Governor Charles D. Baker's Budget Recommendation - House 1 Fiscal Year 2016

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2.605 -EDIP/Economic Development Incentive Program Credit

Item DescriptionFY2012 FY2013 FY2014 FY2015 FY2016
2.605 EDIP/Economic Development Incentive Program Credit
Under the provisions of the Economic Development Incentive Program (EDIP) established pursuant to M.G.L. Ch. 23A, the Economic Assistance Coordination Council (EACC) may authorize taxpayers participating in certified projects to claim tax credits for a percentage of the cost of the property under M.G.L. Ch. 62 S. 6(g) and M.G.L. Ch. 63 S. 38N. The credit is a key component of the Economic Development Incentive Program (EDIP) established pursuant to G.L. c. 23A. To be eligible, a project must be certified by the Economic Assistance Coordinating Council (EACC). The total dollar amount of the EDIPC that may be used in a calendar year is $30 million. Included in the $30 million annual cap are amounts (up to $10 million) awarded pursuant to the certified housing development program authorized by G.L. c. 40V. The total dollar amount that the EDIPC may use is scheduled to decrease to $25 million.

For projects certified prior to January 1, 2010: The project must be in an economic opportunity area and the credit is 5% of the cost of qualifying property. To qualify for the 5% credit, the property must be used exclusively in a certified project in an Economic Opportunity Area. The credit may be carried forward for up to 10 years with certain restrictions. The credit is neither transferable nor refundable.

For projects certified after January 1, 2010: Sections 21 to 24 and 47 of chapter 166 of the Acts of 2009 made significant changes to EDIP. Under the amended provisions of the EDIP, the EACC may authorize taxpayers participating in certified projects to claim tax credits up to 40% of the cost of qualifying property. The EDIPC for manufacturing retention projects, if authorized by the EACC, may be refundable at the option of the taxpayer. If the credit balance is refunded to the taxpayer, the carryover provisions shall not apply. This credit is not transferable.

For certified job creation projects after January 1, 2015: Effective for tax years beginning on or after January 1, 2015, the EDIP credit provisions have been expanded to include certified job creation projects. Individuals and entities pursuing certified job creation projects may be awarded a credit of up to $1,000 per job created (up to $5,000 in a Gateway Community as defined in section 3A of chapter 23A or within a city or town whose average seasonally adjusted unemployment rate, as reported by the executive office of labor and workforce development, is higher than the average seasonally adjusted unemployment rate of the commonwealth). The total award per project may not exceed $1,000,000. The credit for a certified job creation project is allowed for the year subsequent to that in which the jobs are created.

Origin:  M.G.L. c. 63, S. 38N
Estimate:  $24.7 		16.9 18.4 18.4 24.2 24.7

Key:

ORIGIN  
IRCFederal Internal Revenue Code (26 U.S.C.)
M.G.L. Massachusetts General Laws
U.S.C United States Code
ESTIMATES All estimates are in $ millions.

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