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Business and Investment Climate in the United States: Local Economy, State Incentives and Growth Prospects


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Business and Investment Climate in the United States: Local Economy, State Incentives and Growth Prospects, is an update to a report jointly released by CII and SelectUSA in 2011.

CII and SelectUSA have created this report to serve as a ready reference guide to not just Indian companies but to all those looking to expand their business in the U.S. or enter the U.S. as an investment destination.

CII and SelectUSA share a critical and trusted relationship, both in India and the U.S. CII is proud to collaborate with SelectUSA across various spheres to proactively advance the India-U.S. trade, commercial and investment relationship.

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Business and Investment Climate in the United States: Local Economy, State Incentives and Growth Prospects

  2. 2.     3     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES                                       ©  2015  Confederation  of  Indian  industry  (CII).  All  rights  reserved.         The  Confederation  of  Indian  Industry  is  a  body  Registered  under  the  Societies  Registration  Act,  1860  under  the  Indian   Laws.       This  publication  has  been  prepared  by  Confederation  of  Indian  Industry  as  a  guide  only  and  should  not  be  relied  upon   as  professional  advice  in  any  manner  as  the  report  contains  data/information  captured  through  the  secondary   sources.  No  responsibility  can  be  accepted  by  us  for  loss  if  occasioned  to  any  person  acting  or  refraining  from  acting  as   a  result  of  any  material  in  this  publication.  However,  in  the  event  of  any  discrepancy,  suggestions,  etc.,  the  same  may   be  forwarded  to  which  would  be  appropriately  considered  and  followed  from  our  end.  
  3. 3.     4     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES FOREWORD                 Chandrajit  Banerjee   Director  General   Confederation  of  Indian  Industry     The  world  economy  is  today  once  again  on  an  upward  trajectory.  Markets  are  buoyant  and  companies  are  looking  at   outward  expansion—for  new  markets  and  investment  destinations.       India  is  certainly  one  of  the  countries  where  one  can  expect  high  growth  rates  and  heightened  economic  activity.    The   Modi  government  that  came  into  power  in  2014  has  infused  new  enthusiasm  amongst  domestic  and  foreign  businesses.   For  the  members  of  the  Confederation  of  Indian  Industry  (CII),  while  the  domestic  Indian  economy  remains  undeniably   strong,  with  projected  growth  rates  of  8-­‐8.5%  over  the  coming  year,  our  companies  continue  to  also  expand  their  global   footprint.  The  United  States,  in  this  context,  remains  a  prime  investment  destination.       The  US-­‐India  trade  and  commercial  relationship  has  grown  by  leaps  and  bounds  with  bilateral  trade  touching  nearly   $100  billion.  At  the  same  time,  the  investment  story  too  remains  strong  with  the  US  ranked  as  the  sixth  largest  source  of   FDI  into  India,  while  India  has  also  emerged  as  one  of  the  fastest  growing  sources  of  FDI  into  the  United  States.  CII’s  own   studies  have  found  that  Indian  companies  have  invested  in  a  range  of  sectors  in  the  US  including  in  technology,  tele-­‐ communications,   pharmaceuticals   and   life   sciences,   iron   and   steel,   mining,   energy,   manufacturing,   financial   services   etc.    These  investments  are  spread  across  more  than  40  US  states.  Indian  companies  have  made  their  mark  through   greenfield  and  brownfield  investments,  mergers  and  acquisitions,  joint  ventures,  and  other  business  collaborations  with   US  companies.       CII  is  proud  of  its  relationship  with  Select  USA  which  has  been  vastly  helpful  in  facilitating  the  entry  of  Indian  companies   into  the  US  market.       We  first  released  the  report,  ‘Business  Climate  in  the  United  States’  in  2011,  and  it  has  come  to  serve  as  a  critical  tool  kit,   for  not  just  Indian  companies,  but  indeed,  any  company  across  the  world  that  may  be  interested  to  enter  the  US  market.   In  this  updated  version  of  the  report,  we  once  again  look  at  the  ‘Top  10  reasons’  why  a  company  should  invest  in  a  par-­‐ ticular  state,  the  core  and  upcoming  sectors  of  strength  and  growth,  as  well  as  the  various  tax  and  financial  incentives  on   offer.       Our  aim,  through  this  report  is  to  provide  a  ‘first,  one-­‐stop  guide’  to  companies  as  they  evaluate  the  strengths  of  various   US  states  and  decide  where  to  put  their  investment  dollars  to  work.       Through  such  efforts,  CII  continues  to  fulfill  its  role  as  the  premiere  industry  association  in  India,  playing  a  pro-­‐active  role   in  advancing  the  US-­‐India  trade,  commercial  and  investment  relationship.  
  4. 4.     5     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES FOREWORD                 Vinai  Thummalapally     Executive  Director,  SelectUSA   U.S.  Department  of  Commerce     The  year  2014  was  an  exciting  one  for  investment  in  the  United  States,  which  was  again  ranked  #1  by  A.T.  Kearney’s   Foreign  Direct  Investment  (FDI)  Confidence  Index.    According  to  A.T.  Kearney’s  survey  of  global  executives:  “The  mes-­‐ sage  here  is  crystal  clear:  the  United  States  is  back  in  the  minds  of  global  business  leaders  as  the  prime  destination  for   their  investment.  Never  in  the  16-­‐year  history  of  this  index  has  a  country  had  such  a  positive  net  position.”       It  has  also  been  an  exciting  time  for  India,  with  the  election  of  a  new  government  with  a  mandate  to  make  it  easier  than   ever  for  Indians  to  do  business.  In  July  2014,  I  had  the  pleasure  of  hearing  directly  from  Indian  investors  during  a  lunch-­‐ eon  hosted  by  the  Confederation  of  Indian  Industry  (CII)  welcoming  U.S.  Commerce  Secretary  Penny  Pritzker  to  Mumbai.   When  I  returned  to  India  in  September,  I  took  the  opportunity  to  meet  with  CII  leadership  in  New  Delhi  and  to  speak  to   CII’s   Young   Indians   group   in   my   hometown   of   Hyderabad.   In   my   travels   to   the   country,   including   joining   President   Obama  during  his  January  2015  visit,  I  felt  a  palpable  atmosphere  of  optimism.  Quite  simply,  there  has  never  been  a  bet-­‐ ter  time  for  Indians  to  expand  their  businesses  to  the  United  States  than  2015.     That  goes  for  the  rest  of  the  world  as  well.  As  I’ve  told  investors  in  Japan,  Korea,  China,  the  United  Kingdom,  France,  and   many  other  countries,  the  United  States  is  recovering  strongly  from  the  recession.  It  is  the  only  place  in  the  world  with   the  combination  of  a  top  consumer  market,  world-­‐class  university  system,  strong  intellectual  property  regime  and  pro-­‐ ductive  workforce.  However,  we  understand  that,  with  so  many  states  and  territories,  the  United  States  can  be  a  daunt-­‐ ing  market  to  navigate.  At  SelectUSA,  we  aim  to  make  your  entry  into  the  United  States  as  easy  as  possible.     When  we  work  with  Indian  businesses,  CII  is  a  trusted  partner  both  in  India  and  in  the  United  States.    We  are  excited  to   partner  with  CII  on  producing  the  second  edition  of  Business  and  Investment  Climate  in  the  United  States.  By  giving  a   state-­‐by-­‐state  view  of  the  United  States,  this  guide  serves  as  a  toolkit  to  help  bring  clarity  and  direction  to  individuals   and  companies  around  the  world  that  want  to  learn  more  about  how  business  is  done  in  the  United  States,  and  how  to   reach  the  right  contacts  in  each  state  to  quickly  get  more  information.     Housed  within  the  U.S.  Department  of  Commerce,  SelectUSA  coordinates  across  the  federal  government  to  serve  as  a   single  point  of  contact  for  investors.  We  assist  investors  to  find  information  and  contacts,  address  regulatory  questions,   and  access  the  resources  they  need  for  success.  To  learn  how  we  can  help  you,  please  visit       Thank  you  to  CII  for  producing  such  an  informative  and  essential  guide.     Please  don’t  hesitate  to  reach  out  to  us  with  your  investment  questions  and  concerns.      
  5. 5.     6     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES ALABAMA                                                           Top  10  Reasons  to  Do  Business  in  Alabama:     1. Tax  Climate:  The  tax  burden  in  Alabama  is  one  of  the  lowest  in   the  United  States.    In  addition,  Alabama  is  one  of  a  small  num-­‐ ber  of  states  that  allow  a  full  deduction  of  Federal  taxes  paid   from  state  income  tax  liability.  The  state  has  developed  aggres-­‐ sive  tax  incentive  programs  for  new  and  expanding  industry  in-­‐ cluding   sales   and   property   tax   abatements,   and   a   capital   in-­‐ come  tax  credit.       2. Location  and  Logistics:  Alabama  is  a  prime  location  in  the  heart   of  the  fast-­‐growing  U.S.  South.  The  State’s  interstate  system  al-­‐ lows  companies  to  access  over  160  metropolitan  areas  in  a  600   mile  radius.  Alabama’s  comprehensive  transportation  network   includes   six   interstate   highways,   seven   commercial   airports,   five  Class  I  railroads,  multi-­‐modal  services  and  facilities  and  one   of  the  nation’s  largest  inland  waterway  systems.    The  Port  of   Mobile,  Alabama’s  deep-­‐water  seaport  on  the  Gulf  of  Mexico,  is   an   integral   part   of   the   nation’s   intermodal   freight   infrastruc-­‐ ture.       3. Labor  Environment:  Hailed  as  one  of  the  nation’s  most  effective   state-­‐sponsored  workforce  training  programs,  AIDT  has  provid-­‐ ed  state-­‐of-­‐the-­‐art  industrial  training  to  thousands  of  workers   of  Alabama  industries.  AIDT’s  services  are  cost-­‐free  for  qualify-­‐ ing  new  and  expanding  industries  in  Alabama.  AIDT  was  award-­‐ ed   ISO   9001:2008   certification   by   the   International   Organiza-­‐ tion  for  Standardization.     4. Access  to  Talent:  Alabama  offers  a  labor  pool  of  more  than  two   million  dedicated,  reliable  and  skilled  workers.  Alabama’s  edu-­‐ cation   systems   and   workforce   development   agency   work   in   conjunction  with  Alabama  industry  to  meet  current  and  future   workforce   needs.   Alabama’s   institutions   of   higher   education   are   strategically   located   throughout   the   state   providing   Ala-­‐ bamians  with  educational  opportunities  to  meet  the  emerging   needs  of  citizens  and  industry.     5. Cost  of  Doing  Business:  Alabama  offers  an  overall  cost  structure   that  is  one  of  the  Country’s  most  competitive.  In  2014,  Site  se-­‐ lection   consultants   surveyed   by   national   economic   develop-­‐ ment   publication   Area   Development   ranked   Alabama   a   top   state  for  doing  business  and  gave  high  marks  to  the  state  for  its   labor   climate   and   business   environment.   Alabama   ranked   fourth  overall  and  first  for  competitive  labor  costs.     6. Leading  Exporter:  Located  on  the  Gulf  of  Mexico,  Alabama  is  a   gateway   to   growing   international   markets.   In   2014,   Alabama   exports  were  valued  at  $19.518  billion  with  shipments  to  194   countries.             7. International  Appeal:  Companies  all  over  the  globe  have  made   their   way   to   Alabama.   Alabama   is   an   ideal   hub   for   foreign-­‐ based   businesses.   Currently,   more   than   425   foreign-­‐based   companies   from   more   than   30   nations   enjoy   success   in   Ala-­‐ bama.         8. Quality   of   Life:   Alabama   offers   an   abundance   of   natural   and   scenic  diversity  -­‐  mountains  to  the  north,  beaches  to  the  south,   expansive  rivers  and  lakes,  forests  and  plains.  Alabama  has  an   overall  cost  of  living  that  is  ranked  below  the  national  index  and   housing   costs   that   are   well   below   the   national   average.   Ala-­‐ bama  has  nationally-­‐acclaimed  medical,  award-­‐winning  schools,   and   universities   including   those   with   highly-­‐respected   schools   of  Engineering,  Medicine,  and  Agriculture.       9. Custom  Solutions:  The  Alabama  Department  of  Commerce  and   its   five   divisions   (Business   Development,   International   Trade,   Small   Business   Advocacy,   AIDT,   and   Film   Production)   are   led   and  staffed  by  professionals  ready  to  assist  businesses.       10. Leadership   with   a   forward-­‐looking   approach:   Alabama’s   $73   million   Robotics   Technology   Park   was   the   first   of   its   kind   in   North  America.  Accelerate  Alabama,  the  State’s  comprehensive  
  6. 6.     7     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES action  plan  for  economic  development  growth,  includes  strate-­‐ gic  market  targets,  timelines,  and  measureable  objectives.  The   plan  is  now  entering  its  second  phase.  Governor  Robert  Bentley   ran  his  campaign  based  on  a  promise  that  he  would  not  accept   a  salary  until  Alabama  reaches  full  employment  level.           Core  Industry  Sectors  of  Strength:     • Aerospace   • Food  Production   • Automotive   • Chemical   • Forestry  products   • Primary  Metals       Upcoming  Sectors  of  Growth:     • Aerospace   • Automotive   • Bioscience   • Distribution   • Information  Technology                     Select  Tax  Incentives:1     The  corporate  income  tax  rate  in  Alabama  is  6.5  percent.  Because   Alabama  allows  for  the  deduction  of  federal  income  tax  (one  of  the   only  states  in  the  United  States  to  do  so),  the  net  effective  rate  is   4.52  percent.             1. The  Income  Tax  Capital  Credit:  Designed  to  create  jobs  and  to   stimulate  business  and  economic  growth.  It  is  an  annual  credit   of  five  percent  of  the  capital  costs  of  a  qualifying  project  each   year  for  20  years,  to  be  applied  to  the  Alabama  income  tax  lia-­‐ bility  or  financial  institution  excise  tax  generated  by  the  project   income.                                                                                                                               1  For  complete  information  on  the  various  tax  incentives  being  offered  by  the   state  of  Alabama,  please  visit     Photo  Credits:  Alabama  Department  of  Commerce     2. Abatements   are   also   available   and   may   include:   (a)   non-­‐ educational  state,  county,  and  city  property  taxes  for  a  period   of  up  to  10  years,  (b)  state  sales  and  use  taxes  on  construction   materials  and  equipment  used  in  manufacturing,  and  (c)  non-­‐ educational  county  and  city  sales  and  use  taxes  on  construction   materials  and  equipment  used  in  manufacturing.   3. No  Inventory  Tax:    Alabama  does  not  levy  property  tax  on  in-­‐ ventory.  Raw  materials  and  goods-­‐in  process  are  also  exempt-­‐ ed.     4. Business  Privilege  Tax  Cap:    The  maximum  business  privilege  tax   for  most  business  entities  is  $15,000.  The  exceptions  are  for  fi-­‐ nancial  institutions,  financial  institution  groups,  and  insurance   companies   that   have   a   maximum   business   privilege   tax   of   $3   million.      
  7. 7.     8     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES Other  Incentives:     1. Alabama  Industrial  Development  Training  (AIDT) 2 :  Ranked  first   among  workforce  training  programs,  AIDT  services  are  usually   provided  at  no  cost  to  employers,  and  is  the  first  organization   of  its  kind  in  the  United  States  to  earn  international  certifica-­‐ tion  (ISO:  9001:2008)  for  its  quality  management  system.  AIDT   total   workforce   delivery   system   includes:   recruiting   potential   employees   through   advertisements   and   announcements,   col-­‐ lecting   and   screening   applications,   assisting   with   interviews,   pre-­‐employment   training,   on-­‐the-­‐job   training,   leadership   de-­‐ velopment,  safety  training,  and  maintenance  technical  assess-­‐ ments.   2. Alabama’s   Robotics   Technology   Park   (RTP) 3 :   The   Alabama   Ro-­‐ botics  Technology  Park  consists  of  three  individual  training  fa-­‐ cilities,  each  targeted  to  a  specific  industry  need.        The  Robotic   Maintenance   Training   center,   The   Advanced   Technology   Re-­‐ search   and   Development   Center,   and   The   Integration,   Entre-­‐ preneurial  and  Paint/Dispense  Training  Center  (to  be  complet-­‐ ed  in  2015),  represent  an  investment  of  approximately  $73  mil-­‐ lion,  including  robotics  equipment.   3. Grants   and   Bonds   for   Infrastructure:   Grants   may   be   available   for   site   preparation,   water   and   sewer   improvements,   and   in-­‐ dustrial  roads  and  bridge  access  for  qualifying  projects.  Indus-­‐ trial  Revenue  Bonds  financing  can  be  available  for  part  or  all  of   the   cost   of   land   acquisition,   site   preparation,   construction,   equipment,  and  other  basic  costs  for  qualifying  new  or  expand-­‐ ing  projects.                                                                                                                                   2  For  more  information  on  AIDT,  please  visit     3  For  more  information  on  Alabama’s  Robotics  Technology  Park,  please  visit     4. Income  Tax  Education  Credit:  Employers  who  provide  or  spon-­‐ sor  a  program  which  enhances  basic  educational  skills  of  em-­‐ ployees,  up  to  and  including  the  12 th  grade  level,  could  qualify   for  an  income  tax  credit  of  20  percent  of  the  actual  costs  of  an   approved  program,  limited  to  the  employer’s  income  tax  liabil-­‐ ity.     5. One-­‐Stop  Environmental  Permitting:  The  Alabama  Department   of  Environmental  Management  (ADEM)  has  authority  to  issue   the   permits   required   by   all   the   major   federal   environmental   laws.    Therefore,  Alabama  can  offer  “one-­‐stop”  permitting. 4   6. Property  is  available  statewide:  Businesses  of  all  sizes  will  find   plenty  of  available  building  and  sites  options  to  suit  their  needs.   Over  500  industrial  and  commercial  buildings  are  available  for   sale   or   lease.   Business   and   technology   incubators   throughout   the  state  provide  support  for  budding  businesses.  Almost  500   prepared  industrial  parks,  greenfield  sites  and  reusable  proper-­‐ ties  are  available  in  Alabama,  with  acreage  ranging  from  five  to   5,000  acres.       For  more  information,  please  contact:       Agency:  Alabama  Department  of  Commerce     Address:  401  Adams  Avenue,     Montgomery,  Alabama  36130  USA   Email:   Phone:  334.353.0221   Website:                                                                                                                                     4  For  more  information,  please  visit  
  8. 8.     9     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES ALASKA                             Top  10  Reasons  to  Do  Business  in  Alaska:     1. Tax   Climate:   Alaska   levies   a   corporate  income   tax   on   Alaska   taxable  income  which  is  based  on  federal  taxable  income  with   certain   state   adjustments.   Multistate   corporations   apportion   income   on   water’s   edge   basis   using   the   standard   apportion-­‐ ment  formula  of  property,  payroll  and  sales.  Oil  and  gas  corpo-­‐ rations   use   a   modified   apportionment   formula   applied   to   worldwide  income.  Tax  rates  are  graduated  from  1  percent  to   9.4  percent  in  increments  of  $10,000  of  taxable  income.  The  9.4   percent   maximum   rate   applies   to   taxable   income   of   $90,000   and   over.     There   is   no   State   personal   income   tax   and   no   statewide  sales  tax,  although  some  communities  do  have  local   sales  taxes.     2. Location  and  Logistics:  Over  90  percent  of  the  freighter  aircraft   operating  Asia/North  America  Routes  stop  in  Anchorage,  mak-­‐ ing   it   an   important   transit   hub.   Alaska   is   centrally   located   to   serve  the  entire  Pacific  Rim  and  is  well  positioned  to  serve  the   Canadian  and  U.S.  west  coasts.       3. Labor   Environment:   Workers’   Compensation   -­‐   Alaska’s   mini-­‐ mum  wage  as  of  January  1,  2015  is  $8.75.  The  minimum  wage   will  increase  January  1,  2016  to  $9.75     4. Access  to  Talent:  Alaska  boasts  several  world  class  institutions   of  higher  learning  including  multiple  campuses  for  the  Universi-­‐ ty  of  Alaska  Anchorage,  University  of  Alaska  Fairbanks,  and  the   University  of  Alaska  Southeast.  The  next  largest  post  secondary   institution   in   Alaska   is   Alaska   Pacific   University.  Alaska   is   also   home   to   other   colleges   like   Alaska   Bible   College,   Charter   College,   Saint   Herman's   Orthodox   Theological   Seminary,   and   Wayland   Baptist   University.   The   colleges   and   universities   provide  an  excellent  source  of  work-­‐ready  talent  to  businesses   in  the  state.       5. Cost   of   Doing   Business:   The   Anchorage   Consumer   Price   Index   (CPI)   is   probably   the   most   important   cost-­‐of-­‐living   index   in   Alaska,  and  it  is  often  treated  as  the  de  facto  statewide  inflation   measure.  In  2014,  prices  in  Anchorage  increased  by  1.6  percent.     See     6. Alaska’s   unemployment   rate   was   below   the   national   average   from  mid  2008  through  2013.       7. Alaska’s  State  Energy  Policy  target  is  to  generate  50  percent  of   electricity  from  renewable  energy  by  2025,  and  improve  energy   efficiency   by   15   percent.   The   Alaska   Department   of   Labor   received   a   $3.6   million   grant   from   the   U.S.   Department   of   Labor,   Employment   and   Training   Administration   to   focus   training  for  careers  in  emerging  energy-­‐efficient  and  renewable   energy   industries   including   geothermal,   hydroelectric,   wind   turbine,  and  biomass.  Thus,  there  is  a  renewed  focus  on  green   jobs  in  the  state.       8. Alaska   avoided   the   worst   effects   of   the   economic   recession   thanks  to  the  structure  of  its  economy,  with  its  dominance  of   natural   resource   development   and   government,   and   the   relative   lack   of   speculative   real   estate   investment.   Alaska’s   economy   was   simply   different   enough   to   avoid   being   pulled   down  in  the  nationwide  furor.     9. Finding   a   job   in   Alaska   has   been   easier   than   in   most   other   places  in  the  U.S  for  the  last  three  years.  The  July  2011  issue  of   Forbes   magazine   deemed   Anchorage   the   third   best   mid-­‐sized   city  for  jobs  in  the  United  States.     10. Permit  Assistance  and  Development  Bank:  The  state  of  Alaska   assists  natural  resource  development  companies  in  permitting   a  major  facility  through  the  Department  of  Natural  Resources   Office  of  Project  Permitting.    The  state  can  also  participate  in   major   infrastructure   developments   through   the   Alaska   Indus-­‐ trial  Development  and  Export  Authority  (AIDEA).  
  9. 9.     10     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES   Core  Industry  Sectors  of  Strength:     • Energy   • Fisheries   • Mining   • Tourism     • International  Air  Cargo  Transportation   • Forest  Products   • Healthcare   • Retail  Trade       Upcoming  Sectors  of  Growth:                          Same  as  above             Select  Tax  Incentives:     Alaska  has  adopted  several  exploration  and  development  incentive   programs  to  encourage  active  exploration  and  the  timely  develop-­‐ ment  of  the  state's  oil  and  gas  resources 5 .  A  few  are  listed  below:     1. Production  Tax  Credits     2. Exploration  Tax  Credits  Under  AS  43.55.025   3. Exploration  Incentives  Under  AS  38.05.180(i)   4. Cook  Inlet  Jack-­‐Up  Tax  Credit   5. Tax  Credits  Under  AS  43.20.043   6. Production  Tax  Ceiling  for  “New  Production”   7. Production  Tax  “Forgiveness”  for  Small  Producers   8. Nonconventional  Natural  Gas  Rent  and  Royalty  Incentive   9. Royalty  Modification                                                                                                                               5  For  more  information  on  incentives,  please  see:   Photo  Credits:  ABB/  Matthew  F.  Smith,  KNOM  –  Nome       For  detailed  information  about  the  Production  Tax  Credits  and  Ex-­‐ ploration  Tax  Credits  listed,  please  see:     For  more  information,  please  contact:     Agency:  Office  of  International  Trade,  Office  of  the  Governor       Address:  550  West  7th  Avenue,  Suite  1700,     Anchorage,  AK  99501   Email:   Phone:  (907)  269-­‐8118   Website:  www.Trade.Alaska.Gov  
  10. 10.     11     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES ARIZONA                                                 Top  10  Reasons  to  Do  Business  in  Arizona:     1. Tax  Climate:  Arizona  levies  no  corporate  franchise  or  business   inventory   tax,   no   income   tax   on   dividends   from   out-­‐of-­‐state   subsidiaries,  and  no  worldwide  unitary  tax.  In  addition,  virtually   all   services   are   exempt   from   Sales   Tax.   The   Arizona   Competi-­‐ tiveness   Package,   passed   in   2011,   called   for   a   four-­‐year,   phased-­‐in  reduction  of  the  state’s  corporate  income  tax  to  4.9   percent,  which  began  in  January  2014.  The  package  also  man-­‐ dates  an  increase  in  the  electable  state  corporate  income-­‐tax   sales  factor  to  100  percent,  up  from  the  current  80  percent,  as   well   as   a   5   percent   acceleration   of   the   depreciation   schedule   for  business  personal  property.       2. Location  and  Logistics:  Arizona  is  strategically  located  to  serve  a   company’s  western  US  customers  efficiently  and  cost  effective-­‐ ly.  Companies  can  sell  and  ship  to  customers  in  California  from   Arizona   where   operational   costs   are   less   and   transportation   routes  are  often  faster  to  reach  major  California  markets.       3. Labor   Environment:   Arizona   is   one   of   the   few   Right   to   Work   states  by  virtue  of  the  State  Constitution,  providing  more  stabil-­‐ ity  to  the  environment  than  is  the  case  in  states  that  can  make   the   change   legislatively.   According   to   data   from   the   National   Academy  of  Social  Insurance,  Arizona’s  workers’  compensation   employer   costs   are   among   the   nation’s   lowest,   at   $0.89   per   $100  of  covered  wages.       4. Access   to   Talent:   Arizona   employers   benefit   from   a   high   per-­‐ formance,  educated,  diverse  and  fast  growing  workforce  that  is   backed   by   a   strong   university   system   that   includes   Arizona   State   University,   University   of   Arizona,   and   Northern   Arizona   University.  In  addition,  Arizona  is  home  to  the  Maricopa  Com-­‐ munity  College  District  (MCCD),  the  nation’s  largest  community   college  system.  MCC  has  a  well  deserved  and  envied  track  rec-­‐ ord  for  working  closely  with  employers  to  design  programs  to   meet  specific  industry  requirements.       5. Cost  of  Doing  Business:  Arizona  offers  one  of  the  nation's  low-­‐ est   costs   of   doing   business,   thanks   to   its   low   taxes   and   small   state  government.         6.  Arizona   has   demonstrated   an   enduring   pro-­‐business   mentali-­‐ ty–   a   long   tradition   that   transcends   politics   and   trends.   The   state   combines   a   minimalist   regulatory   approach   with   legisla-­‐ tive  consistency  and  predictability  with  respect  to  business.  In   fact,   for   12   consecutive   years,   Arizona   has   reduced   taxes   or   passed  legislation  favorable  to  business.     7. According   to   the   U.S.   Department   of   Labor,   Employment   and   Training  Administration,  UI  Data  Summary  for  the  third  quarter,   2014,   Arizona’s   average   unemployment   insurance   tax   rate   is   just  $0.46  on  total  wages,  among  the  lowest  in  the  country.     8. The   state's   universities   and   its   research-­‐intensive   companies   drive  Arizona's  research  and  development  activities,  and  make   it  one  of  the  nation's  top  patenting  states.  Intel,  IBM,  Honey-­‐ well   International,   Raytheon   and   Freescale   Semiconductors   lead  the  state's  patenting  activity.  Arizona  is  a  leader  in  semi-­‐ conductor  device  manufacturing,  solid-­‐state  devices,  computer   memory,   electrical   systems   and   optics.   Arizona   excels   in   the   ability  of  its  small  firms  to  attract  federal  funding  for  commer-­‐ cialization,  and  the  state's  universities'  ability  to  attract  federal   R&D  funding.     9. Many  recent  studies  have  hailed  Arizona's  potential  for  growth   over   the   next   few   years   due   to   the   state's   continued   strong   economic  performance  and  its  vibrant  technology  community.   Arizona  is  expected  to  increase  its  venture  capital  investments,   business  openings,  and  jobs  over  the  next  few  years.       10. Arizona  is  a  safe  operating  environment  with  little  risk  of  natu-­‐ ral   disasters,   such   as   earthquakes,   hurricanes,   floods,   etc.  
  11. 11.     12     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES Core  Industry  Sectors  of  Strength:     • Aerospace  and  Defense   • Science  and  Technology   • Biosciences   • Nanotechnology     • Environment   • Renewable  Energy   • Optics   • Advanced  Business  Services       Upcoming  Sectors  of  Growth:     Same  as  above       Select  Tax  Incentives:6     1. Qualified  Facility  Tax  Credits:  Refundable  income  tax  credit  for   a  manufacturing  facility  or  a  manufacturing-­‐related  research  or   headquarter   facility.   Credit   is   equal   to   10%   of   the   qualifying   capital   investment   in   a   new   facility   or   $20,000   per   qualified   new  job  created,  whichever  is  less.  51%  of  new  jobs  must  pay   wages  of  at  least  125%  of  the  state  median  and  the  company   must   offer   to   pay   at   least   80%   of   health   insurance   premium   costs  for  the  employee.   2. Arizona’s   Renewable   Energy   Tax   Incentive   Program   (RETIP):   Administered  by  the  Commerce  Authority,  the  Program  offers  a   refundable   tax   credit   of   up   to   10   percent   of   the   qualified   in-­‐ vestment  made  in  real  and  personal  business  property  for  use   in   eligible   renewable   energy   manufacturing   operations.   The   credit  is  taken  over  a  five  year  period  and  may  be  submitted  for   cash  refund  if  there  are  no  state  income  taxes  due,  or  tax  credit   value  exceeds  the  amount  of  tax  liability.     3. Arizona’s  Quality  Jobs  Tax  Credit:  Provides  corporate  tax  credits   of  up  to  $9,000  for  each  qualifying  new  job.  (Paid  out  at  $3,000   per  job,  per  year  over  a  3-­‐year  period).  The  program  is  capped   at  10,000  jobs-­‐per-­‐year.  Credits  can  be  carried  forward  for  five   years.  To  qualify  for  the  $9,000  tax  credit  for  net-­‐new  hires,  a   firm’s   capital   investment   in   metro   communities   must   be   at   least  $5,000,000  and  create  at  least  25  new  qualified  employ-­‐ ment   positions   within   a   12-­‐month   period.     The   wage   must   equal   or   exceed   the   county   median   wage   and   the   employee   must  offer  to  pay  65  percent  of  the  employee’s  health  insur-­‐ ance  premium.     4. Research  &  Development  Income  Tax  Credit:  Arizona  provides  a   tax  credit  for  investments  in  research  and  development  in  ex-­‐ cess  of  expenditures  from  the  previous  year.  The  amount  of  the   credit  is  based  on  the  federal  regular  credit  computation  meth-­‐ od   for   Arizona   qualified   research   expenses   and   Arizona   basic   research  payments.  The  current  formula  calculates  the  income   tax  credit  equal  to  24  percent  of  the  first  $2,500,000  in  qualify-­‐ ing   expenses.   When   qualifying   costs   exceed   $2,500,000,   the                                                                                                                             6  For  complete  information  on  the  various  tax  incentives  being  offered  by  the   state  of  Arizona,  please  visit     Photo  Credits:  Arizona  Commerce  Authority     credit   is   $600,000   plus   15   percent   of   the   amount   exceeding   $2,500,000.   5. Arizona   Additional   Depreciation   Program   (AADP):   The   AADP   provides  a  unique  and  aggressive  depreciation  schedule  to  en-­‐ courage  new  capital  investment  and  reduce  a  company’s  per-­‐ sonal  property  tax  liability.  It  is  worth  pointing  out  that  sched-­‐ ules  for  most  equipment  classes  provide  for  depreciation  down   to   2.5   percent   of   original   value,   thus   virtually   eliminating   the   tax  liability.     6. Sales   and   Use   Tax   Exemptions:   Exemptions   are   available   for   equipment  and  machinery  used  in  R  &  D  and  directly  in  manu-­‐ facturing,  as  well  as  for  electricity  used  in  manufacturing.             Other  Incentives:     1. Arizona’s   Job   Training   Program:   Administered   by   the   Arizona   Commerce  Authority,  this  program  has  been  ranked  among  the   best  in  the  nation  in  terms  of  training  flexibility  and  ease  of  ac-­‐ cess  to  the  funds.  Depending  on  location  and  wage  structure,  
  12. 12.     13     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES the  reimbursable  grant  program  provides  up  to  $8,000  of  eligi-­‐ ble  training  costs  per  employee  to  companies  creating  perma-­‐ nent,  full-­‐time  new  jobs  or  up  to  $4,000  of  eligible  training  ex-­‐ penses   for   existing   workers   within   the   state.   The   program   is   streamlined,  extremely  flexible  and  is  tailored  to  meet  the  spe-­‐ cific  needs  of  the  company.  The  grant  can  be  used  to  cover  up   to  75  percent  of  training  costs  for  net  new  employees,  and  up   to  50  percent  of  the  training  costs  for  incumbents.   2. Foreign  Trade  Zone  Program:  Arizona  has  enacted  special  legis-­‐ lation  that  makes  businesses  located  in  a  zone  or  sub-­‐zone  eli-­‐ gible  for  up  to  an  80  percent  reduction  in  state  real  and  per-­‐ sonal  property  taxes.  The  reduction  lasts  for  the  entire  time  the   company  operates  in  the  zone  or  sub-­‐zone.  The  company  must   meet  the  Foreign  Trade  Zone  federal  eligibility  guidelines.             For  more  information,  please  contact:     Agency:  Arizona  Commerce  Authority     Address:  333  North  Central  Avenue,  Suite  1900,   Phoenix,  AZ    85004   Email:   Phone:  602-­‐845-­‐1200   Website:      
  13. 13.     14     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES ARKANSAS                                                 Top  10  Reasons  to  Do  Business  in  Arkansas:     1. Tax   Climate:   When   it   comes   to   incentives   in   Arkansas,   the   numbers  speak  for  themselves.  There  is  a  strong  variety,  com-­‐ petitiveness  and  customization  of  incentives.  Create  Rebate  can   provide  up  to  5%  payroll  rebate;  Targeted  ArkPlus  credits  2%  on   investments   from   $250,000   up   to   $500,000   and   researchers   that  partner  with  an  Arkansas  university  receives  a  33%  income   tax  credit.       2. Location  and  Logistics:  Arkansas’s  transportation  network  and   central  U.S.  location  define  the  state  as  a  strategic  distribution   center.  Midway  between  Mexico  City  and  Montreal,  Arkansas   offers  a  valuable  distribution  advantage.       3. Labor  Environment:  Arkansas  boasts  a  skilled,  and  well-­‐trained   manufacturing   workforce,   as   well   as   low   turnover   rates.   Arkansas  is  a  right-­‐to-­‐work  state,  as  well  as  a  non-­‐union  state.   In   addition,   state-­‐sponsored,   custom-­‐built,   training   assistance   programs  can  help  businesses  hire  the  right  kind  of  talent.  The   state   also   offers   easy   access   to   universities   and   community   colleges,  which  work  with  local  businesses  to  create  courses  to   produce  a  better  trained  workforce.     4. Access  to  Talent:  More  than  60,000  Arkansans  are  now  certified   through   the   Arkansas   Career   Readiness   Certificate   Program,   which   confirms   to   employers   that   individuals   possess   basic   workplace  skills  in  reading  for  information,  applied  mathemat-­‐ ics,  and  locating  information.     5. Cost   of   Doing   Business:   Market   entry   costs   into   Arkansas   are   lower  than  a  lot  of  other  states  in  the  United  States.  Arkansas   has  the  second-­‐lowest  cost  of  doing  business  in  the  U.S  and  the   second-­‐lowest  cost  of  living  among  U.S.  metropolitan  areas.         6. Amendment   82   –   Customer   friendly   approach:   Amendment   82  was  approved  by  Arkansas  voters  in  2004  and  amended  in   2010.  It  allows  the  State  of  Arkansas  to  issue  General  Obligation   Bonds   to   finance   infrastructure   costs   associated   with   eligible   companies   locating   or   expanding   operations   in   Arkansas.   The   state  can  issue  bonds  to  fund  a  prospect’s  infrastructure  needs   through  the  Arkansas  Development  Finance  Authority,  limited   to   5%   of   net   general   revenues   during   the   most   recent   fiscal   year.     7.  Infrastructure:  We  have  all  of  the  4  Rs  –  rail,  roads,  runways,   and   rivers.   Arkansas’s   intermodal   transportation   network   of   highways,  railways,  air  routes,  waterways,  and  pipelines  is  ide-­‐ ally  suited  to  meet  the  needs  of  business.  These  facilities  pro-­‐ vide  easy  access  to  U.S.  markets  and  the  world.     8. Amazing   quality   of   life:   Arkansas   is   an   outdoor   paradise   with   plenty  of  opportunities  for  hunting,  hiking,  cycling,  fishing,  and   running.   Cultural   offerings   include   world-­‐renowned   museums   and  fine  art  galleries,  theaters,  symphonies  and  performing  arts   centers.   The   state’s   capital   city,   Little   Rock,   has   received   top   honors  for  places  to  live  and  travel.     9. Pro-­‐business  leadership:  Newly  elected  Arkansas  Governor  Asa   Hutchinson  has  stated  that  economic  growth  and  job  creation  is   his  number  one  priority  through  his  PREPARE  workforce  train-­‐ ing  and  education  plan.     10. Entrepreneurial   Spirit:   The   state’s   seven   homegrown   Fortune   500  companies  are  proof  that  Arkansas  has  what  you  need  to   grow  your  business  in  the  21 st  century  global  marketplace.  The   seven  companies  –  Dillard’s,  JB  Hunt,  Murphy  Oil,  Murphy  USA,   Tyson  Foods,  Walmart,  and  Windstream  –  represent  five  differ-­‐ ent  industry  sectors,  demonstrating  Arkansas’s  diverse  econo-­‐ my.  
  14. 14.     15     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES Core  Industry  Sectors  of  Strength:     • Aerospace/Aviation   • Automotive   • Paper  &  Timber  Products   • Rubber  &  Plastics   • Software  Development   • Agriculture/Food  Processing   • Steel   • Information  Technology       Upcoming  Sectors  of  Growth:     • Advanced  materials  and  manufacturing  systems   • Firearms  &  Ammunition   • Agriculture,  food  and  environmental  sciences   • Transportation  logistics   • Biotechnology,  bioengineering  and  life  sciences   • Bio-­‐based  products       Select  Tax  Incentives:     1. Advantage  Arkansas  Income  Tax  Credit:  Advantage  Arkansas  of-­‐ fers  a  state  income  tax  credit  for  job  creation  based  on  the  pay-­‐ roll  of  new,  full-­‐time,  permanent  employees  hired  as  a  result  of   the  project.  The  payroll  threshold  for  qualifying  for  Advantage   Arkansas,   and   the   benefit   received,   depends   on   the   tier   as-­‐ signed  to  the  county  in  which  the  business  locates  or  expands.   2. Sales  and  Use  Tax  Refund:  Advantage  Arkansas  participants  in-­‐ vesting  at  least  $100,000  are  eligible  for  the  Tax  Back  program.   This  program  provides  a  refund  of  sales  and  use  taxes  for  build-­‐ ing   materials,   taxable   machinery,   and   equipment   associated   with   the   approved   project.   The   business   must   sign   a   job-­‐ creation   agreement   under   the   Advantage   Arkansas   program   within  24  months  of  signing  the  Tax  Back  agreement  or  have  an   existing  Advantage  Arkansas  agreement  within  the  previous  48   months.   3. InvestArk  Sales  and  Use  Tax  Credit:  This  program  is  available  to   businesses  established  in  Arkansas  for  two  years  or  longer,  that   invest  $5  million  or  more  in  plant  or  equipment  for  new  con-­‐ struction,   expansion   or   modernization.   The   business   must   be   approved  for  the  program  prior  to  beginning  construction.  The   business  must  obtain  a  direct-­‐pay  sales  and  use  tax  permit  from   the   State   of   Arkansas.   Total   project   expenditures   must   be   in-­‐ curred  within  four  years  of  the  project  plan  approval.  All  pro-­‐ jects  will  be  audited  upon  completion  to  confirm  the  tax  cred-­‐ its.   4. Tuition  Reimbursement  Tax  Credit:  Arkansas  provides  a  30  per-­‐ cent   state   income   tax   credit   to   eligible   companies   for   reim-­‐ bursements   they   make   on   behalf   of   employees   for   approved   educational   expenses.   The   employees   must   successfully   com-­‐ plete  the  course  at  an  accredited  Arkansas  post-­‐secondary  edu-­‐ cational   institution.   The   credit   authorized   by   this  program   cannot   offset   more   than   25   percent   of   the   company’s   state   income  tax  liability  in  any  tax  year.   5. Research  and  Development  Tax  Credit:  Eligible  businesses  that   contract  with  one  or  more  Arkansas  colleges  or  universities  in   performing   research   may   receive   an   income   tax   credit   of   33   percent   of   the   amount   spent   on   qualified   research   expendi-­‐ tures.   The   income   tax   credit   may   be   carried   forward   for   nine   years  beyond  the  year  in  which  it  was  earned.   6. Recycling   Equipment   Tax   Credit:  Arkansas   allows   taxpayers   to   receive   an   income   tax   credit   for   the   purchase   of  equipment   used  exclusively  for  reduction,  reuse  or  recycling  of  solid  waste   material  for   commercial   purposes,   whether   or   not   for   profit,  
  15. 15.     16     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES and   the   cost   of   installation   of  such   equipment   by   outside   contractors.  The  amount  of  the  tax  credit  shall  equal  30  percent   of  the  cost  of  equipment  and  installation  costs  deemed  eligible   by  the  Arkansas  Department  of  Environmental  Quality.  Credits   may   be   carried   forward   for   three   consecutive   years  following   the  taxable  year  in  which  the  credits  accrued.     Other  Incentives:     1. The   Business   and   Industry   Training   Program   of   the   Arkansas   Economic   Development   Commission   (AEDC)   provides   pre-­‐ employment  training  for  workers  to  meet  the  skills  needed  in   the   state’s   new   and   expanding   businesses.   AEDC’s   Existing   Business  Resource  Division  works  with  AEDC’s  Business  Devel-­‐ opment  Division  during  the  negotiation  process.     2. The   Existing   Workforce   Training   Program   (EWTP)   provides   fi-­‐ nancial  assistance  to  Arkansas’  businesses,  and  eligible  consor-­‐ tia  of  businesses,  for  upgrading  the  skills  of  the  existing  work-­‐ force.  Skills  upgrade  training  is  instruction  conducted  in  a  class-­‐ room  environment  at  a  work  site,  an  educational  institution,  or   a  neutral  location  that  provides  an  existing,  full-­‐time  employee   with  the  new  skills  necessary  to  enhance  productivity,  improve   performance,  and/or  retain  employment.       For  more  information,  please  contact:       Agency:  Arkansas  Economic  Development  Commission   Address:  900  West  Capitol  Avenue,  Suite  400,     Little  Rock,  Arkansas  72201   Email:   Phone:  (501)  682-­‐1682   Website:     Photo  Credits:  Welspun  Tubular/  Lockheed  Martin/  Walmart  /APEI              
  16. 16.     17     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES CALIFORNIA            Top  10  Reasons  to  Do  Business  in  California:       1. Tax  climate:  California  is  continuously  working  to  improve  the   tax  climate  in  the  state.    California  does  not  levy  a  tax  on  inven-­‐ tory.  Furthermore,  the  State  has  instituted  tax  incentives  to  off-­‐ set  a  company’s  investment.  These  incentives  consist  of  a  Re-­‐ search   Tax   Credit,   Cal   Competes   Tax   Credit,   Partial   Sales   and   Use  Tax  Exemption  on  Manufacturing  equipment,  Full  Sales  and   Use  Tax  Exclusion  for  Advanced  Manufacturing,  and  a  New  Em-­‐ ployee   Credit   for   firms   that   are   located   in   a   Designated   Geo-­‐ graphic   Area   who   hire   employees   who   meet   certain   criteria.     California  does  not  levy  additional  taxes  on  foreign  firms.     2. Location  and  Logistics:  California’s  location  on  the  Pacific  Rim   gives  businesses  access  to  the  global  economy  and  one  of  the   largest  trade  networks  of  any  state.  California  is  connected  by   more   than   15,000   miles   of   highways   and   freeways,   and   the   state  is  home  to  12  cargo  airports,  and  11  cargo  seaports.  The   state  also  boasts  18  foreign  trade  zones.       3. Labor   Environment:   One   of   Governor   Brown’s   landmark   re-­‐ forms,   Senate   Bill   863   passed   on   August   1,   2012,   and   was   signed  into  law  on  Sept.  18,  2012.  The  bill  makes  wide-­‐ranging   changes  to  California’s  workers’  compensation  system,  includ-­‐ ing  increased  benefits  to  injured  workers  and  cost-­‐saving  effi-­‐ ciencies.  The  bill  took  effect  on  Jan.  1,  2013,  although  some  of   its  provisions  take  effect  at  a  later  date.     4. Access   to   Talent:   California’s   culture   embraced   technology   as   part  of  its  founding  DNA.  Technological  innovation  powers  the   California  economy.  The  state  is  home  to  nearly  1  million  high-­‐ tech  workers,  twice  the  number  of  the  next-­‐closest  state,  and   one-­‐sixth  of  all  U.S.  high-­‐tech  workers.  California  possesses  the   nation’s  highest  concentration  of  engineers,  scientists,  mathe-­‐ maticians  and  skilled  technicians.  California  leads  the  nation  in   several   strategic   high-­‐tech   industry   segments,   comprising   be-­‐ tween  20-­‐60  percent  of  U.S.  market  share  in  electronic  compo-­‐ nents,   commercial   aerospace,   medical   instruments,   biotech-­‐ nology,   and   transportation.   11   of   the   top   50   engineering   schools  are  located  in  California.  The  state  is  a  major  center  for   design  of  automobiles,  furniture,  apparel,  software,  electronics,   telecommunications  services,  computers,  and  semiconductors.   Over  2.3  million  students  are  enrolled  in  330  colleges  and  uni-­‐ versities.   On   average,   California   universities   graduate   over   266,000  college  graduates  every  year.  The  California  Communi-­‐ ty  College  system  is  without  rival  in  the  nation.  It  is  comprised   of  72  districts,  112  colleges,  and  enrolls  more  than  2.9  million   students.     5. Cost  of  Doing  Business:  California  offers  a  variety  of  incentives   that  assist  in  reducing  a  company’s  cost  of  doing  business.    The-­‐ se  incentives  consist  of  tax  credit,  sales  and  use  tax  exemptions   for  manufacturing  and  agriculture  equipment,  and  reimbursa-­‐ ble  training  dollars     6. California   is   currently   the   seventh   largest   economy   in   the   world,   and   the   state’s   2014   Gross   State   Product   (GSP)   is   ap-­‐ proximately  $2.2  trillion.  California’s  strength  lies  in  the  size,  di-­‐ versity,  and  adaptability  of  its  economy,  as  well  as  in  the  talent   and  range  of  its  population  of  38.8  million  people.     7. In  CNBC’s  2014  Top  States  for  Business,  California  was  ranked   at  number  1  for  Technology  &  Innovation  and  Access  to  Capital.   California  boasts  13  companies  on  Fortune’s  100  Best  Compa-­‐ nies  to  Work  For,  2014.  Additionally,  California  is  tied  for  the   most  Fortune  500  companies  in  the  country  with  54.       8. California  is  the  number  1  state  for  venture  capital  (VC)  invest-­‐ ment,  receiving  four  times  more  venture  capital  (as  a  share  of   gross  state  product)  than  the  national  average.       9. California   is   a   global   export   leader   with   over   $174   billion   in   sales  of  merchandise  goods.  .    International-­‐related  commerce   accounts  for  a  large  percentage  of  the  state’s  economy.  Exports   from  California  reached  229  foreign  markets  and  accounted  for   11  percent  of  the  total  of  U.S.  exports  in  2014.  The  ports  of  Los   Angeles,  Long  Beach,  and  Oakland  are  among  the  busiest  in  the   country.  
  17. 17.     18     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES   10. California's  strategic  growth  plan  forecasts  an  ambitious  expan-­‐ sion  of  California's  highways,  freeways,  railways,  aviation,  and   electrical  infrastructure,  investments  that  will  create  immediate   jobs  and  pave  a  foundation  for  long-­‐term  economic  growth.       Core  Industry  Sectors  of  Strength:     • Tech  Industry     • Manufacturing     • Agriculture         Upcoming  Sectors  of  Growth:     • Technology  and  High-­‐tech     • Renewable  Energy                 Select  Tax  Incentives:     New  Business  incentives 7 :  Governor  Brown  enacted  a  new  Economic   Development  Initiative  that  brought  together  business  leaders,  labor   interests  and  legislators  from  both  sides  of  the  aisle.  This  created  a   more  flexible,  more  competitive  set  of  economic  development  tools   that  include  a  Sales  and  Use  Tax  Exemption  for  Manufacturing,  Bio-­‐ tech  and  R&D  equipment;  a  Hiring  Tax  Credit,  and  the  CA  Competes   Tax  Credit  designed  to  incentivize  companies  to  locate  or  expand  in   CA.  The  Governor’s  Office  of  Business  and  Economic  Development   will  allocate  $789  million  to  companies  that  want  to  expand  in  Cali-­‐ fornia  and  add  jobs.       Other  incentives:       State  Assistance  for  Companies  Locating  in  California:  Firms  looking   to  relocate  or  expand  in  California  can  contact  the  Governor’s  Office   of  Business  and  Economic  Development  (GO-­‐Biz).  GO-­‐Biz  serves  as   the  state’s  single  point  of  contact  for  economic  development  spe-­‐ cialists  advising  on  site  selection,  permit  streamlining,  clearing  regu-­‐ latory  challenges,  small  business  assistance  and  international  trade   development.  GO-­‐Biz  provide  no-­‐fee,  tailored  site  selection  services   to  employers,  corporate  real  estate  executives  and  site  location  con-­‐ sultants  considering  California  for  business  investment.     • California  is  the  largest,  and  most  diverse  economy  in  the   United  States   • California  is  one  of  the  nation’s  fastest  growing  economies   and  national  leader  in  job  creation   • California   leads   the   nation   as   the   Number   1   State   for   manufacturing  and  technology   • California  leads  the  nation  as  the  Number  1  State  for  capi-­‐ tal  access                                                                                                                             7  A  summary  of  Business  incentives  in  California:     Photo  Credits:  Todd  Jones/  Calilover/  Rich  Niewiroski,  Jr.    
  18. 18.     19     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES • California   leads   the   nation   with   the   most   Fortune   500   companies   • California’s  quality  of  life  standards  is  one  of  the  highest  in   the  nation   • California  is  a  global  leader  in  agricultural  output  and  ex-­‐ ports   • California  is  a  global  leader  in  attracting  and  retaining  in-­‐ ternational  talent  and  investment   • California   is   a   global   leader   in   innovation   and   entrepre-­‐ neurship     • California  is  a  global  leader  in  higher  education  and  work-­‐ force  readiness         For  more  information,  please  contact:     Agency:   California   Governor’s   Office   of   Business   and   Economic   Development  (GO-­‐Biz)   Address:  1325  J  Street,  18 th   Floor,     Sacramento,  CA  95814.     Email:  GOBizBusinessHelp@GOV.CA.GOV     Phone:  877-­‐345-­‐4633   Website:  www.      
  19. 19.     20     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES COLORADO           Top  10  Reasons  to  Do  Business  in  Colorado:     1. Tax  Climate:  Colorado  has  a  competitive  business  tax  structure   that  rewards  investment  and  innovation.  With  low  taxes  at  the   state  level,  and  a  wide  range  of  local  tax  structure,  Colorado  of-­‐ fers  almost  unlimited  choices  to  meet  the  needs  of  all  types  of   businesses.  Colorado  has  one  of  the  lowest  income  tax  rates  of   any  state  with  a  corporate  income  tax  (4.63%).  The  state  prides   itself   on   having   a   fair   and   accessible   regulatory   environment   with  competitive  business  costs.         2. Location  and  Logistics:  Located  346  miles  west  of  the  geograph-­‐ ic  center  of  the  U.S.,  Colorado  is  an  excellent  location  for  doing   business   across   America.   Denver   International   Airport’s   (DIA)   connectivity  also  makes  Colorado  a  national  and  international   transit   hub.   Skytrax   ranked   DIA   as   the   third-­‐best   airport   in   North  America.  It  is  also  the  nation’s  5 th  busiest  airport,  and  the   16 th  busiest  globally.     3. Labor  Environment:  Colorado’s  2012  annual  average  wage  rate   for  all  industry  sectors  was  $49,950,  according  to  the  Bureau  of   Labor  Statistics  (Occupational  Employment  &  Wage  Estimates,   2013).   Moreover,   the   Denver   Metro   Area   consistently   main-­‐ tains  a  lower  annual  wage  rate  than  other  major  metropolitan   areas,   making   it   an   ideal   location   for   investors   by   combining   leading  talent  and  low  wage  rates.     4. Access  to  Talent:  Colorado’s  highly  educated  workforce  offers   world-­‐class  R&D  capabilities  to  companies  in  the  areas  of  ICT,   energy,  bioscience,  and  engineering.  The  state  ranks  second  in   the  nation  for  percentage  of  adults  with  bachelor’s  degrees— many   of   which   are   degrees   and   training   in   STEM.   In   2013,   Forbes  ranked  Colorado  as  the  best  state  for  labor  supply.       5. Cost  of  Doing  Business:  In  addition  to  a  favorable  tax  climate,   Colorado’s  utility  rates  are  equitable  compared  to  other  states   and  costs  are  lower  than  in  many  large  metropolitan  areas.  Ac-­‐ cording  to  the  U.S.  Energy  Information  Administration,  average   household   energy   costs   in   Colorado   ($1,551   per   year)   are   23   percent  less  than  the  national  average,  primarily  due  to  histori-­‐ cally  lower  natural  gas  prices  in  the  state.     6. Focus  on  Innovation:  Colorado  is  a  natural  fit  for  start-­‐ups  and   fast-­‐growing  companies.  In  2013,  Bloomberg  ranked  Colorado   as  a  top  10  state  in  innovation.  Engine  and  the  Kauffman  Foun-­‐ dation  have  placed  Boulder,  Fort  Collins,  and  Denver  in  the  1 st ,   2 nd ,   and   4 th   positions,   respectively,   for   cities   with   the   highest   startup  density.  Colorado  is  also  home  to  the  annual  Colorado   Innovation  Summit  (COIN)  which  convenes  hundreds  of  leaders   from  around  the  world  to  discuss  innovation.       7. Colorado’s   Spectacular   Quality   of   Life:   Colorado’s   excellent   quality   of   life   helps   attract   people   from   all   over   the   world.   A   combination   of   stunning   scenery,   recreational   opportunities,   moderate   climate,   world-­‐class   arts   and   culture,   safe   streets,   and  excellent  health  care  and  schools  make  Colorado  an  ideal   place  to  call  home.       8.  Strong  Public-­‐Private  Collaboration:  In  Colorado,  state  and  lo-­‐ cal   governments   work   hand   in   hand   with   the   private   sector   every  day  to  ensure  that  companies  have  the  freedom  and  sup-­‐ port   needed   to   grow   in   an   increasingly   competitive   global   economy.   As   a   community,   there   is   collaboration   to   improve   companies’  access  to  capital  and  markets,  the  public  infrastruc-­‐ ture,  the  education  system,  etc.         9. Appreciation  for  the  Cluster-­‐Based  Development  Model:  Colo-­‐ rado’s   government   and   industry   collaborate   to   enhance   the   state’s   14   major   clusters.   From   ICT   to   aerospace,   Colorado   is   weaving  the  cluster  mentality  into  everything  that  is  done  as  a   community  to  expand  the  economy.  Companies  find  Colorado   to  be  a  truly  welcoming  environment.     10. Large  Indian  Expatriate  Population:  Colorado  is  a  second  home   to  many  people  who  moved  from  foreign  countries,  including   India.  The  community  is  increasingly  a  melting  pot  of  many  cul-­‐ tures  that  all  share  in  the  beautiful  natural  environment,  entre-­‐ preneurial  spirit,  and  innovation-­‐based  economy.  
  20. 20.     21     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES Core  Industry  Sectors  of  Strength:       • Aerospace   • Infrastructure  Engineering   • Bioscience   • Technology  and  Information   • Electronics   • Advanced  Manufacturing   • Energy  and  Natural  Resources         Upcoming  Sectors  of  Growth:       • Smart  Grid  Modeling,  Testing  and  Technology   • Natural  Gas  Science  and  Technology   • Oil  Shale  Science  and  Technology   • Biofuels  Science  and  Technology   • Energy  Efficiency,  Storage  and  Transmission  Tech.   • Cleaner  Coal  Technology   • Transportation  Tech:  EVs,  NGVs,  Efficient  Diesels   • Security  and  Defense  Technology   • Film,  TV  and  Media  Creation  and  Distribution   • Infectious  Disease  Modeling  and  Treatments       Select  Tax  Incentives:8     1. Job   Creation   Incentive   Tax   Credit   (JGITC):   The   performance-­‐ based  Job  Growth  Incentive  Tax  Credit  provides  a  state  income   tax  credit  to  businesses  undertaking  job  creation  projects  that   would  not  occur  in  Colorado  without  this  program.  Businesses   need  to  create  at  least  20  new  jobs  in  Colorado,  with  an  aver-­‐ age  yearly  wage  of  at  least  100%  of  the  county  average  wage                                                                                                                             8  For  more  information  on  the  various  incentives  being  offered  by  the  State   of  Colorado,  please  visit­‐ incentives/incentives.   Photo  Credits:  David  Shankbone/  Clean  Energy  Collective  and  Martifer  Solar   USA/  Hogs555     rate  based  on  where  the  business  is  located.  A  business  located   in  an  Enhanced  Rural  Enterprise  Zone  has  to  create  at  least  five   new  jobs  in  Colorado,  with  an  average  yearly  wage  of  at  least   100%  of  the  county  average  wage.  All  new  jobs  must  be  main-­‐ tained  for  at  least  one  year  after  the  positions  are  hired  to  qual-­‐ ify.   2. Strategic  Fund  Incentive  (SF):  The  SF  provides  an  upfront  per-­‐ formance-­‐based  incentive  commitment  to  businesses  that  will   create  and  hire  net  new,  full-­‐time,  permanent  jobs  paying  at  or   above   average   wages,   and   that   meet   other   specified   require-­‐ ments.   The   cash   incentive   award   may   range   from   $2,000-­‐ $5,000  per  net  new,  full-­‐time,  job  created,  based  on  the  aver-­‐ age  wage  rate  of  the  new  jobs  actually  created,  the  location  of   those  jobs,  and  other  factors.  The  program  is  designed  to  sport   highly  desirable  and  high-­‐impact  job  creation  opportunities.    
  21. 21.     22     BUSINESS AND INVESTMENT CLIMATE IN THE UNITED STATES 3. Enterprise  Zone  Program:  Colorado's  Enterprise  Zone  Program   provides  tax  incentives  to  encourage  businesses  to  expand  or   locate  in  designated  economically  distressed  areas  of  the  state.   Businesses  located  in  a  zone  may  qualify  for  nine  different  En-­‐ terprise  Zone  tax  credits  and  incentives  to  encourage  job  crea-­‐ tion  and  investment  in  these  areas.     4. Local   Government   Incentives:   Local   governments   can   provide   property   tax   credits   or   incentive   payments   based   on   the   amount  of  increased  property  taxes  for  qualifying  new  business   activity  in  their  jurisdictions.   5. Job  Training  Grant  Programs:  The  Colorado  FIRST  and  Existing   Industry  grants  are  jointly  administered  by  OEDIT  and  the  Colo-­‐ rado  Community  College  System.  Colorado  job  training  grants   are  for  companies  that  are  relocating  to  or  expanding  in  Colo-­‐ rado   and   provide   funds   to   net   new   hires.   Existing   Indus-­‐ try  grants  focus  on  providing  assistance  to  established  Colorado   companies  in  order  to  remain  competitive  within  their  industry,   adapt  to  new  technology,  and  prevent  layoffs.   6. Public  Infrastructure  Grants:  The  Infrastructure  Assistance  pro-­‐ gram  is  designed  to  create  new  permanent  jobs  and  retain  ex-­‐ isting   jobs,   primarily   for   low-­‐   and   moderate-­‐income   per-­‐ sons.  The  state  may  be  able  to  provide  specific  support  to  re-­‐ tain  jobs  or  offers  business-­‐friendly  tools  that  assist  in  retaining   jobs  (such  as  the  Enterprise  Zone  Program)  for  this  grant.   7. Biotechnology  Sales  and  Use  Tax  Refund:  Colorado  promotes  its   biotechnology   industries   by   providing   them   with   a   taxpayer-­‐ friendly  means  to  recover  the  sales  and  use  previously-­‐paid  tax   expenses  on  equipment  and  supplies  used  for  research  and  de-­‐ velopment.   8. Manufacturing  Sales  and  Use  Tax  Exemption:  Colorado  encour-­‐ ages  manufacturers  to  locate  their  manufacturing  operations  in   Colorado,  recognizing  their  importance  to  the  state's  economy.   Colorado  provides  an  exemption  from  state  sales  and  use  tax   on  purchases  of  manufacturing  machinery,  machine  tools  and   parts.   9. Sales  Tax  Exemption  on  Components  for  Production  of  Energy   from  Renewable  Energy  Sources:  Components  used  in  the  pro-­‐ duction  of  electricity  from  a  renewable  energy  source,  including   wind,   are   exempt   from   state   sales   and   use   tax.   Components   used  in  solar  thermal  systems  are  also  exempt  from  state  sales   and  use  tax.   10. Advanced  Industry  Investment  Tax  Credit:  The  Advanced  Indus-­‐ try   Investment   Tax   Credit   helps   Colorado   advanced   industry   companies  receive  capital  from  Colorado  investors.   11. Aviation  Development  Zone  Tax  Credit:  A  business,  or  any  por-­‐ tion  of  a  business  that  is  involved  in  the  maintenance  and  re-­‐ pair,  completion  or  modification  of  aircraft  located  within  the   boundaries   of   an   airport   designated   as   an   Aviation   Develop-­‐ ment  Zone,  may  qualify  for  a  state  income  tax  credit  of  $1,200   per  new  full-­‐time  employee.        Other  Incentives:       1. Advanced   Industries   Accelerator   Programs:   The   Advanced   In-­‐ dustries   (AI)   Accelerator   Programs   promote   growth   and   sus-­‐ tainability   in   Colorado's   seven   advanced   industries   by   helping   drive  innovation,  accelerate  commercialization,  encourage  pub-­‐ lic-­‐private   partnerships,   increase   access   to   early   stage   capital   and  create  a  strong  ecosystem  that  increases  the  state’s  global   competitiveness.   a. Proof-­‐of-­‐Concept  Grant   b. Early-­‐Stage  Capital  and  Retention  Grants   c. Infrastructure  Funding   2. Colorado  Capital  Access  (CCA)  -­‐  SSBCI:  Colorado  Capital  Access   (CCA)   creates   greater   access   to   capital   for   small   and   medium   sized  businesses  operating  in  Colorado  by  using  small  amounts   of   public   resources   to   encourage   financing   by   eligible   lenders   (such   as   banks   and   community   development   financial   institu-­‐ tions).     3. Cash  Collateral  Support  (CCS)  –  SSBCI:  Cash  Collateral  Support   (CCS)   creates   greater   access   to   capital   for   small   and   medium   sized   businesses   operating   in   Colorado   that   are   experiencing   difficulty   securing   credit   due   to   collateral   shortfalls.   CCS   uses   small  amounts  of  public  resources  to  encourage  private  lender   financing.    The  program  provides  a  deposit  of  cash  as  collateral   for   a   business   loan   or   credit   facility   when   a   business   cannot   meet  the  lender’s  collateral  requirements.   4. Colorado   Credit   Reserve:   The   Colorado   Credit   Reserve   (CCR)   Program  increases  the  availability  of  credit  to  small  businesses   in  Colorado  by  establishing  a  pooled  loan-­‐loss  reserve  fund  that   banks  or  sponsored  lending  entities  may  access  to  recover  loss-­‐ es   associated   with   loans   registered   with   the   program.   OEDIT   works  with  the  Colorado  Housing  and  Finance  Authority  (CHFA)   to  administer  this  program.   5. Venture  Capital  Authority  (VCA):  The  Colorado  Venture  Capital   Authority  (VCA)  was  established  in  2004  to  make  seed-­‐  and  ear-­‐ ly-­‐stage   capital   investments   in   businesses.   The   VCA   selected   fund  manager  High  Country  Venture,  LLC,  and  established  Colo-­‐ rado  Fund  I  and  Colorado  Fund  II,  each  with  approximately  $25   million.   High   Country   Venture   is   independently   operated   and   generally  makes  funding  decisions.  State  approval  is  limited  to   ensuring   that   businesses   receiving   funding   meet   minimum   specified   requirements.   The   minimum   and   maximum   invest-­‐ ment  size  generally  ranges  from  $250,000  -­‐  $3.375  million.     6. CDGB  Business  Loan  Funds:  Every  year,  the  State  of  Colorado   receives  an  allocation  of  federal  funds  to  use  for  both  commu-­‐ nity  and  economic  development  efforts  within  the  state.  Cur-­‐ rently,   Colorado   has   14   Business   Loan   Fund   locations,   which   have  service  areas  covering  the  majority  of  the  state’s  rural  ar-­‐ eas.     7. Certified   Capital   Companies   (CAPCO)   Program:   The   Certified   Capital   Companies   Program   (CAPCO)   makes   venture   capital   funds  available  to  new  or  expanding  small  businesses  through-­‐ out  Colorado.  The  program  encourages  new  business  develop-­‐ ment   and   expansions   of   businesses   by   making   a   $75   million   statewide  pool  available  for  investment  throughout  Colorado,   and  a  $25  million  rural  pool  available  for  investment  in  desig-­‐ nated  rural  counties  in  Colorado.