Governments often use tax incentives to encourage business behaviors that otherwise would not take place. The incentives target the needs of the government’s jurisdiction to encourage behaviors like job growth, research and development, capital investment, sustainability, and job training. This research aims to investigate the core motivations for incentive decisions, to gauge how successful tax incentives are at achieving their goals, and to explore how governments may improve the efficacy of their incentive decisions. The research into these questions was done through reviewing the academic literature, studying professional reports of political groups, and analyzing current examples of incentive projects. Finally, this research concludes with a case study into the Ames business and incentive environments that included interviews from prominent local business people to assess the use of tax incentives are used in the community.