Manufacturers often expand operations without realizing that manufacturing tax incentives and economic development incentives may be available to offset the cost of growth. One Midwest manufacturing company discovered this firsthand when a planned expansion turned into $2.3 million in incentives without changing its business strategy.
Discover the tax incentives for businesses most companies overlook in 2026—and take the first step with a brief discovery conversation.
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How a Manufacturer Secured $2.3M in Economic Development Incentives for Expansion
Manufacturers often expand operations without realizing that manufacturing tax incentives and economic development incentives may be available to offset the cost of growth. One Midwest manufacturing company discovered this firsthand when a planned expansion turned into $2.3 million in incentives without changing its business strategy.
McGuire Sponsel helped the company maximize available state/local programs while keeping its operational plans intact.
Company Snapshot
- Industry: Advanced Manufacturing
- Annual Revenue: $34 Million
- Expansion Investment: $19 Million
- New Equipment Investment: $4.5 Million
- Facility Expansion: 75,000 square feet
- New Jobs: 40 over the next 1-3 years
The company was planning to expand without considering the incentives available. The opportunity was to ensure they realized how it could benefit them by having an early strategic conversation before they started.
Aligning Manufacturing Expansion with Economic Development Incentives
Before pursuing any incentives, we evaluated the company’s expansion strategy over the next 1-3 years. The manufacturer planned to:
- Expand its production facility by 75,000 square feet
- Invest 4.5 million in advanced equipment
- Increase the workforce by 40 employees
These growth plans aligned perfectly with several state and local economic development programs designed to support manufacturing expansion and job creation. Rather than altering the company’s strategy, we aligned incentives with their existing growth plans.
Identifying Available State and Local Manufacturing Incentives
We mapped the expansion against all available programs at the state and local level.
The project qualified for multiple incentives categories:
- Payroll tax credits for new jobs
- Workforce training grants
- Real and Personal Property Tax abatement on the expansion
- Sales and use tax refunds on equipment purchases
- Low-interest financing for manufacturing equipment
By layering these programs together, we created a comprehensive incentives strategy tied to $23.5M in capital investments and new net job growth.
Why Timing Matters for Securing Economic Development Incentives
Timing is critical in economic development incentives.
Many state and local incentive programs require applications to be submitted before construction or hiring begins. By engaging early, we were able to:
- Secure incentives prior to construction, buying new equipment, and hiring/training new employees
- Structure the investment timeline to maximize credit values
- Coordinate approvals with state and local economic development agencies
This proactive approach ensures the project captures incentives that are often missed when companies move forward with expansion and hiring plans.
$2.3M in Manufacturing Incentives Secured
The result was a $2.3 million incentive package supporting the expansion.
Incentives Secured to Support the Expansion Include:
- Payroll tax credits: Supporting the creation of 40 new jobs
- Workforce training grants: Offsetting onboarding and skilled development training for new equipment
- Property tax abatement: Reducing the tax burden on the new 75,000-square-foot facility
- Sales & use tax refunds: Recovering taxes on $4.5 million in manufacturing equipment purchases
- Low-interest equipment financing: Lowering the capital cost of new machinery
The incentives effectively reduced the overall project’s cost while improving long-term cash flow.
Tracking Compliance for Manufacturing Tax Incentives
Securing incentives is only part of the process. Ongoing compliance and reporting ensure companies receive the benefits.
We implemented a tracking and compliance strategy to monitor:
- Hiring milestones for job tax credits
- Monitor for a Phase II project if jobs exceed the proposed number of jobs
- Capital investment documentation
- Training program reimbursements
- Property tax abatement schedules
This ensured that the manufacturer who made those investments and added those new jobs received those incentives over the life of the programs.
The incentive package represents nearly 10% of the company’s capital investment returned through tax credits, grants, and cost reductions.
The Bottom Line
The company was already planning to expand. By getting ahead of the shovel hitting the ground, a press release, and strategically aligning their growth with incentive programs, they were able to capture $2.3 million in economic development incentives without altering or delaying operations. For manufacturers investing in facilities, equipment, or workforce growth, state and local economic development incentives can significantly reduce the cost of expansion when identified early in the planning process.
The right strategy can turn planned growth into measurable tax savings.
Boom!
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Chad Collier
Chad Collier is a Relationship Manager for our Location Advisory Services practice. He is a long-standing member of the business and real estate communities, having served them for over 25 years. Chad builds partnerships across the Midwest with leading commercial real estate brokers, developers, attorneys, and bankers.
Recent Resources
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blogLocation Advisory ServicesFebruary 25, 2026The Most Overlooked Tax Savings in 2026: Credits and Incentives
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case studiesLocation Advisory ServicesJanuary 7, 2026Indiana Business Relocation Incentives for Healthcare Manufacturer
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webinarsLocation Advisory ServicesDecember 19, 2025Site Selection & Incentives in 2026
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