Post-Election Tax Shifts and Site Selection Insights

Shifts in Tax Policy: What’s at Stake

Elections often bring new priorities and adjustments to tax policies, including:

• Updated tax credit programs: Many states may revise eligibility criteria or expand funding to attract specific industries.
• Emerging incentive opportunities: New initiatives are expected to target incentive categories like advanced manufacturing and workforce training.
• Program reductions: Some long-standing incentives could be phased out or modified.

These adjustments are further shaped by the federal government’s overarching priorities, as highlighted by the proposed policies of the new administration. While the Trump administration has signaled pro-business tax reforms, the specifics remain uncertain, leaving many businesses in a holding pattern. Proposed policies aim to reduce the corporate tax rate to as low as 15%, incentivize the repatriation of overseas profits, and enhance tax credits for manufacturing and energy sectors—all while streamlining compliance to simplify corporate tax obligations.

Businesses must adapt to these changes to optimize their tax and site selection opportunities while making informed decisions about location planning and growth.

Credits and Incentives Trends to Watch

Adapting to the shifting tax landscape requires businesses to stay informed about emerging trends in credits and incentives. Understanding these changes and their interplay with state-level policies is critical for businesses. The following state and local developments, influenced by federal policies, could significantly impact site selection and investment strategies as the new administration takes office.

Focus on Domestic Investment and Manufacturing

The administration’s emphasis on boosting domestic production is likely to stimulate state programs that complement federal incentives. This alignment creates a prime opportunity for companies to invest in U.S.-based facilities while maximizing benefits from both state and federal priorities.

Support for Workforce Development

States continue to prioritize tax credits for businesses that invest in employee training and overall workforce development. Programs targeting workforce enhancement are expected to grow, particularly those in states with strong labor market strategies, such as and Alabama’s AIDT.

Impact of Tariffs on Supply Chains

Proposed tariffs on imports from countries like China, Mexico, and Canada are prompting businesses to reevaluate supply chains to mitigate rising costs. Strategies such as diversifying suppliers or shifting production locations are being heavily considered, but these changes may lead to higher prices for end consumers.

Incentives for Innovation

Industries like technology, healthcare, and green energy remain key targets for tax benefits. While federal policies under the Trump administration may lead to a reduction in certain green energy incentives, state-level programs can often preserve or even expand to support innovation in these high-growth sectors. States may bolster R&D credits, infrastructure grants, and exemptions to attract companies in these areas. Businesses should closely monitor both federal and state policy developments to effectively navigate and leverage available incentives.

Collaborative Regional Strategies

In many areas, states and regional organizations have partnered to offer incentive packages aimed at fostering shared economic goals. Initiatives like the MidAmerica Economic Development Council and Tennessee Valley Authority exemplify this trend by supporting regional collaboration to attract businesses and drive growth.

Strategic Considerations for Site Selection

Adapting site selection strategies post-election requires careful evaluation and proactive planning. Consider the following key strategies:

Evaluate Multistate Opportunities

Conduct thorough comparisons of tax incentives across states, factoring in financial impact, policy stability, and alignment with long-term business goals. For example, a manufacturing company might compare property tax abatements in Texas to workforce training incentives in Georgia to determine the best location for a new facility. Pay close attention to how state-level policies align with federal priorities, as this can maximize the overall benefit.

Engage with Local Leaders Early

Connecting with state and local economic development officials early in the rollout of post-election policy changes can provide valuable insights into emerging incentive programs or shifts in priorities. For example, newly elected leaders may introduce time-sensitive workforce development initiatives or infrastructure investments. Establishing communication with local officials during this critical period can help businesses position themselves to take full advantage of these opportunities as they emerge.

Assess and Adapt Supply Chain Strategies

Tariffs on imports and geopolitical uncertainties can significantly impact operational costs. Businesses should evaluate their supply chain resilience by diversifying suppliers, nearshoring production, or leveraging free trade agreements. For example, a company dependent on overseas manufacturing could reduce risks by establishing production closer to key markets, particularly in tariff-exempt zones. Incorporating tariff and trade risks into site selection ensures better cost control and operational stability.

Maintain Planning Flexibility

Post-election policy adjustments can introduce uncertainties that affect incentive agreements and operational plans. Structure agreements with flexibility, such as renegotiation clauses tied to policy changes, and prioritize locations with diverse incentive options. Flexibility in expansion timelines or phased investment plans can also help mitigate unforeseen risks.

Leverage Expert Insight

Partnering with tax consultants and site selection professionals provides unparalleled advantages when navigating the complexities of multistate incentives and site selection. Experienced consultants can not only identify overlapping federal, state, and local incentive programs but also leverage their relationships with economic development organizations across the country. These relationships often provide direct access to key decision-makers and can even help drive demand for your project by highlighting its benefits to the community. By tapping into this expertise, businesses can maximize benefits while ensuring alignment with their long-term goals.

Conclusion

The post-election tax landscape presents opportunities and challenges for businesses considering expansion or relocation. With the Trump administration likely prioritizing economic growth and business-friendly policies, companies can capitalize on these changes by staying informed and strategically planning their next moves.

Now is the time to act—stay informed, be bold, and partner with experts who can guide you through this evolving landscape to secure the best opportunities for your business. Contact DMA’s Credits & Incentives team today to get expert guidance and position your business for success amid these evolving opportunities.