Originally published in State Tax Notes.

Many states have created special treatment for manufacturers, including tax exemptions, credits, and special income tax apportionment rules. In this edition of A Pinch of SALT, we explore the state tax treatment of manufacturers, including their relevance, definitions, and special treatment.


Manufacturing has been woven into the fabric of our economy for centuries, although its predominance has diminished dramatically since the 1960s. In his 2012 State of the Union speech, President Obama discussed the need to ‘‘lay out a blueprint for an economy that is built to last’’ and said ‘‘this blueprint begins with American manufacturing.’’ This renewed focus on manufacturing has put a spotlight on federal and state law, motivating policymakers to stimulate that sector of the U.S. economy.

Manufacturers generally require a significant amount of property in the state, employ numerous workers from all skill levels, and frequently purchase materials from local businesses. Providing incentives to manufacturers to relocate or remain in a state is especially attractive for obvious reasons, including an improved economic climate.

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Topics:  Apportionment, Business Taxes, Income Taxes, Manufacturers, NAICS, Occupancy Tax, Property Tax, Sales & Use Tax, State Taxes, Tangible Property, Tax Credits, Tax Incentives

Published In: General Business Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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