sector, offering up to 10% of capital investment as a refundable credit.
Accelerated Depreciation: Reduces property taxes by accelerating the depreciation schedule for personal property.

California

California’s incentives focus on technology, sustainability, and workforce development, despite its higher cost environment. Programs include:

California Competes Tax Credit: Offers income tax credits based on job creation and investment. Minimum requirements include significant capital investments and job creation tailored to project size.
Sales and Use Tax Exemptions: Exempts purchases of manufacturing equipment and R&D materials, with no minimum investment requirements.
Workforce Training Funding: The Employment Training Panel subsidizes training costs for workers in advanced manufacturing.

Florida

Florida’s incentives focus on reducing costs for high-impact industries. Key programs include:

Qualified Target Industry (QTI) Tax Refund: Provides $3,000 to $8,000 per new job created, depending on wages and location. Companies must create at least 10 high-wage jobs.
Sales Tax Exemptions: Exempts manufacturing equipment and electricity from state sales tax, applicable to operations demonstrating over 50% manufacturing activity.
Economic Development Transportation Fund: Grants up to $2 million for infrastructure improvements tied to job creation, requiring a significant capital investment.

Georgia

Georgia offers robust incentives for manufacturers, particularly in rural areas. Programs include:

Job Tax Credits: Provides up to $4,000 per job annually for five years, with lower thresholds for rural or less-developed areas.
Investment Tax Credits: Credits range from 1% to 5% of qualified investments, depending on the region and industry. Minimum investments start at $500,000.
Quick Start Training Program: Offers free, tailored workforce training for manufacturers, with no minimum job requirements.

Indiana

Indiana’s low tax environment is complemented by targeted manufacturing incentives. Programs include:

Hoosier Business Investment Tax Credit: Grants a tax credit equal to up to 10% of qualified investment costs. Requires significant capital investment and job creation.
Skills Enhancement Fund (SEF): Provides training grants covering up to 50% of eligible costs, requiring a commitment to workforce growth.
Industrial Recovery Tax Credit: Targets redevelopment of vacant industrial facilities with significant rehabilitation requirements.

Michigan

Michigan focuses on advanced manufacturing and revitalizing existing industrial areas. Key incentives include:

Michigan Business Development Program (MBDP): Offers grants or loans for projects creating at least 50 jobs and meeting capital investment thresholds.
Sales and Use Tax Exemptions: Exempts industrial processing equipment from sales tax, applicable to manufacturers with significant production operations.
Property Tax Abatements: Provides abatements of up to 50% for new or expanding facilities, with minimum investment requirements set by local jurisdictions.

New York

New York provides a range of incentives for manufacturers, with an emphasis on targeted industries and regions. Programs include:

Excelsior Jobs Program: Offers up to 6.85% of wages as tax credits for creating at least five jobs and investing $500,000.
Sales Tax Exemptions: Exempts machinery, equipment, and utilities used in production.
Industrial Development Agencies (IDAs): Provide customizable local incentives, including tax abatements and low-interest loans.

Ohio

Ohio’s incentives support job creation and infrastructure improvements. Programs include:

Job Creation Tax Credit (JCTC): Refundable tax credits equal to a percentage of payroll for new jobs created. Requires commitments to create a minimum number of jobs and payroll.
Ohio Enterprise Zone Program: Offers property tax abatements for up to 15 years in designated zones, with required capital investment levels.
Workforce Training Grants: Funds up to 50% of eligible training costs for new or incumbent workers.

South Carolina

South Carolina’s incentives focus on workforce development and export-oriented industries. Programs include:

Job Development Credits: Rebates payroll taxes for projects meeting job creation and investment thresholds, often requiring significant capital investment.
Economic Development Bonds: Provide funding for infrastructure projects tied to job creation.
Sales Tax Exemptions: Exempts manufacturing equipment, raw materials, and energy from sales tax.

Tennessee

Tennessee offers competitive incentives tailored to advanced manufacturing. Programs include:

FastTrack Job Training Assistance Program: Provides grants for workforce training based on job creation, often requiring at least 25 new jobs.
Tennessee Industrial Infrastructure Program: Offers grants for infrastructure development, requiring substantial investment.
Property Tax Abatements: Local abatements for companies meeting investment and job creation thresholds.

Texas

Texas combines low taxes with targeted incentives for manufacturers. Programs include:

Texas Enterprise Fund (TEF): Grants range from $1,000 to $10,000 per job created, requiring significant capital investment and job creation.
Sales Tax Exemptions: Covers machinery, equipment, and materials used in production, with no minimum investment requirement.
Freeport Exemptions: Provides tax relief on goods-in-transit within 175 days, with local approval required.

Virginia

Virginia’s incentives support both job creation and infrastructure development. Programs include:

Virginia Jobs Investment Program (VJIP): Offers up to $1,000 per job created for training costs, requiring a minimum of 25 jobs in manufacturing.
Major Business Facility Job Tax Credit: Provides a $1,000 credit per job for businesses creating at least 50 new jobs.
Enterprise Zone Grants: Cash grants for businesses meeting investment and job creation thresholds in designated zones.

Wisconsin

Wisconsin emphasizes manufacturing and innovation with its incentives. Programs include:

Manufacturing and Agriculture Tax Credit: Reduces the effective tax rate for manufacturers to nearly zero, with no minimum requirements.
Training Grants: Funds up to 50% of workforce training costs, requiring a commitment to skill development.
Property Tax Exemptions: Exempts manufacturing equipment from property taxes, with no specific thresholds.

Conclusion

Every state offers unique incentives tailored to attract manufacturing businesses. By carefully evaluating the options available, companies can find the perfect location that aligns with their operational needs and growth strategies. This guide serves as a starting point for understanding the diverse incentives across the United States. For detailed information, consult local economic development agencies or state departments of commerce.