The best strategy in luring incentives and tax credits is to play it cool.

“Don’t make any kind of a public announcement, don’t start construction, don’t purchase a building,” warned Christine Bustamante, Ohio-based principal, global location and expansion services, state and local tax, during KPMG Global Energy Institute’s recent webcast offering guidance on tax developments affecting the oil and gas industries.

“Buying the land is a little bit iffy,” she said. “Sometimes you can get away with buying the land and still have some leverage relative to the negotiation for incentives, but generally we’re going to suggest that you avoid anything that indicates that you’ve selected your site and you’re moving forward with the project.”

Bustamante’s formula for success is a simple one: “Capital spending plus jobs equals an economic development project.”

Everything from the purchase of the property to the purchase of office supplies to the purchase of popcorn by new employees when they go to the local cinema translates into economic development in the eyes of a local government.

In this case, when the government comes after you, let it.

Your strategy begins with your own budget planning. “Obviously, any type of a new investment that’s being planned or new facility that’s being planned should definitely be a trigger for the possibility of incentives and credits,” Bustamante said. “If there’s going to be job creation or in some instances job retention, that’s also something that could signal incentives and credits.”

“When we talk about incentives, these are always going to be prospective,” Bustamante said. “Incentives are designed to encourage investment, job creation and job retention in state and local areas. They are always going to require some type of upfront negotiation with state and local government officials.”

On the federal side, John Gimigliano, KPMG LLP’s principal in charge of U.S. federal legislative and regulatory services, warns that the oil and gas industry should not be complacent about tax legislation under consideration on Capitol Hill.

Gimigliano pointed to three areas of legislation that warrant attention:

  • Tax inversion, an issue that gathered more steam recently with Burger King’s plan to purchase Tim Horton’s and move operations to lower-tax Canada;
  • Tax extenders, the issue that is most likely to see congressional action, he believes; and
  • Tax reform, an issue that is slowly gaining traction.

A number of bills have been introduced by Democratic lawmakers, including one by Sen. Carl Levin (D-Mich.). Levin’s Stop Corporate Inversions Act of 2014 is designed to discourage U.S. companies from merging with foreign companies and avoid paying taxes on overseas earnings. Among other aspects of the bill, Levin wants to increase the required U.S. stock ownership from 20% to 50% for the company to continue to be treated as a domestic entity.

“It’s not impossible that Congress could act,” said Gimigliano in an admonishment to industry cynics. “That both Democrats and Republicans are talking about it opens that possibility.”

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