State Tax Credits

Indiana State Reps. Suzanne Crouch (R) and Peggy Welch (D) last week introduced H.B. 1248 to create the New Markets Job Growth Tax Credit. The program would provide a state tax credit equal to 39 percent of the purchase price of a qualified investment, which the bill limits to $10 million per transaction.

Introduced in late-December 2011 and passed by the Business and Consumer Affairs Subcommittee in early January, Florida House Bill 1119 increases the total amount of tax credits available to be allocated for the New Markets Development Program from $97.5 million to $195 million.

Missouri State Senate Bill (SB 531) modifies the low-income housing tax credit program and the historic preservation tax credit program by requiring the Department of Revenue to apply any increase in revenue generated from capping these tax credit programs to a decrease in the personal income tax rate to begin on January 1, 2016.

NH&RA member firm, Gallagher Evelius & Jones LLP, has drafted an excellent summary of notable 2011 affordable housing policy changes for the Maryland Affordable Housing Coalition. The memo summarizes a number of federal and local policy changes impacting the Low-Income Housing Tax Credit (LIHTC), compliance issues, the New Markets Tax Credit (NMTC), New Issue Bond Program (NIBP) as well as Maryland specific programs. The entire text of the memorandum is provided below.

On January 4, California Assembly Bill 643 was amended to include the creation of a California New Markets Tax Credit (NMTC) Program.

The Internal Revenue Service (IRS) has released a Chief Counsel Advice (CCA) memorandum stating that the sale of certain Massachusetts state tax credits, including low-income housing and historic tax credits, to a third party by the original recipient is a taxable event.

The University of Minnesota has released a new report entitled, “Economic Impact of Projects Leveraged by the Minnesota Historic Rehabilitation Tax Credit.” The report analyzes the economic impact of the Minnesota Historic Rehabilitation Tax Credit, which was signed into law in April 2010.

NH&RA is pleased to present the PowerPoint presentations from the recent 2011 Fall Developers Forum (November 14-15) in Boston, Mass.

Recently, at a State job summit convened in St. Paul, Minnesota Governor Mark Dayton announced his intentions to create a state New Markets Tax Credit Program (NMTC).

The Massachusetts Legislature recently gave initial approval to a supplemental budget bill, which includes provisions to raise the cap on State Low Income Housing Tax Credits (LIHTC) by $10 million in 2013 and $10 million in 2014.

In February 2011, the Hawaii State Legislature passed S.B. No. 1240 which created a mechanism to provide alternative financing assistance to incentivize the use of the State’s low-income housing tax credit program.

The Missouri House of Representatives approved an economic development bill that includes tax credits towards a China trade hub at Lambert-St. Louis International Airport, a corporate income tax reduction from 6.25 percent to 5.5 percent starting in January 2012, and changes to the historic and low-incoming housing tax programs.