Take Advantage of Tax-Incentive ProgramsReduce taxes by expanding or moving to a tax-friendly area.

One of the best ways to reduce taxes is to take advantage oftax-incentive programs being offered to businesses by many stateand local governments. With one hand, states and localities aretaking money from businesses in the form of taxes. But with theother, they're often willing to give it back as a part of atax-incentive or credit program. Therefore, it pays to thoroughlyinvestigate whether your business qualifies for any of thesespecial tax-incentive programs.

This strategy works really well if you're relocating orplanning to expand your business, says Joe W. Neff, partner incharge of state tax consulting at PricewaterhouseCoopers in LosAngeles.

John Logan, senior state tax analyst with CCH Inc., a providerof tax and business law information in Riverwoods, Illinois, agreesand adds that "states have been in a contest to see which onescan provide businesses locating within their boundaries with themost attractive incentives."

To find out about similar programs in other states, check outindividual states' Web sites.