State Tax Incentive Evaluation Ratings

State Tax Incentive Evaluation Ratings

Note: This map was last updated on Aug. 19, 2019 to reflect Montana’s improved rating after the passage of evaluation legislation. It is no longer being kept up to date.

Tax incentives—including credits, exemptions, and deductions—are one of the primary tools that states use to try to create jobs, attract new businesses, and strengthen their economies. Incentives are also major budget commitments, collectively costing states billions of dollars a year.  Given this importance, policymakers across the country increasingly are demanding high-quality information on the results of tax incentives.

Staff members of The Pew Charitable Trusts have assessed each state on the extent to which it has taken three steps to successfully evaluate tax incentives: making a plan, measuring the impact, and informing policy choices. These criteria were selected because they lead to regular, high-quality analyses that lawmakers use to improve the results of the state’s economic development efforts.

These ratings, originally published in May 2017, will be updated as state practices change. For more details on the rating criteria, see Pew’s May 2017 report “How States Are Improving Tax Incentives for Jobs and Growth: A national assessment of evaluation practices.”

Share

Note: Leading states have well-designed plans to regularly evaluate tax incentives, experience producing quality evaluations that rigorously measure economic impact, and a process for informing policy choices. States that are making progress have made a plan by enacting a policy that requires regular evaluation of major tax incentives. Trailing states lack a well-designed plan to regularly evaluate major tax incentives.

Source: Pew analysis based on interviews with state officials and a review of tax incentive evaluations and evaluation statutes

The front facade of the Supreme Court of the United States in Washington, DC.
ian-hutchinson-U8WfiRpsQ7Y-unsplash.jpg_master

Agenda for America

A collection of resources to help federal, state, and local decision-makers set an achievable agenda for all Americans

Quick View

Data-driven policymaking is not just a tool for finding new solutions for emerging challenges, it makes government more effective and better able to serve the public interest. In the coming months, President Joe Biden and the 117th Congress will tackle a number of environmental, health, public safety, and fiscal and economic issues—nearly all of them complicated by the COVID-19 pandemic. To help solve specific, systemic problems in a nonpartisan fashion, Pew has compiled a series of briefings and recommendations based on our research, technical assistance, and advocacy work across America.

Lightbulbs
Lightbulbs

States of Innovation

Data-driven state policy innovations across America

Quick View

Data-driven policymaking is not just a tool for finding new solutions for difficult challenges. When states serve their traditional role as laboratories of innovation, they increase the American people’s confidence that the government they choose—no matter the size—can be effective, responsive, and in the public interest.

Tax Incentives Report
Tax Incentives Report
Report

State Strategies to Help Businesses Launch and Expand

Quick View
Report

State Strategies to Help Businesses Launch and Expand

State governments can undermine opportunities for investment and job creation when businesses spend too much time or money on inefficient regulatory processes, or when new business projects get delayed because firms don’t understand how to comply with the rules. To address this challenge, state policymakers can focus on two types of reforms.

State tax incentives
State tax incentives
Report

Improving Tax Incentives for Jobs and Growth

A national assessment of evaluation practices

Quick View
Report

Tax incentives—including credits, exemptions, and deductions—are one of the primary tools that states use to try to create jobs, attract new businesses, and strengthen their economies. Incentives are also major budget commitments, collectively costing states billions of dollars a year. Given this importance, policymakers across the country increasingly are demanding high-quality information on the results of tax incentives.