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State Briefs

On March 13, Virginia Gov. Terry McAuliffe approved Senate Bills 963 and 1328. Both bills are effective July 1. Virginia SB 963 extends the $20,000 limitation on the amount of land preservation tax credits that a taxpayer may claim per taxable year to taxable year 2017. The bill increases the tax credit cap to $50,000 for taxable year 2018 and thereafter. Previously, the $50,000 limitation increase was for tax years 2017 and after. SB 1328 amends the definitions of “qualified zone improvements” and “qualified real property investment” for purposes of the enterprise zone grants and tax credits. The bill provides that expenditures for an improvement to real property may qualify for a grant or tax credit regardless of whether it is capitalized or deducted as a business expense under federal Treasury regulations.

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Utah Gov. Gary Herbert signed Senate Bill 164 into law March 23. The bill modifies provisions related to the Governor’s Office of Economic Development. Specifically, when the office is making rules establishing the requirements for a business entity or local government entity to qualify for a tax credit for a new commercial project in a development zone, the office must require that the new commercial project include the creation of high-paying jobs in the state, significant capital investment in the state or significant purchases from vendors, contractors or service providers in the state, or a combination thereof. S.B. 164 is effective May 9.

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Mississippi Gov. Phil Bryant approved March 13 House Bill 710. The bill extends the repeal date of the credit for qualified community development equity investments from Jan. 1, 2018, to Jan. 1, 2020. The bill also provides that the Mississippi Development Authority will not allocate any credits after Jan. 1, 2020. Mississippi H.B. 710 will be effective July 1.

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The Nebraska Department of Revenue issued March 7 a general information letter relating to tax credits under the Nebraska Job Creation and Mainstreet Revitalization Act. The letter addresses whether a new member admitted into a pass-through entity a year after the entity places historically significant real property into service can use the “Type B” Nebraska Historic Tax Credits against the member’s personal tax liability. The department stated that the member could not use the credits, because, unlike “Type A” credits, there is no carryback provision in the law for members that did not have an ownership interest in the entity when the historically significant real property was placed into service. 

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Mississippi S.B. 2474 was signed into law March 13. The bill extends the repeal date to Oct. 1, 2022, for the Mississippi Business Finance Corporation’s (MBFC) revenue bond service credit. The bill enacts statutes that provide for the issuance of bonds in order to finance economic development projects, which induce the location or expansion of certain businesses in Mississippi. In addition, the bill enacted the statute which allows for a credit against Mississippi income taxes for certain companies for debt service paid by those companies under financing agreements entered into with the MBFC. S.B. 2474 will be effective July 1.

Journal Category:

State Tax Credits

Authors:

Novogradac

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