With the legislative season mostly over, states have turned to developing regulations to provide clarity and guide practical application for new changes to their tax codes. This annual trend is readily apparent in the number of state tax credit regulations released just this month. State agencies in New Jersey, Georgia, New York, Delaware, and Mississippi have addressed issues ranging from general credit application to tweaking the kinds of expenses that may qualify. The regulations are essential for taxpayers to ensure the credits are qualified and claimed accurately. This blog contains a brief overview of recent state tax credit regulations.
Approved on May 23, 2018, New Jersey A.B. 3723 revived the off-shore wind tax credit in New Jersey. Following up on the reactivation of the credit, the New Jersey Development Authority released regulations §§ 19:31-20.1 through -20.16 for the renewed credit. The regulations add several definitions, lists the information required for the application and project description, and further clarifies project qualifications for the credit. Considering the size of the potential benefit, the regulations also require the recipient to submit an annual report detailing the progress of the taxpayer toward compliance with employment and investment obligations.
A credit offered for 10 years, the Qualified Education Expense Credit, received small regulatory revisions this year. Regulations 560-7-8-.47 add new information, including the annual aggregate credit cap for each year until 2028, the mandatory electronic pre-approval application process, and the process for claiming the credit. The Department of Revenue also provides updated examples, necessary for an accurate understanding of the credit’s application.
New York has once again adopted emergency regulations concerning its Empire Zone program, effective Oct. 12 and expiring Jan. 10, 2019. NYCRR Title 5, Parts 10 through 16 describe eligibility standards, the certification and decertification process, and certain rules concerning the size and location of development and investment zones. That New York has issued emergency regulations for the 3rd time in the last year, suggesting an inability to propose and adopt permanent guidance. This practice furthers uncertainty for taxpayers wishing to participate and may lead to underutilization of the credit program.
Delaware and Mississippi
Other states made smaller changes to existing credit programs in Delaware and Mississippi. Delaware took the opportunity to amend regulations surrounding its historic rehabilitation credit. 1 D.E. Administrative Code 901-1.0 through -12.0 increases the window in which rehabilitation activities can take place and also increases the application fee. The Mississippi Department of Revenue also adopted amendments to regulation § 35.X.09, amending their motion picture production tax incentive. The rule ends the approval of certain nonresident employee expenses.
While statutory provisions receive much of the fanfare, regulations can provide valuable insight and guidance to ensure the proper functioning of incentives. State agencies that take the time and energy to carefully consider regulatory changes are rewarded with confident taxpayers. That confidence can translate into greater program participation, in most cases a win-win for taxpayers and state governments alike.
Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn: Which new state regulations have had the most impact on your business?
Get a free trial to Bloomberg Tax: State, a comprehensive research service that provides deep analysis and time-saving practice tools to help practitioners make well-informed decisions.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)