This brief summarizes ten best practices the PFM and Smart Incentives team identified from dozens of state incentive evaluations conducted since 2020. The practices: incentives should be targeted (for example, to exporters or high-impact companies); discretionary, usually through an application process; structured to leverage private capital at several multiples of the public investment; concentrated in the first one to three years with limited duration to prevent the incentive from becoming a subsidy; aligned with a location’s economic development strategy; built on clear, measurable goals; transparent in purpose, eligibility, and reporting; accountable, often through pay-for-performance and claw-back provisions; capped to protect fiscal health; and simple enough to administer and comply with. The authors note these practices may need to be weighed against one another — for instance, reporting requirements can reduce simplicity — and observe that states alone offer more than 2,000 incentive programs costing billions, which is driving more governments to evaluate their portfolios rigorously.