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State Tax Credits News Briefs - January 2014

The Illinois State Property Revitalization Tax Credit Act (Senate Bill 341) has passed the Senate and been referred to the House rules committee. The bill provides a tax credit to offset the cost of redeveloping state facilities that closed within the last two years and had at least 100 employees. Qualified expenditures for each structure would have to exceed the adjusted basis of the property or $5,000 to qualify for the credit. The transaction cap would be $10 million and the annual program cap would be $40 million. Tax credits would be issued after July 1, 2014. A copy of the bill is available at www.taxcredithousing.com.

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California recently passed a state tax credit bill that will go into effect in July and are intended to encourage economic development and job growth. Assembly Bill (A.B.) 93 replaces California’s enterprise zones, which expired at the end of 2013, with a 4.19 percent sales and use tax exemption and a credit for hiring new employees. A.B. 93 would also limit the application of sales and tax credits to sales and use tax paid for purchases before Jan. 1, 2014 and limit the carryover of those credits to 10 years.

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Signed into law on June 12, the Iowa Business Property Tax Credit applies toward property tax due on the 2013 property assessment and is payable in the fall of 2014 and spring of 2015. The credit is available to certain commercial, industrial and railroad properties. One credit is also available for each qualified parcel or property unit. The credit has $50 million available for the first year. The credit amount estimated by the Legislative Services Agency that Senate File 295 provides is up to $523. Commercial properties are eligible except for agricultural property, hotels and motels, apartment buildings, mobile home parks and nursing homes. Applications are due by Jan. 15.

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The Massachusetts Department of Revenue published and accepted comments on draft regulations for the Community Investment Tax Credit (830 CMR 62.6M.1). The regulations discuss the cash contributions to certain community partners or partnership funds made on or after Jan. 1, 2014. The cash contributions must be used to support the implementation and the community partner’s community investment plan, which engages local residents and businesses to work together to create community development programs. The credit is 3 percent for qualifying businesses against their state corporate excise tax. Carry forward of the credit is five years, with the sunset on Dec. 31, 2019.

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On Nov. 6, Vermont Gov. Peter Shumlin proposed a 30 percent increase to the $1.7 million Downtown & Village Tax Credit program, which would bring the total to $2.2 million. This would provide an additional $500,000 annually to city and town centers. Shumlin said in a press release that the primary goal of this package is to ensure Vermont’s downtowns and villages are strong, vibrant places to work, play and live.

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USG Oregon LLC, a subsidiary of U.S. Geothermal Inc., completed the $7.4 million sale of its Oregon Business Energy Tax Credit (BETC) for Neal Hot Springs, located near Vale, Ore. USG Oregon received $10 million in tax credits from the state, and sold the tax credits for $7.4 million. After paying tax expenses, the total amount left for the project was $7 million.

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The Albright United Methodist Church in Sunbury, Pa., received a $312,270 grant through the Neighborhood Assistance Tax Credit program, which improves neighborhoods throughout the state by using tax credits to create a partnership between community organizations and the business community. The grant will be used to turn the building into office space for nonprofit organizations that provide services, support and educational opportunities. A new performing arts center will also be constructed.

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The Arkansas Historic Preservation Program’s 2013 State Historic Preservation Plan is now available. Prepared by the Arkansas Historic Preservation program, this plan is to be in effect from January 2013 to December 2017 and is meant to provide a guide for historic preservation planning and activities. The plan includes a summary of the use of the state credit and the federal historic tax credit (HTC) from 2006 to 2012. It also lists the HTC as one of the most popular incentives for preserving, with percentages provided. There are also several questions about the programs in the future plan questions. The plan can be viewed at www.historictaxcredits.com

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The Rhode Island Division of Taxation held a lottery to award the state’s HTCs. The department received applications for more than $54 million, with only $34.5 million available. As of the beginning of November, only the names of those tax credit lottery winners who submitted necessary documents were provided to the public. More names will be available following the Dec. 1 application deadline. Some of the winners include the Albert C. White House, U.S. Rubber Company, Merchants Bank Building and the Narragansett Hotel Garage in Providence, Ashton Village Workers’ Housing project in Cumberland, Wickford Elementary School in North Kingstown and the Holdredge Garage in Westerly.

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U.S. Chemicals and Plastics, a division of Quest Automotive Products, received a tax break for job expansion plans in October because of the construction of a $1.58 million on-site manufacturing building. The new 23,000-square-foot warehouse, located in Massillon, Ohio, will allow the company to add up to 25 new jobs and are expected to produce almost $1 million in additional annual payroll. The Ohio Tax Credit Authority approved a 40 percent, six-year job creation tax credit for the expansion project. Currently there are 123 full-time workers at the Massillon facility owned by Quest. Construction is scheduled to start by the end of November, with the completion anticipated for May 2014.

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GP Renewables announced in October its plan to buy $15 million commercial solar PV projects in the New Jersey and Maryland area of the east coast. The Manhattan, N.Y.-based energy services company’s goal is to reinvigorate the region’s solar renewable energy credit (SREC) program. GP Renewables’ purchase will allow former owners to either liquidize their assets or continue to purchase solar energy from GP Renewables under 10- and 20- year agreements. Investors can buy back the solar power they help generate at a discounted rate, locking them into a secure tariff period while receiving the upfront payment offered by the company.

Journal Category:

State Tax Credits

Authors:

Novogradac

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