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State Tax Credits News Briefs - November 2013

On Sept. 25, First NBC Bank Holding Company announced that the First NBC Community Development Fund LLC, the bank’s community development entity (CDE), was awarded $19.6 million in NMTCs from the state of Louisiana. First NBC will use the award in the rebuilding of New Orleans. The allocation from Louisiana is part of a $55 million NMTC allocation awarded by the Louisiana Department of Revenue.

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The New York State Department of Taxation and Finance released an advisory opinion on Sept. 26 clarifying the relevance of the state’s brownfield redevelopment tax credit relative to a company considering purchasing a property that has been in the Brownfield Cleanup program since 2006. The company may claim the brownfield program’s tangible property credit for certain property at the site. The tangible property tax credit component of the brownfield program can be claimed for up to 10 years after the property has been approved for participation in the program. The opinion is available at www.tax.ny.gov.

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On Sept. 26, Calif. Gov. Jerry Brown signed two bills, S.B. 100 and A.B. 106 into law to take effect immediately. Both bills provide an extension to employers for qualifying for and claiming tax credits available through the Enterprise Zone tax credit program that ends in 2014. S.B. 100 extends the deadline for taxpayers claiming a sales and use tax credit on manufacturing equipment to place the equipment in service, from Jan. 1, 2014 to Jan. 1, 2015, if it is purchased before Jan. 1, 2014. A.B. 106 extends the deadlines for employers to apply for hiring credit vouchers to Jan. 1, 2015 instead of Dec. 31, 2013. A.B. 106 also clarifies that the Enterprise Zone hiring credits are not eligible for employees who start work after Jan. 1, 2014, and it allows taxpayers to carry forward tax credits earned under the expiring program for 10 years beginning with the 2014 taxable year.

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The Alabama Historical Commission (AHC) issued emergency regulations for the state’s new historic structures rehabilitation tax credit. The emergency rules, 460-x-23-.01ER through 460-x-23-.13ER, were effective Sept. 1. The regulations state that before beginning any substantial rehabilitation work on a qualified structure, applicants must submit an application form and rehabilitation plans to the commission. Applicants must also submit an estimate of the qualified rehabilitation expenditures for the project. The emergency regulations require at least 50 percent of the existing external walls of the structure to remain in place as external walls, 75 percent of the existing external walls remain in place as either external or internal walls and 75 percent of the internal structural framework remains in place. Qualified rehabilitation expenditures must exceed $25,000 or 50 percent of the structure’s original purchase price, whichever is greater. Three types of structures may qualify for the tax credit: a certified historic structure, a certified historic residential structure or a qualified nonhistoric structure built before 1936 that does not include residential buildings and does not meet the eligibility requirements of a certified historic structure or certified historic residential structure but is certified by the commission as meeting the requirements of IRC section 47. AHC began taking application forms Oct. 1.

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The Massachusetts Tax Administration Oct. 7 released Draft Directive 13-XX, “Guidance with Respect to Brownfields Tax Credit applications.” The directive addresses recent questions concerning the credit. The rules in directive one will apply to all applications for the credit submitted on or after Apr. 5, 2013. The rules in directives two through four will apply to all pending and future applications. Issues covered include when a person may properly claim the credit when the person is subject to Massachusetts personal income tax or corporate excise liability (tax claimant) or a nonprofit organization that does not file a personal income tax or corporate excise return (nonprofit claimant). Also included are issues concerning nonprofits receiving credits based on submittal of a response action outcome statement and whether or not a person may sell, transfer or assign a credit that was based upon submittal of documentation of a permanent solution. The draft directive is open for practitioner comment.

Journal Category:

State Tax Credits

Authors:

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