Attracting new businesses often leads states to offer tax and or grant incentives as they compete for economic development, by trying to entice businesses to their jurisdictions and spur growth.

While officials must weigh the perceived benefits and costs before giving the green light to with tax incentive or grant package deal authorities often have carefully crafted policies in place to deal with businesses wishing to locate in town or expand.

Although this allows authorities to be up-front with businesses, accountable to voters and diminish the appearance of cronyism, it is not uncommon for companies to play cities or authorities off against one another to get themselves the best deal.

One region offering five years of lower taxes businesses may find itself competing against another willing to forego ten years of revenues at the normal rate.

Businesses will likely continue to seek tax incentives for as long as cities and states are willing to offer them.

Companies and those advising them calculate what regions exactly stand to gain from their presence.

A new business buying land with the production facilities may help to increase the the city’s property tax base with the plant adding value to otherwise vacant land.

To help offset unusually high operating costs incurred by startup operations businesses may push for lower property tax rates during the first few years of operations. Incentives can be used by businesses move into high wage areas where the labor market is tight.

An influx of new employees may help to push up property values because of new home buyers, meaning authorities may receive more sales tax and user fee revenues when workers arrive in town.

Infrastructure costs such as widening streets and the need for more street lighting, extending sewerage facilities may also play into officials thinking.

Could incentives power more US land-based salmon farms? The answers are mixed.