An online exchange has been launched to facilitate the trading of state tax credits, a development that the exchange's co-founder says will increase the transparency and efficiency of the market in such credits. The Online Incentives Exchange (OIX) is starting with tax credits issued by Louisiana and plans to add credits from two more states, California and Georgia, next month. Eventually it hopes to host trading in the tax credits of all 45 states that allow such transactions.

"Our goal is to bring efficiency to a market that is currently a bit opaque and fragmented," says Danny Bigel, CEO and co-founder of the exchange. "There is currently no visibility in terms of pricing. By definition, transparency will bring efficiency to the marketplace."

States have rolled out a variety of credits to lure business activity, including incentives to relocate, create new jobs or invest. A 2011 study by Good Jobs First estimated state tax credits total $11 billion a year. Bigel says OIX's proprietary database on tax credits shows states issue $10 billion in credits each year, with about $5 billion of those tax credits either tradable or transferrable.