PORTFOLIO

Credits and Incentives: Idaho Through Mississippi (Portfolio 1460)

Be a trusted advisor to your clients with Bloomberg BNA Tax Portfolios. In this Portfolio, our expert authors focus on state tax credits and incentives in Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, and Mississippi.

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DESCRIPTION

The Credits and Incentives: Idaho Through Mississippi Portfolio contains a detailed discussion of the tax credits and incentives currently available to businesses on a state–by–state basis.

 

This Portfolio also addresses the issues of constitutionality, effectiveness, and the initiatives and policy directions states have taken with respect to existing programs.

 

The working paper section of the Portfolio contains maps and descriptions of targeted economic development zones, where available, and a listing of state and local economic development authority contacts. These materials will help the reader determine if a proposed site lies within a targeted economic development zone.


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AUTHORS

MARK L. NACHBAR, ESQ., CPA

Mark L. Nachbar, Esq., CPA is currently a principal with Ryan in Chicago, Illinois.

 


Credentials / Mark received his B.S.M., Tulane University (1979); J.D., University of Illinois, College of Law (1982); Certified Public Accountant (Illinois, 1979); member: Tax Management, State Tax Advisory Board; Chicago Bar Association, State and Local Tax Committee; Illinois Bar Association. 

 


SCOTT A. AVERY
Credentials / Scott received his B.S.B.A. from the University of Arizona (1989).

BRENT J. HAWKINS

Credentials / Brent received his B.A. from Brigham Young University (1992); M.S. Brigham Young University (1993).

 


TABLE OF CONTENTS

Detailed Analysis

1460.01. INTRODUCTION

1460.02. GENERAL ECONOMIC INCENTIVES

Introductory Material

A. Investment Credit

B. Jobs Credit

C. Research and Development Credits

D. Energy Credit

E. Targeted Economic Development Area Credit

F. Sales and Use Tax Incentives

G. Property Tax Incentives

H. Other Incentives

1460.03. CONSTITUTIONAL ISSUES

Introductory Material

A. Equal Protection Clause

B. Commerce Clause

1. Boston Stock Exchange

2. Maryland v. Louisiana

3. Westinghouse Electric Corp.

4. Bacchus Imports, Ltd. v. Dias

5. West Lynn Creamery, Inc. v. Healy

6. Perini Corp. v. Commissioner

7. Northwest Airlines, Inc. v. Wisconsin Dept. of Rev.

8. Cuno v. DaimlerChrysler Inc.

1460.04. CREDITS AND INCENTIVES: DO THEY WORK

Introductory Material

A. Factors Affecting Business Location Decisions

B. When Taxes Become a Factor

C. Credits as a Competitive Factor

D. The Cost of Credit and Incentive Programs

1460.05. STATE INITIATIVES AND POLICY DIRECTIONS

Introductory Material

A. Cost Benefit Analysis

B. Clawbacks

C. Strategic Analysis

1460.06. IDAHO

A. Priority of Credits

B. Jobs and Capital Investment Credits and Incentives

1. New Jobs Credit

2. Capital Investments Credit

3. New Capital Investments Incentive

4. Credit for Investment in Broadband Equipment

5. Credit for Research Activities

6. Incentive Income Tax Investment Credit

7. Corporate Headquarters Credits and Incentives

a. Corporate Headquarters Investment Tax Credit

b. Corporate Headquarters Real Property Improvement Tax Credit

c. Additional Income Tax Credit for New Jobs

d. Sales and Use Tax Incentives

e. Property Tax Incentives

8. Small Employer Credits

a. Additional Income Tax Credit for Capital Investment

b. Real Property Improvement Tax Credit

c. Additional Income Tax Credit for New Jobs

d. Sales and Use Tax Incentives

e. Small Employer Growth Incentive Exemption

9. Biofuel Infrastructure Capital Investment Credit

C. Youth, Rehabilitation and Educational Facility Credits and Incentives

1. Credit for Contributions to Youth and Rehabilitation Facilities

2. Credit for Contributions to Educational Entities

3. Technological Equipment Donation Deduction

D. Fuel Credits

1. Special Fuel Tax Refund

2. Gasoline Tax Refund

E. Environmental Credits

1. Postconsumer Waste

2. Natural Resource Conservation Credit

1460.07. ILLINOIS

A. Employment Credits

1. Economic Development for a Growing Economy (EDGE) Tax Credit

2. Dependent Care Assistance Program Credit

3. Employee Child Care Credit

4. TECH-PREP Youth Vocational Programs

5. Corporate Headquarters Relocation Credit

6. Training Expenses

7. Credit for Transportation Employees

8. Film Production Services Tax Credit

9. Credit for Wages Paid to Qualified Veterans

10. Credit for Wages Paid to Ex-felons

B. Enterprise Zone Credits

1. Investment Credit

2. Jobs Credit

3. Sales Tax Exemption for Building Materials

C. Investment Credits

1. Investment Tax Credit

a. Qualified Property

b. Qualified Business

i. Manufacturing

ii. Mining Coal or Fluorite

iii. Retailing

c. Entity Organization Considerations

2. High Impact Business Investment

3. New Markets Tax Credit

D. Research and Development

E. Miscellaneous Credits and Incentives

1. Coal Research and Utilization Credit

2. Environmental Remediation Credit

3. Manufacturer's Purchase Credit

4. Clean Coal FutureGen Incentive

F. Property Tax Incentives

1460.08. INDIANA

A. Priority of Credits

B. Research and Education Credits

1. Research Expense Credit

2. Personal Computer Tax Credit

3. Teacher Summer Employment Credit

4. College and University Contribution Credit

5. Twenty–First Century Scholars Program Support Fund Credit

C. Enterprise Zone Credits and Incentives

1. Enterprise Zone Employment Expense Credit

2. Enterprise Zone Loan Interest Credit

3. Enterprise Zone Gross Income Tax Exemption

4. Enterprise Zone Property Tax Credit

5. Economic Revitalization Area Property Tax Reduction

6. Enterprise Zone Investment Cost Credit

7. Brownfield Remediation and Redevelopment Incentive

D. Business Development Tax Credits and Incentives

1. Industrial Recovery Tax Credit

2. Job Development Tax Credit

3. Airport Development Credit

4. High Growth Nonprofit Company Tax Credit

5. Venture Capital Investment Tax Credit

6. Rerefined Lubrication Oil Facility Tax Credit

7. Ethanol Production Tax Credit

8. Blended Biodiesel Tax Credits

9. Coal Gasification or Fluidized Bed Combustion Technology Investment Tax Credit

10. Tax Credit and Deduction for Recycled Coal Combustion Waste

11. Hoosier Business Development Tax Credit

12. Corporate Headquarters Relocation Credit

E. Military Base Credits

1. Military Base Recovery Credit

2. Military Base Investment Cost Credit

F. Community Revitalization Enhancement District Incentives

1. Investment Credit

2. Other Incentives

G. Miscellaneous Credits

1. Historic Property Preservation Credit

2. Maternity Home Credit

3. Riverboat Building Credit

4. Assessments Paid to Indiana Insurance Associations

5. Neighborhood Assistance Credit

6. Prison Investment Credit

7. Individual Development Account Tax Credit

H. Financial Assistance Programs

1. Industrial Development Grant Fund

2. Industrial Development Infrastructure Program

3. Training 2000

4. Tax Increment Financing

5. Capital Access Program

6. Hoosier Development Fund

7. Recycling Promotion and Assistance Fund

8. Alternative Energy Systems Programs

9. Product Development and Commercialization Funding

10. Other Financing Programs

I. Other Programs

1460.09. IOWA

A. Priority of Credits

B. High Quality Job Creation Act

1. Wage-Benefits Tax Credit

2. New Jobs Credit from Withholding

3. Investment Tax Credit

4. Research Activities Credit

5. Sales and Use Tax Refund

6. Value-Added Property Tax Exemption

C. Enterprise Zone Incentives

1. Property Incentives

2. Research Credit

3. Eligible Housing Business Credit

4. Endow Iowa Tax Credit

D. New Jobs Training Program

1. New Jobs Credit

2. New Jobs Credit From Withholding

3. Supplemental New Jobs Credit From Withholding

E. Energy Credits

1. Wind Energy Production Credit

2. Renewable Energy Tax Credit

3. Fuel Tax Credit

4. Soy-Based Cutting Tool Oil Credit

5. Soy-Based Transformer Fluid Credit

6. E-85 Gasoline Promotion Credit

7. Ethanol Blended Gasoline Credit

8. Ethanol Promotion Credit

9. Biodiesel Blended Fuel Credit

F. Film Credits and Incentives

1. Film, Television, and Video Project Promotion Credit

2. Film Investment Credit

G. Capital Investment Credits

1. Iowa Capital Investment Board Credits

2. Qualified Business or Community-Based Seed Capital Investment Credit

3. Credit for Equity Investments in Venture Capital Funds

H. Agricultural Credits

1. Agricultural Asset Transfer Credit

2. Cow-Calf Credit

I. Miscellaneous Credits

1. Historic Preservation and Cultural and Entertainment District Credit

2. Increased Research Activities Credit

3. Assistive Device Tax Credit

4. Charitable Conservation Contribution Credit

5. Brownfield Redevelopment Credit

6. Targeted Jobs Withholding Credit

J. Financial Assistance Programs

1. Community Economic Betterment Account

2. Economic Development Set-Aside Program

3. Value-Added Products and Processes Financial Assistance Program

4. Targeted Small Business Financial Assistance Program

5. Tax Increment Financing

6. Other Financing Programs

1460.10. KANSAS

A. Business and Jobs Development Tax Credits and Incentives

1. Jobs Expansion and Investment Act - Ten–Year Credit

a. Commencing Operations Prior to Jan. 1, 1993

b. Commencing Operations After Dec. 31, 1992

2. Enterprise Zone Act - One–Time Earned Credit

a. Commencing Operations After Dec. 31, 1992

3. Sales and Use Tax Incentives

B. High Performance Incentive Program

1. Investment and Training Credits

2. Matching Funds Program

3. Sales and Use Tax Incentives

C. Capital Investment Credits

1. Angel Investor Credit

2. Kansas Venture Capital Companies

3. Kansas Venture Capital Inc.

4. Kansas Certified Capital Formation Companies

5. Local Seed Capital Pools

6. Declared Disaster Capital Investment Credit

D. Research and Development Credit

E. Energy Credits and Incentives

1. Biomass-to-Energy Plant Credit

2. New Renewable Electric Cogeneration Facility Credit

3. Biofuel Storage and Blending Equipment Credit

4. Integrated Coal Gasification Power Plant Credit

5. Petroleum Refinery Credit

6. Nitrogen Fertilizer Plant Credit

7. Qualifying Pipeline Credit

8. Nuclear Generation Facility Property Tax Exemption

F. Film Credits

1. Film Production Credit

G. Environmental Credits and Incentives

1. Solid Waste Manufacturing Products

2. Alternative–Fueled Motor Vehicle or Fueling Station Credit

3. Threatened Wildlife Habitat Credit

4. Carbon Dioxide Sequestration Incentive

H. Historic Preservation and Site Credits

1. Historic Preservation Credit

2. Historic Site Contribution Credit

I. Miscellaneous Credits

1. Credit for Small Employer Health Benefit Plan

2. Mathematics and Science Teacher Employment Credit

3. Community Services Contributions Credit

4. Disabled Access Credits

5. Swine Facility Improvement Credit

6. TANF Credit

7. Abandoned Oil Well Credit

8. Credit for Property Tax Paid on Machinery and Equipment

9. Credit for Property Taxes Paid on Telecommunications Equipment

10. Deferred Maintenance Credit

11. Child Care Credit

12. Law Enforcement Training Center Credit

13. National Guard and Reserve Employer Credit

J. Property Tax Incentives

K. Financial Assistance Programs

L. Economic Revitalization and Reinvestment Incentive

1. Manufacturing Projects

2. Aviation Projects

3. Wind or Solar Energy Projects

M. Promoting Employment Across Kansas (PEAK) Incentive

N. Other Incentive Programs

1460.11. KENTUCKY

A. Employment Credits

1. Credit for Hiring the Unemployed

2. Enterprise Zone Job Credit

3. Credit Available Through the Kentucky Jobs Development Act

4. Employee Skills Training Program

5. Tax Credit for Employers Who Assist Employees in Obtaining High School Equivalency Diplomas

B. Energy and Pollution Credits

1. Credit for Recycling Machinery and Equipment Used to Process Post Consumer Waste

2. Credit for Coal Used to Generate Steam and Hot Water for Space Heating and Industrial Processing

3. Kentucky Coal Credit

4. Biodiesel Credit

5. Voluntary Environmental Remediation Brownfields Credit

6. Clean Coal Incentive Credit

C. Miscellaneous Credits

1. Development or Expansion Credits

2. Credit Certified Air Carriers Investing in Transportation in Kentucky

3. Credit for Qualified Investments in Qualified Investment Fund

4. Credit for Income from Kentucky Rural Economic Development Projects

5. Credit for Farms Participating in Networking Projects

6. Kentucky Investment Fund Credit

7. Economic Opportunity Zone Credit

8. Research Facility Tax Credit

9. Historic Preservation Restoration Credit

1460.12. LOUISIANA

Introductory Material

A. Employment and Training Credits

1. Job Tax Credit

2. Re-Entrant Jobs Tax Credit

3. Credit for Hiring Unemployed and JOBS Participants

4. Credit for Employee Basic Training Skills Program

5. Credit for Employment of First Time Offenders

6. Employer Credit for Employee Alcohol and Substance Abuse Treatment Programs

7. Quality Jobs Program Rebate

8. Mentor-Protege Tax Credit

9. Apprenticeship Credit

B. Education and Research and Development Credits

1. Credit for Contributions to Educational Institutions

2. Credit for Donation to Biomedical and Biotechnological Research Investment Fund

3. Credit for Louisiana Biomedical Research and Development Park

4. Credit for University Research and Development Parks

5. Technology Commercialization Credit Program

6. Research and Development Tax Credit

C. Environmental and Recycling Credits

1. Credit for Qualified New Recycling Manufacturing or Process Equipment and/or Service Contracts

2. Credit for Qualified Alternative Fuel for Motor Vehicles

3. Brownfields Investor Tax Credit

4. Wind or Solar Energy Systems Credit

D. Enterprise Zone Credits

1. Modification of the Job Tax Credit

2. Credit for Hiring AFDC Recipients

E. Miscellaneous Credits

1. Credit for Local Inventory Property Taxes

2. Neighborhood Assistance Tax Credit

3. Capital Companies Credit

4. Capital Investment Tax Credit

5. Credit for Playground Donation

6. Credit for Employer's Bone Marrow Donor Program

7. Motion Picture Industry Credits

a. Motion Picture Investor's Tax Credit

b. Motion Picture Employment Credit

8. Donations to Public Schools

9. Vessel Property Tax Credit

10. Low-Income Community Investment Credit

11. Angel Investor Credit

12. Health Insurance Credit for Public Works Contractors

13. Sound Recording Investor Credit

14. Digital Interactive Media Producer Tax Credit

15. Musical and Theatrical Credit

a. Base Investment For Productions and Infrastructure Credit

b. Production Transportation Expenditures Credit

c. Employment of Students in Production Credit

d. Resident Payroll Credit

16. School Readiness Credits

a. Child Care Provider Credit

b. Business-Supported Child Care Credit

17. Cane River Heritage Credit

18. Credit for Conversion or Acquisition of Sugarcane Trailers

19. Credit for Certain Milk Producers

20. New Markets Tax Credit

F. Sales and Use Tax Incentives

1. Industry Exemption

1460.13. MAINE

A. Investment Credits

1. Jobs and Investment

2. Seed Capital Investment Credit

3. High-Tech Investment Credit

4. Pine Tree Development Zone Credit

B. Employee Assistance Credits

1. Daycare Assistance Credit

2. Long Term Health Care Benefits Credit

3. Dependent Health Care Benefits Credit

4. Educational Attainment and Recruitment Credits

5. Educational Opportunity Credit

C. Environmental Credits

1. Solid Waste Machinery and Equipment Investment

2. Clean Fuel Conversion Expense Credit

3. Biofuel Production and Use Credit

4. Credit for Pollution Control Boilers

5. Community Wind Power Generator Credit

D. Research Expense Tax Credits

1. Basic Research Credit

2. Super Credit

E. Employment Tax Increment Financing

F. Business Equipment Property Tax Reimbursement Program

G. Miscellaneous Credits

1. Shipbuilding Credit

H. Financial Assistance Programs

1. State Financial Programs

2. Local Financial Programs

a. Tax Increment Financing

I. Other Programs

1. Maine Quality Centers Program

2. Governor's Training Initiative

3. Apportionment of Income of Mutual Fund Service Providers

4. Credit for Rehabilitation of Historic Properties

5. Quality Child Care Investment Credit

J. Incentive Reporting Requirements

1460.14. MARYLAND

A. Enterprise Zones

1. Income Tax Credits

2. Property Tax Credits

B. Work, Not Welfare, Tax Incentive Act

C. Job Creation Tax Credits

1. Income and Franchise Tax Credit

2. One Maryland Economic Development Tax Credits

3. Property Tax Credit

D. Foreign Trade Zones

E. Other Incentives

F. Energy Tax Credits

1. Maryland Mined Coal

2. Solar Energy Grant Program

3. Green Building Tax Credit

4. Bio-Heating Oil Credit

G. Neighborhood and Community Assistance Program Credit

H. Long–Term Care Insurance Credit

I. Maryland Heritage Structure Rehabilitation Program

J. Credit for Qualified Disabled Employees

K. Brownfields Site Cleanup

L. Commercial Fertilizer Costs

M. Financial Assistance Programs

N. Other Programs

1. Work–Based Learning Program Credit

2. Program for Distressed Counties

3. Commuter Benefit Tax Credit

4. Research and Development Credit

5. Film Production Activity (Sales and Use Tax Exemption)

6. Biotechnology Investment Tax Credit

7. Cellulosic Ethanol Technology Research and Development Credit

8. Credit for Wages Paid to Ex-Felon

1460.15. MASSACHUSETTS

A. Priority and Limitations

B. Investment Credits

C. Economic Opportunity Area Incentives

1. Investments in Certified Projects

2. Renovating Abandoned Buildings

3. Other Incentives

D. Research and Development Credit

E. Motion Picture Credits and Incentives

1. Motion Picture Production Company Credit

a. Payroll Credit

b. Production Expense Credit

2. Motion Picture Production Sales Tax Exemptions

a. Motion Picture Production Company Sales Tax Exemption

b. Film School Student Sales Tax Exemption

F. Miscellaneous Credits and Incentives

1. Company Shuttle Vans

2. Alternative Energy Sources

3. Full Employment Program Credit

4. Harbor Maintenance Tax Credit

5. Insurance Company Investment Tax Credit

6. Low-Income Housing Credit

7. Historic Rehabilitation Tax Credit

8. Jobs Incentive Payments

9. Medical Device Tax Credit

10. Brownfield Site Cleanup Credit

11. Dairy Farm Credit

12. Land Conservation Donation Credit

G. Life Sciences Credits and Incentives

1. Life Sciences Investment Credit

2. FDA User Fees Credit

3. Net Operating Loss Incentive

4. Throwback Provision Incentive

5. Refundable Research Credit

6. Life Sciences Research Credit

7. Orphan Drug Testing Expenses Deduction

8. Sales and Use Tax Exemption

9. Personal Property Sales Tax Exemption

1460.16. MICHIGAN

A. Economic Growth Authority Credits

1. MEGA Payroll Credit

2. MEGA Business Activity Credit

3. MEGA Job Retention Credit

4. High Technology Business Credit

5. High-Technology Anchor Company Credit

6. Photovoltaic Facility Credit

7. Alternative Energy Sources Credits

a. Battery Pack Manufacturing Credit

b. Battery Pack Integration Engineering Credit

c. Vehicle Engineering Credit

d. Capital Investment Expenditures Credit

B. Renaissance Zones

1. Single Business Tax Credits

2. Income Tax Deduction

3. Local Income Taxes

4. Local Property Taxes

C. Small Business and Minority Owned Business Credits

1. Small Business Credit

2. Credit for Investment in Minority–Owned Businesses or MESBICs

D. Enterprise Zone

E. Refundable Credits Relating to Employee Costs

1. Credit for Workers' Disability Compensation Payments

2. Credit for FUTA Increase

F. Credits for Charitable Contributions

1. Charitable Contributions Credit

2. Credit for Contributions to Community Foundations, Food Banks, and Homeless Shelters

G. Miscellaneous Credits and Incentives

1. Brownfield Redevelopment Credit

2. High Technology Credit

3. Apprenticeship Credit

4. Historic Property Rehabilitation Credit

5. Public Utility Property Tax Credit

6. Credit for Insurance Companies

7. Investment Tax Credit

8. Local Property Tax Exemption

9. Next Energy Business Activity Credit

10. Next Energy Payroll Credit

11. Low-Grade Hematite Pellet Credit

12. Credit for Qualified Startup Businesses

13. Costs of Created Jobs

14. Pharmaceutical Company Research Credit

15. Service Station Conversion Credit

1460.17. MINNESOTA

A. Research and Development

B. Biotechnology and Health Science Industry Zones

1. Corporate Franchise Tax Exemptions

2. Jobs Credit

3. Sales Tax Exemption

C. Job Opportunity Building Zones

1. Corporation Franchise Tax Exemption

2. Jobs Credit

3. Property Tax Exemptions

4. Sales Tax Exemptions

5. Wind Energy Production Tax Exemption

D. Enterprise Zone and Rural Area Incentives

1. Enterprise Zone Incentive Grants

2. Enterprise Jobs Credit

3. Rural Area Job Creation Grant

E. Miscellaneous Credits

1. Aircraft Facilities

2. Job Training Program Credit

1460.18. MISSISSIPPI

A. Employment Credits and Incentives

1. Job Creation Tax Credit

2. Jobs Tax Credit for Major Capital Projects

3. Jobs Tax Credit for Integrated Suppliers

4. National and Regional Headquarters

5. New Research and Development Wage Credit

6. Jobs Credit for Remediation Activities

7. Jobs Credit for Telecommunications Enterprises

8. Job Credit for Businesses in Economically Distressed Communities

9. General Employment Credit Restrictions

10. Advantage Jobs Incentive Program

B. Employee Betterment Credits

1. Basic Skills Training or Retraining Credit

2. Credit for Sponsoring or Providing Child Care for Employees

3. Credit for Hiring AFDC or TANF Recipients

C. Enterprise Zone Credit for Qualified Businesses in Designated High Tech and Enterprise Zones

D. Economic Impact Act Incentives

1. Franchise Tax Exemption

2. Sales and Use Tax Exemption

E. Credits Based on Taxes and Fees Paid

1. Gambling License Fees Credit

2. Credit for Privilege Tax Paid by Finance Companies

3. Credit for Property Taxes Paid by Manufacturers or Merchants

4. Credit for Public Port Facilities

5. Import Port Jobs Credit

6. Airport Cargo Export/Import Credit

F. Miscellaneous Credits and Incentives

1. Motion Picture Production Incentives

a. Motion Picture Production Rebates

b. Motion Picture Production Sales and Use Tax Exemption

2. Broadband Technology Credit

3. Reforestation Income Tax Credit

4. Brownfield Remediation Tax Credit

5. Incentive Payments for Developing Remediated Property

6. Tourism Sales Tax Incentive

7. Equity Investment (New Markets) Tax Credit


WORKING PAPERS

Working Papers

Item Description Sheet

Worksheet 1 State Tax Credits and Incentives: Agency Directory

Worksheet 2 Chart of Illinois Enterprise Zones

Worksheet 3 Chart of Indiana Enterprise Zones

Worksheet 4 Chart of Kansas Enterprise Zones

Worksheet 5 Map of Maryland Enterprise Zones

Worksheet 6 Map of Michigan Enterprise Zones

Worksheet 7 Map of Mississippi Enterprise Zones

Bibliography

Bibliography