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State Tax Credits News Briefs - July 2012

The Massachusetts Department of Revenue (DOR) in June released the first-ever Massachusetts Tax Credit Transparency Report, which provides information on 13 refundable or transferable state tax credit programs, including the historic rehabilitation tax credit (HTC) and the low-income housing tax credit (LIHTC). DOR found that in calendar year 2011 the state awarded or issued nearly $50 million in HTCs and more than $9.5 million in LIHTCs. A new law proposed and passed by Gov. Deval Patrick requires agencies that administer the 13 tax credit programs to submit an annual report of credits issued or awarded in the previous calendar year. That reporting includes the awarded taxpayer’s identity, the type of credit, the credit amount, and the date of the award. A copy of the 2011 report is available online at www.mass.gov.

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St. Vincent de Paul in May began constructing a $10 million affordable housing development in Eugene, Ore. The 54-unit property, called Stellar Apartments, will include a mixture of one-, two- and three-bedroom townhome-style units. Ten units will be set aside for National Guard families; four will be reserved for homeless veterans with families. Residents will have access to support services to help families achieve financial and life goals, and additional services will be available for veterans. Financing sources include Oregon Affordable Housing Tax Credits, federal LIHTCs, and funds from the HOME and General Housing Account programs. Stellar Apartments is scheduled to be completed in summer 2013.

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The Indiana Housing and Community Development Authority (IHCDA) announced the availability of $100,000 in Individual Development Account (IDA) tax credits. IDA is a three-to-one matched savings program designed to assist low-income Indiana residents who are below 175 percent of the federal poverty guidelines. Through the program, these individuals build assets and achieve a targeted amount of savings for the purpose of purchasing or rehabilitating a home, pursuing educational opportunities, or starting or expanding a small business. IDA contributors receive a tax credit equal to 50 percent of the contribution that can be applied to their state tax or bank fee liability. The full amount of the contribution can be deducted from federal tax returns. IHCDA estimates that for every dollar invested in this wealth-building initiative, banks have the potential to see $12 in future assets. More information about the IDA program is available at www.ihcda.in.gov.

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Respiderm Corporation has been awarded the ability to offer Arkansas equity investment tax credits (EITCs) to future investors in the Hot Springs-based company, a therapeutic gas delivery device provider. Investors will receive transferable state income tax credits equal to one-third of their investment in Respiderm, and the credit may be used to offset 50 percent of the investor’s state income tax liability. Any unused credit may be carried forward for as many as nine years. Administered by the Arkansas Economic Development Commission, the Arkansas Development Finance Authority and Arkansas Science and Technology Authority, the EITC is designed to promote technology-based job creation in Arkansas where most of Respiderm’s employees will be based.

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Texas posted a 13 percent increase in energy generated from renewable sources in 2011, according to the Electric Reliability Council of Texas, a major grid operator in the state. Texas’ renewable energy credit (REC) program annual report listed 31.7 million megawatt-hours (MWh) for 2011, compared to 28 million MWh in 2010. Wind generation represented the largest share at nearly 30.8 million MWh. Hydroelectric power decreased by more than half due to an ongoing drought, while solar power generation more than doubled. A REC is a tradable instrument that represents 1 MWh of renewable energy produced. Voluntary participation in the REC market increased by 29 percent last year, according to the report. Download a copy of the report at www.ercot.com.

Journal Category:

State Tax Credits

Authors:

Novogradac

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