Incentives Watch: Tax Credit Form Instructions Trump Regulations, State Finds

Many times states enact a tax credit, only to leave it to the departments of revenue to issue implementing regulations. So what happens when the department’s tax credit regulations contradict the information provided to taxpayers on the instructions to the tax credit form? In at least one state, the form’s instructions are controlling.

This issue was recently addressed by the Montana State Tax Appeal Board. In Haidle v. Montana Department of Revenue, the taxpayers were seeking to apply the energy conservation credit against costs associated with installing insulation.

But the department’s regulations and the instructions to the form for claiming the credit contradicted one another, reports a Bloomberg BNA Weekly State Tax Reportarticle.

The Department of Revenue’s regulations called for a more restrictive application of the credit, while the form instructions were more generous.

Noting the inconsistencies between the department's regulations and the information provided in the tax credit form instructions, the board found the instructions controlling because they are provided directly to the taxpayers.

For more information about Montana’s energy conservation credits, check out Bloomberg BNA’s Green Incentives Navigator.

In other developments . . .

A qualified social electronic-commerce company, such as LivingSocial, can receive real property tax and corporate income tax abatements for hiring and maintaining employees who are District of Columbia residents, under a law recently approved by the D.C. Council and Congress, according to a Bloomberg BNA Weekly State Tax Reportarticle.


By: Kathleen Caggiano

Follow us on Twitter at: @SALTax
Join Bloomberg BNA's State Tax Group on