Tax incentives ranked fourth in The Council of State Governments’ Top 5 Issues for 2014: Fiscal and Economic Policy, according to a recent blog post by the organization. In particular, the blog notes that “[p]ublic transparency and oversight of specialized tax and financial incentives to businesses may become a political hot potato, especially as the topic gets more attention from the media and watchdog groups.”
During 2014, states will look to reform their business incentive systems, among other things, in order to create more jobs, reports the blog. The Council of State Governments released a report in September 2013, called Chairman’s Report: State Business Incentives, which looks at tax and financial incentive programs across the country.
The working group, led by Senator Jay Emler of Kansas, came up with some important observations based on their research. Some key observations from the report are that states do not know the actual cost of their incentive program and they lack effective methods for evaluating their incentive programs.
The report also notes that states should look for other ways to encourage economic development beyond engaging in ‘bidding wars’ with other states to attract businesses to their jurisdiction. In fact, the working group’s goal is to make this report “a living document that provides guidance to everyone and advances all economic development, putting an end to border wars.”
*Continue the discussion on LinkedIn: Do you think states will be able to put an end to their bidding war over state tax incentive programs?
For more information about state tax credits, check out Bloomberg BNA’s Credits and Incentives Portfolios, Corporate Income Tax Navigator, Individual Income Tax Navigator, and Green Incentives Navigator.
In other developments . . .
The South Carolina Department of Revenue issued a notice stating that contributions to qualifying scholarship funding organizations for exceptional needs children are temporarily eligible for income tax credits, according to a Bloomberg BNA Weekly State Tax Reportarticle.
By: Kathleen Caggiano
Follow Kathleen on Twitter at: @katcaggiano.
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