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State Tax Credits News Briefs - July 2016

Mississippi Senate Bill 2922 was signed by Gov. Phil Bryant May 12. The bill increases the amount of credits that may be allocated under the state historic tax credit (HTC). The cap will double, reaching $120 million. However, the S.B. 2922 limits the available annual allocation amount to $12 million. The original cap was $60 million, but there was no annual limit. The bill was effective July 1, and applies to properties that are issued a certificate of eligibility before the end of 2020.

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Alabama S.B. 208, also known as Act 389, was enrolled May 4. The bill requires state agencies that administer economic tax incentives to provide annual reports to the legislature. These annual reports will contain an assessment of each economic tax incentive, including whether an incentive has been successful in meeting its purpose, if the state receives a positive return on investment and the economic results of an incentive. The House Ways and Means and Senate Finance and Taxation Committees will conduct hearings on the reports in order to provide a recommendation to modify, discontinue or take no action with respect to each economic tax incentive. S.B. 208 was effective May 12.

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Oklahoma Gov. Mary Fallin approved Senate Bill 1582 May 24. The bill establishes a $25 million annual cap for Investment/New Jobs Tax Credit. In the event that more than $25 million is claimed for the credit during each tax year, the Oklahoma Tax Commission must annually calculate and publish a percentage by which the credits will be reduced so that the total amount of credits paid out by the state do not exceed the cap. S.B. 1582 will be effective Nov. 1.

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Iowa Gov. Terry Branstad signed House File 2443 into law May 26. The bill makes technical changes to the High Quality Jobs program and modifies provisions concerning enterprise zones. In addition, effective Aug. 1, the bill will allow for transfers of certain duties from the Department of Cultural Affairs to the Economic Development Authority under the Historic Preservation and Cultural Entertainment District (HPCED) Tax Credit program. H.F. 2443 was effective July 1.

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The New York Department of Taxation and Finance issued a memorandum April 7 providing guidance on the state’s tax treatment of certain refunds or credits to estimated tax, when the refund or credit must be included in income on a taxpayer’s federal tax return. For federal income tax purposes, the Internal Revenue Service (IRS) previously determined that all or a portion of the qualified empire zone enterprise (QEZE) credit for real property taxes that is refunded, or credited as an overpayment to estimated tax, is considered income to the taxpayer. Now the memorandum notes that if the IRS determines that other New York business tax credits that are refunded or credited as an overpayment to estimated tax are considered income to the taxpayer, these additional credits will also be allowed a subtraction modification on a New York state tax return.

Journal Category:

State Tax Credits

Authors:

Novogradac

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