Incentives relating to companies in the high-tech industry are starting to become the rage regarding new tax incentives. Based on the incentives that states are providing, you can probably get some very substantial benefits for choosing to locate in the right state.

For example, let’s consider Wisconsin and Vermont.

In Wisconsin, for taxable years beginning on or after Jan. 1, 2002, high-technology taxpayers in the eight technology zones that the Department of Commerce may designate can get credits equal to the income, franchise, sales-use and property taxes paid in the taxable year.

The Department of Commerce must certify the taxpayers' eligibility. There is a three-year limit on a taxpayer's use of this credit, which the department can extend to five years in certain cases, and a $5 million limit on total credits in any one zone.

Credits for a partnership, limited liability company, or S corporation are passed onto partners, members or shareholders, as the case may be, in proportion to their ownership interests.

In Vermont, high–tech businesses may request approval of not more than three of the following credits and incentives: the economic advancement payroll tax credit; the economic advancement research and development tax credit; the Vermont export tax incentive; the small business investment credit, but limited to investments in plants and facilities; and the four high-tech credit growth incentives designed specifically for high-tech industries.

The incentives designed specifically for high-tech are, a credit of up to $100,000 per year in an amount equal to 6 percent as determined under the cost–benefit analysis of total investments in Vermont in machinery and equipment, excluding renovation expenses of existing faculties that provide cable, fiber or telecommunications access; a credit up to an amount equal to 6 percent as determined under the cost–benefit analysis of total investments in Vermont in renovation of existing facilities that provide cable, fiber or telecommunications access; a credit equal to that allowed under the work force development incentive tax credit; and an exemption from sales and use taxes for new personal computers and included software packages.

Vermont defines a high–tech business as a business whose activity in Vermont is certified by the commissioner of economic development to be exclusively in the design, development and manufacture of computer hardware and software, and information and communication technologies; electronic devices involving microelectronics, semiconductors, equipment and instrumentation, data and digital communication and imaging devices; medical, dental or surgical devices and equipment, excluding pharmaceutical products; energy technology involving other than fossil fuel energy sources; and electric vehicles, alternative fuel vehicles or hybrid vehicles powered by both consumable fuel and rechargeable energy sources.

While most states are in the process of instituting incentives relating to high-tech businesses, or recently passed legislation relating to high-tech companies, you can see a great deal of thought should be used in deciding on where is the appropriate place to locate a high-tech business.

While we looked at Wisconsin and Vermont, other states such as Hawaii, Maine, New Jersey, New York and North Carolina currently have similar programs.

A great deal of thought should be exercised when deciding where is the right place to locate your high-tech business. There can be some potentially large tax savings and employee benefits if proper planning is done.

Warren B. Lubliner, MST, is director of tax for Mintax, an East Brunswick, N.J.,-based company that specializes in site selection and government incentives for new and expanding businesses. He can be reached at (732) 723-9000.

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A great deal of thought should be exercised when deciding where is the right place to locate your high-tech business. There can be some large potential tax savings and employee benefits if proper planning is