Legislation effective this week in South Carolina retroactively extends the state solar tax credit. S.901 reinstates the 25% state credit that expired Dec. 31, 2021, for solar energy property on specified locations and allows the credit to be taken by a partnership or limited liability company taxed as a partnership. The legislation increases the project cap from $2.5 million to $5 million and allows the credit to be taken in five equal installments beginning within three years of the year in which the property is placed in service.
The proposed global minimum tax and its potential effect on community development tax credit equity investments is the subject of this week’s Novogradac Tax Credit Tuesday podcast episode. Michael Novogradac, CPA, and Novogradac partner Brad Elphick, CPA, discuss the proposal and potential approaches to mitigate the damage to tax credit equity investment. They also examine next steps in the proposal and for community development tax credit stakeholders. Novogradac has also published a white paper on the subject called Pillar Two and Tax Credit Equity Investments and is seeking public comment on the paper. Comments may be sent to [email protected]
The weekly Tax Credit Tuesday podcast offers an in-depth discussion of various tax incentive topics with expert guests.
The three major federal bank regulatory agencies today issued a joint notice of proposed rulemaking to strengthen and modernize Community Reinvestment Act (CRA) regulations. The Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Fed) and Federal Deposit Insurance Corporation (FDIC) jointly issued the proposal, which would be the first significant interagency revision to the CRA since 1995. The proposal would adopt a metrics-based approach to CRA evaluation of retail lending and community development financing that includes public benchmarks. The rule would also clarify eligible CRA activities that are focused on low- and moderate-income, rural and underserved communities, including affordable housing.
A bill introduced Tuesday in the U.S. House of Representatives aims to boost offshore wind construction and manufacturing through the investment tax credit (ITC) and production tax credit (PTC). H.R. 7388, The Offshore Wind American Manufacturing Act, would create a 30% ITC for qualified facilities that manufacture offshore wind components through Dec. 31, 2028, followed by a reduction of 30% for property placed in service in 2029, 65% for property placed in service in 2030 and 100% for property placed in service after Dec. 31, 2030. The bill would also create a new PTC that would range from approximately 2 to 5 cents per watt multiplied by the total rated capacity of the turbine, with components such as blades, towers, generators, gearboxes and foundations contributing to variable factors.
Legislation introduced in the Massachusetts House of Representatives would create a state investment tax credit (ITC) of up to 50% for capital investment in large offshore wind facilities. H.B. 4524 would create the state ITC for offshore wind facilities that cost at least $50 million and employ at least 200 new full-time employees by their fifth year. The state credit would be taken over five years and the annual statewide cap for the offshore wind credits would be $50 million.
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