State Tax Credits
Identify and capture the state tax credits your business has earned.
State and local tax credits and incentives represent some of the most underutilized incentives available to businesses. Credits for research and development, job creation, capital investment, workforce training, and other qualifying activities can reduce a company’s effective state tax rate, generate refunds, or be monetized through transfer. For multistate businesses, the landscape is especially complex, with each jurisdiction running its own programs under its own eligibility rules, application requirements, and carryforward provisions.
BPM’s tax credit specialists help businesses identify applicable programs, evaluate eligibility, and pursue credits through the appropriate process for each state.
Two Common Categories of State Credit Opportunities
State tax credits and incentives fall into two common categories, each with distinct mechanics and distinct opportunities.
1. Negotiated incentives
Negotiated incentives are performance-based programs tied to specific business activities such as expansion, relocation, job creation, or capital investment. They often require proactive engagement with state and local program administrators to secure and are often missed because they require advance planning and active negotiation, frequently before a business decision is finalized.
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2. Statutory Credits
Many statutory credits are built into state tax codes and may be claimed by taxpayers that meet the statutory requirements, sometimes through amended returns for open years. Many can be claimed for prior open tax years, potentially generating refunds or reducing estimated tax payments. Some are refundable or transferable, providing value even when a business has limited state tax liability. Both are frequently overlooked. Statutory credits go unclaimed because businesses are unaware they qualify or lack the documentation to support a claim.
State R&D credits are among the most commonly available statutory credits and frequently claimed along with the federal Research and Development Tax Credit, amplifying the total benefit for businesses already pursuing federal credits.
What BPM’s State Credit Review Looks Like
BPM’s state tax credit practice conducts a comprehensive review of your business activities, tax profile, and geographic footprint to identify applicable credits and incentives across every relevant jurisdiction:
Reviewing operations against available state credit programs to surface opportunities, including credits for R&D, job creation, capital investment, and workforce training
Identifying performance-based incentive opportunities and engaging with state and local program administrators on your behalf
Managing credit identification and compliance across multiple jurisdictions for businesses with operations in more than one state
Evaluating prior open tax years for credits that may have been missed, including refundable and transferable credits that can generate immediate value
Advising on the credit and incentive implications of location decisions, new market entry, facility expansions, and relocations
Preparing the records and applications required to substantiate credit claims and meet state-specific filing requirements
BPM’s state tax credits professionals are ready to help you capture what your business may be leaving behind at the state level. Contact us to get started.
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