Effective January 1, 2010, the Economic Development Incentive Program was reformed, marking an important step in making the Commonwealth’s economic development incentive strategy more effective, accountable and financially sound. Significant changes to the statute that effect the administration of the Program include:
- Enactment of a Budget Cap: The Economic Development Incentive Program (EDIP) and the Housing Incentive Program (HDIP) are capped at $25 million annually.
- Authority & Discretion of the Economic Assistance Coordinating Council (EACC) in Awarding Incentives: Prior to 2010, the EACC was tasked with the review of projects that would receive a fixed 5% Investment Tax Credit (ITC) if state approval was granted. Today, the EACC evaluates the project’s economic impact through a holistic consideration of factors including industry, location analysis, private investment and job creation and retention commitments to maximize taxpayer return on investment.
- Requirement of Company Out-of-State Sales: To ensure that certified projects are driving increased economic activity in Massachusetts, the statue establishes a substantial out-of-state sales requirement.
- Expansion of Program Reach through New Certified Project Types: Prior to the 2010, all projects were considered “Expansion Projects” that required a local property tax exemption. Today, there are 4 types of EDIP projects: Expansion Projects (EP), Enhanced Expansion Projects (EEP), Manufacturing Retention Projects (MRP) and Local Tax Increment Financing (TIF) Only Projects. For more information on the requirements of each project type, please see the Eligibility by Project Type page.
- Increased Company Accountability through Tightened Annual Reporting Procedures: Participating companies are required to submit an annual report outlining the project’s employment and investment progress as well as supply information detailing the utilization of state and local tax credits. If a company is non-compliant with the commitments of their Tax Incentive Agreement, certified project status may be revoked.