State Tax Credit News Briefs - April 2017

Tuesday, April 4, 2017

Bills were introduced in both houses of the Tennessee Legislature Feb. 9 to create a state historic tax credit (HTC). The two bills parallel the federal HTC, with the state credit worth 25 percent of qualified rehabilitation expenditures beginning with those placed in service Jan. 1, 2017 and later. The credit would be taken in three annual installments and could be carried forward five years. There would be no statewide cap. The bills were assigned to the Senate Commerce and Labor Committee and the House Insurance and Banking Subcommittee.

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A large group of legislators introduced bills in the Alabama Legislature Feb. 28 to revive the state’s HTC that expired last year. The legislation would reinstate the HTC effective Jan. 1, 2018, with a sunset date of Dec. 31, 2028. The HTC would be for 25 percent of qualified rehabilitation expenses with a cap of $5 million for nonresidential properties and $50,000 for residential properties. The annual program cap would be $20 million, with a cumulative cap of $200 million through 2028. The legislation is largely the same as the previous credit, which expired May 2. The major exception is that it is refundable. There were 28 cosponsors in the state Senate and 88 cosponsors in the state House. HB 345 and SB 262 are both posted at www.historictaxcredits.com.

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Four Arkansas state senators introduced SB 253 Feb. 17 to increase the state HTC development cap from $500,000 to $1.6 million for income-producing property, effective July 1. The legislation included an emergency clause to explain the need for the increase, citing this change as creating a more efficient and effective means of issuing and tracking the credits. Arkansas’ $100,000 limit on non-income-producing property would remain in place.

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The Colorado Department of Revenue earlier this year updated its guidance on investment tax credits by simplifying and condensing its publication. The CDOR provides a table that contains a high-level view of the credits, including eligibility, qualifying investments, credit calculation and more. Along with the list is a detailed list of additional resources and CDOR directs taxpayers to additional information regarding the tax credits. Included in the list are federal HTCs and renewable energy tax credits (RETCs). Visit www.colorado.gov to see the table of high-level credit information.

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Effective March 22, the Iowa historic preservation and cultural and entertainment district tax credits will be distributed by the Iowa Economic Development Authority. Previously, the Department of Cultural Affairs (DCA) and Department of Revenue distributed the credits. The authority now administers the tax credit portion of the program, while the DCA reviews the historic components of the project applications. The new rules, Chapter 49 of the Iowa Administrative Code, are based on the DCA’s existing rules, with the authority allowed to establish limits on developer fees that qualify for the credit, as well as an expansion of rules governing the certified public accountant examination required for developments with final qualified rehabilitation expenditures more than $100,000.

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