Creating Effective Incentives

Many towns do not realize they have a number of incentives for businesses that have nothing to do with money. Access to natural resources, which includes water, can be a huge selling point and incentive. But what many companies are looking for is a way to start or expand their business without the spectre of high taxes making a direct hit on their profit margin. This reality forces a town’s chamber of commerce to do some serious creative work.

Unless there is a specific Federal program that allows for tax exemptions for a business, there is little a local Missouri town can do about the impact of higher Federal taxes. On the state level, there can be a number of political interests that can be appealed to in order to relieve a new business from a portion of the state tax requirements. The exemptions are rarely allowed for more than a few years, but it gives a new business the opportunity to realize a profit and reinvest it into the business, creating more jobs and expanding its operations.

At the local level, there is far more control over the potential for creating an incentive package. In the vast majority of cases, county government will benefit from the addition of new businesses and is not likely to interfere with developing incentive packages in cooperation with the town’s chamber of commerce. Towns can create tax-free commercial and industrial zoning areas that will not require the business to pay property taxes if they agree to remain in the town for a specified period of time.

The most important factor in creating an incentive package to attract a new business is knowing what the major concerns are beyond saving money. A company whose management are ardent fishermen will look favorably on a location that has easy access to lakes and favorable fishing environments. Providing a free fishing and hunting license may not seem like much of an incentive, but most people know that often it is the little things that make the biggest difference.