Relocating or starting a new business takes a lot of money. However, when you’re in an entrepreneur-friendly city and state, you can potentially save a ton in the form of tax incentives.
That’s what makes Memphis a viable option for entrepreneurs who are looking to start or grow their companies. Memphis even made it onto Livability.com’s list of five cities with enticing startup incentives, and a national study noted that Tennessee has the fourth highest business incentives in the country.
If you’re looking to relocate a business to Memphis, you too can take advantage of competitive City of Memphis taxes. Let’s take a look at some of the incentives you may qualify for once you open up shop.
Freeze your taxes during development
If you’re working on a project with a large capital investment, you may qualify for the Economic Development Growth Engine (EDGE) incentive, which will allow you to expand or relocate your business without worrying about taxes during the building phase.
To qualify, you must create at least 15 jobs and invest a minimum of $1 million in development. EDGE is designed for organizations that are fabricating, processing, assembling, manufacturing and distributing biomedical items, food, electronics, alternative fuels, cars and other products. However, auto dealerships, adult entertainment stores, residential houses, liquor and tobacco shops, pawn shops and payday loan businesses are not covered.
Incentives for international traders
If you trade goods with businesses overseas, you may qualify for the Foreign Trade Zone Program, which allows you to take advantage of quicker shipments for goods, lower processing fees and decreased duties. Note that thanks to this incentive, you can store, process, manipulate and integrate your international goods with your domestic goods before paying duties.
Tax-freeze for commercial real estate
Interested in making Memphis an even better place to live and work? See if you qualify for incentives associated with developing commercial real estate throughout the Central Business Improvement District and surrounding areas. Thanks to the PILOT (Payment-In-Lieu-of Tax) program, your taxes will freeze for a period of time during the pre-development stage. To be eligible, your new construction or site improvements must be at least 60 percent of the total cost of the project.
State incentives available to businesses
Other state tax incentives for which businesses in Memphis can qualify include the Jobs Tax Credit, which gives you $4,500 per job created, and the Industrial Machinery Tax Credit, which covers 1 percent to 10 percent of industrial businesses’ qualifying machine purchases. To maximize your financial standing, it’s a good idea to look further into sales and use tax exemptions and sales tax reductions for which your Memphis business may qualify.
There’s a lot to offer Memphis entrepreneurs here in Tennessee. If you’re planning to found or move a business here, now’s a great time to do so!
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