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State Tax Credit News Briefs - July 2017

Georgia House Bill 73 (Act 205) was effective May 8. The bill amends the Official Code of Georgia Annotated, to provide a tax credit to certified entities and investors that promote the revitalization of vacant rural Georgia downtowns through investment, job creation and economic growth in long-established business districts. The bill is applicable to all taxable years beginning with 2018. A business that establishes a new location or expands its operations in the revitalization zone on or after Jan. 1, 2018, and creates at least two full-time equivalent jobs will be eligible for a tax credit of $2,000 per full-time job created with a maximum of $40,000 per taxable year. An investor that develops a property inside the revitalization zone will receive a tax credit of 25 percent of the investment property purchase price, not to exceed $125,000 as long as an eligible business is located in the property and maintains at least two full-time jobs. Both an investor and an existing business can get a rehabilitation tax credit for 50 percent of the qualified expenditures, not to exceed $75,000. All tax credits are for five-year periods, and have to be prorated over the five-year period. The credit is sunsets Dec. 31, 2027.

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Tennessee House Bill 844 was signed into law and effective May 2. The bill provides that the commissioner of revenue will report annually to the members of the Finance and Ways and Means Committees of the Senate and the House of Representatives. The report will list the number of taxpayers claiming the franchise and excise tax industrial machinery credit, the total amount of credit claimed, the number of jobs created during the fiscal year as reported by the taxpayer, if the credit is awarded based on jobs created, the total amount of credit carried forward from a prior tax year and the nature of business of the taxpayers claiming the credit. The commissioner will report no later than Jan. 1, 2018, and by Jan. 1 of each subsequent year for tax periods ending during the previous fiscal year. 

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The Virginia State Board of Social Services approved amended regulation 22 VAC Section 40-41-30 for the allocation of neighborhood assistance tax credits, effective June 15. The section now reads that in any years where the available tax credits exceed the prior year’s available credit, the excess will be allocated to organizations that did not receive allocations in the preceding year. In addition, if the amount of credits requested by organizations not receiving allocations in the preceding year is less than 10 percent of the excess, then the unallocated portion will be allocated to other approved organizations. The amendment was introduced to conform to the new legislative language of the Code of Virginia regarding excess credits.

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Iowa Senate Bill 488 amends the workforce housing tax incentives program. The bill is effective July 1 and requires allocations to certain housing developments in small cities and increasing the allowable average apartment cost and the percentage of investment for tax incentives for these developments. To receive workforce housing tax incentives, a proposed housing development in a small city must have two or more single-family dwellings and include development at a greenfield site. A small city is any city or township located in Iowa, except those located within the 11 most populous counties in the state. A housing business may claim a tax credit in an amount not to exceed 20 percent of the qualifying new investment. In allocating tax credits, $5 million must be reserved for allocation to qualified housing developments in small cities that are registered on or after July 1. Tax incentives for small cities will be issued on a first-come, first-served basis until the maximum amount of the allocation reserved for small cities is reached.

Journal Category:

State Tax Credits

Authors:

Novogradac

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