FDI has played an important role in Brazil’s push towards a market oriented economy. From 1995 to 2012, Brazil has received $ 511.5 billion dollars in FDI. In 2012 Brazil was the second largest developing country recipient of FDI and the fourth worldwide (UNCTAD).Due to geographical concentration, Brazilian states which are considerably less developed and poorer, and as a result, in greater need of capital investment, have not played host to FDI in a significant way. In 2010, states with the largest stocks of FDI were São Paulo with 42.3 percent of the total ($ 99.9 billion dollars), Rio de Janeiro with 13,3 percent ($ 31.4 billion dollars) and Minas Gerais with 10,6 percent of the total ($ 25.1 billion dollars). As can be observed, only three of the twenty-seven Brazilian states received around 66 percent of the total FDI intended to Brazil.Given such differentiation in the distribution of FDI among Brazilian states, this study seeks to explain if tax benefit is also a determintant of FDI inflow, besides the other variables already considered as determinant. Given the limitation of data, we performed two econometric analysis with panel data: 1. using six key variables: size of the consumer market, quality of workforce, transportation infrastructure, cost of labor, tax burden and tax benefit (by macro regions), in the years 1995, 2000, 2005 and 2010; 2. using five key variables: the same as the first model, excluding the cost of labor (for lack of data) and using the tax benefit data by state, in the years 2010, 2011 and 2012.