Alabama Proposed |
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| Program | New Markets Development Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes that has entered into an allocation agreement with the CDFI Fund pursuant to which Alabama is included in the CDE's service area. |
| Annual State CAP limits | 12,000,000 |
| Transaction CAP limits | |
| What is the credit | 50 percent of the taxpayer's equity investment |
| How is the credit claimed | Years 1-4: 8%, Year 5: 7%, Year 6: 6%, and Year 7: 5% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | Same as federal |
| Recapture | The following events cause recapture: 1) the federal new market tax credits associated with a QEI are recaptured (recapture amount proportionate to the federal recapture); 2) the CDE redeems or makes a principal payment with respect to a QEI prior to the 7th anniversary of a QEI (recapture amount proportionate to the amount of redemption or repayment); and 3) the CDE fails to invest 85% of a QEI within 12 months and maintain such level of investment until the last credit allowance date for such QEI (recapture amount equal to all credits claimed); 12 month reinvestment period permitted. 90 day cure period for recapture after notice from the Department of Revenue. |
| Other | |
| Contact | |
California Proposed |
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| Program | New Markets Tax Credit |
| Proposed Legislation | Click here |
| CDE Application Process | Same as federal |
| Annual State CAP limits | $50 million |
| Transaction CAP limits | |
| What is the credit | 39 percent of the purchase price of the qualified investment |
| How is the credit claimed | Years 1-3: 5%, Years 4-7: 6% |
| Credit period (compliance) | |
| QALICB requirements | "Qualified active low-income community business" means, with respect to any taxable year, a corporation, including a nonprofit corporation, or partnership that, for that taxable year, meets all of the following conditions: (i) Derives at least 50 percent of its total gross income from the active conduct of a qualified business in a low-income community. (ii) A substantial portion of the use of the tangible property of the entity, whether owned or leased, is within a low-income community. "Substantial portion" shall be defined as 40 percent or more of the tangible property of the entity. (iii) Less than 5 percent of the average of the aggregate unadjusted base of the property of the entity is attributable to collectibles. |
| Recapture | A "recapture event" shall include any of the following with respect to an equity investment in a qualified community development entity: (1) The qualified community development entity ceases to be a qualified community development entity. (2) The proceeds of the investment cease to be used as required under clause (ii) of subparagraph (A) of paragraph (7) of subdivision (b). (3) The investment is redeemed by a qualified community development entity. |
| Other | |
| Contact | |
Connecticut |
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| Program | Urban and Industrial Sites Reinvestment Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Must submit an application to be registered and shall have its primary place of business in this state |
| Annual State CAP limits | 500,000,000 |
| Transaction CAP limits | Amount of investment shall not exceed the greater of: (a) the amount of state revenue that will be generated or (b) the total of state revenue and local revenue generated. The tax credits generated to a single investment can not exceed 100,000,000 |
| What is the credit | |
| How is the credit claimed | Years 1-3: 0%, Years 4-7: 10%, and Year 8-10: 20% |
| Credit period (compliance) | |
| QALICB requirements | Investment must be made into an eligible industrial site investment project or an urban reinvestment project, as defined |
| Recapture | Any taxpayer which has claimed credits allowed under this program to an investment where the commissioner has revoked the certificate of eligibility shall be required to recapture such taxpayer's prorate share of the recapture amount, as defined, and no subsequent credit shall be allowed |
| Other | 1) Must submit a report each year by March 1 to the state with transaction data 2) Tax credits can be transferred |
| Contact | Robert Rigney |
Florida |
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| Program | New Markets Development Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes and needs to be authorized to serve businesses in Florida. Need to submit an application to the office to approve a proposed investment as a qualified investment. The qualified community development entity must issue the qualified investment in exchange for cash within 60 days after it receives the order approving an investment as a qualified investment, otherwise the order is void. |
| Annual State CAP limits | 20,000,000 |
| Transaction CAP limits | A qualified active low income community business may not receive more than 10,000,000 in qualified low income community investments under this program |
| What is the credit | 39 percent of the purchase price of the qualified investment |
| How is the credit claimed | Years 1-2: 0%, Year 3: 7%, and Years 4-7: 8% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | (1) Derives at least 50 percent of its total gross income from the active conduct of business within any low-income community for any taxable year. (2) Uses at least 40 percent of its tangible property, whether owned or leased, within any low income community for any taxable year, which percentage shall be the average value of the tangible property owned or leased and used within a low-income community by the corporation or partnership divided by the average value of the total tangible property owned or leased and used by the corporation or partnership during the taxable year. The value assigned to leased property by the corporation or partnership must be reasonable. (3) Performs at least 40 percent of its services through its employees in a low-income community for any taxable year, which percentage shall be the amount paid by the corporation or partnership for salaries, wages, and benefits to employees in a low-income community divided by the total amount paid by the corporation or partnership for salaries, wages, and benefits during the taxable year. (4) Attributes less than 5 percent of the average of the aggregate unadjusted bases of the property of the entity to collectibles, as defined in 26 U.S.C. s. 408(m)(2), other than collectibles that are held primarily for sale to customers in the ordinary course of the business for any taxable year. (5) Attributes less than 5 percent of the average of the aggregate unadjusted bases of the property of the entity to nonqualified financial property, as defined in 26 U.S.C. s. 1397C(e), for any taxable year. Will create or retain jobs that pay an average wage of at least 115 percent of the federal poverty income guidelines for a family of four. |
| Recapture | The following events cause recapture: 1) all the same events that cause a recapture at the federal level, 2) the Federal new market tax credits get recaptured, 3) the CDE fails to provide the office with information, reports, or documentation required by the New Markets Development Program Act, 4) the office determines that a taxpayer received tax credits to which the taxpayer was not entitled, 5) If the CDE fails to maintain 85% of the QLICIs in the State of Florida, 6) The qualified community development entity fails to invest at least 85 percent of the purchase price in qualified low-income community investments within 12 months after the issuance of a qualified investment or 7) The qualified community development entity fails to maintain 85 percent of the purchase price in qualified low-income community investments until the last credit allowance date for a qualified investment (note that the statute does not include a 6 month cure period for (6) or (7)).
The office shall provide notice to the qualified community development entity and the department of a proposed recapture of a tax credit. The entity shall have 6 months following the receipt of the notice to cure a deficiency identified in the notice and avoid recapture. The office shall issue a final order of recapture if the entity fails to cure a deficiency within the 6-month period. The final order of recapture shall be provided to the entity, the department, and a taxpayer otherwise authorized to claim the tax credit. Only one correction is permitted for each qualified equity investment during the 7-year credit period. Recaptured funds shall be deposited into the General Revenue Fund. |
| Other | 1) Qualified investment into CDE can be an equity investment or a long-term debt security instrument (and in the case of a long-term debt security QI, “a qualified community development entity may not make cash interest payments on a long-term debt security that is a qualified investment in excess of the entity’s operating income for 6 years following the issuance of the security). |
| Contact | Karl Blischke |
Kentucky |
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| Program | New Markets Development Program |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes with a service area including the Commonwealth of Kentucky. Needs to have entered into an allocation agreement with the CDFI Fund. An application also needs to be submitted to the state. |
| Annual State CAP limits | 5,000,000 in tax credits per year |
| Transaction CAP limits | The maximum amount of QLICIs that may be made to a QALICB and all of its affiliates with the proceeds of a QEI shall be $10 million |
| What is the credit | 39 percent of the purchase price of the qualified investment |
| How is the credit claimed | Years 1-2: 0%, Year 3: 7%, Years 4-7: 8% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | Same as federal requirements, except as noted below |
| Recapture | The following events cause recapture: 1) the CDE makes a principal repayment with respect to a QEI before the 7 year credit period, 2) the Federal new market tax credits get recaptured and 3) the CDE fails to invest 85% of the QEI into a QLICI within 12 months of the issuance of a QEI and maintain the same level of investment in QLICIs until the end of the 7 year credit period |
| Other | 1) Any business that derives or expects to derive 15% or more of its annual revenue from the rental or sale of real estate is not considered a QALICB, except this restriction does not apply to a business that is controlled by or under common control with another business if the second business (i) does not derive or expects to derive 15% or more of its annual revenue from the rental or sale of real estate, and (ii) is the primary tenant of the real estate leased from the initial business. 2) Tax credits can be carried forward |
Contact |
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Louisiana Inactive |
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| Program | New Markets Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes and an application needs to be submitted to the state |
| Annual State CAP limits | 25,000,000 |
| Transaction CAP limits | The maximum amount that may be issued by a single business shall not exceed 7,500,000 |
| What is the credit | 25 percent of the purchase price of the qualified equity investment |
| How is the credit claimed | Years 1-2: 10% and Year 3: 5% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | Same as federal requirements |
| Recapture | The following events cause recapture: 1) all the same events that cause a recapture at the federal level and 2) the Federal new market tax credits get recaptured |
| Other | 1) The tax credit can be carried forward for 10 years 2) Tax credits can be transferred |
| Contact | Department of Revenue |
Maine |
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| Program | New Markets Capital Investment Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes and an application needs to be submitted to the state |
| Annual State CAP limits | |
| Transaction CAP limits | |
| What is the credit | 39 percent of the purchase price of the qualified equity investment |
| How is the credit claimed | Year 3: 7% and Years 4-7: 8% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | Same as federal requirements |
| Recapture | The bureau may recapture all of the credit allowed under this section if any amount of federal tax credits available with respect to a qualified equity investment that is eligible for a tax credit under this section is recaptured under Section 45D of the Code. |
| Other | |
| Contact |
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Mississippi |
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| Program | Equity Investment Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes and an application needs to be submitted to the state |
| Annual State CAP limits | 15,000,000 |
| Transaction CAP limits | The maximum amount that may be issued by a single business shall not exceed 10,000,000 |
| What is the credit | 24 percent of the purchase price of the qualified equity investment |
| How is the credit claimed | Years 1-3: 8% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | Same as federal requirements |
| Recapture | The following events cause recapture: 1) all the same events that cause a recapture at the federal level and 2) the Federal new market tax credits get recaptured |
| Other | 1) The tax credit can be carried forward for 7 years |
| Contact | Billy Klauser |
Missouri Inactive |
|
| Program | New Markets Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes |
| Annual State CAP limits | |
| Transaction CAP limits | The maximum amount that may be issued by a single business shall not exceed 10,000,000 |
| What is the credit | 39 percent of the purchase price of the qualified investment |
| How is the credit claimed | Years 1-2: 0%, Year 3: 7%, and Years 4-7: 8% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | Same as federal requirements |
| Recapture | The following events cause recapture: 1) the issuer redeems or makes principal repayments with respect to a qualified equity investment prior to the seventh anniversary and 2) the Federal new market tax credits get recaptured |
| Other | 1) Any business that derives or expects to derive 15% or more of its annual revenue from the rental or sale of real estate is not considered a QALICB 2) Qualified investment into CDE can be an equity investment or a long-term debt security instrument |
| Contact | Department of Economic Development (573) 751-4539 |
Ohio |
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| Program | New Markets Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes with a service area including any portion of the State of Ohio. Needs to have entered into an allocation agreement with the CDFI Fund. |
| Annual State CAP limits | 10,000,000 |
| Transaction CAP limits | The maximum QLICI amount per QALICB group, determined on the basis of majority ownership or control, of $2,564,000 |
| What is the credit | 39 percent of the adjusted purchase price of the qualified investment |
| How is the credit claimed | Years 1-2: 0%, Year 3: 7%, and Years 4-7: 8% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | Similar to federal requirements. Excludes businesses that derives or expects to derive 15% or more of its annual revenue from rental or sale of real property, except SPE's principally owned by a principal user of the property which is formed solely for the purpose of renting or selling the real property back to such principal user if the principal user does not derive 15% or more of its gross annual revenue from the rental or sale of real property. |
| Recapture | The following events cause recapture: 1) all the same events that cause a recapture at the federal level; or 2) the Ohio Director of Development determines that an investment is not a QEI or that the proceeds of an investment for which a tax credit is claimed are used to make QLICIs other than in QALICBs. The Director of Development shall adopt rules to determin the amount to be recovered. |
| Other | 1) The tax credit can be carried forward for 4 years 2) Tax credits can be transferred as QEIs are transferred 3) Credit only applies against state franchise tax payable by domestic insurance companies and financial institutions, as well as certain taxes imposed on foreign insurance companies 4) A state QEI must be designated by a CDE as a federal QEI as well 5) Only applies to QEIs made after January 1, 2010 |
| Contact | Department of Development, Urban Development Division (614) 995-2292 |
Oklahoma Inactive |
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| Program | Small Business Capital Formation Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes |
| Annual State CAP limits | |
| Transaction CAP limits | The minimum amount that may be issued by a single business shall not be less than 1,000,000 |
| What is the credit | Credit is 20% of the cash amount invested |
| How is the credit claimed | Credit is 20% of the cash amount invested |
| Credit period (compliance) | 5 years |
| QALICB requirements | Investments made by qualified small business capital companies investing funds in Oklahoma small business venture |
| Recapture | The following events cause recapture: 1) the small business venture fails to expend at least 50% of the proceeds of qualified investments within 18 months after the qualified investment was made and 2) the investment in the small business venture is transferred, withdrawn, or otherwise returned within 5 years; provided, a "recapture event" shall not include the transfer, withdrawal, or return of an investment as a result of a "market-based liquidity event" |
| Other | 1) The tax credit can be carried forward for 10 years |
| Contact | Oklahoma Tax Commission (405) 815-5262 |
Oregon |
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| Program | Low Income Community Jobs Initiative |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes with a service area including any portion of the State of Oregon. Needs to have entered into an allocation agreement with the CDFI Fund. An application also needs to be submitted to the state. |
| Annual State CAP limits | 16,000,000 |
| Transaction CAP limits | The maximum amount of QLICIs that may be made to a QALICB and all of its affiliates with the proceeds of a QEI shall be $4 million |
| What is the credit | 39 percent of the purchase price of the qualified investment |
| How is the credit claimed | Years 1-2: 0%, Year 3: 7%, Years 4-7: 8% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | Same as IRC 45D |
| Recapture | The following events cause recapture: 1) the CDE makes a principal repayment with respect to a QEI before the 7 year credit period, 2) the Federal new market tax credits get recaptured and 3) the CDE fails to invest 85% of the QEI into a QLICI within 12 months of the issuance of a QEI and maintain the same level of investment in QLICIs until the end of the 7 year credit period |
| Other | 1) Fifteen percent of the total qualified equity investments is set aside for investments in QALICBs that improve the environment. |
| Contact | |
Texas |
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| Program | Certified Capital Company Program |
| Enacting Legislation | Click here |
| CDE Application Process | Becoming a CAPCO can be a difficult and time consuming process. Here are a few of the requirements: 1) A completed Application for Certification on a form provided by the Comptroller; 2)A nonrefundable application fee of $7,500; 3) An audited balance sheet with an unqualified opinion from an independent certified public accountant; 4) Additionally, a Statement of Auditing Standard No. 61 communications provided by the auditor, as of a date not more than 35 days before the date of application; 5) Documentation that the prospective CAPCO is duly organized and qualified to do business in Texas; 6) Evidence of an equity capitalization of at least $500,000 in the form of unencumbered cash or cash equivalents; 7) Evidence that at least two principals or persons employed or engaged to manage the funds of the applicant have at least four years of experience in the venture capital industry. |
| Annual State CAP limits | |
| Transaction CAP limits | |
| What is the credit | A single insurance company may claim and invest a maximum of 15 percent of the total tax credit allocation amount. |
| How is the credit claimed | For Program One, tax credits may be taken in 2009 for tax year 2008. For Program Two, the credits may be taken in 2013 for tax year 2012. |
| Credit period (compliance) | |
| QALICB requirements | A qualified business is one that, at the time of a CAPCO's first investment in the business: Is headquartered in Texas; has no more than 100 employees and pays at least 80 percent of its payroll to employees residing in Texas; and is primarily engaged in manufacturing, processing, or assembling products, conducting research & development or providing services. A qualified business cannot be primarily engaged in any of the following: retail sales; real estate development; business of insurance, banking, or lending; or professional services. |
| Recapture | |
| Other |
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| Contact | Texas Treasury Safekeeping Company |
Wisconsin Proposed |
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| Program | New Markets Tax Credit |
| Enacting Legislation | Click here |
| CDE Application Process | Needs to be a CDE for federal purposes with a service area including any portion of the State of Wisconsin. Needs to have entered into an allocation agreement with the CDFI Fund. An application also needs to be submitted to the state. |
| Annual State CAP limits | |
| Transaction CAP limits | |
| What is the credit | 39 percent of the purchase price of the qualified investment |
| How is the credit claimed | Years 1-3: 5%, Years 3-7: 6% |
| Credit period (compliance) | 7 years (same as federal) |
| QALICB requirements | |
| Recapture | |
| Other | 1) If a claimant transfers an interest in a partnership, limited liability company, or tax-option corporation after the first credit allowance date but before the final credit allowance date, the claimant shall be entitled to claim the credit for the remaining credit allowance dates by filing a written agreement with the return that specifies that the claimant, not the transferee, is the person entitled to claim the credit. 2) Tax credits can be carried forward for 15 years |
| Contact | |