State Tax Credits News Briefs - May 2011

Sunday, May 1, 2011

New York's Independent Democratic Conference (IDC) called for the reinstatement of the state's Historic Rehabilitation Tax Credit (HRTC) program. The IDC, a group of four lawmakers that broke away from the state's Senate Democratic Conference to caucus together as a third legislative conference, also released a report touting the HRTC's benefits. According to the report, entitled "Investing in our Upstate Economy: The Historic Rehabilitation Tax Credit," the HRTC program would generate more than $460 million in private investment and create more than 1,600 jobs in upstate New York. Because the program is set to sunset in 2014, the IDC says that the credit delay effectively kills the program as an economic development tool. Download a copy of the report at www.historictaxcredits.com.

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Grow Smart Rhode Island is working to restore the historic tax credit program as a way to jumpstart the state's economy, particularly the construction industry. GrowSmartRI said the former credit program, which closed to new enrollees in 2008, leveraged an estimated $5.35 in total economic output for each $1 of investment. The organization plans to advance a legislative proposal that it says will address critics' concerns about the former program; it will exclude private social clubs, emphasize mixed-use commercial/residential development projects, and reduce and stretch the projected program costs.

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The Iowa Senate passed a bill to provide income tax credits for the construction and installation of solar and wind energy systems. Senate File 516 would create a credit equal to 30 percent of the construction or installation cost, subject to a maximum credit of $15,000 for commercial or agricultural systems or $3,000 for residential systems. The total tax credits issued would not exceed $10 million annually. The bill was referred to the House Ways and Means Committee. View the full text of S.F. 516 at www.energytaxcredits.com.

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In advisory opinion TSB-A-11(4)C, the New York State Department of Taxation and Finance (DTF) notes that a business that expands to an additional site in the enterprise zone in which it was originally certified is eligible to claim Empire Zone (EZ) tax credits for both locations. Although the EZ program expired in 2010 and companies are no longer able to amend their certificates of eligibility under the program, they may claim the credits for additional locations for the balance of their EZ benefit periods as long as the business experienced no change in company structure or ownership, the department said. Read the full text of DTF's opinion at www.tax.ny.gov.

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The Missouri Senate is considering a bill that would create a $60 million tax incentive for shipping companies that export goods by air from Missouri and an additional credit for building warehouses and other shipping facilities. Senate Bill 390, the Aerotropolis Trade Incentive and Tax Credit Act, would authorize air export tax credits equal to 25 cents per chargeable kilogram (kg) shipped on a qualifying flight; or, if the shipment contained perishable freight, the freight forwarder would be entitled to a 30 percent credit per kg. The total amount of credits under the act would be capped at $60 million. The second incentive under the act would provide a credit worth 5 percent of the eligible costs of an international cargo shipping facility. S.B. 390's supporters say the proposed act would restage St. Louis as a center of commerce, transportation and distribution of goods.

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A bill to eliminate 14 state tax credit programs was introduced in the Montana Legislature. A few programs that Senate Bill 253 would repeal include the state tax credits for geothermal systems, alternative energy system installation and alternative energy generation. The Governor's Office of Budget and Program Planning estimates that the measures would save the state roughly $12.5 million in fiscal year 2013. See the full text of S.B. 253 at www.energytaxcredits.com.

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The Delaware Legislature is considering a bill that would create an incentive for qualifying companies to hire new workers. Senate Bill 40, the New Job Creation Credit, is an updated version of the state's more than 25-year-old Blue Collar Jobs Credit, which is set to expire this year, and expands the number of industries that are eligible under the program. The proposed credit has no sunset provision and targets companies in the advanced technology and sustainable energy industries.

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