| In the pursuit of economic growth, state and local governments are reaching out to the business community. Governments offer grants, low-interest loans, relocation assistance and tax credits to companies considering expanding or relocating their operations. This study examines how U.S. firms integrate tax planning into business location decisions. Specifically, it considers how state and local tax and non tax incentives influence corporate relocation decisions. The study identifies, empirically, important tax and non tax factors that U.S. firms consider when making relocation decisions and assesses the importance of these factors to the firms. Through the use of eight case studies and a survey of 67 organizations that have relocated their operations as a result of both tax and non tax and state and local government incentives, this paper provides an examination of the restrictions and frictions which businesses considering relocation decisions face and how incentives can reduce these frictions to encourage business development. |
