From tax breaks to worker training grants to infrastructure improvements, a wide variety of incentives and financial assistance is available to help companies startup, expand, and relocate in Minnesota.
Some incentives are offered by state government, some by local governments or other authorities. Generally, state incentives are tied to wage and job creation goals, and companies must enter into a formal business subsidy agreement to be eligible.
For more information on any of these programs, or to see if your project qualifies, contact our Location and Expansion Assistance Specialists.
Job Opportunity Building Zones
The Job Opportunity Building Zone (JOBZ) initiative provides a wide variety of local and state tax exemptions to companies that start up or expand in targeted areas of Greater Minnesota.
There are 10 job zones comprising more than 29,000 acres in about 325 communities. Each zone includes acres for primarily industrial, value-added, or high paying service businesses.
Angel Tax Credit
Businesses headquartered in Minnesota with fewer than 25 employees and engaged in the research or development of qualifying high-technology can qualify for up to $1 million in angel tax credits.
Greater Minnesota Business Expansion Tax Credits
Greater Minnesota Business Expansion program will provide sales tax exemptions of up to 12 years to eligible existing businesses located in Greater Minnesota that meet eligibility requirements including specified job creation and wage level.
Research and Development Tax Credit
The tax credit for R&D expenditures is 10 percent, up to the first $2 million in eligible expenses. The credit is 2.5 percent for eligible expenses above $2 million.
Individuals involved in partnerships, S-corporations and limited liability companies are allowed to claim the credit against their individual income taxes. This opens up the tax credit to more small and medium-sized businesses.
Border Cities Enterprise Zones
The Border-Cities Enterprise Zone Program provides property tax credits, debt financing credit on new construction, sales tax credit on construction equipment and materials, and new or existing employee credits to qualifying businesses in the border cities of Breckenridge, Dilworth, East Grand Forks, Moorhead, and Ortonville.
The SEED Capital Investment Program provides tax incentives for investing in innovative business located in the Minnesota border cities of Breckenridge, Dilworth, East Grand Forks, Moorhead, and Ortonville. Investors may receive a 45 percent tax credit on their investment, up to $112,500 per year.
Tax Increment Financing
Cities, counties, and development authorities may use tax increment financing to help finance costs of real estate development to encourage developers to construct buildings or other private improvements and to pay for public improvements, such as streets, sidewalks, sewer and water, and similar public infrastructure improvements that are related to the development.
Cities, counties and school districts may use tax abatement to help finance certain economically beneficial projects. Property taxes are forgiven for a period of time to allow the project to cash flow. Or the taxes are captured for a period of time and an up-front payment is made by the political subdivision to help the project cover start up costs.
Minnesota Investment Fund
Offering a maximum of $500,000 per grant, the fund focuses on industrial, manufacturing, and technology-related industries. We award grants to local units of government, which use the money to provide below-market rate loans to help companies expand. Funding may be used to purchase land, machinery and equipment.
Minnesota Job Creation Fund
The fund provides up to $1 million in grants to approved businesses after specified job creation and capital investment goals are achieved. Minimum requirements: 10 jobs created and $500,000 capital investment. Actual job creation and capital investment rebates are based on project parameters.
State Small Business Credit Initiative
The fund stimulates private-sector lending and improves access to capital for small businesses and manufacturers that are credit worthy but not getting loans they need to expand and create jobs. The initiative allocates up to $15.4 million into three state programs.
Small Business Development Loan Program
The program provides loans for business expansions that result in the creation of new jobs. Loans are up to $5 million.
Urban Initiative Loan Program
The program provides loans of up to $150,000 at below market rates to minority-owned and operated businesses in economically distressed areas of the Twin Cities.
Indian Business Loan Program
The program supports the development of Indian-owned and operated businesses and promotes economic opportunities for Indian people in Minnesota. Loans may be up to 75 percent of project costs and feature favorable interest rates and repayment terms.
Growth Acceleration Program
The program provides consulting services to help small manufacturers that employ up to 100 workers become more efficient, more competitive, and more likely to thrive and grow. GAP provides grants of up to $50,000, which are matched dollar-for-dollar by companies.
The program partners strategically with businesses and schools to train or retrain workers, expand opportunities, and keep high-quality jobs in the state. Grants of up to $400,000 are awarded to educational institutions that partner with businesses to develop new-job training or retraining for existing employees. Training grants are offered in five different program areas.
SciTechsperience is a paid internship program that connects college students in science, technology, engineering and math disciplines with rewarding hands-on opportunities at Minnesota companies that need their skills. The focus is on strengthening Minnesota’s STEM industries and developing an experienced and well trained workforce. Learn more about Scitechsperience .
Employers may claim a refundable credit of up to $2,000 for each internship provided to eligible students in Greater Minnesota. The credit is available for tax years that begin in 2014 or later. Contact the Minnesota Office of Higher Education, which administers the program.
Companies that build data or network operation centers of at least 25,000 square feet and invest $30 million qualify for sales tax exemptions for 20 years on computers and servers, cooling and energy equipment, energy use and software, and they pay no personal property tax ever. Companies have 48 months to complete the project.
Foreign Trade Zones are commerce sites (industrial sites, buildings) set up in or near U.S. Customs ports of entry where merchandise is considered legally outside U.S. Customs territory. The zones are operated as public utilities by states, port authorities, other political groups, or corporations charted by the state.
Companies can use foreign trade zones to reduce duty payments, streamline supply chain costs and improve your competitive position in domestic and foreign markets.
There are eight General Purpose Zone sites in Minnesota, including six in the Minneapolis-St. Paul metropolitan area (FTZ#119), one site in Duluth (FTZ#51), and one site in International Falls (FTZ#259). Individual companies may apply to the U.S. Department of Commerce to designate an area of their facility as a Subzone. This situation is ideal for companies too far from a General Purpose Zone.
EB-5 Investor Program
The U.S. Department of Homeland Security's Citizenship and Immigration Services division (USCIS) administers the Immigrant Investor Program, also known as EB-5.
The program is intended to stimulate the U.S. economy through job creation and capital investment by offering foreign investors a permanent resident visa for investing $1 million (or at least $500,000 in a Targeted Employment Area) and creating or preserving at least 10 jobs for U.S. workers.