State governments across the country have enacted significant expansions to their business incentive programs in early 2025, with Illinois, South Carolina, and Colorado leading the way with enhanced tax credits, expanded eligibility criteria, and new grant programs targeting specific economic development goals.
Illinois: Enhanced EDGE Program and Comprehensive Incentive Overhaul
Illinois enacted what state officials are calling "2025 Enhanced Incentives"âa comprehensive suite of legislative changes reinforcing the state's commitment to job creation and capital investment. The centerpiece of these reforms is a significant expansion of the Economic Development for a Growing Economy (EDGE) Tax Credit Program.
Extended EDGE Tax Credits
The EDGE program, which provides corporate income tax and withholding tax credits to qualifying businesses, received substantial enhancements:
Key EDGE Program Changes
- Extended credit period: Tax credits now available for up to 15 years (increased from 10 years)
- Target projects: Large-scale developments with over $50 million in investment and 100+ employees
- Credit types: Tier I credits for corporate income taxes; Tier II credits for withholding taxes
- Goal: Support major job creation and capital investment projects
Industry-Specific Incentives
Illinois also enhanced targeted programs for emerging industries:
- MICRO Act: Incentives for semiconductor manufacturing and research
- REV Program: Support for electric vehicle production and renewable energy projects
- Quantum Computing Campus: New incentives to attract quantum computing facilities
- Prime Sites Grant: Additional funding for designated development-ready sites
Workforce Development Support
The state also committed continued funding for workforce training programs, including:
- Manufacturing Training Academies (MTAs)
- Employer Training Investment Program (ETIP)
- Economic Development Closing Fund for deal-specific support
According to state economic development officials, these "2025 Enhanced Incentives" underscore Governor Pritzker's dedication to making Illinois "the premier destination for business innovation and growth."
South Carolina: Expanded Tax Credits for Economic Development
South Carolina enacted multiple tax credit enhancements in 2024 that took effect for income tax years beginning after 2023, significantly expanding the state's economic development toolkit.
Corporate Headquarters Credit Becomes More Accessible
The state made it substantially easier for companies to qualify for the Corporate Headquarters Tax Credit:
- Reduced job threshold: Minimum new full-time jobs requirement dropped from 75 to 40
- Remote work recognition: Remote and hybrid employees now eligible if they are South Carolina residents
- Expanded tax types: Credit can now be applied against additional tax categories
- Effective date: Income tax years after 2023
Qualified Recycling Facility Tax Credits
In response to growth in circular economy industries, South Carolina significantly expanded recycling facility incentives:
Recycling Facility Credit Details
- Reduced minimum investment: Capital investment threshold lowered from $300 million to $150 million
- Expanded eligible products: Now includes recycling of batteries, solar panels, and wind turbines
- Credit rate: 30% income or corporate license fee tax credit
- Strategic focus: Supports clean energy infrastructure recycling
Job Development Credits Modernized
South Carolina updated its Job Development Credit (JDC) program to reflect modern work arrangements:
- Regional remote workers: Remote employees from South Carolina, North Carolina, or Georgia now eligible if subject to South Carolina withholdings
- High-wage exception: Companies leasing property (rather than making capital investments) can now qualify by creating just 25 new jobsâif those jobs pay more than 2.5 times the county per capita income
- Retroactive application: Changes apply retroactively to income tax years after 2020
Enhanced Workforce Training Support
Two programs received significant expansions for workforce development:
Retraining Credit
- Now includes warehouse and distribution facilities
- Expanded list of eligible retraining costs
- Requires $1 spent on actual training per $1 claimed in credit
- Training programs must receive State Board approval
Apprenticeship Income Tax Credit
- Up to $4,000 per apprentice (or $6,000 for youth apprentices)
- Additional $1,000 credit per apprentice for up to three additional years
- Employers can choose the greater of cost-based or per-apprentice credit
- Effective May 21, 2024
Colorado: Rural Jump-Start Operating Grants Launch
On March 25, 2025, Governor Jared Polis and the Colorado Office of Economic Development and International Trade (OEDIT) announced a new three-year Rural Jump-Start Operating Grant program designed to support business development in economically distressed rural areas.
Program Structure
The Colorado Economic Development Commission approved $630,000 in grant funding, available through June 30, 2028, or until funds are exhausted. The program builds on the existing Rural Jump-Start tax incentive program, which has been operating since 2016.
Rural Jump-Start Grant Details
- Standard grant: Up to $15,000 for businesses in Rural Jump-Start zones
- Enhanced grant: Up to $25,000 for businesses in coal transition communities (Tier 1 Just Transition areas)
- Expected impact: Support for approximately 36 businesses and 120+ new jobs over three years
- County cap: Maximum of 3 new grant awards per county (to be re-evaluated in January 2027)
Comprehensive Tax Benefits
Beyond the operating grants, businesses in Rural Jump-Start zones receive significant tax relief:
- State income tax relief
- State sales and use tax exemptions
- County personal property tax relief
- Municipal personal property tax relief
- State income tax relief for Qualified New Hires
New Hire Requirements
While the separate New Hire grant has been discontinued, businesses will receive the final $5,000 of their grant award only after they have created and maintained a New Hire job for at least one year, ensuring job creation goals are met.
Geographic Coverage
Currently, 35 Colorado counties are approved as Rural Jump-Start zones, and 33 companies are actively participating in the program. The tax benefits are available through December 31, 2030, while grant applications will be accepted through June 30, 2028.
Governor Polis emphasized the importance of the program: "Colorado is committed to supporting the small businesses that drive our economy." OEDIT Executive Director Eve Lieberman added, "Companies in rural Colorado are creating incredible new technologies," highlighting the innovation happening outside urban areas.
Common Themes Across State Initiatives
Several trends emerge from these state policy changes:
1. Recognition of Remote Work
Both Illinois and South Carolina have updated their incentive programs to acknowledge remote and hybrid work arrangements, ensuring that job creation credits don't inadvertently exclude modern workforce structures.
2. Focus on Emerging Industries
States are targeting specific growth sectorsâIllinois with semiconductors and quantum computing, South Carolina with clean energy recyclingârather than maintaining purely sector-neutral incentive programs.
3. Rural Economic Development
Colorado's Rural Jump-Start program reflects a broader national trend of states directing incentives toward economically distressed rural areas, often with enhanced benefits in communities facing industrial transitions (such as coal-dependent regions).
4. Workforce Development Integration
All three states have expanded workforce training incentives, recognizing that attracting business investment requires ensuring an adequate supply of skilled workers.
5. Lower Barriers to Entry
Multiple programs have reduced minimum job creation and investment thresholds (South Carolina's Corporate Headquarters credit, Qualified Recycling credit) to make incentives accessible to a broader range of companies.
Looking Ahead
The early months of 2025 demonstrate that states continue to view business incentives as critical tools for economic development. The sophistication of these programsâwith targeted industry focus, recognition of modern work arrangements, and integration of workforce developmentâreflects states' growing expertise in economic development policy.
Companies planning expansions should carefully evaluate how these new and enhanced programs align with their business models, growth plans, and location preferences. With significant variations in eligibility criteria, benefit levels, and strategic focus across states, professional site selection and incentive negotiation expertise can be valuable in maximizing available benefits.
As state legislatures continue their 2025 sessions, additional incentive program changes are likely. Business Incentives Network will continue monitoring state policy developments and updating our comprehensive incentive database to help companies navigate this complex landscape.
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