State Tax Credits News Briefs - June 2015

Friday, May 1, 2015

North Carolina Senate Bill 372 was signed into law April 30. The bill extends the safe harbor deadline for the state energy investment tax credit (ITC) to Jan. 1, 2017. It was previously Jan. 1, 2016. Projects eligible for the extension under S. 372 include those with less than 65 megawatts of capacity that are at least 80 percent complete by Jan. 1, 2016, and those with 65 megawatts capacity or more that are at least 50 percent complete by that date. The bill is available at www.energytaxcredits.com.

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On April 15, the New Mexico Energy Conservation and Management Division enacted S.B. 279, establishing a new sustainable building tax credit. The tax credit will be available for the construction of a sustainable building, the renovation of an existing building into a sustainable building or the permanent installation of sustainable manufactured housing. The credit will cap at $1,250,000 for commercial buildings. The credit is available for commercial buildings for taxable years ending on or before Dec. 31, 2026. S.B. 279 is effective June 19 and is available at www.energytaxcredits.com.

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The United States Tax Court determined April 2 in T.C. Memo 2015-63 that Section 707(a)(2) of the Internal Revenue Code prevents use of the partnership provisions to render nontaxable what would in substance have been a taxable exchange if it had not been run through the partnership. The court determined that SWF Real Estate LLC engaged in a disguised sale under Section 707, resulting in an overstatement of the value of the easement on the property, and therefore overstating SWF’s charitable contribution deduction. The ruling was made in SWF Real Estate LLC, Yellowfish Investment Inc. v. Commissioner of the Internal Revenue.

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Maryland H.B. 943 was enacted May 12. The bill restructures the principal economic development entities in Maryland. H.B. 943 creates a Secretary of Commerce in the governor’s office. This role will act as the head of economic development policy and implementation efforts in Maryland. A Maryland Public-Private Partnership Marketing Corporation will also be created.

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The Maryland Department of Business and Economic Development is to be renamed to the Maryland Department of Economic Competitiveness and Commerce. The Secretary of Commerce will also be responsible for this newly renamed department, as well as the Technology Development Corporation, the Economic Development Corporation, and the Public-Private Partnership Marketing Corporation. H.B. 943 is effective Oct. 1

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