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State Tax Credits News Briefs - May 2013

The Alabama Department of Commerce released administrative code for the Alabama New Markets Development (ANMD) program. The code covers the rules of the ANMD Act, which became effective Dec. 20, 2012. The ANMD program provides state-level new markets tax credits (NMTCs) for economic development projects that meet certain requirements. The state program has a $20 million annual cap and its requirements mirror that of the federal NMTC program.

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The Ohio Tax Credit Authority approved job creation tax credits for several businesses, including Verizon Wireless. Thirteen projects were approved and it is anticipated that more than 1,400 jobs will be created and roughly 3,000 positions will be retained. The 13 projects are expected to have a combined amount of $57 million for payroll and $86 million in investments. Verizon Wireless plans to create 500 full-time jobs in the Columbus suburb of Hilliard, and Epipheo Inc. in Cincinnati, plans to add 100 full-time jobs.

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New York’s budget includes a provision to increase film production in the northern part of the state. The state will offer a refundable 30 percent tax incentive for qualified production costs, with a $420 million total allocation amount through 2014. Eligible productions include feature films, episodic television series, T.V. pilots and T.V. movies and miniseries. With the new tax provision, a two-tiered system will be implemented so an additional 10 percent credit could be applied to wages or salaries paid to those employed by a film production in one of the accepted areas. The new film production tax credit is modeled after S. 498, authored by NY Sen. Patrick M. Gallivan, who announced the accepted provision of the budget. The budget extends the state’s film tax credit program through 2019.

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Missouri State Auditor Thomas A. Schweich announced in April his plan to audit the state’s low-income housing tax credit (LIHTC) program. The Missouri LIHTC program, administered by the Missouri Housing Development Commission, may be affected by a Senate reform bill that will cut LIHTCs from $190 million to $55 million. The audit can take anywhere from a few weeks to several months. The report will be released to the general public when it is complete.

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Dorfman Capital, alongside Twin Cities Community Development Corporation, secured financing for the rehabilitation of the former Whitney & Company building in Leominster. The Massachusetts Historic Rehabilitation Tax Credit (HTC) and Massachusetts Brownfield Tax Credit programs provided necessary funding for the 1893 building. Equity raised from the tax credits helped renovate the building into the Water Mill Apartments, a 40-unit affordable housing complex. Dorfman Capital handled the sale of the tax credits, while Epsilon Associates Inc. provided consulting services. Construction began in July of 2011 and the building is currently occupied.

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California Assemblymember V. Manuel Pérez in February introduced A.B. 305. The bill proposes the creation of a state new market tax credit (NMTC), and would limit the allocation of tax credits to no more than $30 million for the life of the program and an annual cap of $200 million between the years of 2013 and 2020. The bill was referred to the Jobs and Economic Development Committee in March.

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Correction

An article in the April issue of the Journal of Tax Credits misidentified the amount of equity that the Bank of the Ozarks provided to Urban Frontier LLC for Arkansas historic tax credits; Bank of the Ozarks provided 87 cents on the dollar. Additionally, the developer has accumulated approximately $120,000 in federal HTCs that he cannot use. We regret the errors.

Journal Category:

State Tax Credits

Authors:

Novogradac

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