Maine’s business landscape is about to witness a game-changing opportunity for manufacturers with the upcoming launch of the Dirigo Business Incentive Program. With the sunset of the Pine Tree Development Zone program, the Dirigo Business Incentive Program, set to kick off in 2025, is tailor-made to empower businesses in the manufacturing sector with substantial tax credits and strategic advantages. Manufacturers planning to grow their business should consider the following benefits the program has to offer.
Key Benefits for Manufacturers
Capital Investment Credit
One of the standout features of the Dirigo Business Incentive Program is the Capital Investment Credit, which offers refundable tax credits of 5% for investment placed in service in Cumberland, Sagadahoc, and York counties, and 10% for investment placed in service outside of those counties. This financial boost, capped at $500,000 per year for eligible capital investments, is a great opportunity for manufacturers considering expansion, modernization, or new facilities.
Employee Training Program Credit
With the Employee Training Program Credit, businesses can earn a flat $2,000 credit for each worker completing qualified training programs, including apprenticeships. This benefit is designed to promote workforce development and productivity, reduce turnover, and make Maine a more attractive destination for skilled professionals seeking rewarding career opportunities.
Strategic Advantages for Maine’s Manufacturing Sector
The strategic advantages offered by the Dirigo Business Incentive Program are geared towards enhancing the competitiveness of Maine’s manufacturing sector on a national and global scale. By driving significant investment in local communities, creating job opportunities, and lowering operational costs, the program sets the stage for sustainable economic growth.
How to Prepare
Early preparation is key to taking full advantage of the Dirigo Business Incentive Program. Businesses are advised to start planning and consulting with the Department of Economic and Community Development well in advance of the program’s activation in 2025. Applications will be accepted starting July 1, 2024, with approvals effective January 1, 2025. The application process involves providing detailed documentation of investment projects, proof of eligibility, and compliance with program requirements. It’s crucial to be ready with comprehensive information about investment plans, training programs, costs, timelines, and expected outcomes to meet these requirements. Only expenses incurred starting in 2025 will qualify for the credits.
Looking Ahead
The Dirigo Business Incentive Program presents an unparalleled opportunity for the sustainable growth of Maine’s manufacturing. By leveraging the program’s tax credits and strategic advantages, innovative businesses can position themselves for success in the dynamic economic landscape ahead.
For more information on eligibility and application requirements, visit the Maine Office of Business Development’s Dirigio Business Incentives page here. We invite businesses to contact our Manufacturing Team to discuss qualifying investments, timing, and how to maximize the benefits of the Dirigo Business Incentive Program.
by Holly Ferguson, CPA
Holly Ferguson is a principal at ARB and the Practice Leader of the firm’s Accounting & Attest, Manufacturing, and Credit Union Services Teams. She provides industry-specific services for manufacturers, distributors, credit unions, businesses, and nonprofit organizations. Throughout her career, Holly has provided manufacturers with financial reporting consulting services, assisted with transactional accounting and consulting related to business acquisitions/sales, and analyzed implications and strategic implementation of new accounting standards. She is the former Treasurer on the Board of Directors and Finance Committee of the Manufacturers Association of Maine.
