State Tax Credits News Briefs - August 2015

Saturday, August 1, 2015

Texas Gov. Greg Abbott signed H.B. 3230 into law June 17. The bill amends the determination of eligible costs and expenses for the rehabilitation of historic structures using the state historic tax credit (HTC). Non-taxable entities are now exempt from HTC eligibility. The depreciation and tax-exempt use provisions do not apply to costs and expenses incurred by an entity exempt from Texas franchise tax, and those costs and expenses are eligible costs and expenses if the other provisions of Code Sec. 47(c)(2) are satisfied. Previously, Texas law stated that eligible costs and expenses for the purposes of the state HTC are qualified rehabilitations as defined by Section 47 of the Internal Revenue Code. The bill will be effective Jan. 1, 2016. Texas H.B. 3230 is available at www.historictaxcredits.com.

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Iowa Gov. Terry E. Branstad signed H.F. 645 into law June 26. The bill expands the state’s solar energy tax credit cap for 2015 and 2016. H.F. 645 reduces the state credit to 50 percent of the federal credit, but expands the cap to $5 million per year. The expanded cap will take effect this year and the reduced credit will apply to solar energy systems installed after Jan. 1, 2016. The credit is claimed over a 10-year period. The bill is available at www.energytaxcredits.com.

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On July 2, the California Governor’s Office of Business and Economic Development (GO-Biz) announced the application periods and allocation amounts for fiscal year 2015–2016. Applications for the California Competes Tax Credit will be accepted from July 20 through Aug. 17 with $75 million available; Jan. 4, 2016, through Jan. 25, 2016, with $75 million available; and March 7, 2016, through March 28, 2016, with $50.9 million available plus any remaining unallocated amounts from the previous application periods. GO-Biz also announced the California Competes Tax Credit Committee meetings will be held Nov. 10; April 14, 2016; and June 16, 2016. The times are to be determined. More information about the California Competes Tax Credit is available at www.taxcredihousing.com.

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Iowa S.F. 510 was enrolled July 2. S.F. 510 repeals the 20 percent tax credit for an investor’s cash equity investment in Community-Based Seed Capital Funds and increases the tax credit for investments made in qualifying businesses to 25 percent of the taxpayer’s equity investment. The law provides that tax credits for equity investments in qualifying businesses are refundable and any tax credit in excess of the taxpayer’s may be credited to the tax liability for the following three years or until depleted, whichever is earlier. Tax credits for equity investments in qualifying businesses made on or after July 1 will not be issued before July 1, 2016, and cannot be claimed by a taxpayer before Sept. 1, 2016. The bill was effective July 1.

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