Growing companies can unlock valuable credits and incentives to support their strategic expansion or new location projects. 

When a company considers adding new jobs or making new investments in their company, many state and local authorities offer tax incentives to support that growth. However, many companies don’t possess the knowledge or resources to explore all the tax-saving options available. By partnering with an economic credit and incentive specialist, growing companies can maximize their available incentives by leveraging state and local incentives. Companies that avoid or fail to consider the multiple layers of incentive opportunities risk leaving money on the table.

States across the United States offer incentives to help growing companies expand within their boundaries. States often compete for projects, offering incentives to induce a project to increase jobs and make investments in their state versus another. By offering incentives, states provide a short-term “break” on the taxes that would have otherwise been owed, for the long-term goal of “winning” businesses and their lasting establishment or expansion within the state. 

State incentives come in many forms, from corporate income tax credits (the most common form) to wage-withholding refunds to cash grants for job training and upskilling employees. Incentives are complex, often requiring many hoops to jump through. Incentives frequently require applications, supporting documentation, negotiation on incentives, public meetings, and final documentation of the formalized acceptance of incentive benefits. These steps are necessary, and missing a step or making project decisions too early (before incentives are secured) could jeopardize the receipt of incentives. A trusted advisor with expertise in state and local credits and incentives will know how to maximize the incentive benefit from all of these different programs.

Ultimately, most states offer discretionary incentives, meaning they do not have to provide incentives to companies. Navigating all of the options available, and not just taking the first offered program, is how a trusted advisor can ensure no dollars are left on the table. An incentive expert evaluates the different programs available and gauges the scope of a “good” incentive offer and a “not good” incentive offer. This approach to credits and incentives ensures growing companies receive the most valuable incentives for their particular growth project.

Local incentives

Some companies attempt to research incentive programs on their own and feel like they understand the process. A quick internet search of a community’s available incentive programs will likely provide insight into the titles of programs. However, these searches do not give the complete picture of what it takes to achieve these incentives, which include applications, negotiations, timing and the documentation process.

Similarly, established companies often have good relationships with their local community leaders. Chambers of commerce, community festivals and school organization events pull the business community into community activities. As such, business leaders may believe they can have a quick call to secure incentives for their project. This is often not true. A good relationship with a City Council member or the mayor’s office is a valuable connection. However, this relationship does not guarantee the incentive process will be smooth nor effective. Many local incentives must go through multiple rounds of local public meetings, which take time and open the company to public scrutiny. 

Local incentive applications may require additional documentation, and companies may not want to make that documentation public record. Additionally, local communities may require companies to fulfill specific job creation goals, maintain average wage standards, and/or make minimum investments to qualify for incentives. These goals could seem like simple checklist items during the application process. Yet, commitments to goals that are not realistic could lead to the loss of the incentive program or, worse, clawbacks of any received incentive value later down the road.

Further, collaboration on incentives at one level, from state or local officials, does not guarantee that all incentives noted will be offered. Local leaders often do not possess the insight or authority to provide state incentives, therefore they don’t (or unfortunately cannot) help secure those incentives. Similarly, state officials don’t typically support the growth project at the local level, other than nominal letters of support. Additionally, clients must note that incentives are not isolated to city officials and governor’s offices; utility providers may be able to offer discounts and savings for particular growth projects; regional organizations may have funds available to support specific initiatives within their target areas; and higher education systems often have ways of supporting new job training demands that utilize their campuses and resources.

Having a trusted advisor to navigate all of the layers of state and local incentive programs will ensure that growing clients maximize available incentives and don’t leave dollars on the table. Incentive experts will also align available programs with the client’s needs, sifting through programs that may not be as tax effective for a client and negotiating toward programs that deliver the best and highest value. By connecting with an incentive expert early in the growth planning process, growing companies create the best chance of securing the most valuable tax incentives at every level of economic development.

Exchange-traded funds have amassed trillions of dollars by offering investors greater tax efficiency, liquidity and lower costs than mutual funds. Now, a looming regulatory shift is poised to bring the two vehicles closer together — and threatens to complicate the very features that fueled the ETF boom.

The Securities and Exchange Commission is expected to approve applications for dual-share-class structures, perhaps as soon as this summer, allowing managers to add an ETF sleeve to an existing mutual fund. More than 50 firms, including BlackRock Inc. and State Street Corp., are waiting for the regulator’s greenlight to deploy the hybrid structure — made possible after Vanguard Group Inc.’s exclusive patent expired two years ago. 

The two-in-one blueprint is a tantalizing prospect for asset managers looking to break into the ETF market at scale, without having to launch a new strategy from scratch. It also offers a lifeline to firms battered by years of mutual-fund outflows, as investors fled for more tax-efficient alternatives. The hybrid structure famously helped Vanguard save its clients billions in taxes over two decades.

Yet replicating that playbook may prove harder than it looks. Some Wall Street experts caution the shake-up could erode key benefits of the wrapper, especially if hybrid funds face significant withdrawals during market stress. 

“I’ve been in the ETF business for 20 years — we have spent it talking about how great they are at managing capital gains, and I don’t think folks have an appreciation for how more ETFs could potentially end up paying capital gains distributions,” said Brandon Clark, director of ETF business at Federated Hermes, who previously led the ETF capital markets team at Vanguard. 

At the heart of the concern is a tax dynamic that ETFs were built to avoid. These funds rarely pay capital-gains tax distributions, thanks to their in-kind redemption process, which allows the issuer to swap securities with authorized participants rather than sell them outright. 

By contrast, mutual funds redeem in cash, meaning managers may need to sell securities to meet outflows. If those sales generate capital gains, they may distribute them to investors. In a hybrid vehicle, those taxable gains risk getting passed onto ETF shareholders, too. 

“For mutual funds drawing inflows or net zero flows, there should be no issues, but for ones with outflows, there’s a potential risk for the ETF holders,” said Bloomberg Intelligence senior ETF analyst Eric Balchunas, in a note. 

About two-thirds of ETF issuers surveyed by consulting firm Cerulli Associates flagged this spillover issue. There’s precedent. In 2009, a Vanguard fund distributed a 14% capital gain across both share classes, after a large mutual-fund withdrawal, Bloomberg data show. Though rare, the episode underscores the fiscal complications in the event a fund experiences outsized outflows within a shared portfolio.

“The investors that stand to benefit most immediately are the ones that already own the fund, as it can only improve the fund’s tax efficiency,” said Ben Johnson, head of client solutions at Morningstar Inc. 

Wirehouses like UBS Group Inc., which list funds for financial advisers, are studying how this would impact which funds they will offer on their platforms. 

An ETF share class could “run the risk of receiving tax distributions they otherwise wouldn’t have,” said Mustafa Osman, who runs due diligence on funds before they are added to the platform as head of ETF and mutual fund strategy and analytics at UBS. 

The SEC refers to this issue as “cross-subsidization” and has directed applicants to detail how they’ll mitigate it. In response, firms like Dimensional Fund Advisors have amended their applications to detail a governance structure where the fund works with its independent board to determine if the dual structure is beneficial to both shareholders, while monitoring risks like cross-subsidization before and after launch. Among issues that would be considered: cash levels, unrealized gains and losses, and turnover.

Even standalone ETFs are paying out more capital gains more frequently these days, as more products track derivatives or assets that have risen markedly in value. In 2024, roughly 5% of passive ETFs paid out capital gains, the most since 2021, and 12% of active ones did, the highest since 2022, data compiled by Bloomberg show. Those figures are much larger for mutual funds, of course, with more than 50% paying them out last year.

Another complication lies in how the structure would impact the economics of ETF listings on big-name platforms. Cerulli estimates wirehouses and broker-dealer platforms could lose as much as $30 billion in revenue if mutual fund assets shift to ETF share classes in droves.

To stem the loss of revenue, intermediaries could begin to introduce revenue-sharing agreements with ETF issuers, which may ultimately raise costs for investors.

“This trend of trying to recapture some of that revenue that’s been slowly melting from the mutual funds has been in place for ETFs for the last few years,” said Ben Slavin, global head of ETFs at BNY. 

Beyond fees and tax advantages, ETFs famously offer more liquidity than mutual funds — a selling point that may be undermined in some instances, if the two models are combined. According to Cerulli, ETFs that struggle to scale could see wider bid-ask spreads, with costs ultimately passed onto investors. 

All told, this is uncharted territory. Vanguard’s success relied on stable flows, deep relationships with market makers and highly liquid portfolios. Large firms may be able to follow suit smoothly, but smaller managers holding less liquid assets could find the road ahead trickier.

“It’s not evident that authorized participants are ready for a plethora of smaller ETFs as a share class exposures, especially outside the most liquid underlying markets,” Cerulli researchers wrote in a report. 

President Donald Trump is granting pardons to reality television stars Todd and Julie Chrisley, who were convicted of fraud and tax evasion, the latest offer of clemency to prominent figures accused of white-collar crimes.

Trump communications aide Margo Martin posted a video to X showing the president on a call with the Chrisleys’ daughter, Savannah Chrisley, announcing his decision.

“Your parents are going to be free and clean, and I hope we can do it by tomorrow,” Trump said. “I don’t know them but give them my regards and I wish them a good life.”

“I hear they’re terrific people, this should not have happened,” Trump added.

The Chrisleys, who starred in the television show Chrisley Knows Best, were found guilty of conspiring to defraud community banks out of more than $30 million in fraudulent loans. A jury convicted them of conspiracy to commit bank fraud, bank fraud, wire fraud and conspiracy to commit tax evasion. Julie Chrisley was also convicted of obstruction of justice.

The couple’s daughter, Savannah Chrisley, spoke at the Republican National Convention in July 2024, criticizing the Department of Justice under Trump’s predecessor, former President Joe Biden. In February she had lunch at the White House in her bid to help secure a pardon for her family.

Prosecutors said the Chrisleys submitted fake documents to banks when applying for loans and that Julie Chrisley also submitted a false credit report and bank statements when trying to rent a house in California. The couple then used a company they ran to hide income to avoid paying taxes, prosecutors said.

Julie Chrisley was sentenced to seven years in prison, while Todd Chrisley was sentenced to 12 years. The couple was also ordered to pay restitution.

Trump, a former reality star himself, has pardoned a number of people convicted of white-collar offenses, including granting clemency in March to the three co-founders of the storied crypto exchange BitMEX and to Trevor Milton, the founder of Nikola Corp.

Trump has also commuted the sentence of Ozy Media co-founder Carlos Watson, who was convicted over a scheme to con investors out of tens of millions of dollars.