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State Tax Credits News Briefs - August 2014

From June 24 through July 14, the Wisconsin Economic Development Corporation (WEDC) placed a moratorium on the state historic tax credit (HTC) program because of higher than anticipated demand. Original estimates projected the first year of the HTC would result in an approximately $4 million loss in tax revenue. However, WEDC reported in a June 23 letter to the state legislature’s Joint Committee on Finance that 29 projects eligible for $35 million in credits were approved during the program’s first year. Reed Hall, chief executive officer of WEDC, said that if fully realized, the amount of credits could potentially result in nearly $180 million in additional economic development in communities across the state. After reviewing the program, the state lifted the moratorium for certified historic structures on July 14. At press time the moratorium on tax credits for non-historic structures remains in place. The governor announced that WEDC will also begin collecting more information about the return on investment to the state, including projected employment, wages, leverage of investment, local participation, tax impact and other relevant information. More information about the program and the moratorium can be found on page 65.

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H.B. 824 (Act 825) was signed by Louisiana Gov. Bobby Jindal June 23. The law changes the application fee for historic tax credits from the amount of $250 per application to an amount to be determined in rules and regulations issued by the by the Department of Culture, Recreation and Tourism. Previous law requires the state historic preservation office to charge a fee of $250 per application. The new law also requires payment for a tax credit transfer processing fee by the person transferring the tax credit. The new law was effective July 1. H.B. 824 can be found at www.historictaxcredits.com.

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Rep. Dan Kildee, D-Mich., introduced the 21st century Manufacturing Skills and Jobs Act of 2014 (H.R. 4831) June 10. The act establishes a federal tax credit matching program. The program would allow the Secretary of the Treasury to, on a quarterly basis, make a payment to each eligible community college in an amount equal to the aggregate new manufacturing job withholding matches for all eligible trainees. This would expand training programs for new manufacturing jobs. Local businesses would identify new positions and partner with community colleges to train prospective workers for those positions. H.R. 4831 also expands on Michigan’s New Jobs Training Program, which also allows community colleges and local businesses to partner up and provide workforce training. The bill is available at www.newmarketstaxcredits.com.

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On June 12, Professional Asbestos and Lead Services Inc. and Amazon Fulfillment Services Inc. were two of the 31 companies that received state tax credits from the first round of California Competes tax credits. Nearly 400 applicants requested tax credits in the first round of the new program. The Governor’s Office of Business and Economic Development announced that the $30 million in tax credits awarded in the first round could help create roughly 6,000 jobs and produce more than $2 billion in investment in diverse industries. Professional Asbestos and Lead Services Inc. will receive $100,000 in tax credits over a five year period for the investment of a $650,000 business expansion and the creation of 71 full-time equivalent jobs. Amazon Fulfillment Services Inc. will receive close to $1.6 million in state tax credits for the investment of $225 million over five years in expanding its facilities in California and creating 1,550 new jobs.

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On June 16, Baltimore Mayor Stephanie Rawlings-Blake’s administration introduced Council Bill 14-0399. The bill would require new calculations for determining the allocation of HTCs. The bill was introduced after it was discovered that calculation errors were made when determining how much credit recipients owed in taxes. The Baltimore Sun reported that in addition to the bill, city officials announced they are doubling the staff of their billing integrity unit, which oversees the calculation process, and that the city has moved to an automated system to calculate the bills. The city will also be providing $3 million to roughly 300 owners of historic properties whose taxes will be higher than what government officials previously indicated. City officials estimate they’ve missed out on $11 million in revenue during the past decade because of incorrect bills. At press time, the bill had been referred to the Department of Real Estate and a report about the bill was expected July 19.

Journal Category:

State Tax Credits

Authors:

Novogradac

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