Manufacturing in Eagle Technologies’ home state of Michigan has gotten a bad rap over the past few years. The problem has been the collapse of the auto industry (which is now on the upswing). Sure, Michigan state officials have tried to shift the work force to other things, such as promoting tourism and filmmaking.
However, Michigan is a blue collar, industrial state. Recognizing the rise in alternative energy needs and the abundance of manufacturing talent, officials have created a slew of incentives that have actually succeeded in drawing factories back to the state, with the promise of more business to come. These green incentives for manufacturing are Michigan’s way of leading the industrial horses to Michigan’s talented unemployment pool to drink.
Below are a few of the green incentives that state officials have created to promote alternative energy and manufacturing.
Nonrefundable Business Activity Tax Credit
Businesses engaged in green alternative researching or actively manufacturing in Michigan are eligible for a state business tax credit. There are a few stipulations of course. You must be registered with the Michigan Next Energy Authority, an agency that presides over alternative energy in the state. The credit is limited by tax liability, but can reap savings for the business on the tax bill.
Renewable Energy Renaissance Zone (RERZ) incentive
In order to lure manufacturing businesses to certain areas in Michigan that need the revenue and jobs, the state has created RERZ. It is an area that is predetermined by the state inside of which businesses can reap the benefit of exemptions from:
• Michigan Business Tax
• State education tax
• Personal tax
• Property tax
• Local tax in some areas.
For 15 years, a business can operate in the state practically tax-free. There is a catch. The company must be located inside the RERZ and it must also manufacture, research or develop the actual renewable energy or the systems used in creating it.
Refundable Payroll Tax Credit
Businesses certified by the Michigan NextEnergy Authority are also eligible for a credit of their payroll taxes. The credit is the qualified payroll multiplied by the company’s income tax rate. Only the payroll for certain employees apply, those actively performing alternative energy related duties.
Through these incentives, Michigan has succeeded in drawing not only employment to a state that was among the highest in the nation, but also encouraging new companies to look at alternative energy as a primary focus. This will help in the effort to wean the nation off fossil fuels while keeping Michigan families fed and sheltered.