Novogradac Journal of Tax Credits Volume 9 Issue 5
The May 2018 issue of the Novogradac Journal of Tax Credits
Barnett Tower is a symbol of both the old days and the future for Jacksonville, Fla.
There are two big winners in a new markets tax credit (NMTC) equity-financed development in Santa Fe, N.M.: the families who bought affordable, energy-efficient homes and the rest of the neighborhood.
Some key concepts related to the first year of the low-income housing tax credit (LIHTC) compliance period are commonly misunderstood.
H.R. 1 (the 2017 tax legislation) made only a few changes to the Internal Revenue Code (IRC) that could directly affect renewable energy, but one was the addition of a new minimum tax, the Base Erosion Anti-Abuse Tax, or BEAT.
Question: In the wake of new tax legislation, are there any significant potential effects on credit recognition in state historic tax credit (HTC) programs?
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New regulations for the Maine state New Markets Tax Credit (NMTC) program, enacted March 18, will disqualify as qualified low-income community investments (QLICIs) any investment made after Nov. 9, 2015, that includes more than 5 percent of the investment for any of several uses. QLICI uses that can’t exceed the 5 percent level include refinancing costs, expenses or investments incurred or paid by the qualified active low-income community business (QALICB) or a party related to it before the date of the QLICI; equity distributions from the QALICB to its owners; investments to acquire an existing business or enterprise in the state; or transaction fees. The change will go into effect 90 days after the end of this year’s second legislative session, which is scheduled to end April 18. The bill is available at www.newmarketscredits.com.
New Jersey state Rep. John McKeon and state Sen. Bob Smith introduced A3273 and S3723, respectively March 14. The bills establish and modify clean-energy-efficiency programs and modify New Jersey’s solar renewable energy portfolio standards. The bills would stabilize the solar market through 2021 by increasing the renewable portfolio standard target for solar and enabling a community solar program, which will ensure that 100 percent of residents have access to solar energy. The program will give consideration to residential customers, especially in multifamily buildings, and low-to-moderate income customers. The Solar Energy Industries Association in a press release voiced support for the legislation to grow New Jersey’s renewable development, maintain more than 7,100 solar industry jobs and expand the benefits of clean energy to more residents.
The National Park Service (NPS) issued 1,501 preliminary certifications of rehabilitation with nearly $9.1 billion in rehabilitation costs under the federal historic tax credit (HTC) program in fiscal year 2017 (FY17), according to the annual report released March 13. In the report, “Federal Tax Incentives for Rehabilitating Historic Buildings Annual Report for Fiscal Year 2017,” NPS also observes that 106,846 jobs were created by HTC developments in FY17. There have been an estimated $90 billion in investment and 43,328 projects certified in the 40-year history of the program. The report is available at www.historictaxcredits.com.
The U.S. Department of Housing and Urban Development (HUD) released income limits for fiscal year (FY) 2018 March 30. The limits are used to determine income eligibility for HUD-assisted housing programs, including public housing, Section 8, Section 202 and Section 811, as well as what HUD calls Multifamily Tax Subsidy Program, which includes low-income housing tax credit (LIHTC) properties. For FY 2018, the national median income increased by 5.75 percent. HUD will continue to cap increases at twice the change in national median income, which means the 2018 cap will be 11.5 percent.
The Ohio Housing Finance Agency (OHFA) announced March 13 its 2018 tax credit compliance-training schedule. The OHFA training is required for owners trying to obtain their 8609s, the low-income housing tax credit (LIHTC) allocation and certification. The training provides information about the LIHTC program and also reviews OHFA-specific rules. All owners are required to have at least one person with decision-making authority over resident files and program compliance activities attend the training every two years. The training schedule is available at www.ohiohome.org.