State Tax Credit News Briefs – August 2019

Friday, August 2, 2019

The Colorado Department of Revenue (CDOR) issued guidance June 12 to a taxpayer that was considering a project in a Colorado enterprise zone and that had been precertified to treat certain income tax credits as transferable tax credits. CDOR clarified for the taxpayer that the Enterprise Zone Investment Tax Credit and the Job Growth Incentive Tax Credit are allowed when all statutory qualifications are met. However, the taxpayer had not requested that CDOR apply the statute to its set of facts, so no determination was made whether the taxpayer would qualify for these credits. CDOR indicated that it will accept the Economic Development Commission’s value certification for purposes of auditing a taxpayers’ return, but CDOR retains all other authority to audit a return. Colorado General Information Letter No. PLR-19-001 was dated March 15.

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Illinois S. 689 was effective June 5. The bill provides that, under the Blue Collar Jobs Act, tax credits will be enacted beginning Jan. 1, 2020. Businesses designated as high-impact businesses will qualify for the high-impact business construction jobs credit. Likewise, an Enterprise Zone construction jobs credit is available to a business entity in a certified Enterprise Zone that makes a capital investment of at least $10 million in an Enterprise Zone construction jobs project. New construction EDGE credit means an amount agreed to between the department and the taxpayer that does not exceed 50 percent (75 percent if in an underserved area) of the incremental income tax attributable to new construction EDGE employees at the taxpayer’s project. A River Edge construction jobs credit is available in an amount equal to 50 percent (75 percent if in an underserved area) of the incremental income tax attributable to River Edge construction job employees employed in the course of completing a River Edge construction jobs project. The credit is only available to taxpayers that make a capital investment of at least $1 million in a qualified rehabilitation plan. None of the credits can exceed the taxpayer’s liability, but the excess may be carried forward. The total aggregate amount of credits awarded under the Blue Collar Jobs Act cannot exceed $20 million in any state fiscal year.

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Colorado Gov. Jared Polis signed Colorado H. 1264 June 3. The bill was effective June 30 and extends the Conservation Easement Oversight Commission and the conservation easement certification program until July 1, 2026. The original sunset date was July 1, 2019. The legislation requires the development of proposed statutes and regulations for an alternate method to the appraisal process in certifying the amount of tax credits for which a qualified conservation easement contribution would be eligible. In addition, the bill establishes a process to provide and develop eligibility criteria for retroactive credits, payments or refunds to taxpayers who claimed credits that were denied between Jan. 1, 2000, and Dec. 31, 2013. Beginning Jan. 1, 2020, a property owner who is granting a conservation easement must execute a disclosure form acknowledging that the easement is being granted in perpetuity. The credit is subject to a credit cap of $5 million (previously $1.5 million) per donation.

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New Jersey S. 3599 was effective June 30 and modifies neighborhood revitalization tax credit. The bill increases the amount of tax credits that may be annually awarded to $15 million, as well as amending the definition of an eligible neighborhood. The law also reduces the period of time in which a business entity is required to provide program funding from 60 days to 30 days following the receipt of a tax credit certification; reduces the period of time in which a business entity may request a payment extension from 15 days to seven days before the payment due date; and increases the application fee that may be imposed by the Department of Community Affairs to support the administrative costs of the program.

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